Journal of Safety Research - ECON proceedings 36 (2005) 231 – 236
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Economic Evaluation Proceedings Paper
Participation for understanding: An interactive method
Ernst A.P. Koningsveld
TNO, Hoofddorp, The Netherlands
Abstract
Introduction: There are many available models that help evaluate the effectiveness of safety and health measures, but many are complex and
require input from many departments within an organization. There is a need to develop a more user-friendly model. Method: A participative
model was developed that involves face-to-face interviewers with workers, maintenance department, purchasing department and health and
safety experts. They were asked about costs, efforts, benefits, and effects of gauging the effects of prevention efforts. Results: Cost
effectiveness analyses are essential in all cases and can include whatever the end-user requires, whether it is a small or lasting improvement.
Having management participate helps validate the data. Conclusions: Organizations who collaborate with someone with at least some skill in
cost-benefit evaluations will find that they will be able to establish policies and procedures from the data. The end result is a calculation that
is understood by all involved.
D 2005 National Safety Council and Elsevier Ltd. All rights reserved.
Keywords: Economic evaluation tools; Safety; Costs; Evaluation models
1. Introduction
2. Goals
Over the past few decades many models have been
developed to evaluate the cost effectiveness of health and
safety measures. Many of these models are complex and
require that data must meet the specifications defined by the
model, which oftentimes requires data collection from
different departments within an organization. Working with
available and easily-accessed data would be more clientoriented and more efficient.
The needs of the organization need to be addressed
when developing an appropriate model, and questions need
to be addressed. Why do they want cost benefit evaluations? Who will be the one to make them? What data will
be available or can easily be produced? What level of
details is necessary? And which level of reliability will be
required?
We developed a participatory approach to address these
concerns that is efficient, quick, and gives the insight that is
needed to make decisions.
Cost effectiveness evaluations can be made with several
goals:
E-mail address: [email protected].
1. To convince people that investments in health and safety
are useful.
2. To evaluate a proposed investment, or to evaluate the
decision afterwards.
3. To benchmark to other companies.
4. To follow a trend in time.
5. To sell products, systems.
As the goal is to decide what kind of tool or evaluation
method one should use, we will explain what the impact is
of each of the five goals.
1. Examples of cost benefit analyses can be so
convincing that the outcomes will not only validate current
investments, but they can be expanded to be used in other
situations. The calculation for these analyses must be
plausible and easy to understand. Data are sufficient if the
input data are considered to be in the expected range, they
do not need to have a high level of reliability. A practical
example is a small computer program that calculates the cost
0022-4375/$ - see front matter D 2005 National Safety Council and Elsevier Ltd. All rights reserved.
doi:10.1016/j.jsr.2005.06.004
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E.A.P. Koningsveld / Journal of Safety Research - ECON proceedings 36 (2005) 231 – 236
of absenteeism, which we developed and is now available
on the internet for several sectors in the Netherlands (e.g.,
www.keerpunt.nl, in Dutch).
2. Management will make a decision on the basis of
several considerations. Financial considerations (e.g., the
expected return on investment) are among these, but certainly
not the only consideration. Next to quantitative parameters,
qualitative pro’s and con’s count, sometimes even more so.
Most of the company’s decisions are only partly based on
financial terms; ‘‘abdominal feelings’’ are also important,
although people don_t always admit this. Cost benefit
analyses need to be accurate in proportion to the extent and
consequences of the investment. For smaller investments, a
quick analysis partly based on estimations may be good
enough.
3. Benchmarking is a hobby for managers. Often the size
of the differences gets more attention than the background of
the differences. Of course this is not correct. In order to make
benchmarks useful, it is highly recommended to use the same
evaluation method, as well as the same assessment tools. This
implicates that a well-balanced method should be developed,
which is not easy. The method needs to be described in as
much detail as possible in order to guarantee a use according
to the specifications. Such methods will often be difficult to
apply, resulting in little use. Many of the cost effectiveness
methods in the field of health and safety suffer from this.
In the Netherlands the national costs of poor working
conditions were investigated for 1995 and for 2001. While
the same method was used, after only six years many
categories could not be compared due to changes in
legislation and losses of data files.
4. To follow a trend in time is useful for management to
evaluate the progress of the business. The only important
qualification is a well-described method that at different
moments in time will be applied in the exact same way.
Estimations don_t fit in such methods.
5. Producers and retailers like to convince their potential
clients of the benefits of their products. Of course there are
honest companies and people, but it is likely that these
groups are tempted to use invalid methods. While their
published data and methods may look reliable, the opposite
may be true. Always ask for the details of the model used,
and ask by whom the data were collected. If you want to use
cost benefits to sell your products, let the evaluation and
calculation be made by an independent and reliable party.
3. Method development
The Dutch method was developed on the basis of
expertise built up over a period of about 10 years. Most
of the work consisted of research. In early 2003, a project
changed the view on cost effectiveness models radically.
The Ministry of Social Affairs and Employment in the
Netherlands promoted Design for All (D4A) as an approach
to help reduce lost workdays and disability. D4A, also
known as Universal Design, aims to design and produce
products that allow as many people as possible to use these
products effectively, and without a health or safety hazard.
The same principles can be used to design workplaces and
work organization.
In the project, 10 cases were evaluated with an emphasis
on cost effectiveness. Given the budget and the access to
data, all relevant data were collected in a conference-like
way. The owner of the improvements (e.g., an employer
or a producer) was invited, and a team of health and
safety experts interviewed him/her. Items in the interviews
were:
– What belongs to the specific case?
– What made you choose a D4A-solution?
– Which investments in money and time did you spend,
and what further efforts had been brought in?
– Which effects can be seen as a result of the investments
and efforts? Can these be specified in terms of money?
If not in quantitative data? If not in qualitative
statements?
Five fairly different groups of experts did the interviews.
The experts had no insight or knowledge about the cases
beforehand.
A list of potential categories for costs, efforts, benefits,
and effects was drafted as a reference for the interviews. After
the 10 cases, the list was slightly adapted. In the 12 years
since the onset of the project, the list has been used about 30
times for different goals: health improvements, safety
measures, and environmental projects. Very few adaptations
have been necessary, so now this list is considered as a
general means.
Some general calculation rules can be defined, but the
general rule is that each case has to be customized. Some
cases deal largely with productivity aspects, others with
absenteeism or accidents. A general model turned out to be
impossible.
4. The method
The method was developed mainly for goals 1 and 2, and
under restrictions for goal 5. This choice implies that it is
more a consultation method than a research method. The
level of accuracy and reliability is not higher than what is
expected by the owner of the question.
Basically the model is a participative model. The cost
benefit experts interview the one who wants to have a cost
effectiveness evaluation. In many cases some other people
take part in the interview as well: users, workers,
maintenance departments, purchase departments, or health
and safety experts.
The list of potential items is used as a reference manual,
not as a strict program. The consulting skills of the experts,
in particular their skills to analyze deeply, is essential to
E.A.P. Koningsveld / Journal of Safety Research - ECON proceedings 36 (2005) 231 – 236
bring all relevant aspects up. An example illustrates this (see
inserted text block).
Box 1
An example to illustrate the advantage of participation
In a steel plant liquid iron is transported by rail
wagons to the steel factory. The wagons have
an inside ceramic covering to prevent hot iron to
melt the wagon. The covering needs to be
replaced regularly. The masons_ work is physically straining, resulting in a high percentage of
absenteeism and cases of disability off and on.
Besides the population gets older, so there is a
need of urgency to improve.
Many different solutions were evaluated, and
the use of smaller blocks (less thick) was
considered to be a good option. Blocks of a
30% reduced thickness met ergonomic standards. The logical expectation was that this
measure would result in 30% more repairs.
The calculation of management showed that
the solution would result in extra costs of
$
300.000/year.
In the cost effectiveness interview the expert
heard about the thinner covering. He asked: ‘‘A
thinner covering will result in a higher volume of
melted iron on the wagon; will the axes and the
track be strong enough to bear the extra load?
Management answered enthusiastic: ‘‘Yes,
that_s no problem. But: more iron in each wagon
means less transports, so reduced costs!’’
The next question was: ‘‘Are you sure that a
30% thinner covering will have a 30% shorter
life cycle?’’ The discussion turned into the
question if a thinner ceramic block would have
the same qualities as a thicker one. The blocks
were tested and it showed that the hardness of
the thinner block was evidently higher! In the
cost benefit calculation the factor for the extra
repairs (30%) turned out to be essential for the
outcome: a break even was reached as this factor
was 27%! So management decided to start a
test in practice with one wagon, in order to
examine the endurance of the thinner covering.
The expert can also help in finding and processing data
that are required for a cost effectiveness analysis. Next the
expert makes a draft of the analysis. In a participative
session the draft is discussed. Potential missing data can be
added, either by comparing company records or by
estimations. Critical factors can be discriminated. The
outcomes are discussed. The result is an analysis that has
a broad basis.
233
Depending on the goal of a cost and benefit evaluation,
the method can be chosen. A quick scan is adequate for a
relatively small investment to improve the work of one
person or a small group. For long lasting improvements with
a wide scope, a more thorough assessment of factors and
parameters is more appropriate. In general, if estimations
have to be made, it is advisable to make the estimations in
close collaboration with the responsible management; they
have easy access to data and are familiar with indices. This
prevents the consultant from having to prove the data, and
because management has taken part in validating the data,
the outcomes are traceable and acceptable.
5. A specific example: glaziers
Glazier is a good but physically straining job. The work
results in discomfort and an unacceptable level of health
hazards. In particular, double panes (which have become
common) are heavy (often too heavy for manual handling)
(Fig. 1).
Over the past several years new tools and means for
transport have been introduced. The tools and means were
developed in a participatory ergonomics project (Urlings,
Bronkhorst, & van der Grinten, 1998). Despite a lot of
promotional activities, the implementation on the work
floor goes slowly. Employers are reluctant, as they doubt if
the investments pay back. In a costs and benefits
evaluation, a set of tools was considered: a simple crane
mounted on a van to help hoist the glass on and off. Next
there are two carts, each of which has a specific
application depending on the transport circumstances. For
the vertical transport to the window frame an aluminummade hoisting unit of 10m tall was developed. For cutting
out the old panes, a new electric hand tool was developed
that prevents the straining involved in manual cutting of
glass paste. All means together are always available in the
van, so the workers themselves can choose which means
they will use in each given situation.
Fig. 1. Glaziers using a glass cart.
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E.A.P. Koningsveld / Journal of Safety Research - ECON proceedings 36 (2005) 231 – 236
This investment lead to annual depreciation costs of Euro
640 (see Table 2). The time to learn to work with the means
is short and can be depreciated over many years; so the
annual costs will be very small and are not taken into
account (these are stated as pro memoria).
The annual exploitation costs consist of an inspection of
the crane and some maintenance: Euro 200. So the total
annual expenses amount to Euro 840 (see Table 1).
For the benefits we look at the performances of the
workforce. According to law, the maximum lifting weight is
25 kg per person. To handle and lift glass panes of more
than 50 kg the regular team of two glaziers will need a third
person, which indeed is practiced when needed. Together
with management it was estimated that in total a third
person spends 15% of his/her working time to travel and
help a team of two glaziers. That represents 15% of his/her
wages (Euro 26,000/year). With the new tools and lifting
means, no third person is needed. The reduction of costs is
15% Euro 26,000 = Euro 3,900. The travel costs for that
third person are included.
Analysis of work has shown that the net productivity
hardly differs when the glaziers use the means. But the time
spent for rests was reduced by about 10%; presumably this
is the result of the reduction of the musculoskeletal
workload. It may be expected that part of that time will be
used to perform more work. As a working day consists of
many different tasks, including travel, management and
consultants estimate that an increase of productivity with
3% is likely. This 3% has a value of 3% of the margin
between the turn over of two persons minus their wages.
The team’s annual turnover is 1,670 man-hours 2 persons Euro 35/hour = Euro 116,900. Their wages are: 2x Euro
26,000 = Euro 52,000. So the margin of their work is Euro
64,900. The new working methods lead to a gain in
productivity of 3% of Euro 64,900 = Euro 1,947/year.
The increased productivity does not mean that the
workload and the discomfort will not decrease. Specifically,
peak loads on the back, arms, and shoulders are reduced. As
a result, the related health complaints are expected to
decrease; so will the number of lost workdays. The
absenteeism rate in this branch of industry is 7%. From
previous projects (Koningsveld & Thé, 1999), we know that
45% of absenteeism is caused by musculoskeletal disorders;
Table 2
The financial costs and benefits of new glaziers’ equipment
Cash flow
Per year
Investments
& Depreciation costs
& Training in new working methods
Operating costs
& Inspection, maintenance
& Reduction of lost working days
Performance:
& No third worker needed
& Increased productivity
Total cash flow
C 640
p.m.
C 200
C 328
C 3.900
C 1.947
C 5.335
50% of these cases find their origin mostly or completely
from work. So 7% 45% 50% = 1.58% of the workforce
is lost by absenteeism as a result of manual handling. When
workers use the available tools and means frequently, the
most physically straining work is eliminated, though not all
of it; so it is likely that only part of the work-related
absenteeism by musculoskeletal disorders would decrease.
Ergonomists have estimated a decrease by 40%. So the
decrease in absenteeism is 40% of 1.58% = 0.63%, with a
value of 0.63% 2 persons wages of Euro 26,000 = Euro
328/year.
In Table 2 the usual presentation in a cash flow table is
given. The benefits are given as negative amounts, the costs
as positive.
The benefits by productivity gains and reduced absenteeism are Euro 6,175. These benefits can be compared with
the costs of Euro 840 per year. So we can conclude that the
financial ratio is very positive.
Besides these, several non-financial benefits can be seen.
The work-related discomfort is decreased. The health of
glaziers will be better preserved; on the long term it is more
likely that they can stay active in their jobs. These points are
important for employers, as recruitment of new young
workers is a big problem. As the workload is lower, more
people can perform the work, so recruitment can be directed
at a larger target group. The risk of damage to the panes, to
the frames, and to parts of the building is reduced, as the carts
and hoists allow better control over the handling process.
The risk of cutting and falling accidents is also reduced.
6. Evaluation at sector level
Table 1
The total investment in tools and equipment per team of 2 glaziers and 1
van
Equipment
Costs
Depreciation
time
Annual
costs
Crane mounted on the van
Cart 1
Cart 2
Electric glass paste cutter
Aluminium hoisting unit
Annual inspection, maintenance
Total annual costs
C
C
C
C
C
C
5 years
5 years
5 years
5 years
5 years
–
C
C
C
C
C
C
C
1.250
150
250
300
1.250
200
250
30
50
60
250
200
840
In the Netherlands, so-called covenants are agreed upon
between the Ministry of Social Affairs and Employment, and
employers_ organizations and unions in several sectors of
Table 3
Health complaints amongst Dutch paviours (2000, including assistants)
Workers with complaints (% of all)
Wrist, hand, shoulder complaints
Knee complaints
Low back pain
40%
53%
69%
E.A.P. Koningsveld / Journal of Safety Research - ECON proceedings 36 (2005) 231 – 236
235
Based on long-term registration of health records at
occupational health centers, 12 trades were allocated as highrisk groups. Paviours and their assistants are among these.
Paving is physically straining work; typical work postures
are kneeling, bending, and squatting. Continuous manual
materials handling characterizes the work of both the paviour
and the assistants. Assistants pull wheelbarrows over uneven
ground surfaces, often consisting of loose sand. The work
paces are high as cost prices are constantly under pressure.
In Table 3 relevant health complaints among paviours are
shown.
Goals of the covenant on working conditions in the
construction industry in general and specifically for paviours are:
– 90% of all workers will have knowledge about health
hazards and measures to reduce these;
– a 10% reduction in the number of health complaints
over 4 years;
– a significant growth in the implementation of machines
and equipment that reduce workloads, and in the
application of lightweight materials.
Fig. 2. Machine to lay a square meter of blocks at a time.
industry or services. The collective goal is to reduce the
health and safety hazards, including physical workloads. The
building and construction industry is one of these sectors.
Paving company
Mechanical paving compared to traditional manual work
paving
manually
Investments
Purchase costs machine
Depreciation term in years
Interest rate
Value after depreciation
Depreciation costs (total)
Investments rebate (tax reduction)
Total interest of depreciation term
Subsidy
Fixed machine costs over depreciation
term
paving
mechanically
€
€
€
€
€
€
€
€
80.000
7
0
8.000
72.000
18.920
-
€
80.000
€
8.000
€
€
€
18.920
-
€ 106.920
Annual machine costs
Maintenance
Insurance
Expected effective machine days
Costs of transport
Fuel costs
Total annual machine costs
€
€
€
€
1.600
800
70%
2.000
3.500
€
€
1.600
800
€
€
€
2.000
3.500
7.900
€
€
€
€
€
37,80
10,20
9,55
7,05
0,15-
Results
Wages per hour
Cost of temporary workers
Fixed machine costs per hour
Flexible machine costs per hour
Reduction of lost working days
€
58,80
Total costs per hour
€
58,80
Cost price per m2
€
3,14
(excl. paving materials)
Production in m2 per hour
€
64,45
€
2,15
19
30
© TNO Work and Employment, Hoofddorp, The Netherlands, 2004
Fig. 3. An interactive spreadsheet for the calculation of the cost effectiveness of mechanical paving.
236
E.A.P. Koningsveld / Journal of Safety Research - ECON proceedings 36 (2005) 231 – 236
Generally paving companies are small (5– 15 workers)
and the owner usually works as a member of one of the
gangs. Traditional as they are, they tend to work manually;
craftsmanship is highly appreciated. Only recently have
employers considered investing in machinery and equipment as an alternative for manual work. Interviews with
employers show that the decision to invest or not is made
emotionally rather than rationally.
Several types of machines are on the market that
transport materials and lay small elements, curbs, or slabs.
Using vacuum techniques, tens of blocks in the established
pattern are handled in units of a square meter at a time
without physical strain.
We have searched for a simple method to convince
management of small and traditional companies to make
their decisions on factual considerations. We tried to help
them to think rationally about the return on investment.
Employers_ worries about machines include comments like
‘‘machines cost money when they stand still.’’ We wanted to
support them in realizing that it is true that a still-standing
machine is a cost, however, you must look at the overall cost
of a team of workers plus the machine(s). In other words,
the overall team’s performance to recover the cost of the
machine must be determined.
Many employers feel that the absence of a worker for a
period of several months is a natural phenomenon that no
one can affect. It is important that they understand that
absence is a cost factor that needs to be repaid as well. The
implementation of machines and equipment contributes to
the reduction of the risk on such unpredictable costs, which
makes them investments to reduce costs in the future.
Spreadsheets were developed for cost effectiveness
calculations for three types of work: (a) transport of paving
materials, (b) laying blocks, and (c) laying curbs (Fig. 2). In
all three spreadsheets the overall costs of mechanical work is
compared to traditional manual work. Recently the spreadsheets were presented on the internet and on a CD-Rom
(www.werkgoed.nl in Dutch). There are currently only a few
experiences that show how these contribute to employers_
behavior. Nevertheless, we experienced some understanding
in the test stage in which representatives of paving
companies were involved. This resulted in adaptations:
– originally type of work only calculations were given as
an example. Per request of the test persons, it is now
possible to fill in a company’s own data and get a
customized calculation. If data are missing, reference
data are provided.
– because employers are not used to thinking in terms of a
payback period, the output is given as the cost price per
square meter paved surface of manual work versus
mechanical work (Fig. 3).
7. Conclusions
Organizations who collaborate with someone with at
least some skill in cost benefit evaluations will find that it is
very well possible to establish the efforts and effects of
interventions, or of a certain policy. The related costs and
benefits can be stated on the basis of existing data, on
measurements, or as collectively-made best guesses. The
interaction results in a specific cost effectiveness calculation
that is understood by all involved and that will have their
support.
On the other hand, it is considered impossible to draft a
general model that can easily be filled out by anyone and
that addresses all questions about all kinds of interventions
or policies in the field of occupational health and safety.
References
Koningsveld, E. A. P., & Thé, K. (1999). Macro costs of poor working
conditions in Dutch construction industry. Amsterdam’ Elsevier (in
Dutch).
Urlings, I. J. M., Bronkhorst, R. E., & van der Grinten, M. P. (1998).
A participatory ergonomics approach to redesign working methods
and tools of glaziers. In P. Vink, E. A. P. Koningsveld, & S. Dhondt
(Eds.), Human factors in organizational design and management – IV
(pp. 597 – 602). Amsterdam’ Elsevier.
For more than two decades Ernst Koningsveld has been involved with the
impact of health and safety programs and interventions. Cost effectiveness
is an essential item, for which he has developed a practical approach and
gathered many experiences.