| INTRODUCING
OSHA'S SAFETY AND HEALTH PROGRAM MANAGEMENT GUIDELINES
INTRODUCTION
How
can you increase worker protection, cut business
costs, enhance productivity, and improve employee
morale?
There
are many ways you, as a business owner or manager,
can approach this challenge. One way is by doing
a better job of managing your company's safety
and health program.
No
matter how sophisticated your safety and health
efforts, they can always be improved. No matter
how small your worksite, systematic methods
for protecting workers can work for you.
Effective
management is the key to reducing the numbers
and severity of workplace injuries and illnesses.
This means using proven methods to find and
understand existing and potential hazards, and
then either preventing or controlling those
hazards. A direct relationship exists between
effective management and low numbers and severity
of injuries. We also credit good management
with lower levels of work-related illness: a
well-managed safety and health program prevents
or controls employee exposure to toxic substances
or other unhealthful conditions that can cause
sickness.
The
Safety and Health Program Management Guidelines,
published in the Federal Register (54 CFR 3908)
on January 26, 1989, were developed from the
safety and health program elements used by the
state-run onsite consultation services which
are geared toward small and medium-sized businesses,
and from the Voluntary Protection Program (VPP)
requirements which is geared toward large businesses.
Recommendations
in the Guidelines work! Although the recommendations
are not mandatory, we urge all employers in
all industries to adopt these management practices.
With the help of the Guidelines, we are confident
that any company can establish a successful
safety and health program.
This
chapter briefly reviews each section of the
Guidelines and the benefits you can expect from
carrying out its recommendations. We will be
referring to subsequent chapters for more detailed
explanations of how to carry out the recommendations.
Many of the following chapters include tools
useful in initiating or improving management
systems for worker protection. The information
which is presented is intended for the full
spectrum of large and small industry worksites
and is not dependent on any particular management
style.
THE
GUIDELINES
The
Guidelines outline a management program whose
purpose is to accomplish the following: to recognize
and understand all the hazards and potential
hazards of the workplace; to prevent or control
those hazards; and to train employees at all
levels so they understand the potential hazards
they may be exposed to and know how to help
protect themselves and others. To accomplish
this, the Guidelines are divided into four parts
called major elements:
- Management
Leadership and Employee Involvement
- Worksite
Analysis
- Hazard
Prevention and Control
- Safety
and Health Training.
Each
element is further divided in several recommended
actions. See Appendix 1-3 for worksheets that
address these elements.
MANAGEMENT
LEADERSHIP AND EMPLOYEE INVOLVEMENT
This
element describes the leadership that management
provides to encourage employee involvement at
all levels in safety and health protection.
Many actions listed under this element are applicable
to all areas of business management. The Guidelines
simply put them to use in improving worker safety
and health protection. The actions cover:
- Safety
and Health Policy,
- Goal
and Objectives,
- Visible
Top Management Leadership,
- Employee
Involvement,
- Assignment
of Responsibility,
- Provision
of Adequate Authority and Resources,
- Accountability,
and
- !Program
Evaluation.
SAFETY
AND HEALTH POLICY. By developing a clear
statement of management policy, you help everyone
involved with the worksite understand the importance
of safety and health protection in relation
to other organizational values. By clearly communicating
the policy to all employees, you ensure that
no confusion will exist when a conflict arises
between two of these values, such as productivity
and safety or health. Here is the language of
the Guidelines that describes this desired action:
state clearly a worksite policy on safety
and healthful work and working conditions,
so that all personnel with responsibility
at the site and personnel at other locations
with responsibility for the site understand
the priority of safety and health protection
in relation to other organizational values.
For
information on and samples of worksite safety
and health policies, see Chapter 2.
GOAL
AND OBJECTIVES. You make your general safety
and health policy specific by establishing a clear
goal and objectives for your program. These set
the framework for assigning responsibility. Each
employee should be able to see his/her work activities
in terms of moving toward the goal and achieving
objectives. The language of the Guideline is:
Establish
and communicate a goal for the safety and
health program and objectives for meeting
that goal, so that all members of the organization
understand the results wanted and the measures
planned for achieving them.
For
examples and information on goal and objectives,
see Chapter 2.
VISIBLE
TOP MANAGEMENT LEADERSHIP. If employees
can see the emphasis that top management puts
on safety and health, they are more likely to
emphasize it in their own activities. It is
important for worksite managers to follow set
safety and health rules and work practices in
order to provide an example for rank and file
workers. Managers should show their involvement
in other ways, as well: for example, making
plant-wide safety and health inspections; chairing
the safety and health committee; personally
stopping activities or conditions that are hazardous
until the hazards can be corrected or controlled;
personally tracking safety and health performance;
and -- an essential management function -- holding
managers and employees accountable for their
actions. The element of management leadership
also should include ensuring equal safety and
health protection of any contract workers at
the site. Remember, actions speak louder than
words. The language of the Guideline is:
Provide visible top management leadership
in setting up the program and ensure that
all workers at the site, including contract
workers, are provided equally high quality
safety and health protection, so that all
will understand that management's commitment
is serious.
For
further information, see Chapter 3.
EMPLOYEE
INVOLVEMENT. The best worker safety and health
protection occurs when everyone at the worksite
shares responsibility for protection. For that
to happen, all employees must know that they are
helping to develop the program. Employees at all
levels should be actively involved in finding
and correcting safety and health problems. This
does not mean the employer gives up responsibility
and authority. The Occupational Safety and Health
Act places responsibility for worker protection
against occupational hazards squarely on the employer.
The wise employer, however, uses employees' unique
knowledge and experience to help find problems
and resolve them successfully. The Guidelines
recommend that employers:
Provide
for and encourage employee involvement in
the structure and operation of the program
and in decisions that affect their safety
and health, so that they will commit their
insight and energy to achieving the safety
and health program's goal and objectives.
For
more information on employee involvement and
how to initiate or improve it, see Chapter 4.
ASSIGNMENT
OF RESPONSIBILITY. Everyone in the workplace
should have some responsibility for safety and
health. Clear assignment helps avoid overlaps
or gaps in accomplishing needed activities.
In particular, you should make sure that the
safety/health "expert" at the worksite
is not assigned line responsibility that properly
belongs to line managers and supervisors. The
line responsibility would include managers and
supervisors. This line responsibility would
include functions such as supervising and evaluating
a worker's performance in areas of safety and
health, providing on-the-job training in safe
work practices and personal protective equipment
(PPE), and encouraging worker participation
in safety and health activities. The responsibilities
should flow logically from the objectives that
were set to meet the general program goal. The
actual language of the Guidelines is:
Assign and communicate responsibility for
all aspects of the program, so that managers,
supervisors, and employees in all parts of
the organization know what performance is
expected of them.
For
more information and examples of assigned responsibility,
see Chapter 5.
PROVISION
OF AUTHORITY/RESOURCES. Any realistic assignment
of responsibility must be accompanied by needed
authority and adequate resources. The latter
includes appropriately trained and equipped
personnel as well as sufficient operational
and capital funding. The language of the Guidelines
is:
Provide
adequate authority and resources to responsible
parties, so that assigned responsibility can
be met.
ACCOUNTABILITY.
Once you have assigned responsibility and provided
the appropriate authority and resources to individuals,
you must follow up by holding these persons
accountable for achieving what they have been
asked to do. Accountability is crucial to helping
employees understand how critical their individual
performances are and to teaching them to take
personal responsibility for their performance.
The Guidelines recommend that employers:
Hold managers, supervisors, and employees
accountable for meeting their responsibilities,
so that essential tasks will be performed
For
more information on developing accountability,
see Chapter 6.
PROGRAM
EVALUATION. Once your safety and health
program is up and running, you will want to
ensure its quality. You do this by evaluating
program activities and their results in relation
to the established goal and objectives. During
this evaluation, keep these questions in mind:
"Did we get where we wanted to go?"
"Did each specific activity help us get
there?" The Guidelines suggest that employers:
Review program operations at least annually
to evaluate their success in meeting the goal
and objectives, so that deficiencies can be
identified and the program and/or the objectives
can be revised when they do not meet the goal
of effective safety and health protection.
For
more information on safety and health program
evaluation and useful evaluation tools, see
Chapter 12.
WORKSITE
ANALYSIS
Worksite
analysis is a combination of systematic actions
that provide you with the information needed
to recognize and understand the existing and
potential hazards of your workplace. While these
actions may appear complicated at first glance,
they consist of activities that already are
being performed in most workplaces. For the
sake of clarity, the Guidelines differentiate
these actions as follows:
- Comprehensive
Hazard Identification
- Comprehensive
Hazard Surveys
- Change
Analysis
- Routine
Hazard Analysis
- Regular
Site Safety and Health Inspections
- Employee
Reports of Hazards
- Accident/Incident
Investigations
- Injury
and Illness Trend Analysis
COMPREHENSIVE
HAZARD IDENTIFICATION. There are three components
of a complete hazard inventory from which a
program of prevention and control can be designed.
The
first of these is the comprehensive survey.
This is the most basic of all the tools used
to establish the inventory of hazards and potential
hazards at your worksite. This survey is best
performed by experts from outside the worksite
who have a broad-based knowledge that includes
safety engineering, industrial hygiene, and
often, occupational medicine. After the initial
survey, comprehensive surveys need to be repeated
only periodically. These will enable the expert
who is conducting the survey to apply new information
concerning the hazards or methods of control.
The
second component of comprehensive hazard identification
is change analysis. This means what its name
suggests. Each time there is a change of facilities,
equipment, processes or materials in your workplace,
the intended change should be analyzed for hazards
before being introduced. This helps avoid exposing
your workers to new hazards. Also, it helps
you to avoid the needless expense of retrofitting
controls after installation and use.
The
final component of a complete hazard inventory
is routine hazard analysis. The basic form of
this analysis which is useful at every type
of worksite is the job safety analysis. This
analysis divides a job into tasks and steps
and then analyzes the potential hazards of each
step. The analysis produces a method of prevention
or control to reduce exposure. A variation that
is used at worksites with highly complex hazards
-- such as chemicals or nuclear energy -- is
the process hazard analysis. This analysis reduces
a process to its smallest elements, identifies
the hazards of these elements, and devises the
preventive measures or controls. In rapidly
changing workplaces such as construction, phase
hazard analysis is another useful form of the
routine hazard analysis. Here each phase of
the rapidly changing work is analyzed for the
new hazards it may introduce so that preventions
or controls can be devised.
The
language of the Guidelines follows:
So that all hazards are identified: (a) conduct
comprehensive worksite surveys to establish
safety and health hazard inventories and update
the surveys periodically as expert understanding
of hazards and the methods of control in our
industry change; (b) analyze planned and new
facilities, processes, materials, and equipment;
and (c) perform routine hazard analysis of
jobs, processes, and/or varied phases of work
as needed.
For
more information and tools to help you, see
Chapter 8 and OSHA Publication 3071, "Job
Hazard Analysis."
REGULAR
SITE SAFETY AND HEALTH INSPECTIONS. General
site inspections should be performed by personnel
at the worksite. These employees will need training
to recognize hazards that can slip through the
controls designed to reduce employee exposure.
Inspectors also should watch for hazards that
may not have been identified in the comprehensive
survey or uncovered by other means. The actual
language of the Guidelines is:
Provide for regular site safety and health
inspections, so that new, recurring, or previously
missed hazards and failures in hazard controls
are identified.
For
further information, see Chapter 9.
EMPLOYEE
REPORTS OF HAZARDS. A successful safety
and health program finds and corrects problems
before any harm is done. Involving a greater
number of workers in the monitoring process
will increase the thoroughness and efficiency
of the process. It is imperative that one or
more systems be established for employees to
alert management to the hazards. It also follows
that employees who report hazards will be protected
from harassment.
Employees
should see timely and appropriate responses
to their reports. These responses are visible
evidence of management's commitment to worker
safety and health and it also demonstrates management's
desire for meaningful employee involvement.
The actual language of the Guidelines is:
So that employee insight and experience in
safety and health protection may be used and
employee concerns addressed, provide a reliable
system for employees, without fear of reprisal,
to notify management personnel about conditions
that appear hazardous and to receive timely
and appropriate responses; and encourage the
employees to use the system.
For
further information and assistance, see Chapter
9.
ACCIDENT/INCIDENT
INVESTIGATION. Investigating accidents and
incidents (these terms are defined in Chapter
9) presents another opportunity to find hazards
and design prevention and controls. For each
accident, there usually are several steps that
must be taken to prevent future occurrences.
The Guidelines recommend that you:
Provide
for investigation of accidents and "near
miss" incidents, so that their causes
and the means for their prevention are identified.
For
further information, see Chapter 9 and the National
Safety Council publication, "Accident Investigation...A
New Approach."
INJURY
AND ILLNESS TREND ANALYSIS. It is useful
to review injuries and illnesses that have occurred
over a period of time, including those illnesses
that do not appear to be occupationally related.
Such an analysis may reveal patterns or clusters
that suggest common worksite causes or origins
not apparent when the cases first were recorded.
The Guidelines recommend that employers:
Analyze injury and illness trends over time,
so that patterns with common causes can be
identified and prevented.
For
further information, see Chapter 9.
HAZARD
PREVENTION AND CONTROL
Once
you have inventoried the hazards and potential
hazards of your workplace, you can begin designing
a program of prevention and control. Your program
will consists of:
- Appropriate
Controls
- Preventive
Maintenance
- Emergency
Preparation
- Medical
Program
APPROPRIATE
CONTROLS. In designing a program of prevention
and control, the ideal choice always is prevention
of employee exposure to a hazard. This means
removing the hazard or preventing exposure through
engineering controls. Where neither of these
measures is feasible, the next best choice is
complete enclosure. Where complete enclosure
is not feasible, a combination of partial enclosure
and work practices, perhaps including PPE, is
the next best choice. Where no enclosure is
possible, a combination of work practices and
PPE should be used.
Keep
in mind that work practices and PPE place special
responsibilities on the employees who use them.
Employees should be trained to understand why
these protective measures are necessary and
how they can use these methods to protect themselves
and others. Protective measures should be stressed
in every possible way, including when necessary,
the use of fair and consistent discipline.
When
all other controls fail to provide enough reduction
in exposure, appropriate administrative controls,
such as worker rotation, should be used. The
actual language of the Guidelines is:
So that all current and potential hazards,
however detected, are eliminated or controlled
in a timely manner, establish procedures for
that purpose, using the following measures:
(a) engineering techniques where feasible
and appropriate;
(b)
procedures for safe work that are understood
and followed by all affected parties, because
of training, positive reinforcement, correction
of unsafe performance, and, if necessary,
enforcement through a clearly communicated
disciplinary system;
(c)
provision of personal protective equipment;
and
(d)
administrative controls, such as reducing
the duration of exposure.
For
further information, see Chapter 8.
PREVENTIVE
MAINTENANCE. A good equipment maintenance
program can keep engineering control systems
working as intended and can prevent ordinary
non-hazardous equipment from becoming hazardous.
For these reasons, the Guidelines recommend
that you:
Provide for facility and equipment maintenance,
so that hazardous breakdown is prevented.
For
further information, see Chapter 8.
EMERGENCY
PREPARATION. Planning and preparing for
emergencies is an essential part of any effective
safety and health program. The greater the possibility
of an emergency, the more preparation should
be done. All employees should know exactly what
they must do in each type of emergency. With
sufficient practice the responses needed at
times of crisis can become practically automatic.
The language of the Guidelines is:
Plan and prepare for emergencies, and conduct
training and drills as needed, so that the
response of all parties to emergencies will
be "second nature."
For
further information, see Chapter 8 and OSHA
Publication 3088 (Revised 1991), "How to
Prepare for Workplace Emergencies."
MEDICAL
PROGRAM. Having a medical program onsite
does not necessarily mean having an onsite doctor
or nurse. It does mean involving occupational
health professionals in worksite analysis for
hazards, in hazard prevention and control programs,
in early recognition and treatment of injuries
and illnesses, and in limiting the severity
of illness and injury. For smaller businesses,
these important tasks can be arranged by contract
with occupational health professionals. Besides
health professionals, other employees at the
site should be trained in first aid and CPR.
The Guidelines recommend that you:
Establish a medical program that uses occupational
health professionals in the analysis of hazards,
early recognition and treatment of illnesses
and injury, and limitation of the severity
of harm; and which provides first aid and
cardiopulmonary resuscitation (CPR) onsite
and physician and emergency medical care nearby,
so that harm will be minimized if an injury
or illness does occur.
For
more information, see Chapter 10.
SAFETY
AND HEALTH TRAINING
For
an effective program of safety and health management,
it is crucial that everyone at the worksite
understand his/her role in that program, the
hazards and potential hazards that need to be
prevented or controlled, and the ways to protect
themselves and others. You can achieve such
a program by:
-
Ensuring that employees understand hazards,
-
Ensuring that supervisors understand their
responsibility to:
- analyze the work under their supervision
of hazards,
- maintain physical protections, and
- reinforce and enforce needed protective
measures; and
-
Ensuring that managers understand their responsibilities.
EMPLOYEES.
At a minimum, employees must know the general
safety and health rules of the worksite, specific
site hazards and the safe work practices needed
to help control exposure, and the individual's
role in all types of emergencies. You usually
can achieve this by thorough orientation, periodic
safety and health training, and emergency drills.
Additional specialized training may be needed
to teach skills required for the job or for
activities under the safety and health program.
The actual language of the Guideline is:
Ensure that all employees understand the hazards
to which they may be exposed and how to prevent
harm to themselves and others from exposure
to these hazards, so that employees accept
and follow established safety and health protections.
For
information about employee activities within
a safety and health program, see Chapter 4.
For further information about employee training,
see Chapter 11 and OSHA Publication 2254, "Training
Requirements in OSHA Standards and Training
Guidelines."
SUPERVISORS.
Supervisors should be given special training
to help them in their leadership role. They
should be taught to look for hidden hazards
in the workplace under their supervision, to
insist upon the maintenance of the physical
protection in their areas, and to reinforce
employee hazard training through performance
feedback and, when necessary, fair, consistent
enforcement. The Guidelines recommend:
So that supervisors will carry out their safety
and health responsibilities effectively, ensure
that they understand those responsibilities
and the reasons for them, including:
(a)
analyzing the work under their supervision
to identify unrecognized potential hazards;
(b)
maintaining physical protections in their
work areas; and
(c)
reinforcing employee training on the nature
of potential hazards in their work and on
needed measures, through continual performance
feedback and, if necessary, through enforcement
of safe work practices.
For
further information, see Chapter 11.
MANAGERS.
All line managers must understand their own
responsibilities for safety and health. This
probably will not require special classroom
training; however, you will need some form of
effective communication that will raise managers'
safety and health awareness. The Guidelines
recommend that employers:
Ensure that managers understand their safety
and health responsibilities as described under
"Management Leadership and Employee Involvement,"
so that managers will effectively carry out
those responsibilities.
For
further information, see Chapter 11.
SUMMARY
Based
on a variety of experiences, we are convinced
that good management of worker safety and health
protection will translate into fewer injuries
and illnesses. We also believe that effective
management will pay off in better employee morale,
higher productivity, and improved product quality.
This manual can help set up a quality safety
and health management program to provide that
protection. The information we present is useful
whether you own or manage a small or large business.
We predict that your efforts to protect your
workers will be amply rewarded.
APPENDIX
1-1
WHAT
DIFFERENCE DOES IT MAKE?
There
are several good reasons for improving the way
you manage your worker protection program. Better
management can help reduce lost time and costs;
improve productivity, morale, and quality of
product; prevent OSHA citations; and, should
the need ever arise, strengthen your company's
position during any judicial proceedings.
REDUCED
INJURIES
One
consultation project conducted a study to assess
the outcomes of employer participation in the
Safety and Health Achievement Recognition Program
(SHARP) program in their state. They found that
those employers who participated in SHARP for
two or more years on average experienced only
40 percent of the injuries expected for their
respective industries and less than half (46%)
of the total number of injuries expected for
these industrial classifications overall.
A
small meatpacking establishment with 95 employees,
after working with the consultation project
to develop an effective workplace safety and
health program, lowered their loss workday injury
rate (LWDI) from 18.9 to 7.0.
REDUCED
COSTS
One
fabricated structural steel manufacturing operation
began working with the consultation project
two years ago. Since that time, their LWDI rate
has dropped from 14.0 to 1.0, and they have
returned a portion of workers' compensation
premiums back to the employees. To date, over
$50,000 has been distributed back to their employees.
One
forklift manufacturing company has experienced
a decline in losses due to injuries and illnesses
on the job from $70,000 three years ago to $7,000
in the past year. The owner attributes these
decreases to their involvement with the consultation
program and the services provided to him.
A
Business Roundtable report, "Improving
Construction Safety Performance" (New York:
The Business Roundtable, Report A-3, January
1982, p.16), concludes that for construction,
the savings from effective administration of
safety and health protection is 3.2 times the
cost.
Frank
E. Bird, Jr., in Management Guide to Loss
Control, (Loganville, GA: Institute Press,
1978), says that for every $1 spent on medical
or insurance compensation costs -- considered
"direct costs" -- for a worker injury,
from $5 to $50 more is likely to be spent on
"indirect costs" to repair building,
tool, or equipment damage; to replace damaged
products or materials; and to make up for production
delays and interruptions. He says that an additional
$1 to $3 in indirect costs will be spent for
hiring and training replacements and for time
needed to investigate the incident. Mr. Bird's
figures do not consider the impact of reduced
commitment to work when employees operate in
a situation in which injuries are common. And,
because they frequently involve longer absences,
the impact of job-related illnesses can be even
greater than work-related injuries.
According
to James Findlay and Raymond Kuhlman in Leadership
in Safety, (Loganville, GA: Institute Press,
1980), effective safety and health management
can contribute more to organizational profits
than your best salesmen. They recommend that
you use a chart similar to the one below to
figure out the estimated impact of accidents
to your organization. The chart shows the amount
of extra sales needed to pay for accidents;
i.e., if your profit margin is 4 percent, it
is necessary for you to sell an additional $250,000
in products to pay the costs of $10,000 in annual
losses from injury, illness, or property damage.
With a 2 percent profit, sales must be increased
to $500,000 in order to cover the $10,000 in
losses.
|
ACCIDENT COSTS |
1%
PROFITS
|
2%
PROFITS
|
3%
PROFITS
|
4%
PROFITS
|
|
$
1,000
|
100,000 |
50,000 |
33,000 |
25,000 |
|
$
5,000
|
500,000 |
250,000 |
167,000 |
125,000 |
|
$
10,000
|
1,000,000 |
500,000 |
333,000 |
250,000 |
|
$
25,000
|
2,500,000 |
1,250,000 |
833,000 |
625,000 |
|
$
100,000
|
10,000,000 |
5,000,000 |
3,333,000 |
2,500,000 |
BETTER
EMPLOYEE MORALE, PRODUCTIVITY AND PRODUCT QUALITY
An
automotive parts manufacturer with 170 employees
called on the consultation program for assistance
in identifying and correcting occupational health
and safety hazards. The consultation project
worked with the employer not only to identify
and correct the hazards noted during their on site
visit, but also helped the employer to develop
and implement an effective workplace safety
and health program. As a result of the visit
the employer noted a much lower frequency in
accidents, a reduction in his workers' compensation
costs, and a much improved worker morale at
the site. The company's president offered the
following comment, "Utilizing the . . .
consultative service demonstrated to our work
force (which is represented by the Teamsters)
our concern for their well being. Our teamsters
local is enthusiastic about our continued use
of the consultative program. Not only did we
reduce costs related to safety and health, but
use of this valuable program provided me with
a comfort factor because I know there will be
no surprises in the plant."
OSHA
ENFORCEMENT
Over
the past several years, OSHA has added more
safety and health management provisions to its
promulgated standards. These provisions include
self-inspections for specific conditions, employee
training and specific types of hazard analysis.
They also have focused more on the management
of workplace safety and health when enforcing
the "general duty clause" (Sec. 5(a)(1),
29 U.S.C. 654), which requires that each employer
"furnish each of his employees employment
and a place of employment that are free from
recognized hazards that are causing or likely
to cause death or serious physical harm to his
employees." As an employer, you have a
responsibility to take feasible steps to render
your workplace free of recognized hazards. As
part of this responsibility, you have a duty
to establish and maintain management practices
necessary for ensuring that safe and healthful
work practices are followed.
JUDICIAL
PROCEEDINGS
When
an employer is cited for a violation he believes
was caused by an employee's failure to obey
a safety rule, evidence of good management practices
is particularly important in establishing a
defense. Decisions from the Occupational Safety
and Health Review Commission and the U.S. Courts
of Appeal clearly hold that, to establish an
"employee misconduct" defense, an
employer must show that it has adopted appropriate
safety rules, and that it enforces these rules
through such means as regular training and adequate
supervision. In short, employers can avail themselves
of this defense only by maintaining a comprehensive,
adequate safety program.
APPENDIX
1-2
USING
THE BELL FORMULA TO HELP DETERMINE
YOUR
COSTS OR SAVINGS
In
his article, "Gauging Safety Outlays and
Objectives," in Occupational Hazards, June
1987, David R. Bell describes a method you can
use to find out the costs to your worksite when
injuries occur, and the costs to your worksite's
experience to your industry's average for lost
workday case rates. To do this, you use information
published annually by the Bureau of Labor Statistics
(BLS), other information easily available at
your worksite, and Bell's formula for the calculation
of "lost workday cases avoided."
To
begin, find the latest published lost workday
case rate for your industry by checking the
BLS publication "Occupational Injuries
and Illnesses in the United States Industry."
(The BLS statistics are published annually --
usually 1.5 years after the year for which they
were collected -- and are available from the
U.S. Printing Office, Washington, DC 20402).
In this publication, locate the table entitled
"Reported occupational injury rates by
industry." Make sure that you do not use
the table that includes illnesses. When you
have found the correct table, look for the SIC
(Standard Industrial Code) that best describes
your industry. From the table's column headed
"Lost Workday Cases," take the number
reported for the most recent year. That number
represents the average lost workday cases per
100 workers. It is the lost workday case rate
(LWCR) for your industry.
Next,
calculate the employment at your site in terms
equivalent to the data used by BLS. The BLS
number represents the equivalent of one worker's
full work year, whether it was actually worked
through regular shifts, part-time work, or overtime
work. To figure your equivalent employment,
divide the number of total hours worked by 2,000.
(The number 2,000 represents the average number
of hours a full-time worker is generally expected
to work each year in the United States.)
With
this information, you can use the Bell formula
to calculate how many injuries with lost workdays
your site would have had if it had been exactly
average for your industry. This number Bell
calls "expected cases." You can compare
this expected number to the actual number of
lost workday cases you had at your site. If
you had fewer cases than the expected number,
the difference between the number of expected
cases and the actual number of cases that you
experienced at your site is called "injuries
avoided." If you had more cases than the
expected number, the difference is "excessive"
cases.
Bell
suggests that you also calculate the average
cost of lost workday cases at your site. Bear
in mind both the direct and indirect costs as
discussed in the preceding appendix. When you
have found the average cost, you can use the
Bell formula to figure how much you saved your
company by "avoiding lost workday cases,"
or how much it cost your company to be over
the average. You can also calculate the potential
savings from improving your safety and health
management enough to avoid more injuries.
This
is Bell's formula:
Average
Lost Workday Case Rate x Equivalent Site Employment
100
= Expected Lost Workday Cases
To
illustrate further how this formula can work
for you, consider a glass container plant that
employed 200 workers in 1990. To apply the Bell
formula to this site's safety and health statistics,
begin by looking up the SIC code for glass container
plants in Table 3 of the BLS bulletin. The SIC
code is 3221. The table shows that for that
SIC code in 1990 (the most recent figures available),
the lost workday cases averaged 8.2 per 100
workers in that industry.
Next,
calculate the equivalent employment for this
site. You know from site records that in 1991
workers logged 456,432 hours of work at this
site. Using 2,000 as the average number of hours
a full-time worker in the United States is expected
to work each year, you divide 456,432 by 2,000
to find the full-time equivalent employment
at this site. The result of that division is
228.2. Applying the Bell formula, you multiply
the lost workday case rate (8.2) by the site's
full-time equivalent employment (228.2). The
result of that multiplication is 1,871.2. Finally,
divide 1,871.2 by 100 to find the expected lost
workday cases if you were average for your industry.
You can expect to find 18.7 (rounded up to 19)
lost workday cases at this facility.
Rendering
the Bell Formula mathematically, you get the
following equation (with the answer rounded
to the nearest whole number):
8.2
x 228.2 = 19
100
The
glass container plant, with its very good safety
and health program, had only six lost workday
cases. This was 13 (19 - 6 = 13) fewer than
would have been expected had it been average
for its industry. The employer estimates that
lost workday cases incur direct costs averaging
$16,800. By avoiding 13 of the expected lost
workday cases for its industry, this site saves
$218,400 in direct costs each year. Conversely,
if this site had experienced 25 lost workday
cases, subtracting expected cases from actual
lost workday cases (25 - 19) would show that
his site had six lost workday cases above its
industry's expected average. These six lost
workday cases would have cost $100,800 more
than expected direct costs had the site been
average.
Although
economic incentives are secondary to human health
and safety as motives for safety and health
protection, the potential economic benefit of
effective safety and health management is considerable
and clearly worth considering.
Most
people, correctly or not, believe their operation
is significantly different from others in their
SIC and reject the use of the formula. If you
prefer to use your own history or other hypothesis
to calculate probable case rates, that certainly
is not discouraged. It is very important, however,
to use some reasonable method to project a quantitative
case rate as a standard of measure.
How
much would you save at your worksite if you
could be below, or even 50 percent below, your
industry average? These figures can help you
make a good economic case for improving the
management of your safety and health effort
even if some spending is required.
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Section: Forward
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the Direction of Your Program
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