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Leading & Lagging Indicators

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 Table of Contents
 Setting Goals

 Key Performance Indicators (KPIs)

 What are leading and lagging KPI’s?
 leading and lagging KPI’s Against EHS performance

 Frequency Rate Calculation

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 Setting Goals
Goals setting is an explicit process that starts with identifying a new objective you
want to achieve. Then, you make a plan for achieving it, and you work to complete it.
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 Setting Goals
Here are 7-step process to help you create Better Goals:
1. Think about the results you want to see

2. Create SMART Goals

3. Write your Goals down

4. Create an action plan

5. Create a timeline

6. Take action

7. Re-evaluate and assess your progress

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 Key Performance Indicators (KPIs)

 Definition
KPIs are measurable values used to track, evaluate and assess progress on specific Goals.
KPIs are data. But it isn’t just any data. The important here is that the data should be both
relevant and important to measuring progress towards an outcome.
 Example:
• When you go in for a checkup, your doctor might measure your blood pressure, cholesterol
level, heart rate, weight, and so on to help her get a picture of your overall health.
• But, if you go to the doctor with a sprained ankle, measuring your cholesterol level is NOT a
good indicator of your progress toward healing your ankle. It’s a data point, but not a KPI.
 Key Performance Indicators Include:
• Levels of compliance with rules and procedure • Legal compliance
• Staff morale • Management commitment
• Staff complaints • Average Overtime Hours per Person
• Staff turnover • Medical checkups and Fitness Assessments
• Levels of absenteeism • Lost Time Injury (LTI) Frequency Rate
• Accident and Sickness rates
• Number of Reported Accidents & Incidents
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 What are leading and lagging KPI's?

The best way to manage performance is to merge the insights from backward-looking indicators
(your lagging indicators) with more forward-looking insights and predictions (your leading
indicators).
Therein lies the main difference between the two:
• A lagging indicator looks back at whether the intended result was achieved.
• A leading indicator looks forward at future outcomes and events.

Lagging Indicators
Leading Indicators
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 leading and lagging KPI’s Against EHS performance

 Reactive/lagging indicators
• Measuring the failures / weaknesses of the health & safety management system after the
accident or the problem by looking and by identifying the consequences and the causes of
failures that already happened, to establish what controls and procedures can and should be
done to prevent a repeat (recurrence) in the future.

 Examples of reactive/Lagging monitoring tools:

• Incident reporting and investigation
• Ill health and sickness absence review Meetings
• Identifying trends
• Benchmarking (Internal/External)
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 leading and lagging KPI’s Against EHS performance

 Proactive/Leading Indicators
• Measuring the progress of the EHS performance of the organization before the accident or
the problem To give an overview of the strategies currently in place to control risk, then
identify possible causes of accidents, injuries, ill-health, any loss and prevent accidents from
happening by ensuring suitable controls & procedures are in place, before things go wrong

 Examples of Proactive/Leading Monitoring Tools:

• Inspections
To assess if the safety processes effectively ensure the health and safety of the organization's team members
• Audits (Internal / External)
To examine of how the company manages team members' health and safety
• TBTs
• Safety Alerts
• EHS Meetings
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 leading and lagging KPI’s Against EHS performance

 Both Proactive (Leading) and reactive (Lagging) monitoring could be used to measure legal
compliance or non-compliance and by providing a basis for continual improvement may
demonstrate commitment on the part of management and improve the morale of the workforce.

 The purpose of measuring performance through indicators is to really understand performance

and identify ways to improve performance in future. To do this properly, you need both types of
indicators.

 It’s also worth noting some indicators can be both leading and lagging. For example, being able
to recruit the best talent could be considered a lagging indicator for HR (as in, has HR put the
right systems and processes in place to recruit the right people?), yet it’s a leading indicator for
the company as a whole, because it should translate into better business performance in the
future.
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 Frequency Rate Indicators

When assessing safety performance, one of the most important KPIs to track is Total Recordable
frequency rate. While it may tell you where you once were, it gives no indication of how you
should move forward or what might help you get better.

 TRIFR Calculation
An incidence rate of injuries and illnesses may be computed from the following formula.
Number of recordable incidents X 200,000
= Incidence rate
Man Working Hours

The 200,000 figure in the formula represents the number of hours 100 employees working
40 hours per week, 50 weeks per year would work, and provides the standard base for
calculating incidence rate for an entire year