On 7 August 2012, the Victorian Premier, Ted Baillieu, verbally attacked the Federal Government over its COAG program and lack of support for productivity initiatives. The criticism of productivity sounded odd as the Victorian Government has dropped out of the reform program for occupational health and safety laws yet OHS is understood to have a positive effect on productivity. More clarification was needed on this understanding.
In April 2012 the Productivity Commission, an organisation favoured by Premier Baillieu, discussed OHS reforms in Australia. that
“Improved health and safety outcomes achieved in practice would then lead to benefits for businesses (such as increased worker productivity, reduced worker replacement costs and reduced workers’ compensation costs), workers (increased participation, reduced medical costs among others) and society more generally (though reduced public expenses on health, welfare and legal systems).” (page 170)
For years there has been a debate about safety versus productivity. Partly this stemmed from the taking of shortcuts on safety in order to satisfy production. In the short-term, it was perceived that safety could be an impediment to production – take the guard of a machine, run the line speed faster than recommended, “don’t worry about the faceshield, just get it done”. But safety professionals have been arguing that this risky behaviour masks the real problem of not integrating safety management into the business operations and seeing safety as an optional add-on, or something applied when the boss is watching.
The recently released OHS Body of Knowledge provides some relevant insights on the productivity benefits of safety management that deserve better and broader communication.
Leo Ruschena of RMIT University writes about cultural change in Australian’s mining sector:
“in the late 1990s when another large mining organisation in the Pilbara tried to follow this example to improve productivity and sought to force its employees onto individual employment contracts, it caused tremendous resentment in the workforce, which soured relations between management and workers for many years. This subsequently resulted in OHS initiatives being adversely viewed by the workforce as merely management attempts to improve productivity, regardless of their OHS effectiveness (Ritter, 2004).” (page 14, emphasis added)
It can be argued that this level of worker suspicion is common and productivity initiatives are often perceived as “screwing the workers”.
Ruschena also states that:
“To achieve the best productivity and safety outcome, organizations need to optimize both technology and social sub-systems,” (page 15)
“Returning to the government’s desire to foster productivity and innovation in Australian workplaces (Boedker et al., 2011), there is evidence that an organisational culture focused on safety (Hopkins, 2005*; Zohar, 2010**) contributes to health and safety and organisational performance” (pages 11-12, link added)
“A large amount of research has applied social psychology principles to organisational behaviour, such as leadership dynamics, decision-making and productivity in the workplace. However, the application of these principles to OHS has been limited and needs further development.” (page 2)
The paper on Psychosocial Hazards: Bullying, Aggression and Violence by Kïrsten A Way repeatedly states negative impacts on productivity through workplace bullying, an important consideration for the current national inquiry into workplace bullying in Australia.
The international context and support for the Australian evidence is not difficult to locate.
In 2009 Petra Ulshoefer, Regional Director, Europe and Central Asia, International Labour Office (ILO), Geneva, Switzerland told the International ILO Safety Conference in Düsseldorf, Germany (Abstracts) that
“Having a job in good and healthy conditions increases the quality of working life and contributes to higher productivity.”
Sylvie Siffermann, Labour Director, Ministry of Labour, Département L‘Indre-et-Loire, Tours, France said that
“Health is a crucial aspect that feeds back into company employment and productivity.”
Maureen Shaw, International Advisor and formerly President and CEO of IAPA (Industrial Accident Prevention Association),Ontario, Canada said
“Productive people equal productive organizations. When an individual suffers whether it be physical or psychological injury or illness, then their productivity and quality and effectiveness suffers and as a result, by extrapolation the organization’s productivity, quality and effectiveness suffer.”
Wiking Husberg, International Labour Office (ILO), Subregional Office for Eastern Europe and Central Asia, Moscow, Russia said
“Employers’ Organisations have realized the direct link between safe work and productivity.”
A US research report from 2008 stated there was a notable correlation between OHS and productivity and called for further research to provide conclusive proof
“Following workplace safety initiatives, the studies revealed an average increase of 66% (2%104%) in productivity, 44% (4%73%) in quality, 82% (52%100%) in safety records, and 71% (38%100%) in cost benefits. In a few reported cases, it took only 8 months to obtain a payback in terms of monetary investment in the safety initiative. Although the studies did display a correlation between safety, productivity, and quality, there is insufficient evidence to categorically state that the improvements in productivity, quality, and cost efficiency were brought about by the introduction of an organization-wide safety culture.
Notwithstanding, there is demonstrable evidence to indicate that safety as a business objective can assist an organization in achieving the long-term benefit of operational sustainability, that is, achieve a long-term competitive advantage by balancing business costs against social costs.”
It would have been good if one of the safety associations had entered the COAG/productivity debate pointing out the lack of support from the Victorian Government for the productivity benefits that could be gained by the active implementation the OHS reforms through the harmonisation process. The trade union movement may have been better equipped to enter the fray but it rarely argues on productivity issues from the safety perspective. Perhaps this blog can make a difference.
* Hopkins, A. (2005). Safety, culture and risk: The organisational causes of disasters. Sydney, NSW: CCH Australia.
** Zohar, D. (2010). Thirty years of safety climate research: Reflections and future directions. Accident Analysis & Prevention, 42(5), 1517–1522.