Leading and Lagging Key Performance Indicators (KPI)
Not only is it important to select Key Performance Indicators (KPI) that are fit for purpose, easy to manage and sustainable but it’s also a good idea to have two-faced KPI.
Two faced KPI – What does that mean? That means they can be Leading or Lagging indicators.
Let’s start with some definitions…
Key Performance Indicators (KPI) are a type of performance measurement that help you understand how your organisation or department is performing.
Lagging indicators look back at historical performance and hence focus on outcomes. Lagging indicators are easy to measure.
Leading indicators are forward-looking and offer a glimpse into future performance. Leading indicators are more difficult, prone to subjectivity and error due to the quality of data.
When it comes to Health and Safety, companies are shifting their focus more towards Leading indicators for driving success.
Selecting indicators that drives success
Leading indicators drive continuous improvement because they measure performance, whilst lagging indicators measure failure. Of course, we can improve on performance by looking at what gives bad performance. However, that might take longer…
For indicators that drive success (and reasonably quickly), they should:
- Clearly, indicate small improvements in performance.
- Measure positive aspects (i.e., what people are doing versus failing to do).
- Facilitate feedback to all stakeholders (internal and external).
- Be reliable, credible and predictive.
- Focus dialogue and increase constructive problem solving around safety.
- Provide transparency on what needs to be done for improvements.
- Track impact versus intention.
Examples of Leading and Lagging Indicators for Health and Safety
Typical examples of indicators for Health and Safety include:
- Safety Training Hours
- Behaviour Based Audits / Assessments
- Safety Audits/ Inspections
- Toolbox Talks
- Near Misses
- Participation in Safety Committee Meetings
- Equipment/ Machinery Maintenance
- Hazard Identification & Risk Assessments
- Injury Frequency and Severity
- Lost Workdays
- Reportable injuries or incidents (i.e., regulatory)
- Employees compensation/insurance related costs
- Chemical releases
Leading and lagging indicators are the traditional focus of reporting and analytics initiatives. They ensure we are heading in the right direction. They have a very important role to play in every organisation.
To “really” improve Health and Safety performance within your organisation, use a combination of Leading and Lagging indicators.
Focus on what drives success. For example, don’t just track the number and attendance of safety meetings and training sessions – measure the impact of the safety meeting by determining the number of people who met the key learning objectives of the meeting/training.
Leading and lagging indicators work in harmony towards achieving goals and objectives.