The clock is ticking down to 4 April 2016 when new health and safety legislation with significant consequences for directors and officers of organisations here in New Zealand comes into force. While it may be tempting to set CEO targets for measures around zero harm, this might be a big mistake.
When I first started consulting I used to advise boards and senior leaders to measure accident and incident rates like MTIs and LTIs (medical treatment and lost time injuries respectively). Some of those leaders also set zero harm targets and linked their achievement to the bonus calculations for their most senior people. It seems logical that this should work. Only it doesn’t work. So why is this?
I discovered to my dismay that two of the companies I provided advice to failed to improve health and safety outcomes for their workers. Not only had they failed to improve worker safety, they had also managed to pay bonuses to their senior officers. This was not meant to happen. Each company in order to meet its zero harm targets had created the behaviour of under-reporting both accidents and their severity. There was a clear skewing of results beginning shortly after the new health and safety targets were set and the bonus calculation announced. Leaders had driven this behaviour of under reporting in order to meet their zero harm targets. This under reporting behaviour was in conflict with the normally open and transparent culture the organisation had worked hard to promote. Fortunately, realising the destructive path they were on, the bonus scheme was changed. This was an important lesson learnt over a decade ago.
It turns out that we are lazy individuals and will always be able to find ways of achieving what we need to by doing the least amount of work we can get away with. We will go to extraordinary lengths to achieve what we really want. When we set goals particularly those tied to financial rewards we need to be very careful that we are going to drive the behaviours we want.
The best way to ensure that the right behaviours are encouraged is to align the measures to the desired behaviours themselves. If you really want to create a zero harm culture in your organisation, then put lead measures around the behaviours your people need to demonstrate day-to-day, week in week out, that ensure people do stay safe. Get these lead measures right, track them as part of daily operations, and report on them to senior management and the board. Trends for these lead measures will provide an early warning how health and safety outcomes, or lag measures such as MTIs and LTIs, will trend in future. It is imperative that directors and senior officers of organisations have systems, lead measures and information that provide them with information that they can act on. Lead measures for worker health and safety will provide early warning that key outcomes are trending negatively and provide time for taking necessary action.
Be careful what you decide to measure and link to any bonus payments. You may reach the target you set but it may not achieve what you expect and certainly won’t be what you want. Use lead measures and especially those with strong links to behaviours and culture and you will likely get what you want for your organisation.
Contact me if you would like help choosing the right measures for your organisation.
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