Guidance on environmental KPIs
A key performance indicator (KPI) is a measure of how well an organisation is meeting key business objectives. Sounds pretty straight forward, but often they are not, and there are pitfalls.
The examples in this article are environmental (because that is where most of my experience lies), but the same considerations apply to workplace safety KPIs.
Let’s say we set a target of reducing waste to landfill by 10%. We then need to decide what can be measured to gauge the progress towards our 10% reduction. What reliable data is available to measure waste quantities? This can be a challenge because, at most sites, waste is not weighed and reports from waste transporters are usually estimates based on the volume of the bin, not the amount of waste contained in it. Full or empty, it is recorded at x kg.
Usage of consumables should be easier to measure, but there are complications here too. If your organisation is growing, efficiency savings may be cancelled out by increases in staff, plant or office space. This can be overcome simply by measuring resource usage against an appropriate unit of production. For example, water or electricity usage can be reported “per person” or “per 100 square metres of factory space” or “per 1,000 products sent to market”. Vehicle fuel use could be measured per $1,000 worth (or per tonne) of product delivered.
Question all measurement data and try to verify it is accurate
Are measurement devises calibrated? Is third party data (eg from the waste transporter) reliable? Are estimates reliable or are they somebody’s guesswork. Be wary because some data is inaccurate by its very nature, eg. number of near misses reported.
KPIs affect behaviour
Used well, they incentivise staff to improve. But this will happen only if individual staff members or teams believe they can make a difference to the result. Therefore, they should be localised. Instead of reporting results for the whole of your organisation , report for individual teams or sections or even departments. Of course, to be able to do this, you need segregation of measurement data. This may mean, for example, installing additional electricity or water metres so a section’s usage can be measured.
Finally, how many environmental/safety KPIs should you have? The experts say fewer rather than more, because having many measures can dilute their incentive value and therefore the improvement effort. There’s a heap more that could be said about this topic – another time, or in the forum.