To be used in making business decisions, a metric must be consistent, comparable, credible, and relevant to the people using it. For example, the kilowatt-hour meets these metric criteria for electricity consumption and is widely used in business decisions related to energy use.
Business leaders focus on revenue, profit, market share, new products, and increasing capacity, productivity, or efficiency. These can all be measured using metrics that describe the current situation, compare current numbers with previous years or with the metrics of a similar operation in another workplace, and quantify goals and measure progress. By measuring the current situation compared to quantifiable goals, business leaders make data-driven decisions.
The best-run EHS operations employ a similar approach to decision making, one based on data and facts. Decisions related to the allocation of resources, technology purchases, training, employee performance, and outsourcing or internalizing EHS functions can all be based on data compiled through the use of appropriate metrics.
There are a range of performance metrics available for safety and environmental activities. Several are described in this section. Metrics are available for measuring the social or ethical performance of an organization. Use considerable care when choosing these metrics to ensure that they meet the criteria for comparability, consistency, credibility, and relevancy to the activity or program that is measured. They must also be actionable or lead to actions that improve performance.
It’s time to sit down and learn exactly which EHS data to collect, how to analyze your findings, and how to effectively act on them. Register now for an interactive webinar on February 26.
Components of a Good Metric
A good metric is one that provides decision makers with the data they need to make fact-based decisions. A good environmental or safety metric must be aligned (consistent and compatible) with the methods used by the business to measure financial and management performance, collect data, and report business results. The method used to display the results of the metric must also be consistent with the terminology and methods used to display other business outcomes within the organization. A measurement system should incorporate several primary attributes:
According to the Global Environmental Management Initiative (GEMI), a nonprofit association of businesses dedicated to improving EHS performance, an EHS metric should be able to accomplish one or more of the following goals:
- Demonstrate progress toward the organization’s goals and objectives.
- Inspire or motivate a change in behavior or a process.
- Make it easy to measure and/or collect data.
- Be easily understood by management.
Raw and Normalized Data
Metrics can be expressed as raw data or normalized data for comparative analysis. Raw data will express absolute value, such as total emissions in tons or total number of workplace injuries. Normalized data allow comparison through space and time and are often expressed as rates, such as total emissions per hour or number of injuries per unit of production. Normalized data are often used for comparing the performance of two or more separate activities (e.g., injury rates between facilities for the same time period) or a single activity at different time intervals (injury rates per month for the same facility).
Do you have safety and health program responsibilities, in addition to your environmental ones? This webinar is for you. Join us for an interactive webinar on February 26, and learn the value of qualitative EHS measures.
Choosing What to Measure
Following are general tips for choosing the data or other information that will be measured:
- Use data that are readily available and can be gathered at regular intervals.
- Use the ratios, formulas, key performance measures, and language used by business leaders.
- Include measures of results and quality, and do not limit the focus to costs.
- Tie metrics directly to the key challenges facing the business and the results that must be achieved.
- Avoid metrics that do not add value in making decisions.
- Identify and compare results with those of key competitors or similar operations, whenever possible.
- Establish goals for continuous improvement.
- Avoid soft metrics based on feelings or intuition about a program, and use hard metrics or data to drive fact-based decision making.
See tomorrow’s Advisor for a quick guide to EHS metrics.