A strategic safety management framework throughbalanced scorecard and quality function deployment

Murat Gunduz and Burak Simsek

Abstract: The aim of this paper is to propose a safety management framework for construction companies. A literaturereview was carried out to identify significant factors that would improve safety performance. Two management tools—namely, the balanced scorecard and quality function deployment (QFD)—were used to construct the framework. Strategicgoals were established for each of the following perspectives of the balanced scorecard: financial and cultural, employee,process, and learning. Afterwards, a questionnaire was prepared using the QFD approach. The goals in the financialand cultural perspective were defined as the safety-related needs of the organization (“customer requirements” in theoriginal QFD approach); and the goals in the remaining perspectives included the actions that the organization couldtake to meet its needs. Results of the questionnaire were used to set the final strategic goals in the balanced scorecard.Safety performance measures and initiatives were used to accomplish the goals in the balanced scorecard.

Key words: safety management, balanced scorecard, quality function deployment.

Résumé : Cet article propose un cadre de gestion de la sécurité pour les compagnies de construction. Une revue de lalittérature a tout d’abord été réalisée afin d’identifier les facteurs significatifs qui pourraient améliorer la sécurité. Puis,deux outils de gestion ont été utilisés pour la présente étude, dont le tableau de bord équilibré et le déploiement de lafonction qualité. Des objectifs stratégiques ont été établis pour chaque aspect du tableau de bord équilibré : financier etculturel, les employés, les procédés ainsi que l’apprentissage et la croissance. Par après, un questionnaire a été préparéen utilisant l’approche du déploiement de la fonction qualité. Les objectifs financiers et culturels ont été définis commeétant les besoins reliés à la sécurité (« exigences des clients » dans l’approche initiale du déploiement de la fonctionqualité) et les objectifs des autres aspects comprenaient les actions que l’organisation pourrait prendre afin de répondreà ses besoins. Les résultats ont été utilisés pour déterminer les objectifs stratégiques finaux dans le tableau de bordéquilibré. Les mesures et les initiatives de sécurité ont été utilisées pour réaliser les objectifs du tableau de bord équilibré.

Mots-clés : gestion de la sécurité, tableau de bord équilibré, déploiement de la fonction qualité.

[Traduit par la Rédaction] Gunduz and Simsek 630

Introduction

The construction industry is one of the most dangeroussectors in Turkey. In the past 10 years, more than 9000 peoplehave died from injuries received during construction work.Many more have been injured or have contracted illnessesrelated to construction work. Moreover, work injuries canturn out to be a significant cost for construction companies.In addition to direct costs, such as legal penalties, companiesmay incur indirect or hidden costs, such as the cost ofreplacing an employee or training a new one during theinjured worker’s recovery period, reduced productivity ofthe crew, overtime to make up for lost productivity, and pos-sible project delays.

This paper proposes a safety management framework (Fig. 1)that can be used by construction companies. Two manage-ment tools—the balanced scorecard and quality functiondeployment (QFD)—were used to construct this framework.The balanced scorecard provides a medium for translating avision into a clear set of objectives. These objectives arethen further translated into a system of performance mea-surements that effectively communicate a powerful, forward-looking, strategic focus on the entire organization. QFD is aprocess for determining customer requirements and translat-ing these requirements into product attributes that each func-tional area can understand and act on. The process involvesconstructing one or more matrices through which the cus-tomer perspective is converted into a product or processhow-to. A product how-to is a set of pre-defined activities toachieve customer needs. The study combines these two toolsin a questionnaire to identify the needs of the constructionindustry and current safety management practices. Construc-tion companies can use this framework to establish theirmission and vision statements related to safety managementand to continually establish measures of program perfor-mance.

An industry analysis of safety issues, which was based onthe vision and mission of the construction industry, was con-ducted. Strategic goals were set for the following perspec-tives of the balanced scorecard: financial and cultural,

Can. J. Civ. Eng. 34: 622–630 (2007) doi:10.1139/L06-163 © 2007 NRC Canada

622

Received 17 May 2006. Revision accepted 4 November 2006.Published on the NRC Research Press Web site at cjce.nrc.caon 20 June 2007.

M. Gunduz.1 Department of Civil Engineering, Middle EastTechnical University, Ankara 06531, Turkey.B. Simsek. Corporate Credit Assessment, HSBC Bank,Istanbul 34398, Turkey.

Written discussion of this article is welcomed and will bereceived by the Editor until 30 September 2007.

1Corresponding author (e-mail: gunduzm@metu.edu.tr).

employee, process, and learning. Since it would not be feasi-ble to deal with all these perspectives, the QFD tool wasused to evaluate each of them one by one and select themost relevant for goal setting. The next step was to utilizethe balanced scorecard to determine the appropriate safetyperformance measures for each goal. Initiatives to accom-plish these goals were developed in the final stage of thisstudy.

Literature review

A literature review of previous safety research was carriedout to identify significant factors that would improve safetyperformance.

Hinze (1978) drew attention to the safety impact of newworkers and turnover rates and stated that worker turnover isa key factor in job safety. Studies have also revealed thatinjury levels are affected by how well company managersand policies help new workers adapt to their work environ-ment. Hinze and Pannullo (1978) showed that increased jobcontrol led to better safety performance. Their study revealedthat contractors who closely monitored and controlled theirprojects had fewer job injuries among their workers thancontractors who did not. The following year, Hinze and Gordon(1979) investigated supervisor–worker relationships and howthey affect injury rates. These researchers found that super-visors who were more flexible in dealing with conflictsbetween subordinates had better safety records than morerigid supervisors did. Hinze and Harrison (1981) investi-gated safety program practices in large companies in associ-ation with reduced rates of injury. According to their study,training and safety awards led to lower accident rates. Partic-ularly safe records were observed in firms that (i) providedformal orientation for new workers; (ii) had field-safetypersonnel that were hired by the corporate safety director;and (iii) placed the field-safety director in charge of training

other safety personnel. Furthermore, Hinze and Raboud (1988)identified appropriate means of achieving or maintainingacceptable safety performance on large projects. They foundthat monitoring safety, holding safety meetings regularly,and organizing safety site tours reduced the number of acci-dents.

Kibert and Coble (1995) recommended that safety andenvironmental regulations be consolidated for the benefit ofthe construction industry. Jaselskis et al. (1996) analyzed thesafety programs of 48 companies and 69 projects with vari-ous levels of safety performance and provided the industrywith strategies for improving construction safety. Statisticalanalysis of the data pointed to several company- and project-specific factors that were significant in improving safety per-formance. Kartam (1997) tried to integrate safety and healthperformance with critical path method scheduling software.The rationale for a knowledge-intensive integrated systemwas suggested to show how the development of such a sys-tem would improve industry practice. Elbeltagi et al. (2004)presented a layout planning approach that considered bothsafety and productivity as opposed to considering only pro-ductivity issues during site planning. Weinstein et al. (2005)studied the impact of a large-scale safety-in-design initiativeduring the design and construction of a semiconductor man-ufacturing facility in the Pacific Northwest of the UnitedStates. A procedure to optimize the layout of temporaryfacilities was then developed in combination with a schedul-ing tool. Furthermore, a case study on a prototype systemwas presented to demonstrate the benefits of the proposedapproach. Huang and Hinze (2006a, 2006b) presented a modelthat evaluated the impact of different owner practices onproject safety performance. They concluded in both studiesthat the owner could favorably influence project safetyperformance by setting safety objectives, selecting safe con-tractors, and participating in safety management during con-struction.

The literature has thus defined the most significant factorsthat would reduce losses due to construction accidents. Thesefactors and the relevant references are listed in Table 1. Forthis study, the factors were investigated in a survey form todefine a strategic safety management framework using thebalanced scorecard and QFD management tools.

Safety and the balanced scorecard tool

An organization can use the balanced scorecard tool as aframework for translating its vision and strategies and clarifyits strategy through selected objectives and measures. Ratherthan focusing only on short-term performance, this tool alsoprovides guidance for long-term goals. The scorecard main-tains the financial perspective and complements it with thecustomer, the internal business, and the innovation and growthperspectives. The original balanced scorecard frameworkdeveloped by Kaplan and Norton (1996) was modified asshown in Fig. 2.

This study slightly modified the perspectives of the origi-nal balanced scorecard and focused on financial and cultural,learning, process, and employee perspectives. As mentionedearlier, the objectives were selected for each perspective bytaking into consideration relevant research in the literature.

© 2007 NRC Canada

Gunduz and Simsek 623

Fig. 1. Proposed safety management framework.

The most important objectives of these perspectives weredetermined with a questionnaire. After an analysis of theresults of this questionnaire, some of the less significantobjectives were eliminated, and measures and initiativeswere developed for the remaining objectives. The modifiedperspectives, with measures and initiatives, are shown inTable 2. However, this table does not indicate the initiativesfor the financial and cultural perspective, because they areused to build the product or process how-to part of the QFD.

Financial and cultural perspectiveThe financial and cultural perspective mirrors the organi-

zation’s mission statement regarding safety. Safety has bothfinancial and humanitarian impacts, so this perspective isconcerned with the financial effects of safety-related issues.Moreover, it tries to incorporate cultural aspects as a safety-consciousness policy of the company’s commitment.

Employee perspectiveIn this study, the customer perspective in the original bal-

anced scorecard was replaced with the employee perspec-tive. Although the objectives in the original scorecard weretargeting more satisfied customers, the objectives in the cur-rent scorecard target more satisfied employees.

Process perspectiveThe process perspective is concerned with the operational

aspects that ensure a safer workplace and create a safety-conscious climate.

Learning perspectiveHaving determined strategic objectives for the aforemen-

tioned perspectives, the balanced scorecard process identifiedsome gaps between the required and existing capabilities,such as gaps in employee skills and motivation. The learningperspective includes objectives aimed at addressing thesegaps.

Safety and the quality function deploymenttool

The QFD approach evolved from a desire to translate anassessment of customer needs into a systematic improve-ment process. Customer requirements are determined andtranslated into product attributes that can be understood andacted on by each functional area. The process involves con-structing one or more matrices through which the customerperspective is converted into product or process how-tos. Themost common matrix is the house of quality shown in Fig. 3.

To eliminate any non-value-adding processes, the QFDtool was used early in the design process to help determinewhat would satisfy the customer and where to deploy themost effort. As explained earlier, the objectives were definedfor each perspective of the balanced scorecard. However, thescorecard was not further utilized because dealing with allthe objectives would consume resources, such as time. Thus,QFD can determine the most important objectives, whichthereby eliminates the less important ones in the early stages.

Data collection and analysisThe QFD is usually prepared by the top management peo-

ple in large organizations. However, in this study it was pre-pared in the form of a questionnaire to analyze the safetymanagement practices of construction companies in Turkey.The QFD approach has two dimensions. For the purpose ofthis questionnaire, the first dimension (customer needs in theoriginal QFD) was taken as the financial and cultural per-spective of the balanced scorecard and included the objec-tives established for this perspective previously. The seconddimension (product or process how-tos in the original QFD)included the objectives of the remaining perspectives (em-ployee, process, and learning), since these perspectives arethe enablers of the financial and cultural perspective. The

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624 Can. J. Civ. Eng. Vol. 34, 2007

Factors Source(s)

Training Hinze (1978); Hinze and Harrison (1981)Controlling, monitoring Hinze and Pannullo (1978); Hinze and Raboud (1988)Coordination Hinze and Gordon (1979)Numerical analysis with models Jaselskis et al. (1996); Weinstein et al. (2005)Integration with critical path method Kartam (1997)Owner practices Huang and Hinze (2006a, 2006b)Productivity Hinze (1978); Elbeltagi et al. (2004)

Table 1. Significant factors in the literature.

Fig. 2. Original balanced scorecard framework (after Kaplan andNorton 1996).

© 2007 NRC Canada

Gunduz and Simsek 625

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financial and cultural perspective actually compromises theultimate safety goals. The first dimension can be called thesafety objectives in the current house of quality, and thesecond one can be called “enablers”.

The “roof” of the house of quality was omitted from thequestionnaire to avoid complexity for respondents. However,the roof can help establish the cause–effect relationships ofthe balanced scorecard. Furthermore, the dimensions of thehouse of quality were reversed for convenience—in otherwords, the enablers (product how-tos in the original QFD)were placed on the left side of the house of quality, and thesafety objectives (customer needs in the original QFD) wereplaced at the top.

Construction companies of different sizes and the safetydepartment of the Ministry of Labor and Social Securitywere asked to complete this survey. The list of companieswas developed with the help of the ministry. Approximately200 forms were mailed, and 50 hard copies were distributedto potential respondents. A total of 40 surveys were com-pleted, representing a response rate of 16%. A sample ques-tionnaire form is shown in Fig. 4. The matrix was empty onthe forms given to the respondents, but the enablers andsafety objectives had been predetermined and filled out asshown in the figure.

All the respondents were civil engineers, and the responsesreflect the opinions of these construction industry profes-sionals. The projects involved varied from building projectsto infrastructure projects, though the type of project was notreflected in the questionnaire.

The steps involved in answering and evaluating the matrixin the questionnaire were as follows:• Respondents evaluated the importance of each safety

objective by assigning a value from 1 to 5, with 1 beingthe lowest and 5 being the highest grade. They also speci-fied how capable each enabler was in meeting the safetyobjectives by entering a Y, O, or D (representing a strong,

moderate, or weak relationship, respectively) into the cellsor leaving them empty if they found no relationship. Afilled-in questionnaire is shown in Fig. 4.

• The D, O, and Y responses were then replaced with thediscrete values 1, 3, and 5, respectively. The empty spaceshad a value equal to 0 (Fig. 5). The values 1, 3, and 5were assigned because this practice is common in statisti-cal literature.

• The values entered into the cells by each respondent wereadded and then divided by the number of respondents(Fig. 6).

• The importance rating for each enabler was then deter-mined by the weighted average of the importance ratingsof the safety objectives and the relationship value of therelated enabler. The summary and the results of the pro-cess are shown in Fig. 6.The data were sent out to the owners, project managers,

and site superintendents of the construction projects in Turkey.

Discussion of resultsThe importance ratings for each objective can be seen in

Fig. 6. Some enablers were considered more important thanothers, as shown numerically as shown in the last column.All the safety objectives, which represent the objectives ofthe financial and cultural perspective in the balanced score-card, are included in the final scorecard. The enablers repre-senting the objectives of the remaining perspectives in thebalanced scorecard turned out to be less important and wereeliminated. The selected components of each perspective areshown in Fig. 7.

Application of quality function deploymentresults to balanced scorecard

The next stage will be to utilize the scorecard, taking thefollowing steps:• List the objectives for each perspective.• Establish the cause–effect relationships.• Propose possible measures for the objectives of each per-

spective.• List possible initiatives.

Milestones for the establishment of the objectives will notbe set here, since the timeline for accomplishing these goalswill vary from one company to another. However, each com-pany is strongly advised to set target dates for meeting itsobjectives so that everyone involved will have a definite timeframe to follow.

As mentioned above, a list of possible objectives, derivedfrom a literature survey, was selected for all perspectives inthe balanced scorecard. Afterwards, a survey was conducted,and the most important objectives were determined. The out-comes shown in Fig. 7 will form the strategic objectives forthe perspectives of the balanced scorecard.

Cause–effect relationshipsDetermining cause–effect linkages allows a company to

set accurate milestones for the accomplishment of interre-lated goals. Although setting milestones is beyond the scopeof this study, some possible cause–effect linkages are shownin Fig. 7. For example, providing orientation and training to

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626 Can. J. Civ. Eng. Vol. 34, 2007

Fig. 3. Typical house of quality.

new employees will improve compliance with safety-codesstandards (link 1). Compliance, in turn, will improve workplaceclimate (link 2). Improved workplace climate will increaseemployee satisfaction (link 3), and employee satisfaction willresult in improved productivity (link 4). However, there ismuch debate about link 4 in the literature. Borcherding andOglesby (1974) analyzed the hypothesis of social psycholo-gists that high job satisfaction leads to high productivity. Incontrast, the present study found the reverse —that high pro-ductivity resulted in job satisfaction. In addition, a study by

Soderberg and Salena (1981) found no correlation betweenjob satisfaction and productivity. Mansfield et al. (1989)presented an excellent review of literature in this area andconcluded that the importance of worker satisfaction had notyet been resolved. These studies suggest that link 4 needscareful attention.

Defining measures and initiativesA relevant measurement system is needed to provide feed-

back and motivation for stakeholders. Table 2 lists possible

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Gunduz and Simsek 627

Fig. 4. Sample questionnaire.

performance measures, most of which were derived from asurvey of the literature.

The last step in completing the balanced scorecard is todefine initiatives. Initiatives are actually the required actionsthe company has to take to accomplish its objectives. Theobjectives in the financial and cultural perspective will bethe outcomes of the objectives in the other perspectives.Therefore, initiatives should be defined for the objectives for

the employee, process, and learning perspectives. The pro-posed initiatives are also listed in Table 2.

Conclusion

The balanced scorecard and QFD are effective tools thatmanagement can use to identify relationships between objec-tives and performance measures in safety management prac-

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628 Can. J. Civ. Eng. Vol. 34, 2007

Fig. 5. Relationships as discrete random variables.

tices. In this study, these two tools were slightly modified toset targets and define goals for a safety management frame-work that a construction company could use for benchmarkingand measuring its safety performance. A survey form wasdeveloped to define the final strategic goals in the balancedscorecard. The proposed balanced scorecard will help theconstruction industry test and receive feedback on cause–

effect relationships. In this way, the system is expected toimprove itself over time, leading to the construction of aneven better safety management framework.

Defining the milestones for each goal in the balancedscorecard should be considered. However, the present studyleaves implementation to the individual companies, sincethese targets change from one company to another. Com-

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Fig. 6. Importance of ratings.

panies are also strongly advised to continually evaluate theirstrategy by comparing their actual performance with the mile-stones set for each strategic goal.

Acknowledgments

The authors would like to thank Mr. Sedat Bitik and Mr.Ekrem Turk for their continuous support during the researcheffort.

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Elbeltagi, E., Hegazy, T., and Eldosouky, A. 2004. Dynamic layoutof construction temporary facilities considering safety. Journalof Construction Engineering and Management, ASCE, 130(4):534–541.

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Fig. 7. Cause–effect linkages.