Productive safety management reinforces the principle that employees are assets. The traditional approach to OHS management has portrayed them as a liability – the primary source of accidents in the workplace – and therefore, a cost. In addition, for accounting purposes, labor is recorded as an expense and technology as an asset. The channel suggests that the treatment of human resources as an asset is a necessary and important philosophical shift for firms intending to build sustainable businesses that are aligned internally and externally in the twenty-first century.
Figure 6.1 illustrates how the model and channel are integrated to reflect an economic and values-based definition of human resources. It shows that the system factors of the model are related to the capital resources in the channel. Processes provide the interface by which the physical environment, technology and human resources system factors interact, as shown by the arrows on the left-hand side of the figure. When system factors are maintained at optimal performance, safety and quality, the firm increases the value of its capital assets. This is not an increase in value in accounting terms but in practical terms that may be translated, for example, into extended physical capital life and reduced equipment downtime, as explained in Chapter 4. Financial capital is raised through increased efficiency, improved quality and reduction in rework and system failure costs. Optimization of human resources assets means that competencies are developed to a high level and this builds competitive advantage for the firm.
Figure 6.1 also shows that all capital factors are important to the firm.
Some companies rhetorically use the catch phrase, ‘Our people are our greatest asset’. In today’s competitive, high-tech world, employees know that this is actually only a half-truth because, with technological innovation,
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the firm has increasing opportunities to substitute machinery and labor.
In addition, business re-engineering that has resulted in downsizing and outsourcing has eroded the relationship between management and employees, sending a clear message to the workforce that firms no longer provide job security.
To illustrate this point, big businesses such as major oil and gas companies are exploring strategic alliances with suppliers of resources, including labor-hire companies, to gain a competitive and cost advantage.
This outsourcing is an attempt by the industry to dilute capital risks.4 Consequently, the labor market in this sector is becoming less permanent.
The shift is towards single source alliances where one firm services all the resource needs for an outsourcing firm in a particular service sector.4 In other words, the use of contracting companies in this industry is on the rise. The main benefits expected are cost savings and improved profitability, better safety performance, optimized service output and continuous improvement. Effectively, these firms are using their financial capital to source human capital rather than ‘owning’ it themselves. In the current climate, all assets are important for the company‘s success and the methods of obtaining them and substituting them allows firms greater flexibility than in the past.
As explained previously, the use of labor-hire companies and contractors does not reduce the company’s duty of care to these employees nor does it reduce the dependence of the firm on the competencies of these individuals to achieve its goals. Regardless of whether the business acquires its human resources from the labor market or through outsourcing, its legal responsibilities and its reliance on the workforce are the same. In
Figure 6.1 The link between system factors and capital resources Entropy Model
System factors
Maintained at optimal performance and
safety level
Strategic Alignment Channel Capital resources
Extended life of technology Reduced equipment downtime Increased efficiency Improved quality Reduced costs
Competencies which build competitive advantage Human capital
Financial capital Physical capital Physical environment
Technology
Process
Human resources
Human resources 153 either case, the quality of human resources is important in terms of both productive capacity and risk management.
These current trends in labor usage are changing the nature of the employment contract. At the same time, social values are eroding the effectiveness of traditional management styles. These styles were characterized by power aligned with authority, linked to responsibility and systems that would detect errors immediately and point out the
‘delinquent’.5 The holistic approach to safety management which has emerged in recent years and which is the basis of productive safety management is driven by this shift in values. ‘Blaming the worker’ has always created a quandary because managers and supervisors have known that the worker does not choose to be injured. Likewise, managers do not intentionally set out to harm employees. This philosophical transition has opened the door for a new approach to safety management underpinned by shared values. These values have become increasingly important in the ‘back to basics’ approach to organizational management:
Human behavior in the workplace is conditioned by a number of factors. It is not only governed by corporate imperatives, but is conditioned by the employee’s values. Thus success of the enterprise depends in large measure on the extent to which these two value systems – the corporate and the personal – are in harmony . . . In other words, to achieve a safe workplace, we need leadership that supports safety, health and environmental excellence as a reflection of values.6
Behind such statements is a fundamental belief that the application of values in the workplace leads to sustained, desirable behavioral change, which in turn generates positive outcomes for both the firm and its employees. In Part 3: Behavioral change, the process of identifying these values and developing common goals based on them, that underscore the OHS management system, will be discussed. In the meantime, the key point in relation to risk management is that, as a result of these values, the employee is no longer seen as the primary cause of workplace incidents. This allows a shift away from the person approach to a systems perspective. The onus is therefore now on management to develop work systems which minimize risk, facilitate employee participation, and encourage leadership and achievement at all organizational levels. The starting point for the development of such systems, as explained by the channel, is for management to understand its responsibilities in relation to legal compliance and social responsibility – to align the firm with the external regulatory and social framework. In addition, employees need to be acknowledged as company assets.
Legal provisions
Under ‘duty of care’ legislation, there are clear provisions related to the employer ’s responsibility to maintain human resources at a safe performance level. For instance, the Occupational Safety and Health Act 1984 (Western Australia) requires employers to:
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provide such information, instruction, and training to, and supervision of, his employees as is necessary to enable them to perform their work in such a manner that they are not exposed to hazards;7
In addition, the Act encourages consultation and co-operation with health and safety representatives and/or other employees regarding OHS in the workplace. While it is extremely important for employers to understand their responsibilities for the safety of employees, it is equally important that workers understand their legal duty. This legislation includes ‘duties of employees’ as follows:
20. (1) An employee shall take reasonable care –
(a) to ensure his own health and safety at work; and (b) to avoid adversely affecting the health or safety of any other person through any act or omission at work.
(2) Without limiting the generality of subsection (1), an employee contravenes that subsection if he –
(a) fails to comply, so far as he is reasonably able, with instructions given by his employer for his own health or safety or for the health or safety of other persons;
(b) fails to use such protective clothing and equipment as is provided, or provided for, by his employer as mentioned in section 19 (a) (d) in a manner in which he has been properly instructed to use it;
(c) misuses or damages any equipment provided in the interests of health, safety or welfare; or (d) fails to report forthwith to his employer –
(i) any situation at the workplace that he has reason to believe could constitute a hazard to any person and he can not himself correct; or (ii) any injury or harm to health of which he is aware that arises in the course of, or in connection with, his work.
(3) An employee shall co-operate with his employer in the carrying out by his employer of the obligations imposed on him under this Act.
(4) An employee who contravenes subsection (1) or (3) commits an offence.7
The duties of employers requires that employees ‘are not exposed to hazards’. The entropy model indicates that exposure to hazards is unavoidable due to residual risks and the tendency of systems to degrade.
The intent of the legislation therefore, is that employers do not expose employees to hazards unnecessarily, that such hazards are minimized to an ‘acceptable’ level of risk and that all practicable means are taken to prevent injury and damage.
The employer’s duty is also to ensure that employees understand their obligations. Most firms start this education process during the induction
Human resources 155 of new recruits. At this stage, workers are made aware of the relevant provisions of the legislation. This can be referred to as ‘know-what’ – knowing what is required in broad terms. Does this enable them to perform their work safely? Clearly the answer is ‘no.’ Being aware of the legislation and understanding how one’s own competencies and behavior affect compliance are two different levels of comprehension. Instruction in legislative requirements provides basic understanding of responsibilities.
It does not ensure that the employee shares the same understanding of
‘reasonable care’ as his supervisor, colleagues or government regulators.
In addition, the employee’s capacity to manage his behavior in a manner that prevents unnecessary exposure to hazards needs to be imparted through on-going training and education. It cannot be assumed that induction provides the worker with all the required knowledge and skills.
Induction is therefore only the beginning of safety awareness development.
Learning to work safely and the desire to work consciously requires the development of a sound understanding of the risks involved in the job. Employees need to be provided with the ‘know-how’ – the competencies – to do the job safely. In addition, for such learning to be permanent they also require ‘know-why’ – to appreciate the importance of this learning and behavioral modeling. As a result, employees should appreciate what risks are present in the workplace, the implications of these risks, be able to recognize changes in risk, and make conscientious choices to manage their responses to prevent injury. These choices include reporting changes and collaboratively modifying work practices to manage the risk. In some cases it will involve collectively deciding that the risk is too high and electing not to carry out the task until the risk has been reduced to an ‘acceptable’ level. The aim of knowledge-based training is therefore to attain an ability to assess risks objectively and to have a shared understanding of the nature and potential consequences of the risk.
Employees need to understand the risk factors associated with processes, technology and the physical environment to prevent incidents. They also need to appreciate the sources of entropic and residual risk associated with human resources – themselves. The reason for referring to workers as ‘human resources’ is to provide an arms-length objective term to shift the focus away from the individual and on to the system. The risks associated with this system factor are common to all employees and are generic. This provides a clearer understanding of ‘human error’ as a concept derived from the residual and entropic risks associated with this system factor, as explained in the following section.
Under productive safety management, employees are to be held responsible for their actions, however, it is the firm’s duty to equip them with the capacity to make sound judgements in the presence of risks.
Accountability for the quality of human resources, therefore, lies primarily with management who has control over strategy development, resource allocation and procedure implementation. It is management, for example, who determine recruitment, training, performance appraisal and supervisory practices, which in turn, affect the mix and level of competencies of the workforce.
An important caution should be asserted in relation to the shift from
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the worker perspective to the systems perspective. There is a danger that incident investigation may, having diverted away from ‘blame the worker’, migrate towards ‘blame the manager’. This would erode the intent of developing a systems perspective. The entropy model suggests that human fallibility is derived from the inability of individuals, and likewise management systems, to have an ideal set of competencies to anticipate and control all organizational risks. The purpose of incident investigation is thus to enhance continuously the quality of these systems and to shift the firm further along the organizational learning curve. In other words, the emphasis is on continuous improvement and this involves, in some cases, learning from mistakes. Human resources, like the other system factors discussed in earlier chapters, have both inherent weaknesses and the tendency towards entropy, and as a consequence all human systems including management systems will be subject to these natural pre-conditions.