The worst oil spill in US history began when BP’s drilling rig, Deepwater Horizon, exploded on April 20, 2010 in the Gulf of Mexico, killing 11 crewmen and releasing as much as 65,000 barrels of oil per day into the sea. This disaster was the logical consequence of the worst safety record of any oil company operating in North America. As examples, consider the following:? In 2005, an explosion in BP’s Texas City refinery killed 15 people and injured 180 more; a post-accident review indicated that safety procedures were either not followed or had not been established. BP was fined $21 million for the accident.? In 2007, a corroded BP pipeline burst, releasing 200,000 gallons of crude oil into Prudhoe Bay, Alaska; this created an environmental hazard and required massive clean-up efforts. Investigators concluded that BP was aware of the pipeline corrosion but failed to take any corrective action. The spill cost BP vast sums of money in lost production during repairs, criminal fines, and state compensation.? Since 2005, BP has admitted to breaking US environmental and safety laws, has paid $373 million in fines, and has been cited 760 times.The financial benefits associated with creating a safe working environment are as obvious as is the moral obligation to do so. How do organizations create safe working environments? If the problem is placed in the proper conceptual context, the answer becomes quite clear. The three components that must come together to create a culture of workplace safety are: (a) worker personality; (b) a culture of worker engagement; and (c) organizational leadership. Based on these three vital components of workplace safety, Hogan has developed a system of reliable and valid measures of individual differences in safety orientation.The first step in creating a safe working environment involves hiring and training people who are disposed to work safely. The second step concerns creating “engagement,” a concept at the intersection of employees and their organizations. Safety orientation is a trait; engagement is a state that is characterized by an employee’s feeling that the policy is consistent with that person’s own values, tendency to be energized by the policy, and sense that the policy makes overall sense in the workplace. The third and most important step in creating a safety culture depends on the leadership of an organization. The principal factor driving accidents at work is the degree to which the leadership team emphasizes safety. This essential step in creating a safe working environment involves leadership teams building a culture of engagement with safety as a key element. If leadership teams fail to facilitate engagement, no amount of safety training will matter, nor will the safety orientations of individual workers.
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Personality has been one of the hottest trends in assessment over the last 10-15 years, as organizations and practitioners realize the value and utility a personality can provide in selecting and developing talent. Witness the rise of numerous personality instruments in the marketplace, the use of personality to develop the most highly-prized organizational talent, and the role of personality in the red-hot topic of derailment. While everyone at Hogan certainly would agree whole-heartedly with this movement, we’ve also been banging our drum about the role of values and culture in organizational performance. Despite ample evidence (both scientific and anecdotal), values just don’t seem to get the same degree of attention from organizations and practitioners. This is a shame, because there is a lot of utility in these types of instruments, and the return on investment for assessing culture is tremendous. In a recent example, one of our financial services clients used the Motives, Values, Preferences Inventory (MVPI) in an effort to reduce turnover in one of their frontline positions. After one year of using the MVPI, they had reduced their turnover by 66%. That’s not a typo – two-thirds reduction in turnover! I’m not arguing that we should abandon personality and narrow our focus on values. Quite the opposite. Personality and values are very distinct constructs, and each adds incremental prediction and validity over the other. Personality has a lot to do with our abilities to perform certain types of tasks, while values have more to do with our motivation and satisfaction with an organization’s culture. An employee whose values align with the organization’s culture will be more satisfied, and likely to work harder and with a better attitude. If the values and culture don’t align, then even a very capable performer won’t be motivated to do his or her best. Going back to the study above, we were able to find significant reductions in both voluntary turnover (employees who wanted to leave the organization) and involuntary turnover (employees who were shown the door). Voluntary turnover is naturally where we would expect to find the biggest impact; satisfied employees won’t be searching Monster.com on their lunch break. But the reduction in involuntary turnover means that the organization had employees who were capable of doing the job but just didn’t want to, and were subsequently being terminated for poor performance. By aligning the culture and values for these employees, these underperformers improved as a result of increased motivation. So how much is this all worth to an organization? In the study above we estimated the cost of turnover at half an employee’s annual salary (a conservative estimate). The annual savings attributed to this program (the difference in the number of employees turning over each year) is well into the millions. Annually. With an ROI of greater than $30 for every $1 spent, this program has paid for itself over and over and over again. Jarrett Shalhoop Senior Consultant Hogan Assessment Systems