# Safety cost performance measurement indexes

Table of Contents:

Over the years, many indexes have been developed for measuring the overall safety cost performance of an organization. To the best of author's knowledge, there is no single index adequate for determining the overall safety cost effectiveness of an organization; several indexes in combination can be used to serve this very purpose.

The true purpose of using these indexes is to indicate trends, using the past safety cost performance as a point of reference, and to encourage all involved individuals to improve over the past performance. This section presents three, considered to be quite useful, safety performance cost-related indexes [11,15,17].

## Average cost per injury index

This index is used for determining the average cost per occupational injury in an organization/company and is defined by

TC ■

ACoi = 2^L (12.6)

TNoi

where

ACoi is the average cost per occupational injury.

TCm is the total cost of occupational injuries.

TNoi is the total number of occupational injuries.

## Average injury cost per profit dollar index

This index is used for determining the average cost of occupational-related injuries per profit dollar in organization/company and is defined by

TC ■

ACOIpd = f^L (12.7)

where

ACOIpj is the average cost of occupational-related injuries per profit dollar.

TCoi is the total cost of occupational-related injuries.

TPd is the total profit in dollars.

## Average injury cost per unit turnover index

This index is used for determining the average cost of occupational-related injuries per unit turnover in an organization/company and is defined by

TC

ACOlul = ^- (12.8)

TN„;

where

ACOI,lt is the average cost of occupational-related injuries per unit turnover.

TCoi is the total cost of occupational-related injuries.

TN„( is the total number of units' turnover (i.e., unit quantity, tons, etc.).

# Problems

• 1. Discuss at least seven important safety cost-related facts, figures, and examples.
• 2. Write an essay on safety costing.
• 3. List at least ten losses of a company that can result from accidents involving its manufactured products.
• 4. Discuss the Simonds safety cost estimation method.
• 5. Compare the Simonds and Heinrich safety cost estimation methods.
• 6. Write down the equation for the accident hidden cost estimation model.
• 7. Define the average cost per injury index.
• 8. Discuss the elements of the total safety cost estimation model.
• 9. Compare the two product life cycle safety cost estimation models presented in the chapter.
• 10. Describe the Wallach method.

# References

• 1. Safety Subjects, Bulletin No. 67, Bureau of Labor Standards, Department of Labor, U. S., Government Printing Office, Washington, D.C., 1955, p. 14.
• 2. Grimaldi, J.V., Simonds, R.H., Safety Management, Richard D. Irwin, Homewood, Illinois, 1989.
• 3. Report on Injuries in America in 2000, National Safety Council (NSC), Itasca, Illinois, 2001.
• 4. Spellman, F.R., Whiting, N.E., Safety Engineering: Principles and Practice, Government Institutes, Rockville, Maryland, 1999.
• 5. Lancianese, F., The Soaring Costs of Industrial Accidents, Occupational Hazards, August 1983, pp. 30-35.
• 6. Ferry, T.S., Safety Program Administration for Engineers and Managers, Charles C. Thomas Publisher, Springfield, Illinois, 1984.
• 7. Williams, W.E., Safety at All Costs, WorldNetDaily.Com, Cave Junction, Oregon, September 5,2001, pp. 1-3.
• 8. Hammer, W., Price, D., Occupational Safety Management and Engineering, Prentice Hall, Upper Saddle River, New Jersey, 2001.
• 9. Tenth Annual McGraw-Hill Survey of Investment in Employee Safety and Health, McGraw-Hill Publications Department, McGraw-Hill, New York, June 1982.
• 10. Hammer, W., Product Safety Management and Engineering, Prentice Hall, Englewood Cliffs, New Jersey, 1980.
• 11. Dhillon, B.S., Engineering Safety: Fundamentals, Techniques, Applications, World Scientific Publishing, River Edge, New Jersey, 2003.
• 12. Simonds, R.M., Estimating Accident Cost in Industrial Plants, Practices Pamphlet No. Ill, National Safety Council, Chicago, 1950.
• 13. Goetsch, D.L., Occupational Safety and Health, Prentice Hall, Englewood Cliffs, New Jersey, 1996.
• 14. Heinrich, H.W., Industrial Accident Prevention, McGraw-Hill, New York, 1931.
• 15. Andreoni, D., The Cost of Occupational Accidents and Diseases, International Labor Office, Geneva, Switzerland, 1986.
• 16. Wallach, M.B., Accident Costs: A New Concept, The Journal of the American Society of Safety Engineers, Vol. 7, July 1962, pp. 25-26.
• 17. Blake, R.P., Industrial Safety, Prentice Hall, Englewood Cliffs, New Jersey, 1964.