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The data collected is centered around the people and not the product which, to some extent, is a
point of departure from the organizational concepts originating from the work of, for example,
Deming (1982). The major determination of this cost-benefit analysis is of the workers who
produce the goods or services and not of the goods or services themselves. Although there are
programs that take the starting point as the equipment and processes of the manufacturing or
service systems, this cost-benefit analysis concentrates on the people's side. In the long run both
approaches need to be integrated but, for the purposes of this article, we will concentrate on the
people's side.
Certain assumptions need to be made for a cost-benefit analysis model and these include:
.
The important and
or critical data relating to employment costs
.
The costs for implementing the intervention in the work place
.
The financial benefits due to the intervention
/
These assumptions are little different from the assumptions made when the warehouse manager wants a
new fork lift truck, the call center manager wants new computer software or the hotel manager requires
more cleaning staff. The initial costs may be known but the benefits are only assumptions. Will the fork
lift truck reduce loading time and goods damage? Will the new software bring in more telephone custo-
mers? Will the extra staff increase the standard and the guest fees of the hotel? Determining the future can
only be based on the best guess even if based on experience.
Once the assumptions are agreed upon then data can be collected. Some of the employment data
required are straightforward and usually easy to obtain. These include the direct labor costs of hours
worked, wages, social costs, training, absenteeism, etc. but may also include a portion of the organiz-
ational costs of supervision, management and head office costs.
Other data may be less easy to obtain but, in our experiences, give the greatest return from ergonomics
investment. These include:
.
Productivity (gross output and quality)
.
Labor turnover
.
Error and warranty costs
One can also add equipment and material costs (equipment failures, waste, errors, etc.) particularly if
these are expected to change, for better or worse, due to the intervention. The costs for all these items,
and the eventual savings, are related mainly to the labor costs.
4.3.3 A Cost-Benefit Analysis Model: The Productivity Assessment Tool
As we have noted earlier, there is a dearth of cost-benefit analysis models specifically directed to
occupational ergonomics, health, and safety. In this article we will describe one generic cost-benefit analy-
sis model (the Productivity Assessment Tool) developed for use by ergonomists and other occupational
health and safety practitioners. The model is equally applicable for service or manufacturing industries.
A basic software version of the Productivity Assessment Tool has been published in Oxenburgh et al.
(2004), which allows one employee or an employee group and one test case for comparison with the
initial or present situation.
The full version of the Productivity Assessment Tool (ProductAbility, 2004) allows the user to have
upto five individual employees or five employee groups in the selected workplace. That is, the employees
can be individuals or groups, each working for a different number of hours per week, different rates of
pay, overtime, absenteeism and degrees of productivity. With the reduction in full-time or permanent
employment and the concomitant rise in precarious or casual employment (Bohle and Quinlan,
2000), such employment variations are common.
In addition, the present or basic state of the workplace (the initial case) can be compared with upto
four possible interventions (the test cases). The advantage is that one can propose several possible
solutions to any problem and directly compare their economic effectiveness. Needless-to-say, these
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