Hazard v Risk
To manage Risk, management MUST first understand the Hazards.
So What is Risk ??
Risk is defined as "the potential of gaining or losing something of value"
When considerd in a business context, "RISK" is generally rated in terms of Injury or overall as financial loss.
So What is Hazard ??
A hazard is something that can cause harm, e.g. electricity, chemicals, working up a ladder, noise, a keyboard, a bully at work, stress, etc.
A simple Example......
Hazard - Wet floor (from a dripping tap)
Risk - Slip,Trip or Fall
Consequences - Twisted ankle, Loss of production, Medical treatment and WorkCover Claim, Legal Proceedings
Risk Assessment - Evaluating the Risk by comparing the likelihood that this will occur and the Potential consequences
Risk Management - Process that assesses and minimise the Risk, by reducing the Likelihood or the consequences.
Lets Assume that the likelihood of a wet floor is Possible (May occur) and
the Consequences are Moderate (Hospital admission).
Therfore using the template to the Right, RIsk Rating would be High.
Risk Assessments are generally considered against a range of consequences
People - Injury
Environmental - Damage / Impact
Property - Damage / Loss
Ecconomic Impact - Loss
Reputation - Negative Public Image
Capability - Sustainability of Operations
Information - Security / Confidentiality
To reduce the Risk, we must first undertstand the hazard, its likelihood and all potential consequences.
We can then reduce the liklihood that it will occur (ie fix the leaking tap) or reduce the consequences (unrealistic i know, but lets say provide soft fall flooring). In this case, the likelyhood would be reduced to a Rare ( probably never will) and Consequences reduced to Not Significant ( no medical treatment) - Overall Risk Rating would now be Low.
Obviously you implement preventative actions and reduce the risk by reducing the likelyhood, the consequences or both.
One of my pet hates is when preventative actions are implemented and only the liklihood is reduced but the risk rating reflects a change to consequences as well.
e.g 2 Situation - A person is working on a roof .
Hazard is obviously falling from height.
Consequence is that he will be inured.
If we only reduce the liklihood - eg. Use of a fall prevention system ie handrails, theoretically preventing him from falling.
However, Consequence still remains the same, IF he fell he would still be injured.
If we only reduce the consequence - Use of fall mats bellow the working area.
Liklihood would still remain the same, Without fall prevention, he could still fall
Consequences and Likelihood are two very separate considerations that need to be made and reflected in the reduction of risks.