Synopsis

Interpretation of Indicators

Even when indicators met the above SMART characteristics, they can be difficult to interpret. Take a look at the health and safety graphs/tables adapted from two companies’ reports that we will call Company X and Company Y.

If you compare the social data for the companies, both report “lost-time injury frequency” and “recordable injury frequency.”

COMPANY X

Look at Company X’s trend in its graphs on both indicators. The decrease over time indicates good performance, as fewer injuries need to be recorded (indicating better working conditions) and fewer work hours are lost due to injuries (a healthier work place). If you look closer, Company X’s performance is below the industry average. Company X also sets a target. Although its performance is slightly above the target, we do not really know how challenging the target is; however, it is below its actual past performance; therefore we can assume that the company is somewhat challenged to reach the new target.

Let’s review:

It is apparent that Company X’s performance is improving from past years.
Company X’s performance is better than the industry average (a benchmark was provided).
Company X challenges itself by setting targets.

However, if the narrative to the charts was provided, it would explain that Company X combines employees and contractor data providing a broad indicator covering performance of both types of workers. We would also find out that there was one contractor fatality.

COMPANY Y

Now let’s turn our attention to Company Y. If we review Company Y’s performance on the same indicators (see the starred indicators), we see that Company Y’s trend is increasing on both indicators and the absolute amounts are greater than Company X, suggesting that Company Y has more injuries that are recorded and hours lost from injury than Company X. Company Y indicates that it is using industry calculation for office worker hours, but there is no indication as to the method used for the other workers. Company X does not indicate a calculation method. The assumption could be that Company X is using industry methodology because it is using the industry as a benchmark. However, we don’t know that for sure. Company Y appears to have not had any fatalities.

A critical thinker would ask these questions:

1) Do both companies include contractors and office workers?
2) Are both companies using the same calculation method?
3) Is a fatality worse than a higher injury rate?
4) Which company’s performance is really better?

The above discussion helps to highlight some of the problems with interpretation of the data presented with indicators. Until indicators become more standardized, it will be difficult to determine which companies are actually performing the best. It is also important to read the narrative along with the indicators to help with the interpretation. Both types of information are important.