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Performance Reviews Are A Good Time To Identify Risk

By William R. Henry, Jr.
The CIMA Companies, Inc.

Some of the most valuable ideas for reducing risk in the workplace come from employees themselves, rather than from management, loss control staff of insurance companies, or OSHA inspectors. One way you can encourage these ideas is to make a place for them in performance evaluations. In a discussion where the focus is on the employee’s efforts to do his or her job well and reach certain objectives, you might ask, “What can you think of that might prevent us from reaching those objectives? Is there anything that is keeping you from doing your job the way it needs to be done?” Part of the answer might be a risk exposure that had not been obvious to you.

For example, a stockroom employee might tell you the reason it takes so long to stock shelves is that he has to make so many trips up the stepladder with individual containers that are stored on the higher shelves. Here you have an issue of productivity, a possible fall hazard, and possible inventory damage hazard, all in one. If the employee has to reach around or under things to pick stock, it is an issue of productivity, a possible back or shoulder injury, and a possible tripping hazard, all in one. Looking at the stockroom from the employee’s point of view, you might decide to store inventory at lower levels, or rearrange your inventory some other way, or obtain some materials-handling equipment that could prevent injuries and workers’ compensation claims.

In your performance evaluation with an accounting department employee, you might hear, “I don’t know what we would do if Sid got sick. He’s the only one who knows how to do his job.” It’s a basic tenet of risk management to rotate duties that have to do with the financial aspects of the operation, and segregate those duties so that, for example, bank accounts are reconciled by someone not authorized to deposit or withdraw. There have been too many instances of employees stealing from the organization simply because they were given the opportunity to do so, and took it. (See Resources, below, for information on how to prevent these inside jobs.)

A sales rep might tell you the one thing that could wipe out her objectives would be to lose a particular customer because you aren’t able to get a product to them. Look “upstream” at your vendors. Is there a single vendor you are depending on for a component that goes into that customer’s product? If so, perhaps you should arrange a backup vendor, just in case. The sales rep also might tell you, if pressed, about some customer complaints that would help you find a flaw in the system — a flaw that has created the risk of losing that customer. (Service staff also might know about some customer complaints you haven’t heard, too.) The sales rep also might express the fear that a competitor could learn too much about a product or a process of yours. What information is out there in marketing materials, on your Website, or elsewhere, that might be good “competitive intelligence”? Tone it down.

A delivery person’s big worry is failure to deliver what’s been promised, and deliver it on time. Probing the risks in your performance evaluation, you might learn that your sales people are making unrealistic promises, that your vehicles are on the verge of not passing inspection, or a number of other conditions you might want to change. The person in charge of ordering or shipping supplies might mention the upcoming regulations of the Bureau of Customs and Border Protection that would require shippers to notify the Bureau, within specified time frames, of shipments that will cross the U. S. border. Many shippers and manufacturers are worried that the security regulations will disrupt just-in-time delivery schedules. 

RESOURCES

CIMA white paper, “Crime Coverage” — email your request to bhenry@cimaworld.com. We will reply with the white paper attached as a Word document.

ABOUT THE AUTHOR

William Henry is director of communication for The CIMA Companies, Inc., an independently owned insurance broker and risk management firm with offices in Alexandria, VA; Baltimore, MD, and Atlanta, GA. More information is available at www.cimaworld.com. William Henry can be contacted at bhenry@cimaworld.com.

riskVue | The webzine for risk management professionals
November 2003