Safety performance evaluation of Indian organizations using data envelopment analysis

Abstract

Purpose -The main purpose of the present study is to develop appropriate construct to benchmark occupational health and safety performance in industrial setting so that deficiencies can be highlighted and possible strategies can be evolved to improve the performance. Design/methodology/approach -Data envelopment analysis (DEA), being a robust mathematical tool, has been employed to evaluate the safety performance of industries. DEA, basically, takes into account the input and output components of a decision-making unit (DMU) to calculate technical efficiency (TE). TE is treated as an indicator for safety performance of DMUs and comparison has been made among them. Findings -A total of 30 Indian organizations under three industrial categories such as construction, refractory and steel are chosen for comparison purpose. It has been observed that safety performance of construction industries is consistently low as compared to other categories of industries. TE has been calculated using two types of models of DEA such as constant return to scale (CRS) and variable return to scale (VRS). A paired two-sample t-test indicates that TEs obtained using two models are significantly different. Mean efficiency of 30 samples is found as 0.898 using CRS model whereas same is calculated as 0.942 using VRS.Research limitations/implications -The limitations may be number of input and output components considered for each DMU. If different set of inputs and outputs may be considered, the results may be different. Another limitation may be the number of industrial sectors considered in the study. Practical implications -The method, being a generic one, can be adopted by the managers to assess present safety performance and find a suitable peer to which, it should follow to improve own TE followed by in what respect it has to improve. Industrial safety and occupational health concerns in industries is not only important from government regulation point of view but also essential for enhancing productivity and profitability to become competitive in the marketplace. The practical limitation may be collection data quantitatively from various DMUs because many a time the DMUs are unwilling to share data. Originality/value -This work proposes use of simple mathematical tool like DEA for benchmarking based on safety performance in Indian industries. In Indian context, safety performance of industrial settings has hardly been assessed. The study provides a simple but comprehensive methodology for improving safety performance. The study also outlines comparative evaluation of safety practices in different industries.

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