Risk Vs. Reward
What is the difference between risk versus reward and reward versus risk? Traditionally, Safety Professionals determine if the risk presented by a hazard/activity is tolerable or intolerable and worth the reward. Workers, generally, think of the reward first then they may or may not consider the risk.
One way to understand risk versus reward is to look at the stock market and investments comparing the risks of a particular investment to the potential rewards associated with that investment. Risk versus reward is, generally, a ratio of the prospective reward an investor can earn for every dollar they risk on an investment. For example, an investment where an investor is willing to pay $1.00 for a stock (risk is losing the $1.00) for the prospect of earning $7.00 (reward). Adversely, an investment where an investor is willing to pay $3.00 (risk is losing $3.00) for a stock with the prospect of earning $1.00 (reward) on their investment so the risk is higher than the reward.
Traditionally, Safety Professionals determine if the risk presented by a hazard/activity is tolerable or intolerable. If the risk (probability and consequences (harm)) are too high, then the risk is regarded as intolerable and the activity is stopped or not started. On the other hand, if the risk (probability and consequences (harm)) is tolerable, then we look at the reward (benefits) associated with the activity/hazard. If the rewards are considered low, we stop or not start the activity or we try to find a less risky alternative. But if the risk is justified by reward (benefits), then we allow the activity/hazard to continue or be conducted.
Traditionally, workers think of the reward first then they may or may not consider the risk. If the reward is acceptable to the worker then they perform the task. Workers do not, generally, think about risk or risky behaviors.
Rewards to a worker include, yet are not limited to, getting job done sooner to go on break longer, not having to take the long walk back to the tool storage area, getting the job done faster so the Supervisor praises them in front of fellow workers, getting a promotion for being more efficient (faster), to satisfy the worker’s need to “do it my way” which is, in their mind, the better way, or financial benefit to the worker for getting the job done faster or ahead of schedule or producing more widgets.
Behaviors that are risky include, yet are not limited to, not identifying potential hazards to the task, not identifying the risk (probability and consequences) associated with the identified potential hazards, taking shortcuts or bypassing steps in the SOP, not getting or using the right tool, operating equipment outside of normal operation, not planning a non-routine task, becoming complacent in a routine task, reaching into a moving machine, or not using the correct PPE.
In an article by Dave Fennell of Dave Fennell Safety Inc. titled “Personal Risk and What Influences Our Safety Decisions”, he explains risk perception and risk tolerance. Risk perception is the processing of sensory information to determine exactly how and to what extent identified hazards could impact a person’s well-being. Risk tolerance is the cognitive process of deciding, based on the perceived risk, to proceed with the task or activity, to change how we do it, or to not do it at all.
Mr. Fennell continues to explain that “…risk perception deals with the ability of workers to understand how a hazard could result in an incident or harm. It is dependent on their background, knowledge and their ability to predict the consequences being exposed to the hazard…(workers)…may need additional assistance in this area through a review of incidents and safety alerts, which show how hazards have or could have resulted in an incident.” With risk tolerance, Mr. Fennell states that “…we…may have an acceptance of risk that is too high. Processes are needed to help workers with these risk-based decisions. Processes that are available usually rely on the trust that a worker will be able to determine the acceptable level of risk, based on the hazard-recognition training they have received. The solutions to risk tolerance can be found in the processes that help individuals and groups use their hazard-recognition skills to better understand risks. Therefore, they will be better able to make sound decisions on whether to accept the risk, change the approach, or reject the risks associated with the task or activity.”
This article has introduced some terms like risk versus reward, risk perception, and risk tolerance. In future blogs, I will review what we can do to reduce the risk while maintaining the reward, what in the management system rewards risky behaviors, and how we can change the management system to remove the rewards for risky behaviors and encourage safe behaviors.
For more information and/or assistance, contact:
Wayne Vanderhoof CSP, CIT
RJR Safety Inc.