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The Balanced Scorecard

Updated: Dec 18, 2023


Many organizations primarily use traditional lagging indicators like recordable rates, severity rates, and the costs of accidents to measure safety performance. These metrics are important for accountability, but they often fall short in guiding proactive safety improvement strategies. It's akin to businesses that once relied only on financial data; we, in the safety field, also require a more nuanced approach. In this discussion, we'll delve into how the concept of the balanced scorecard, typically used in strategic management, can be innovatively applied to foster a comprehensive view of safety.


Understanding the Shortcomings of Lagging Indicators

Lagging indicators have their roots in historical performance measurement practices, developed during the industrial era primarily for evaluating capital utilization and ROI. While they offer insights into past performance, they don't necessarily illuminate the path forward for enhancing safety.


Broadening Metrics Beyond Traditional Indicators

To advance safety improvements, we need to broaden our scope beyond just lagging indicators. Incorporating metrics like near-miss reporting, behavior-based safety (BBS) assessments, physical condition audits, and employee perception surveys can provide a more well-rounded perspective. Each of these metrics contributes unique insights, but they don't, in isolation, paint the full picture of an organization's safety performance.


Adopting a Balanced Safety Scorecard

The balanced scorecard methodology, initially designed for broader strategic management, can be an excellent tool in safety management as well. It provides a structured approach to integrating diverse metrics, offering a more balanced view of safety performance.


The Four Perspectives of a Balanced Scorecard

1. Financial Perspective: Traditional financial measures, like accident costs, are vital but should be considered alongside other metrics for a comprehensive safety performance understanding.

2. Customer Perspective: In safety, our 'customers' are the employees and stakeholders impacted by safety practices. Measuring their satisfaction and perceptions of safety efforts is crucial. Regular surveys can assess how safety initiatives are perceived and how they align with the organization's goals.

3. Process Perspective: This involves evaluating the effectiveness of various safety processes, including risk assessments, safety audits, and compliance procedures. Training effectiveness, including participant feedback and knowledge retention, also falls under this category.

4. Learning and Growth Perspective: This dimension focuses on assessing the organization's culture related to safety, employee attitudes towards safety, effectiveness of onboarding programs, and ongoing safety training and behavioral observations.


Leveraging the Balanced Scorecard for Comprehensive Safety Management

Implementing a balanced scorecard approach in safety allows for a more all-encompassing understanding of safety performance and areas for improvement. This methodology facilitates the correlation between leading and lagging indicators, predicting the effectiveness of safety interventions. It aligns safety processes with overall organizational objectives, transforming the safety culture from reactive to proactive.


In summary, moving beyond traditional lagging indicators to a balanced scorecard approach enables HSE professionals to more effectively align safety efforts with organizational strategies, identify specific areas for improvement, and enhance overall safety processes. It's a shift from a narrow focus to a broad, strategic view of safety, essential for continuous improvement and cultural transformation in the realm of workplace safety.

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