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Financial Assessment of Health and Safety Programs in the Workplace

Paez, Omar
http://rave.ohiolink.edu/etdc/view?acc_num=ucin1383909213

Abstract Details

2013, PhD, University of Cincinnati, Engineering and Applied Science: Industrial Engineering.
Health and safety are gaining increasing interest across industries, but the business case for workplace health is not necessarily solid, as most operations models focus largely on compliance and risk mitigation. Managers realize that organizational health goes beyond health costs because employees are the primary drivers in achieving the business's desired performance. A more balanced approach should account for both contributions of a healthy workforce and the resources required to support it. This research introduces a financial model to quantify the effect of improvements on health and safety in the workplace, by (1) establishing a numerical relationship between improvements in the work environment and performance outcomes and (2) linking multiple operational outcomes into a common financial indicator. While different methods have been proposed to assess the implementation of health and safety programs, the challenge for any financial approach is the aggregation of the different performance outcomes linked to health and safety improvement. The Economic Assessment of the Work Environment (EAWE) builds upon prior work regarding health assessment in the workplace to forecast the financial benefits of health and safety implementations. The model can be applied by any organizational unit following a five-step process, beginning with a health assessment of the workplace to identify critical elements in the work environment. Based on the health assessment, an action plan is developed to address those gaps in the work environment. Next, performance targets are defined based on a set of internal goals and external benchmarks. The economic model transforms the expected improvements in the health and safety status into expected performance outcomes. The net cash-flow effect on the firm is the result of the combined costs and benefits associated with the implementation plan. The implementation plan should be applied in stages, starting from individual jobs and proceeding towards department and organizational practices. The proposed model was tested in a packaging firm in the Midwest that intended to start a health and safety assessment program. Based on the health assessment, an action plan was developed by management to address gaps in the specific tasks, as well as the overall work environment. The net results from those initiatives delivered $1.62 million in savings, consistent with the estimates of the proposed model for Stage 1 ($764,501), which was focused on job improvement, and Stage 2 ($1.75 million), which was focused on department improvement, findings consistent with the estimates provided by the theoretical approach. The EAWE aggregates both health costs and performance improvement outcomes into a common cash-flow analysis. The proximity between the proposed financial estimate and the actual results in the firm is an indication that the proposed model can provide a range-of-magnitude estimate for the health and safety improvements. The model offers a dynamic framework for corporate decision makers when evaluating health and safety programs. Further research should explore the bounds of EAWE across different types of organizations and the evolution of performance over time.
Henry Spitz, Ph.D. (Committee Chair)
Amit Bhattacharya, Ph.D. (Committee Member)
Ernest Hall, Ph.D. (Committee Member)
Richard Leroy Shell, Ph.D. (Committee Member)
David Thompson, Ph.D. (Committee Member)
96 p.
Industrial Engineering
Financial Assessment; Health and Safety Programs; Performance Outcomes; Outcomes beyond health costs; Economic Impact of Health and Safety

Recommended Citations

Citations

  • Paez, O. (2013). Financial Assessment of Health and Safety Programs in the Workplace [Doctoral dissertation, University of Cincinnati]. OhioLINK Electronic Theses and Dissertations Center. http://rave.ohiolink.edu/etdc/view?acc_num=ucin1383909213

    APA Style (7th edition)

  • Paez, Omar. Financial Assessment of Health and Safety Programs in the Workplace. 2013. University of Cincinnati, Doctoral dissertation. OhioLINK Electronic Theses and Dissertations Center, http://rave.ohiolink.edu/etdc/view?acc_num=ucin1383909213.

    MLA Style (8th edition)

  • Paez, Omar. "Financial Assessment of Health and Safety Programs in the Workplace." Doctoral dissertation, University of Cincinnati, 2013. http://rave.ohiolink.edu/etdc/view?acc_num=ucin1383909213

    Chicago Manual of Style (17th edition)

ucin1383909213
457
© 2013, some rights reserved.Creative Commons License Financial Assessment of Health and Safety Programs in the Workplace by Omar Paez is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License. Based on a work at etd.ohiolink.edu.
This open access ETD is published by University of Cincinnati and OhioLINK.