General contractors try to eliminate such risks from their operations by
subcontracting; this is referred to as risk transfer. But risk transfer only
applies to organizations that do not themselves perform any of the work. So,
those general contractors, subcontractors, and fabricators that perform work
must manage such risks effectively.
History of Construction Safety
The construction industry started to take safety management seriously
after the passage of workers compensation (WC) legislation, first enacted by
Wisconsin in 1911, with the rest of the states following thereafter. Prior
to that, organizations had no responsibility for occupational injuries
suffered by workers. WC rating takes the type of work (class code) in which
the worker is engaged and uses the employer's loss experience to modify the
insurance rate charged. Employers that manage their safety process
effectively and have fewer worker injuries than the industry average pay a
lower premium than the established base rate. Due to this element in the
program, over time employers have endeavored to positively affect their
safety process and so manage the organization's cost of risk.
Between the passage of WC laws and the late 1960s, the effort to improve
safety was driven by organizations interested in reducing their cost of
doing business. Due to changes in society's outlook on occupational
injuries, it was generally believed that businesses were not doing enough to
reduce accidents. In 1970, the federal government enacted the Occupational
Safety and Health Act (OSHA). These standards obligate certain employers to
have a safety process with which to implement the requirements of the
standards. These include writing a safety program (for illness and injury
prevention) and effectively managing it. Most safety programs are about the
prevention of injury and/or illness to the organization's employees and
involve a regurgitation of the safety standards as promulgated by the
jurisdiction in which the organization resides. In an effort to make their
programs more effective, some firms have added elements dealing with
substance abuse, driving for the company, work practices, incentives and
punishment, wellness, etc.
The Three Es
The content of such programs can be categorized in three fundamental
areas, represented by the three Es: engineering controls, education
(training), and enforcement (inspection). The three Es reportedly were a
simplification of American industrial safety pioneer Herbert William
Heinrich's 10 axioms for safety management written in the late 1920s. One
can safely draw the conclusion that the OSHA standards also fall into these
very same basic areas. The standards focus on hazards in the workplace with
means of providing physical controls to protect workers. The education
element requires employers to train their employees in the requirements of
the standards and the use of protective equipment. The enforcement elements
deal with site inspections to ensure that conditions reflect the
requirements of the standards and that the workers are complying with them.
It is interesting to note that it has been almost a century since the
construction industry has been trying to control workplace injuries, and
OSHA has been in effect for 4 decades, yet occupational injuries still occur
despite all the effort to prevent them.
The bulk of this effort is directed to controlling the hazards workers
may be exposed to in the physical environment. H.W. Heinrich conducted a
research project and reviewed thousands of accident reports for causation.
His findings indicated that 2 percent of the accidents had indeterminate
causes ("acts of God"). Ten percent of the accidents were traced to causes
from the physical environment, and 88 percent resulted from actions (unsafe
acts) by the employees. Frank E. Bird Jr. validated this finding in the late
1960s in a much larger study, which attributed 5 percent of accident causes
to the physical environment and 95 percent to unsafe acts by workers. So, it
would seem that safety programs, which generally focus on the physical
aspects of the work site, are not structured to address the area where most
of the risk resides.
Construction Industry's Approach to Safety
At a recent national safety conference, researchers from the University
of Tennessee reported on a study they conducted involving a large group of
contractors. These contractors reported that approximately 6–7 percent of
the estimated total cost of construction went into insurance premiums,
related safety expenses, and injury costs. These same contractors reported a
1.5 percent profit from their operations. The conclusion they drew was that
contractors could greatly improve their profits by more effectively managing
their safety process and controlling the related costs. This is also borne
out by owner controlled insurance program or contractor controlled insurance
program results as reported by a number of brokers and insurance companies.
They report dramatic reduction in injury rates and substantial reductions in
the cost of risk. One may also divine that reduced injury rates translate
into better planned operations with greater operational efficiencies, which
would further improve productivity and profits.
In reviewing the industry's approach to safety, it seems that
organizations are still engaged in the traditional initiatives, with more of
the same—only done more rigorously. This effort generally includes writing
or rewriting elements of the safety program, reviewing past losses, and
implementing priority programs to address specific losses from the past. It
also includes providing training or retraining to the employees, focused
inspection to correct field conditions, finding noncomplying workers and
"writing them up," giving incentives for no recordable injuries over a set
period of time, or writing procedures of how to deal with hazardous
operations or conditions, to name a few. Unfortunately these interventions
are not highly effective as contractors still have workers getting injured
on their work sites. As these efforts have not proven effective in
dramatically reducing injury rates, then it stands to reason that
construction companies need to try innovative approaches to reduce their
safety results so as to improve their competitive advantage as well as
positively impact their bottom line results.
Another significant element of the cost of risk vis-à-vis the
construction industry improvement rate is that the increase in medical care
costs is dramatically outpacing it. So, even though companies are improving
on or doing somewhat better than the industry rate, they are actually
"falling behind," and their ineffective safety management processes further
erode their profits. The construction industry was forced to go from a
no-safety-process posture before the enactment of various WC laws to what
can be termed as traditional safety, where these organizations try to comply
with federal safety standards. This safety focus could have also been
triggered by some major loss event with significant financial impact. To
transition to safety performance that produces optimal results, the
organization must go through a radical organizational change related to its
vision, systems, strategy, and operations. Since the contractor controls
safety, and there are significant and ample opportunities to improve it,
then, given the economic and business environment of today, effectively
managing safety not only improves the bottom line but also may be a matter
of survival!
Reassessing Construction Safety Management
Given this economic reality, it may be prudent to reassess the way
business and safety are managed to find a more effective way to execute as
well as engage management and employees in achieving stellar results. In
fact, since the mid-1990s, most organizations have restructured the way they
manage their organizations. Before the advent of the Balanced Scorecard
strategic performance management framework, organizations were managed from
one perspective—by financial metrics alone. But due to dramatic changes in
the economy, globalization, etc., Fortune 1,000 companies now manage their
businesses using organizational scorecards with multiple perspectives. It is
no surprise that safety would greatly benefit from such an innovation in
measurement, because the existing metrics are historical and not of much use
in day-to-day management.
The thinking behind this change in business and management approach was
triggered by organizations' need to focus on their customers' demands and
expectations, align business and operational process to respond to them,
learn from their interactions and experience, as well as devise innovative
solutions in improvement efforts to achieve desired financial results. This
revolutionary approach has improved companies' agility, response to changing
situations, and strategy deployment, as well as made them more efficient,
competitive, and profitable. Construction safety management needs just such
a dramatic overhaul.
Some of the deficiencies in the traditional safety programs and
management processes are that they focused on one perspective: historical
data analysis of past losses and accident investigation reports for
improvement strategy deployment. Another problem is the fact that this
assessment is done annually, and so this information is not highly useful in
effectively managing day-to-day operations and improvement in "real time."
The primary focus is on the worker rather than all the stakeholders in the
organization and the operational process. Little attention is given to why
workers do what they do, while interventions are driven by engineering
controls or training solutions. These have proven to be less than effective
in creating a zero-harm work environment.
Contractors have process metrics to drive their operations and a defined
process to control them. At the end of each day, the foremen or
superintendents have a pretty good idea of whether they are on target to
make their production goals and are therefore able to address any shortfalls
in "real time." They also control the flow of resources (personnel,
material, and money) at formal meetings, with the involved parties
documenting the discussion and agreements. This is not the case with safety,
where the metrics may be informal "snapshot" job walks and/or annual reviews
of loss statistics. Historical data and information may be useful to get an
overall picture of the effectiveness of the company's effort, but it is of
little use in managing daily operations, which is what is needed at the job
site.
Any organization produces a product or service, has internal systems with
which to achieve this, and has people to operate and manage the systems to
produce the output. The sources of risk are in either the systems or the
people. The operational function resides within the larger organizational
entity. The organization also has systems and people. The systems include
staffing, accounting, marketing, legal, hiring resources, performance
evaluation, salaries, benefits, etc., to name a few. And the people involved
include the manager and executives.
In construction, the output is the completed structure. The operational
systems include scheduling, estimating, procuring, expediting, cost control,
as well as the plant, equipment, and tools. The people are the producers
(workers). What is important to note is that the workers are the ones
exposed to work site hazards and the ones who potentially get injured. They
have to function within the operations systems, which are devised and
managed by supervisors as well as management.
Workers work because they have to. The worker is selected, hired, and
assigned work by managers. Management must ensure that workers meet the
company's work expectations. If they do not, then it is management's
responsibility to either provide guidance, coaching, or training as
necessary or take some other appropriate action to rectify the situation. To
keep their jobs, workers have to function within the operations and meet
required objectives, at designated speeds to meet production goals, using
provided tools, in designated locations, in assigned crews, etc. They have
little control over any of this except their own actions. So, if keeping
their jobs means meeting or exceeding management's expectations, they will
do so. And if this entails taking risks, then in all likelihood, workers
will choose to do that as well.
Since management controls virtually everything on-site, managers are
responsible for doing the necessary planning, assessing and anticipating
potential risks, responding to changed conditions rapidly, and effectively
coordinating the work to minimize worker exposure to dangerous conditions
and risks. To achieve a zero-harm work environment, then, there needs to be
an alignment of vision with capabilities, an integration of systems and
goals, a synthesis of expectations and motivation. Things have to align
horizontally as well as vertically. The strategy and metrics have to be
realistic and achievable. Organizational resources and personnel
capabilities have to be carefully assessed for strengths and weaknesses.
The lack of safety performances is a symptom of a failure in the
organization's management system! So a paradigm shift is in order.
Organizations need to look at safety holistically as an integral part of the
organization's policies, procedures, and practices, and not as an
independent function. If the organization is serious about keeping its
employees injury free, then it needs to look at not only the employee but
also the physical environment, the human dynamics, the systems, as well as
the organizational culture, climate, and leadership. All of these in one way
or another influence the decisions employees make, which sometimes lead to
an incident, injury, or loss. More recent thinking espouses that,
ultimately, the greatest drivers of incidents, injuries, and losses are the
systems, leadership, climate, and culture of the organization. And this
brings us to the 10 elements of the safety excellence framework.
Note: See "The 10 Elements Framework" in
January 2012.