International And National Regulation Bodies Construction Essay

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Injuries and fatality related to work happen all around the world, many rules and regulation by international and national regulation bodies were made to prevent of that however the rate of injuries is unacceptable. There are many different reasons that contribute on occurrence of accident but commitment of managers introduced as the basic and main items for implementation and maintenance of any management system.

According to the definition of management was given by Peter Drucker in his book "Management is a multi-purpose organ that manages business and manages managers and manages workers and work" (drucker, 1954, p. 135). Management is an individual or a group of individuals that accept responsibilities to run an organisation. They Plan, Organise, Direct and Control all the essential activities of the organisation. Management does not do the work themselves however they motivate others to do the work and co-ordinate (i.e. bring together) all the work for achieving the objectives of the organisation. Indicators would be one the main essential tools as we couldn't manage something if we can't measure. HSE same as other organizational function and component needs powerful indicator to be managed at organizational level.

Mortis Leonard in his research at 2009, had interview with workers in Belize to find out factors impact on unsafe work at construction environment. He declared 12 items that participate toward unsafe work environment such as: 1- poor HSE procedures and regulation on work environment, 2- Arbitrary obligation for wearing PPE, 3- No promotion or positive intention for managers for safe working, 4- weak penalties from managers when facing with unsafe behavior, 5- personal poor safety culture, 6- Abuse of tools and materials, 7- Cost saving by managers by cutting safety 8- poor safety practice in work environment and so many other items. He stated that all of these behaviors are because of poor HSE commitment of site management. Put safety out from first priority and lack of effective safety systems and heavy work pressure on workers are the evidences for poor commitment. He continued that government and non-government agencies are unable to ensure that proper safety practices are adhered to the execution practices. (Mortis, 2009) This behavior can be seen in many other countries and industries that describe latter.

Few important factors out of many factors that have significant impact to raise the injuries in work environment are: Fast track nature of the work, involving numerous trades at the same time, changing labors and workers, dynamic work environment and work procedures (Mortis, 2009) .

The author believed that current in place HSE indicators are not designed properly for managers in field to supervise its resources on safety practice. So this research is designed to find more practical tools out of many existing HSE indicators that help managers go on proper details.

Importance of SMEs

Noci asserted that many studies in HSE performance usually focus on large corporations and neglect the SME sector (Noci and Verganti, 1999). Eakins, 1992 demonstrated that small businesses are poorer than larger organization in implementing HSE programme. With the same objective, McVittie in his research, 1997, found that the rate of injury frequency vary in reverse with the size of firms; Smaller company have higher rate of injuries.

SMEs have a great contribution in social and economic situation and take majority of industrial contribution in countries however their poor performances on HSE have worse impact in society and environment totally. Different research asserted the significant environmental impact of SMEs than larger establishments on Environmental degradation as a whole. (Biondi et al., 2000; de Bruijn and Lulofs, 2000; Friedman et al., 2000; Kassinis, 2000, (Laurinkevic, 2011)). Hillary (2000) declared that environmental impact of SMEs group may in fact outweighed that of their larger found. He said that the Health and safety world in this groups are very narrow and rare while they just have concerns regarding profits. Moreover he believed that lack of resources is the main reason that forward company toward poor safety management system.

SMEs HSE Performance

Poor HSE performance of small and medium enterprises, SMEs, in real world drove this research to find a way for uprising these groups by inducing effective tools. Smaller firms display a higher rate of workplace injury was confirmed by different researcher, (Loewenson 1994), (Mortis, 2009).

Malaysian industry at 2012 proposed to decrease the fatality rate 20% less than 2010 but the fatality rate raised near 20 %. This increase happened in situation that other indicators highlighted significant drop in the total recordable case of injury. They achieved their targets in some cases but this achievement was not effective.

HSE foundation in SMEs is poor and not reliable. In terms of basic safety systems and standards SMEs are not obey HSE rules as they asked, for example in Australia risk assessment is a basic legal requirement prior handling a job however a research in 1997 found that SMEs undertake little on OSH management system. He highlighted that this enforcement has little improvement on safety performances in SMEs in Australia (Mayhew 1997). Another observation in Malaysian SMEs indicated that there is less attention to the health and safety is in SMEs let alone Environmental matters. This observation in terms of measuring the level of safety awareness revealed that 37 percentages of SMEs just achieved the awareness of grade D and others 73% took grade E out of five level of A as a best to the lowest grade E. (online, 2010).It means that no SMEs caught the average level of awareness of OSH.

Impact of Subcontracting on SMEs HSE performance:

In Malaysia more than 97 percent of Malaysian industries are SMEs from which more than 70% is on service sectors that give their services to the bigger size company and public as well. As mentioned above, Size of company is considered as an important factor in association with the number of injuries. In business world many of tasks outsourced to the contractors.

Lack of resources, dynamic work environment and Poor HSE commitment conduct SMEs toward poor HSE performance as well. They have no more time and no more money to spent on this topic; the expense on this area seems to be unnecessary expenses (Rowlinson, 2005). Moreover SMEs are reluctant to implement the free given HSE advice (Lam 2003). Mortise highlighted that smaller companies display a higher rate of injuries in work place. When the firms are small, the cost of reducing HSE hazards is too high in compare with their income and firms couldn't benefit from the scale of economics.

In business market subcontracting considered as a contributing factor to either poor or good HSE Performances. Jim Bucki said by outsourcing the contract, the main company will turn the managerial control of the function to another company. The outsourcing company has his standards and missions that driven to make profit from the services. Since many contracts has fix price so any concept on elimination over cost are welcome unless extra payment considered by clients for safety. If increase at the cost of contract is accepted by client it brings positive contribution on contractors HSE performance and raise HSE culture, otherwise it's a lose- lose collaboration in terms of HSE while both sides are reluctant to do practical action for safety before incidents. So the desired business outcome will determine the best way to improve HSE performance in contractors, regardless how it classified, products, services and suppliers. (Harris, 2006)

Sometimes the contract is made based on "payment by result" which means payment based on amount of work not by the amount of time need. So this strategy motivate contractors to minimise time and maximise profit which always increase risk of operation (Rowlinson, 2005). Compulsory HSE requirements could penetrate inside the organization culture if it requested by managers as a function performance or being set as a project quantitative target. Rowlinson, 2005 cited that some small contractors had great HSE performance because of their senior managers were interested to champion on OSH, having positive partnering between main client and contractor and educated and OSH training foreman.

The other kind of strategy in making contract is engaging the contractors' finance or products partially or completely as a project partner, "partnership contract". Clients have free hands to conduct HSE requirements if the project finance with them otherwise by sharing the finance of project with contractors or third parties, strings will be attached that brings negative impact on HSE performance (Kumaraswamy & Dissanayaka 1997).

Statement of the problem:

SMEs in most developed and undeveloped countries play a major role in their industries. For example in Australia , the majority of construction industry firms are SMEs. They make up 97 percent of firms with population of 20 and less employees in which more than 85 percent consist of contractors with less than 5 employees (ABS1998). Based on the report of department of statistics Malaysia (DOSM), on Malaysian establishment and enterprises, 2005, SMEs in Malaysia are mainly on the service sector. Number of SMEs is around 474707 in 2005 which covered 87 percentages of total business establishments of Malaysian industry. In 2011 SMEs number raised to 645,136 SMEs out of 662,939 total establishment in Malaysia (SMECorp, 2011) that cover more than 97 percentage of Malaysian companies. Most of these businesses (90%) are involved in the service sector which includes wholesale or retail, as well as hotels and restaurants. The manufacturing sector, meanwhile accounts for 6 percentage of total SMEs or a total of 37861 businesses, of which more than half are in the three key subsectors, namely textiles and apparels, metal products and food and beverages (F&B). This is followed by the construction sector with 3%, Agricultural sector 1% which constitutes 4 percentage of SMEs. (SMECorp, 2011). Distribution of size of SMEs in Malaysia at 2011 indicated that 77% considered as micro business (SMECorp, 2011) with less than 5 employees; 20% in small size with 5 to 10 employees and 3 % as medium size with 20 to 50 employees population (Menteri, 2011). Following Table show a short summary of data regarding the amount of population distribution in Malaysian company.










5_ 20














According to the annual report of PERKESO, official organization for social security in Malaysia, on 2010, the number of active employees in Malaysia was 5,519,000 employees that worked for 348000 employer. In 2007,with little differences by 2010, the number of active workers was 5,450,950. It also shows that in 2010 an average employees work in each company were 15.8 employee per each employer (importance of attention to SMEs). This number shows that the suitable HSE indicator could have enough scale to support the decision at this company in short time.

From reports issued by MSOSH, the accident rate at workplace in Malaysia declined form 9.5 (cases per 1000 workers) at 2002 to 6.1 cases at 2007 then 4.9 at 2010 (DOSH, 2010) this rate dropped to 3.4 workers injury per 1000 workers at 2012 according to the official website (online, 2010).

On the contrary with declining in the injury rate, fatality rate (per 100,000 workers) raised from 9.5 death at 2002 to 12.4 work fatality at 2007 and continue its climbing reached 13 death at 2010 (DOSH, 2010)and now is reached the highest rate of 15 death per 100 000 workers (2012) (online, 2010).

Comparison of these two trends clearly highlighted the impact of enforcing of safety regulation without creating related foundation. Author believed that increasing the disciplinary requirements on Malaysian companies rose their frightening in terms of reporting their incidents. This fear resulted company try to show off without preparing proper tools and resources internally. In this situation companies prefer to hide their incidents in their premises. This hiding will lead to a higher accidents rate however they couldn't hide their death. Both remarks clearly are visible in the next graph.

Dayang did a short review of most significant accident in Malaysia within construction industry (Abdullah, 2011). His study also demonstrate the increasing rate of incidents in this industry from 2005 to 2008 and hoped that by implementing the MP15 plan in Malaysia this trend would be decreased. The target set by Malaysian government for 2015 according to the OSH-master plan is 20% decrease in the rate of fatalities (around 10 fatalities per 100000 workers) and 30 percent decline in work related injury rate (around 3.4 per 1000 workers) (DOSH, 2010).

An important point in this paper was related to the statistic of foreign workers death among all significant incidents as described.

Most significant accidents in Construction Industry in Malaysia and distribution of fatalities


Third parties

 (Abdullah, 2011)




1) Tower crane broke into two and fell onto four Indonesian construction workers at a construction site building department located at Batu 14, Puchong.




2) Iron mould weighing almost two tonnes fell from 20 storey condominiums under construction onto Dr. Liew Boon Horng's BMW; killed him and severely injured his wife and the driver at Plaza Damas located along Jalan Hartamas.





1) Landslide occurred at a construction site located at Taman Desa, Kuala Lumpur buried; killed a 35 year old Indonesian man at about 3.30pm while he was working on some iron steel beam foundations for the five- block 609 units' condominium complexes.




2) Negligence of three construction companies, led to the death of another Indonesian worker on 15 May 2006 located at Lot 206, Section 63, Lorong Binjai where a 32-storey of 100 units apartment was to be built.



3) Two sides collapsed of a bridge that was under construction at 3.2 kilometres of the Klang Valley Highway that caused the death of two Bangladesh workers.





1) Death of two workers and severe injuries on ten worker at The Pavillion Kuala Lumpur, Jalan Bukit Bintang construction site where the cables of the workmen's lift at the posh condominium and shopping complex project snapped and plummeted 15 metres to the ground.

Not clear


2) Death of two Malaysian construction workers, buried alive four meters deep in a landslide while working on the fencing located at Taman Merbau 2, Fasa III at Kubang, Pasu.



3) One foreign construction site worker died; another colleague severely injured at the construction site of the prestigious KK Times Square commercial complex after piles of sand fell on them in Kota Kinabalu.



4) Three Indonesian construction workers fell from scaffolding to their deaths when they slipped from the top floor of a 21-storey condominium under construction and landed on the fifth floor at Taman Tampoi Indah.



5) Bricks fell from the construction site in Taman Bukit Angkasa, Kerinchi on several cars parked at the nearby flats during a three hour downpour

Near miss


6) Eight huge concrete beams with a measurement of at least 40m long and 70 tonnes weight of an uncompleted flyover near Nilai collapsed, which narrowly missed a motorist and his aged parents

Near miss


Contribution of Foreign workers:

In March 2008, there were 2.2 million documented foreign workers, especially low skilled workers for construction and plantation sectors, that compromising 18 % of total labour forces in Malaysia. From this, 36 % are working in manufacturing, 16% plantation and 15% for constructions. (Hasan, 2008). Malaysian government is to reduce the amount of foreign workers to 1.5 million by 2015.

There is no statistics regarding the rate of fatalities in foreign workers as their fatalities were not recorded according to the Malaysian Occupational Safety and Health regulation in Malaysia (Occupational Safety & Health Act, 2012). By analysing the raw data reported by Abdullah in 2010 regarding most significant accidents in construction industry in Malaysia, it can be seen that near 75% of total fatalities, between 2005 to 2007, were related to the foreign workers.

Commitment of Malaysian Regulation Body to support foreign workers;

Malaysian social security organization provides social security protection by social insurance just for Malaysian workers and permanent residents, under "Employees social security Act 1969". So it does not cover foreign workers and domestic servants employed to work in private dwelling house (cooking, gardening, drivers …). The workmen's compensation Act 1952 will compensate payment to the injured people or to his dependents in case of death; however this act will not applied to the foreign workers with wages more than 500RM per month!!! (Social Security Organization, 2012) (all manual workers irrespective of the wage). In addition, Malaysian occupational safety and Health just set for Malaysian workers not foreign workers. It means that none of the injuries and fatality at foreign workers was recorded and considered at previous statistics (Occupational Safety & Health Act, 2012). Finally, the prosecution is just considered for employers who failed to comply with employee's social security regulation 1969 and no support for foreign workers.

Author believed that three different policies make foreign workers on high risk of death in Malaysia as:

less payment to the foreign labour who works on sever/unhealthy work environment,

Less compensation in case of injuries

Less prosecution against who failed to consider the labour's right

Rowlinson 2005 expressed that Source of project finance has many implications such as responsibility to ensure that the finance provided is adequate for the whole process. Although many financers make it clear in tender documents but HSE performance needs to clearly linked within financial agreement to prevent fatalities and injuries in practice. This responsibility of financer will be fascinated if the regulation bodies support HSE requirements in business market as well.

Safety culture importance - Texas and BP accidents because of poor culture

A research on organizational safety, 2007, emphasized that improvement of individual safety attitude will improve their safety responsibilities (Ayyalasomayajula, 2007). If we want to improve HSE commitment at management level we have to increase his/her attitude toward safety. By considering this fundamental clue, this research is designed to find out how to improve management desire on safety.

HSE Indicators impact:

HSE performance like other operational performance can go through formative and summative evaluations. If the manager was interest to improve the HSE along with other functions he needs to use formative evaluation. On contrary if evaluation of HSE performance in their department was set as his goal at the end of operation so summative evaluation would be employed. An example of formative decision-making relative to Malaysian Occupational Health and Safety is changes at the number of companies who implemented the Malaysian OSH standards or changes in the number of injuries that reported to it. At the end of a season these data will support summative judgment about how the safety performance in whole Malaysian industries went at that period of time. For example the ratio of total recordable care of injury per 10000 workers at the end of a year could be a summative evaluation for Malaysian government.

OGP or many different safety and Health organization classified indicators on this concept within two groups called Lagging and leading indicators. Lagging indicators are equal to summative evaluation and leading indicators for informative evaluation. Indicators could be classified on both lagging and leading depends on the level of judgments.

In organization combination of proper leading and lagging indicators should be adjusted with goals at each organization level. In today business inadequacy of measurement for effective decision making understood because of not involving the entire organization hierarchy (David A. Army, 2012). He mentioned "to make this, it should be applied to all levels of organization … and personnel should feel responsible and held accountable for end result". Moreover the measurements are inappropriate for the process and business because they are based on result base (lagging) indicators which not jointed with the proper process (leading) indicator at the floor level. (David A. Army, 2012)

History of safety and health statistical system,

First record of health and safety in US back to the word war I at the steel industries that issued by Bureau of Labor Statistics, 1918. Frequency and severity of injuries were two reported factors aligned with occupation of injured people and nature of injuries. (BLS, 1918). Before that Dr. Alice Hamilton had a pioneering research on lead poisoning in the workplace in the early of 1900 (Hamilton, 1911) however no indicators were report on safety performance.

In 1970, by passing the Occupational and Health Act in US, BLS was delegated as a responsible centre to develop a comprehensive statistical system for work related injuries, illness and fatalities by congress. This system became on operation two years later by cooperation many of US state governments and annual survey of occupational injuries and illness program was designed. The outcomes of this system were used by states to decide how to allocate their prevention resources among several hundred divers industries and the business with higher risk of injury or work illness however it was not so practical. Many of gathered row data didn't help to understand the causes moreover collecting data had not enough reliability for decision making. These deficiencies were corrected by strong linkage of this system with administrative records for death or work injury compensations in 1987. (Keimig, 1987) With Congressional funding and technical support from safety and health organization of 40 states,

A new improved safety and health statistical system was fully implemented at 1992.

This critical review of the SOII, which highlighted longstanding deficiencies, provided the impetus for its redesign. With congressional funding, technical support from the safety and health community, and assistance from some 40 participating states, BLS began a multiyear effort to redesign and test an improved safety and health statistical system, which was fully implemented in 1992. Since then SOII focus on two main indicators: 1- non fatality work related injuries and 2- Fatalities work related injuries. Both were expanded to profile detailed case circumstances and worker characteristics for cases that involved days away from work, and a separate Census of Fatal Occupational Injuries (CFOI). Any statistic to counts and profiles of work-related injuries/fatalities can be found within this system. By entering the number of working hours per one year and selection of type of business, managers be able to knowledge of overall performance of his/her company but it shortly being forget during the daily operation.

History of HSE statistic in Malaysia

The total number of accidents reported to Perkeso in 2010 and 2007 were 56,639 and 56,339 respectively. By dividing these two variables, a new normalized indicator called Total recordable case (TRCRate) of injury is measured. In Malaysia the normalized factor for this indicator is as 10000 employees per year. TRCR for 2010 was 104.4 that calculated through following Formula:

TRCF (Incidents with injury ratio/10000 active workers) = (Number of accidents with injury * 10000)/ Number of active employees

To generate the other HSE indicator that called, Total recordable injuries (TRIR), the number of injured people were calculated through following formula:

TRIF (Rate of injured people because/10000 active workers) = (Number of injured workers * 10000)/ Number of active employees

According to the PERKASO annual report, recipients have different group and some of their data is produced collectively. The number of injured people who was received the compensation calculated through:

Number of direct recipients form accidents= Number of temporary disablement + (Permanent Disability of this year- Permanent disability of Last year) + (Invalidity pension of this year - Invalidity pension of last year) + Constant attendance allowance of this year - Constance allowance of last year) + (Funeral benefit + Medical benefit+ physical and vocational

Notice that Survivors' pension and dependents' benefit didn't considered in above calculation as they are not directly have relation to the work environment incidents.

Then By dividing the number of people injured per number of employees who worked per year, Total recordable injury rate per 10000 people calculated as 126.7


Rate of fatalities/100 000 active employees = (number of funeral benefit paid * 100,000) / number of active employees


Fatal Incident rate/100000 is the ratio of incident case leading to fatalities per 100000 workers.

Malaysian Injuries rate in 2010

Total incidents case lead to fatalities



Total fatalities



Total incident case lead to injuries



Total Injuries



Total active employees



Total active employer



According to the above raw data following safety indicator can be produced:

Fatality Incident Rate/100 000 Workers



Fatal Case/ 100 000 workers

Fatality Rate/100 000 Workers



Death/ 100 000 workers

Total Recordable Case Rate/10 000 Workers

Total Recordable Injury Rate/10 000 workers

Total Recordable Injury Rate/100,000 Worked Hours



Incident Case/ 10 000 workers



Injury / 10 000 Workers



Injury / 100 000 Worked hours

As discussed, more than 5,519,000 registered men in a year work in Malaysia, the number of incidents happened with injury in 2010 were around 48567 cases. These incidents lead to injury of more than 69700 people. Moreover the number of incident with fatality was around 325 cases that lead to 945 fatalities at 2010.

By dividing the raw data to number of active employees, the ratio of fatality and incidents was calculated. Figure below show a triangle of the normalized data per 100,000 employees in Malaysia:

The first Colum is demonstrating the raw data that gathered and the second Colum is the list of routine safety indicators extracted from raw data and finally the normalized numbers presented in triangle for each indicator.

Data issues and concerns

Raw data is known as a crude information but it should pass sequences to become knowledge by itself. During this sequence, data would be changed to information, then fact and finally become knowledge. In organization for decision making managers need to have information or reliable data to process with himself at least. Transition of data to information happened if it was relevant to the decision problem. (Arsham, 2012). Information becomes fact if they have enough evidence to support it and by passing successful completion (statistical degree of confidence) the fact will change to knowledge.

One of this knowledge extracted by a research in 1985 by analysing enough population as samples to find out how considering safety budget in contracts to enhance the safety performance of business.

Hudson in 1985 found that inclusion of safety cost in a tender document of project can reduce lost-time accident frequency rate from a range of 2.5-6 per 100,000 man hours to a range of 0.2-1 per 100,000 man hours worked. This knowledge is helpful for many decision makers who conduct the safety stream with macro perspective. 100 000 man hours means working at least 500 fulltime workers per year. If we scale down this rate to the medium size company with 50 workers, the Lost time accident frequency rate would be :

6/10= 0.6 which is less than one. In practice it means no lost time injury per 50 fulltime workers per year. The adjusted score after inclusion safety requirement in tender document would be 1 lost time accident frequency rate per 100,000 man hours worked. By considering each man worked 2000 work hours per year and size of medium enterprise of 50, It means:

1/10=0.1 fulltime workers which is less than one; In practice it means no lost time accident will happen per year in SMEs with 50 full time workers. So how contractors or clients have to monitor their HSE performances in practice?

Indicators are important tools not just for setting targets and assessing performance but also for measuring the magnitude of a problem. The most common used absolute and relative indicators for measuring the different HSE elements were presented in chapter 4. However lack of incident statistics couldn't necessity means having reliable safety systems in place.

Two very common classifications of indicators are the leading indicators and lagging indicators. The number of deaths per 100 000 000 working hours, and total recordable injuries (Total recordable case rate) per 1 000 000 working hours are two most reported indicators. Both of these indicators have limitations regarding their reliability and validity that place restrictions on how they can be used and interpreted. The number of fatalities per 100 000 population in UK or per 1 00 000 000 working hours (OGP) is widely used with reasonable confidence to monitor changes over time in industrial levels and to make comparisons between countries.

In US, the incidence rate is calculated on two categories: fatal injuries and none fatal injuries. In non-fatal section, total recordable case (TRC) measured by aggregation of incident cases lead to 1- lost work day case, 2-restricted work day case and 3-other occupational recordable cases (Medical treatment case without lost day or restrictions). This number will be normalized by multiple at 2000 000 worked hours and dividing by sum of working hours per year. Changing of weighting factor for work related illness from 100 full time employees to 10 000 full-time employee demonstrates that the number of reported case of illness is much lower than incident injuries. However US Bureau of Labor Statistics BLS mentioned on his report that the incidence rates regarding illness can be converted to rates per 100 workers (instead of 10 000) by moving the decimal point left two places and rounding the resulting rate to the nearest tenth. (Statistics, 2012). For example if the number of fulltime employees in a SME were 15 persons and just one occupational illness/injury were reported during the last working year, the incidents rate would be 670 per 10 000 Employee or 6.7 per 100 fulltime employees. If this company had no injury during the last year then this rate would be 0. It means fluctuation at safety performance indicator in terms of TRC of this company after a year would be changed from 0 to 670 or 6.7(depend on normalise factor) just by one incident case. In this company no matter to the consequence of incident whether fatality or a medical treatment case, when an incident happened, "total recordable case per 100 fulltime worker" would be 6.7 per 100 full time workers. Supposed that this system implement inside the SME as a safety performance indicator between three foremen each support 4 persons; TRC rate after first incident would be 25 per 100 fulltime workers. Changes from 0 to 25 just showing the interval between data and means the data at this scale is not continuous. This group of data are just some ordinary character not metric and didn't being meaningful for decision makers.

Another problem with occupational health indicator in organization is of the latency period of illnesses. So it is difficult to find an association between illnesses and work, it is difficult to compile a complete count of all fatal illnesses in a given year. Thus, information on illness-related deaths is excluded from measurement by company for their business.

Scale of measurement of indicator

CSP (Current Population Survey under BLS, 1959) in US gathered statistical data of labor force through approximately 60 000 sampling per month across 31 states. Type of employment and rate of unemployment are some criteria at this survey with 95 percentage of confidence. The sampling is designed on state bases but it revised based on state population size to maintain the required reliability of data. The ratio of sampling across each states is ranged from 1 in every 200 sample population to 1 in every 3 000 samples that repeat each month. With considering different adjustments at the data collection, CPS declared that "although the sampling is a state based design, the sample size of the CSP is sufficient to produce reliable monthly estimates at the national level only. The sample does not permit the production of reliable monthly estimates for the states."

Figure 3.1: Trend of HSE Indicators in a sample company Report

The HSE performance of one other company with 300,000 man hour per month is presented in above graph. By converting the man hour to the number of workers by rate of 200 working hours per month, it has been more than 1500 workers per month worked full time for this company. This huge population has big gap with SMEs by less than 150 populations. Moreover inside any big company the population of each division is limited to less than this rate too.

Total recordable incident frequency represent total incidents ranging from lowest impact of Medical treatment to the upper and worse cases such as incidents with restricted work injuries, Lost work day case or fatalities. Frequency of this rate is based on 1,000,000 working hours but MTC cases are countable enough that make more reliable data. By eliminating the number of incidents that just lead to MTC or RWDC, remaining incidents called LTI frequency within 1,000,000 working hours. It means the incident resulted to death or lost working days. TRC frequency in this company changed between 0.5 till 3.7 while LTIF fluctuated between 0.2 till 1.3.

More discussion on the time interval represented in chapter 6.

Performance indicators:

Performance indicator is defined by different organization and group according what they have desired to achieved. As its name show, performance indicator is a measure for tracking changes on special subjects.

To understand whether business move toward its goal, managers need to measure their performances regardless of its outcome, good or bad. According to the UK construction community the performance traditionally measured simply in terms of price and programme with a subjective view on quality but clients now become more sophisticated that these KPIs couldn't answer their needs and expectations. They suggested some basic rules but they didn't declare any classifications. He suggested enhancing the performance of a measure it should have these characteristics as follow:

Measuring what is matters and aligning the measurement with business priority objectives

Not select too many issues for monitoring and prioritizing the selection

Concentrate on consistent indicators to monitor the continuous improvement.

The cost of collecting data should not exceed the value of data

So according what mentioned above HSE KPI should measure business objectives in terms of Health, Safety and Environment. It couldn't be many indicators and consist on one or just few beside easily can collected. The methodology of this research is designed in a way that by asking from managers, their answers will covere all above items as well.

Others divided Performance indicators based on its subjects for example: financial and non-financial indicators. Some others defined it based on type of measuring such as metrics, semi quantitative, qualitative measure.

Patrick Pc Ow, one of the lawyer in business based on his experience divide performance indicators into two groups:

Performance result indicators, e.g. percentage return on capital

Performance Drivers, which conduct company to move ahead in short and long term. He believed that short term operational driver is essential to make company move forward in their daily operations and long term performance driver, called strategic driver, is important because they determined the priorities within business strategy.

He stated that in business frame work, 80 percentage of senior managers task passed through strategic drivers and just 20 % consumed by operational drivers. In contrast, one operational managers or team leader reports cover 80% of operational drivers and just 20 % on strategic drivers.

This classification is different from lagging and leading indicators. Within this classification, lagging and leading indicators just showing the state of an indicator within frame of authority level and concept of subjects. Although Patrick proposed that Lead and lag indicators are like cause and effect, there is not necessity for this relationship. Leading just send preliminary warnings and notice regarding a narrow subjects while lagging is conducted by many known and unknown elements, however we just get the last result. Finding the rout cause of lagging indicators needs complementary research on facts and figures and having reliable data. By doing such research, we just can approach to the subjects with acceptable confidential interval.

The classification provided by Patrick, there are three different performance measurement that two of them, operational driver and result performance, act the same as leading and lagging indicators but the third one, strategic drivers (long term operational driver) is a metric that extended from the lowest level of operation to the highest level of strategy making. By this classification, the lagging indicator is used almost to control the accuracy of what the others measures presented and leading could be one of lots of operational drivers. Sometime result performance indicator analysed at higher scale to provide a golden norm for helping other companies to compare itself on specific subject with the other related company.

For example in financial system debit and credit are two strategic drivers that integrated different operational indicators, such as purchase indicators or sells indicator. These measures are extended from down level to the highest level of organization for decision making.

Strategic driver should be metric or on "ordinary scale with suitable time interval" to provide a tool for counting or measuring changes at the lowest business operational level. Beside it should have capability to compile many smaller operational drivers output as its own input.


The literature review highlighted the gap analysis regarding the lack of proper HSE indicator. Reliable data, proper scaling of indicators and full coverage different concept of HSE requirement in practice are necessary to have a suitable KPI for decision making. Finally SMEs are most susceptible group to enhance the HSE performances and no research focus on introducing a proper HSE indicator to raise the HSE commitment at this level. The best HSE KPIs shall be strategic drivers which started from the basic operational drivers and extended along the different management layers to the top management. This HSE KPI could increase HSE commitment in managers while involvement of different managers within the indicator spread the soul of HSE culture all around the business. Then raising HSE Commitment and culture for sure will conduct company and its contractors to safe operation as well.