Civil Engineering Reference
In-Depth Information
thus include reduced injury or other costs in a cost-benefit analysis? When we make predictions about the
future we are limited in the accuracy of our predictions. Enterprises must use historical data to make
predictions about the future and hence can only estimate costs and benefits.
We suggest that ergonomists follow the lead of engineers in making use of cost-benefit analysis tools.
Engineers have developed cost-benefit models that suit the questions they want to answer such as “should
we buy that new machine or should we continue to maintain the old one?” Engineers are also comfor-
table with the need to make estimates and how to go about estimation on the basis of their experience.
Think of cost-benefit analysis as just a financial tool to assist in asserting one's point of view about the
need for, and worth of, one's ergonomics interventions.
Cost-benefit analysis is actually an economic model and to use it effectively in situations where one's
proposal is competing for funds against other projects, it is necessary to understand at least some of the
economics behind it.
4.2.1 How is Work Valued in Economics?
Ergonomists need a way not just to present the costs for implementing ergonomics solutions but also a
way to quantify the benefits from this implementation. Many of the benefits from ergonomics interven-
tions flow to workers, and so, how do we quantify this?
Accounting systems are based on financial concepts but are narrow in focus, usually constructed for
the purposes of taxation, regulation and financial accounting. Simplistically within the accounting
system all financial transactions are recorded to be either as assets (money-in), or expenses (money-
out). Traditional accounting practice considers workers merely as an expense and hence safety measures
are just another expense, while ergonomists and human resource professionals consider workers and
their safety and well-being to be the paramount. In many cases this has led to disputation about the
value of ergonomics interventions with enterprises arguing that they cannot afford the expense of the
intervention.
The debate centers on the meaning of the term “asset”. In an accounting sense an asset is something
that the organization owns and has the right to sell. The theory is that the value of an enterprise (its asset
base) is equal to the money that someone would pay for the components of the enterprise, which
includes buildings, machinery and products waiting to be sold. As the enterprise has no right to sell
its workers they are not considered assets. Hence any intervention that increased the value of the
workers does not result in an increase in the asset base of the enterprise.
This accounting concept of an asset was developed early last century in manufacturing industries. The
nature of work is changing with an increasing proportion of people working in service-based industries,
where the product is intangible, or working from home or out of a car where there is little investment in
buildings or machinery. The value of these enterprises is based on their people, which economics terms as
“human capital,” and accounting is grappling with ways of placing a value on these types of industries.
4.2.2 What Models Suit Ergonomists?
Ergonomics is person focused (Oborne et al., 1993) and hence cost-benefit analysis models that also
focus on people are needed. As it is not possible to capture the value of an ergonomics intervention
to workers directly within enterprise financial systems, ergonomists need to measure the benefits
indirectly, that is, through changes to the enterprise costs or the value of physical assets.
For example, implementation of multi-skilling could render work more interesting, make workers feel
valued and reduce work stress be it physical or mental. If a cost-benefit analysis was undertaken in
support of funding for this project these benefits may be reflected in lower injury costs, higher pro-
ductivity, reduced warranty costs, reduced waste, improved staff retention, etc. Section 4.4 provides
other examples of ways enterprises have applied a cost-benefit model to ergonomics projects.
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