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Near-Miss Incident Reporting Drives The “Safety Ratio”

What is a Safety Ratio?

Here are several definitions that my search on Google uncovered.

#1 – Society of Manufacturing Engineers:

Safety Ratio: A figure that establishes the relationship between the burst pressure and working pressure. A component with a safety ratio of 4-to-1 will likely fail if the operating pressure reaches a level 4 times the normal level.

#2 – General Accepted Accounting Principles (GAAP)

Margin of Safety Ratio (MOSR): The excess of budgeted or actual sales over the break even volume of sales. It stats the amount by which
sales can drop before losses begin to be incurred. The higher the margin of safety is, the lower the risk of not breaking even will be.

Margin of safety as a percentage of sales:

12,500 / 100,000

= 12.5%

It means that at the current level of sales and with the company’s current prices and cost structure, a reduction in sales of $12,500, or 12.5%, would result in just breaking even. In a single product firm, the margin of safety can also be expressed in terms of the number of units sold by dividing the margin of safety in dollars by the selling price per unit. In this case, the margin of safety is 50 units ($12,500 ÷ $ 250 units = 50 units).

#3 – Wikipedia: Risk of Investment Loss When Selecting One Portfolio over Another

Safety-first Ratio: It is the comparison of portfolio returns over time based on the (Expected ROI – Actual ROI) / the Standard Deviation over time.

There are many other “safety ratios” to be found,including one that applies to drugs and vaccines, one for the number of nurses needed for a number of patient, another for implantable medical devices, and still another that applies to the number of safety professionals needed based on the number of workers. WOW!

However, none of the definitions that I found had anything to do with work place safety.

What’s the Point?

First, that the terms “safety” and “safety ratio” have many definitions. Second, I heard about a company using a safety ratio to measure it’s safety performance, so I decided to Google it to find out more. What I found was nothing!!!

A “Real World” Situation

In talking with a safety professional working for an insurance company, she shared that one of her clients is trying something that is unique.

The client operates a pork processing plant. Management genuinely cares about workplace safety and demonstrates their leadership. The associates speak many languages and are from various world cultures. The company uses “coaches” who speak native languages to train new people and to communicate regularly about safety. There is a active safety committee. They have a good system for communicating the need for and importance of early reporting of injuries like strains or small lacerations. They even have a good return-to-work program. And to top it off, they just won the Governor’s Safety Award for top safety performance in the state.

However, they recognized that they needed to change something; their safety awards system. You see, it rewarded based on not having a visit to the doctor for an injury. Even though they stress the importance of early injury reporting, because of the multi-cultural environment and probable fear of individual attention the company recognizes that some physical problems – injuries – go unreported.

A “Safety Ratio” We Can Use

The company safety director had recently attended a seminar that discussed the effective use of Near-Miss Reporting. Though they have good communication and safety record, the safety director felt they could do better. If employees would begin to report unsafe situation/conditions/and near-miss incidents and see improvements from this reporting, that trust could be built and some fear dissipated.

Here’s where the “Safety Ratio” comes into play. They are starting to keep track of leading indicators, including: Near-Miss reports filed and closed, training attendance, safety committee participation, inspections completed, etc. Each item receives a point and becomes the numerator in the equation. Then, to dissuade under reporting of injuries, 10 points are subtracted each late report. They then use the number of lost time injuries as the denominator to get the safety ratio – SR.

Safety Activities – (10 x Late Injury Reports) ÷ Lost-Time
Injuries = SR

The new safety awards program pays off when the safety ratio number grows, weekly/monthly/and annually. This is a real Win-Win for everyone.

The employees are going to love the Near-Miss Reporting program.  Not only will they see their increased involvement pay off in better working conditions and work practices, but the numerator will grow and so will the Safety Ratio! They will be personally rewarded for their active participation in the safety program.

Obviously, the company wins as well. This is a good example of an organization that could have stayed as it was, but decided to continue to improve. They also recognized that they were rewarding for the wrong reasons and found a creative alternative that will drive even more improvements.  Imagine how they will feel when the find out the real power of Near-Miss Reporting!

4 thoughts on “Near-Miss Incident Reporting Drives The “Safety Ratio”

  1. David Marquette

    Hi Rick – I’m really enjoying these blog posts. Relevant and thought-provoking, each and every one. I especially appreciate your ongoing commentary on “training” – which I think is an often overused solution in many settings. The fact that you, a training guy of the first magnitude, would question training’s value in some situations, is very refreshing! You’re doing our profession a great service and I urge you to keep it up.

    A comment or two on “near-miss” reporting if I might. First, they’re really not near misses, are they? I nearly missed the tree by the side of the road, but damnit, now I need a new bumper…. A near miss, by definition, is a hit! It’s kind of like the word accident – an unplanned, unwanted, unexpected event that causes injury or damage. We use the word every day without really thinking about its definition. Yet, most thorough “accident” investigations reveal that the incident was clearly forsseable, predictable, and programmed to occur by identifiable elements in the work system. Hardly fortuitous! I would suggest we replace accident with incident – in my mind, a more accurate term not encumbered with definitional baggage. Nomenclature specificity is one element of any profession. As safety pros, we need to be better and more consistent at this stuff.

    Second, I’ve pondered the relationship of near-miss reporting and behavior-based safety initiatives. Does every at-risk behavior represent a near-miss? Should we count and measure these things? Are they competitors or allies? Is every near-miss equal – does the slip from a ladder (no injury) equal the guard reach-around (no injury) for a power press? How do we, as professionals, react to each?

    I have worked with firms that use near-miss reporting metrics as leading indicators for their SMS. They expect the number of reported near-miss incidents to grow each month as evidence that the organization is more adept at hazard identification and risk assessment. Conceptually, I like this approach, but still wonder if it has merits over the long-term (many years…) Assuming that near-misses receive as much corrective action attention as actual incidents, when do you reach the point where you’ve fixed the underlying problems that led to near-misses in the first place? Wouldn’t the monthly number then start to decline?

    More questions than answers – that’s my life after 35 years in the safety biz. As Warren Buffet, the CEO of Berkshire Hathaway, and so-called Oracle of Omaha, said in his annual shareholder letter this year, and I am paraphrasing, “I thought I would have arrived at this point older and wiser. Turns out I’m just older….”


    1. Rick Post author

      Oh but Dave, you are wiser! Thanks for the comments and perspective, and I am encouraged that you enjoying my blog posts. So far, I’m finding it enjoyable.

      As you noted, I’m trying to shake the tree a bit when it comes to safety training. With Near-Miss reporting, my focus is on the underlying learning that can occur when an organization encourages employees (without penalty and maybe reward) to openly participate. My mom used to say, “many hands make light work.” I think that means that when everybody pitches in, the work goes faster. It’s sort of like that with NM systems that work well. The best ones I’ve seen really tie together with 6 Sigma and Lean, in that they look at overall productivity not just injury/environment/property loss potential. Ideally, everyone becomes involved and the effort results in real change.

      As you pointed out, at the end of the day there are more questions than answers. With NM reporting the potential for creating a more “just” organization that is willing to learn from its mistakes and short-comings, rather than point fingers and place blame or duck their heads and hide, should lead to greater overall business success. Wouldn’t it be great if we had real good, hard data to back all this up! Thank again!

  2. Paul Farrell

    Driver Safety Hotlines provide a reporting tool to management about egregious behavior that if left unaddressed, would likely lead to a crash.

    The hotline reports can be abused — to ruin trust and intimidate drivers, but progressive safety teams use the reports to discuss, coach and train for the employee’s benefit (to help them avoid getting tickets, fines, increased personal insurance rates, and most of all to avoid injury or death).

    Statistics? We have a dozen insurers who’ve conducted their own studies, and about the same number of private companies who have statistically relevant fleets (1000 or more power units) who’ve also done their own studies. Does getting a glimpse of who is taking risks before they end up on a “first notice of loss” form work when it’s used as a near-miss conversation (not confrontation)? You betcha! Most studies showed a 20-30% reduction in claim count and a stronger reduction in costs.

    Additionally, if you consider work done at American Transportation Research Institute (ATRI) in “risk profiling” for drivers (looking at past tickets and crashes), they confirm “past behavior” indicated a continued pattern of behavior that increased the likelihood of a future event. That’s good, but it requires hard-bought events (tickets and crashes) to make the predictor model run. The hotline jumps further forward in the process to actually report behaviors before they result in a negative outcome for the driver.

    I know many safety people who dismiss driver safety hotlines without ever having used them for coaching and driver-positive training, but its hard to blame a baseball bat for being ineffective when the worker tries to use it to hammer nails instead of it’s designed purpose. All I’m saying is that any system can be applied poorly or well — it’s not the systems’ fault if the team applies it to punish instead of assist.

    Unfortunately, it’s kind of hard to get in-plant employees to wear a t-shirt that says “safety is my goal, call this number to report near misses!” (;->)

  3. Rick Post author

    Thanks Paul. I appreciate your insight and experience on fleet near-miss reporting. I like your comment about the progressive use of safety teams to discuss, coach and train. Peer influence in a psoitive setting can really go a long way toward correcting behavior. I love the t-shirt idea!


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