10 Key Factors in Risk Tolerance

Pangea is fully committed to providing a safe workplace for employees and instilling a safety culture that goes beyond general compliance standards. As our path towards Project Management is being solidified, we need to embrace the belief that our employee’s safety is more important than the job itself.

The concept of “safety culture” in the workplace has evolved significantly over the past 50 years, while there is always room for growth, the industry has reached a point in which even the smallest “near-miss” is considered a key indicator in determining preventative actions and protocols to avoid injury. Thus, several programs have been initiated across the industry to significantly reduce the number of onsite injuries (i.e. Observation and Intervention, Mining the Diamond, etc.).

Organizations have repeatedly demonstrated that instilling a culture that goes beyond compliance obtaining an honest commitment from the employees, further reduces probability of onsite injury. At this point, people understand they are responsible for their own safety and that of their peers because it is “the right thing to do” instead of just complying due to fear of reprimand.

In trying to understand why incidents occur, pioneers in the safety field have delved further uncovering that the psychological frame of reference of each individual is key in determining the likelihood of an individual getting hurt. Consequently, the term “Risk Tolerance” was introduced a few years ago as a way to evaluate factors that influence a decision to either accept or reduce risk. How these factors are perceived and weighed in the mind of the worker and the work group affects safety behavior.

Key individuals in major Oil & Gas operators who are leading the proliferation of the concept and has said that the brain’s risk assessment process works in three ways; Exposure (hazard recognition), Perception (knowing what impact a risk might have) and Decision (accepting, mitigating or rejection the risk).

Insights on Risk Tolerance

  • People across diverse cultures with various work backgrounds and with different personal experiences demonstrate variability in how much risk they are prepared to accept (on and off the job).
  • Safe and at-risk behaviors are the result of a multistage process that includes:
  • Hazard Recognition
  • Risk Perception
  • Risk Tolerance
  • A simple model that shows the relationship between hazard recognition, risk perception and risk tolerance is needed to reduce the personal and group acceptance of risk.
  • While existing SSH&E systems focus primarily on hazard recognition, more direct focus on risk perception and tolerance is needed to enhance the effectiveness

Key Risk Tolerance Concepts

  • What is a Hazard?
  • A condition or situation that could create an incident
  • What is Perception?
  • Process to add meaning to received information • Influenced by our knowledge and experience
  • What is Risk Perception?
  • Subjective judgment we make about the characteristics and severity of risk, specifically What could go wrong?
  • How bad could it be?
  • What is Risk Tolerance?
  • The amount of risk that an individual or group is willing to accept in the pursuit of some goal.

It is important to note that human behavior is determined more by perceived rather than by actual risk.

There are 10 Key Influencing Factors in Risk Tolerance

  1. Overestimating Capability or Experience
  2. Familiarity with the Task – especially among senior workers. “I have been doing this for 20 years…”
  3. Seriousness of Outcome – something that can be diminished by the terminology used. For example, the oil and gas industry term “sweet gas,” which refers to the dangerous hydrogen sulfide and the phrase, “pinch point,” which actually could be designating an amputation hazard.
  4. Voluntary Actions and Being in Control – comes into play a great deal outside of work. A survey of Caterpillar’s industrial employees found that 90 percent of their injuries occurred off the job (although those injuries often affected the worker’s ability to do the job).
  5. Personal Experience with an Outcome – As organizations get safer and safer, you’re going to get fewer and fewer people who’ve had a personal experience with a serious outcome. The new people won’t understand it. They don’t remember it because they have never experienced it. Hence, senior workers can be helpful in communicating about serious incidents to newer workers.
  6. Cost of Compliance/Non-Compliance – “How is this going to affect me?”
  7. Confidence in the Equipment – It can actually be overconfidence
  8. Confidence in Protection and Rescue – Some oil and gas companies found that after they handed out the Nomex (FRC) apparel, which doesn’t burn – the incidence of burn injuries increased, because what’s underneath the suit burns. Impact resistant gloves and gas detectors that can only detect certain gases may also lead to an overly optimistic reliance on them
  9. Potential Profit or Gain from Actions – “When we can gain, we accept more risk”. For example, longer working hours that yield bigger paychecks but can cause fatigue-related risks. He encouraged safety professionals to go back to their workplaces and evaluate practices that may be creating incentives to accept more risk.
  10. Role Models Accepting Risk – Because of personality or experience, leaders in a group or organization can have a powerful effect on those around them.

By implementing these key factors into our Safety Programs, we will better understand and influence risk tolerance in the workplace. Generally, we may have an acceptance of risk that is too high, but clear guidelines and procedures along with an established safety culture are needed to help workers with these risk-based decisions. Therefore, the employee will be better positioned to make sound decisions on whether the risk is low enough to be acceptable/ manageable, change in approach is necessary, are steps needed to mitigate the risk, or simply refuse to perform the task if conditions are unsafe until resolved.

We encourage you to visit our website www.pangeasite.com to learn more about Pangea’s commitment to safety.

Leave a Reply

Your email address will not be published. Required fields are marked *