Benchmarking: "I'll show you mine if you show me yours"

Chris Dyer looks at the HSE's new guide to benchmarking, supporting the total quality management approach set out in HSG65.

"Where are we now?"; "Where do we want to be?"; and "How do we get there?"1 are the three questions any organisation planning to change its health and safety management system needs to answer.

To get meaningful answers, the organisation needs competent people - they will need to have appropriate training and experience - to carry out analysis and make judgments. It needs accurate information about the existing situation from inspections and audits. But an organisation needs a third element at the start of the process - standards and benchmarks against which it can make comparisons.

The obvious comparators are standards established by legislation; and in this sense the idea of benchmarking has been around for a long time. From 1880, health and safety legislation in the UK developed in response to what were deemed unacceptable workplace conditions, with its scope continually extended as safeguards were introduced to protect against new hazards.

By the 1960s, a comprehensive legislative framework existed, mainly concerned with "hardware" requirements, ie the physical condition of plant, equipment and premises. Compliance with the standard could be assessed - by either the inspectorate policing the legislation or the organisation itself - through inspection. This would identify the conditions in the workplace so that action could be taken to maintain acceptable standards or bring them up to those required by the legislation.

Despite the legislation, in the 1960s the battle to reduce accidents at work was being lost. In 1969, the total number of serious injuries in workplaces reported under the Factories Act was 50% higher than in 1963, while the annual number of fatal accidents increased from 610 to 649,2 the figures suggesting that comparison with prescriptive standards alone was not enough to successfully manage health and safety.

In 1972, a Royal Commission, chaired by Lord Robens, set up to inquire into the improvement of workplace health and safety, concluded: "It is unnecessary to dwell on what the bare statistics mean in terms of human tragedy and suffering; nor on the economic cost to the nation in terms of lost production and diverted resources: the rough figures, however imperfect, speak for themselves. For both humanitarian and economic reasons, no society can accept with complacency that such levels of death, injury, disease and waste must be regarded as the inevitable price of meeting its needs for goods and services."

The Robens Report recommended: ". . . a comprehensive and orderly set of revised provisions under a new enabling Act. The new Act should contain a clear statement of the basic principles of safety responsibility."3 This led to the enactment of the HSW Act and a change in approach from an emphasis on health and safety hardware to the managerial control - the software aspects of risk control systems. The HSW Act is centred on items such as:

  • the provision of information and instruction;

  • the provision of training and supervision;

  • the preparation and revision of safety policies;

  • the need for effective cooperation between employers and employees; and

  • the provision of safe systems of work.

    The first, and arguably the most important, duty imposed on employers by the HSW Act is "to ensure, so far as is reasonably practicable, the health, safety and welfare at work of all his employees" (s.2(1)). There is no attempt to itemise how an employer should do this (although later parts of the Act are more specific, albeit without prejudice to the generality of s.2(1)). The effect of s.2(1) is to require employers to review completely all of their operations to ensure that in every aspect they are as safe as is reasonably practicable. This is very different to the situation with the earlier legislation.

    The requirement for employers to have comprehensive risk-management systems is spelt out in the Regulations made under the HSW Act, particularly the Management of Health and Safety at Work Regulations 1992. Under these Regulations an employer has a duty to assess the risks that its employees and others are exposed to arising out of its business activities and to make appropriate and proportionate arrangements for the planning, organisation, control, monitoring and review of preventive and protective measures - which leaves much scope for interpretation.

    Where do you want to be?

    In deciding "where it wants to be" an organisation may conclude that the minimum acceptable standard is compliance with the legislation, in which case it can compare the results of its baseline measurements with statutes and Regulations, and codes of practice and guidance produced by the enforcing authorities. But reaching a decision as to whether or not the existing arrangements in a particular organisation meet these standards is not always straightforward.

    In other cases, organisations may be confident that they comply with the law but may wish to improve their performance or to see how it compares with that of other organisations. In all these situations benchmarking can inform the planning process not only in terms of "Where do we want to be?" but also "How do we get there?"

    Although benchmarking initially meant comparison with a standard the term has now come to mean a specific business improvement tool that can be applied to any area of an organisation's work, including health and safety management: the European Foundation for Quality Management defines benchmarking as "the activity of comparing a particular process or result in one organisation with the equivalent in other organisations with the purpose of improvement".4

    Benchmarking is also a characteristic of organisations that are adopting strategies to achieve "business excellence" and "world-class performance" through using total quality management (TQM) to support an integrated approach to business management. The 1991 edition of the HSE's Successful health and safety management (HSG65) stated that: "Much of the guidance involves the application of the principles of total quality management to health and safety." Since its publication, the HSE has found little evidence to suggest that the application of the core principles of TQM have been applied to the management of health and safety on any significant scale.

    HSE steps in

    In 1995, the HSE commissioned research5 to show how the principles of TQM could be applied to health and safety management. Traditionally this has related to the management of activities to control the risk of harm to employees in the workplace, although HSG65 encourages a much wider and holistic perspective with the aim of satisfying the expectations of shareholders, employees, customers and society at large.

    The research looked at companies known to be using TQM in the management of their core business. It found that the integration of health and safety into core business management was not high and that health and safety was not as far along the road to quality as other facets of the business. Nor was benchmarking used to the extent that it was in other areas of the business.

    To encourage organisations to make greater use of benchmarking the HSE has produced new guidance,6 which outlines a basic approach to applying benchmarking in health and safety. The benchmarking guidance suggests an organisation's first step is to decide what to benchmark. Although this could be any area of health and safety where the organisation is particularly interested in its performance, it is important to establish priorities. The HSE suggests potential areas for investigation could include:

  • high hazards and risks identified through risk assessment;

  • accident and ill-health patterns in the organisation or industry sector; and

  • topics suggested by safety representatives, supervisors and trade associations.

    Both processes (how you do things) and performance (the results of what you do) can be benchmarked, but the HSE warns that care is needed with some performance data, particularly accident statistics: organisations measure accident frequencies in different ways, and statistics are a form of reactive monitoring and may not be good indicators of performance.

    The HSE says that process benchmarking "allows real improvement to be made as you examine what goes on and how it could be done better. Processes may be at a workplace (eg how you control a particular hazard) or management level (eg how you investigate incidents, carry out risk assessments)." But it also warns that benchmarking may not be the best way forward and that analysing processes in preparation for benchmarking may show that there is another solution to the problem.

    The HSE's benchmarking method suggests that partners can be found within the same organisation, if it is large enough (internal benchmarking). But smaller organisations will probably need to look outside if they are to have a sufficient range of potential partners to choose from (external benchmarking).

    Organisations can find benchmarking partners through;

  • a direct approach or personal contact with a neighbouring firm;

  • trade and local business organisations;

  • contractors and suppliers; and

  • health and safety organisation and unions.

    Off-the-shelf packages

    "Off-the-shelf" benchmarking packages are available from the Safety, Health and Environment Intra Industry Benchmarking Association (SHEiiBA, see box ) and from the Confederation of British Industry (CBI, see box). It is possible to work with more than one partner simultaneously and both of these systems benchmark performance against all the other organisations in the scheme.

    Organisations selected as partners should be leaders in the area chosen for benchmarking, but should not be so far ahead that working with them is unrealistic. If an organisation is benchmarking a workplace precaution, such as safeguarding a machine, the HSE suggests it looks for partners with similar processes in similar industries. Benchmarking a management process, such as carrying out risk assessments, allows a wider choice of potential partners as the processes are common across industries.

    The HSE says that when choosing a benchmarking partner other issues are what the partner will gain - the process should provide mutual benefits, and the ethics of the process. The Benchmarking Code of Conduct7 sets out the principles of efficient, effective and ethical benchmarking and may be particularly important if organisations working with a competitor wish to avoid breaches of competition law. Trade associations can help when working with competitors by acting as an intermediary to handle sensitive information.

    Although benchmarking information can be shared over the telephone, the HSE recommends that partners meet so that information is gained at first hand. It also recommends that managers and safety representatives are involved in visits as they will be instrumental in implementing any improvements identified. The Benchmarking Code of Conduct sets out a protocol for working with benchmarking partners (see box).

    At the point when partners exchange information, such as statistics, it must be comparable, and organisations need to be clear that they understand what their partners do, how they do it and why it is better. The final stage in the process is to draw up a plan based on the findings of benchmarking.

    The plan should have objectives that are specific, measurable, agreed with those who deliver them, realistic, trackable, and set against a suitable timescale. Progress needs to be regularly reviewed; if problems are encountered, partners may be able to offer help in overcoming them. As objectives are achieved, benchmarks can be reset - the process should be one of continual improvement.

    Avoiding reinventing the wheel

    Many organisations regret the more sophisticated approach to health and safety management now needed to comply with legislation and hark back to the days of simpler - more prescriptive - standards. Last year, Frank Davies, then chair of the HSC, told an audience that the message he received from small firms was "tell us what to do and we will do it",8 but the reality is that successful health and safety management can be driven only from inside organisations.

    Although the hardware measures required by the earlier prescriptive legislation are still relevant, the systems needed to ensure compliance with more recent legislation, with its much greater emphasis on management systems, have to be more sophisticated. By using benchmarking, organisations have a means of comparing their health and safety performance and can avoid reinventing the wheel in their efforts to improve their health and safety management systems. Even so, it will not be right for every organisation and all situations. In organisations that are pursuing the goal of business excellence through TQM, compliance with legislation is a secondary to achieving world-class performance.

    The benchmarking process

     

    Inputs

    Process

    Where are we now?

    Where do we want to be?

    How do we get there?

    Outputs

    Comparable information on current status of process or performance measure prioritised for benchmarking.

    Suitable internal or external benchmarks.

    Commitment from competent people, both senior management and employees.

    A willingness to adopt an open and participative approach and to share information with others.

    Comparison with benchmark to identify own strengths and weaknesses, including:

  • the adequacy of systems in area being scrutinised (Are we doing the right things?);

  • the functioning of systems (Are we doing things right?); and

  • is this giving cost-effective, proportionate prevention an the workplace?

    Analysis of the "gap" leads to:

  • devising new health and safety management system components; or

  • improving existing components.

    Plans based on the findings of benchmarking must fit with the culture of the user organisation, the objective is to learn, not to copy.

  • Health and safety plans and objectives for developing, maintaining and improving the health and safety management system.

    Specifications for new or improved management arrangements, risk control systems and workplace precautions.

    Performance standards for those implementing the health and safety management system.

    BENCHMARKING PROTOCOL

    Benchmarkers should:

  • know, and abide by, the European Benchmarking Code of Conduct; and

  • have a basic knowledge of benchmarking and follow a benchmarking process.

    Before initiating contact with a potential benchmarking partner benchmarkers should:

  • determine what to benchmark;

  • identify key performance variables to study;

  • recognise superior performing organisations; and

  • complete a rigorous internal analysis of the process to be benchmarked.

    Benchmarkers should also:

  • prepare a questionnaire and interview guide, and share these in advance, if requested;

  • possess the authority, and be willing, to share information with benchmarking partners; and

  • work through a specified contact and mutually agreed arrangements.

    When the benchmarking process proceeds to a face-to-face site visit, the following behaviours are encouraged:

  • provide a meeting agenda in advance;

  • be professional, honest, courteous and prompt;

  • introduce all attendees and explain why they are present;

  • adhere to the agenda;

  • use language that is universal, do not use jargon;

  • be sure that neither party is sharing proprietary or confidential information, unless prior approval has been obtained by both parties from the proper authority;

  • share information about your own process and, if asked, consider sharing study results;

  • offer to facilitate a future reciprocal visit;

  • conclude meetings and visits on schedule; and

  • thank your benchmarking partner for sharing their process.

    Source: Benchmarking code of conduct, Performance Improvement Group.

    SHEiiBA

    The scheme is operated through Edinburgh-based Corporate Benchmarking Services.9 It allows members to benchmark: management processes; accident and injury performance; health, safety and environment personnel resources; and environmental practices and performance against organisations in a range of industry sectors.

    To facilitate the process of gathering, processing and disseminating the information, the scheme has its own software program, which allows participants to complete a questionnaire on screen with either numerical or text answers. Once participants have submitted their data they receive a read-only version of the entire database, which they can browse by single company, by question or by a filtered subset of companies that correspond to user-defined criteria, such as industry sector or geography of operations. Existing members are sent six-monthly updates containing new members' responses.

    The first SHEiiBA self-assessment questionnaire was sent out to around 100 members in January 1997. An updated questionnaire was launched in March 1999 and this will be replaced in late 2000 as the database is developed.

    The subject areas covered in the current questionnaire are:

  • company and background information;

  • locations, processes, size, injury data, and health, safety and environment organisation;

  • structure, responsibilities, behaviour and future challenges;

  • safety, health and environment management policy;

  • driver training and the management of public road risk; and

  • environmental performance and challenges.

    The current data cover conventional accident statistics and include an anonymous league table of 1998 injury incident rates. But SHEiiBA says the main strength of the questionnaire lies in its focus on open questions that generate a knowledge-base of ideas and methods used in health, safety and environment management and allow participants to make detailed comparisons with their own systems.

    To be eligible to join SHEiiBA, organisations must have either more than 1,000 employees and/or "significant hazards" or environmental risks. There are no international barriers to membership.

    To join SHEiiBA costs £750 plus VAT, and there is an annual subscription of £750 plus VAT.

    CONTOUR

    The CBI says that CONTOUR10 is a dynamic management tool that allows a company to measure its health, safety and environment performance against its competitors. It highlights opportunities for improvement as well as establishing current best practices, and is based on research by a CBI cross-sector working group that has developed a model of important health, safety and environment practice and performance indicators. The pilot phase was successfully completed in 1996 and launched as a service to CBI members in 1997.

    A cross-functional and multi-level team from the participating company completes a 75-question self-assessment questionnaire covering environment, health and safety management practices and quantifiable performance results. An independent facilitator visits the company for a day to help the team finalise its performance score. This external view ensures a consistency of approach across the database.

    Once the scores are agreed, the facilitator enters them into a bespoke software package and presents the results and observations to the team. This analysis shows the company's overall results as a practice and performance score against the CONTOUR model, and allows comparison of all the criteria within the model against peers. The results also include a ranking of the site's or unit's strengths and opportunities for improvement. The system does not facilitate contact with other benchmarkers. although this is being developed. The CBI has acted as an intermediary on an ad hoc basis. Within two weeks of the facilitator's visit, the company receives a written report highlighting and summarising the main results and findings. All data gathered is confidential.

    The questionnaire covers:

  • management systems in place to manage health, safety and environmental impacts;

  • establishing how the organisation promotes and protects the health and safety of its workforce;

  • examining how the organisation manages the environmental impact of its operations;

  • establishing how the organisation approaches the health, safety and environmental impacts of its product, including raw materials, suppliers, design, manufacture, transport, use and final disposal;

  • investigating how the organisation manages the direct and indirect health, safety and environmental effects of its transport logistics (including employee commuting);

  • analysing the extent to which the organisation understands how its operations fit into a broader picture. For example, how the business works with suppliers, insurers and the public to improve health, safety and environmental awareness and performance; and

  • measuring the organisation's vision, commitment and communications on environment, health and safety, and how far health, safety and environmental considerations are integrated into the business strategy and planning processes.

    The CONTOUR database includes around 165 companies - many from the FTSE 100 as well as small companies. The cost of CONTOUR to CBI members is £1,200 plus VAT and the facilitator's reasonable travelling expenses.

    1"Successful health and safety management (HSG 65)", HSE Books, ISBN 0 7176 1276 7.

    2"The worker and the law", Wedderburn, Pelican, ISBN 0 14 022659 1.

    3Ibid. p.188.

    4"Determining excellence: a questionnaire approach", British Quality Foundation, 32-34, Great Peter Street, London SW1P 2QX, tel: 020 7654 5000, fax: 020 7654 5001, ISBN 90 5236 098 7.

    5"Total quality management and the management of health and safety", HSE Books, ISBN 0 7176 1455 7.

    6"Health and safety benchmarking: improving together (INDG 301)", HSE Books (see p.6).

    7"Benchmarking code of conduct", Performance Improvement Group, Old Vicarage, Main Street, Offenham, Evesham, Worcestershire WR11 5RL, tel/fax: 01386 40705.

    8"Good Neighbour Forum", Gosforth Park, Newcastle upon Tyne, 22.10.98.

    9SHEiiBA, 2 Commercial Street, Edinburgh EH6 6JA, tel: 0131 555 4390, fax: 0131 477 7027.

    10EHS Group, CBI, Centrepoint, 103 New Oxford Street, London WC1A 1DU, tel: 020 7395 8190, fax: 020 7497 2597.