Mistake 2: Assuming that lagging indicators show the total potential that exists organization wide

Potential Management

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Mistake 2: Assuming that lagging indicators show the total potential that exists organization  wide

Also problematic is the fact that some outcome metrics can be wholly misleading (e.g. severity rate). Severity rate is typically calculated by dividing the total number of lost or restricted workdays experienced by the total number of incidents experienced. If a leader doesn‘t understand the variables within the calculation and the issues that come with them, unwarranted beliefs about the rate‘s meaning can arise. In this instance, the following three questions must be answered when considering severity rate:
How are fatalities factored into the rate? In some systems fatalities are excluded from the severity rate altogether. In other systems fatalities trigger a one-time charge of a fixed number of hours.
How does an incident‘s timing affect the Severity Rate? In many systems, severity rate is a “rolling rate” where a lost time injury that occurs January 1st may have a certain span of days from the previous year included in its calculation. In other systems the severity rate “resets” annually, so this same January 1st injury would produce a completely different severity rate and thus a different picture of what is occurring in the organization.
How is the site‘s case management capability factored into the rate? Depending on the site‘s location (e.g. variability by state in the U.S.) and local bargaining agreements that are in place, there can be considerable variation in how the same injury is “managed” across different sites and organizations. For instance, some employees may be required to return to work on restricted duty whereas others may not be allowed to return to work until they are capable of fulfilling all their job duties. This is important as restricted time does not factor into most severity rate calculations.