Cultural & Human Factors in Identifying and Reducing People Risk

There are many factors that encompass People Risk in organisations from employees not following procedures, systems, processes and rules of the organisation to individual and organisational human factors. One of the unpredictable areas of being human is that we can at times deviate from expected behaviours, deliberately or not or what we may call human error.

For many organisations understanding human behaviour is a huge challenge.

Measuring how people perform and behave is crucial, especially in sectors such as utilities and transport where it can affect health and safety compliance, and in highly regulated industries such as financial services and banking, where wrongdoing can lead to a toxic culture of excessive risk-taking and poor decision-making. Even in customer service sectors or sales environments wrong behaviours can lead to companies losing customers, sales, and reputation.

So why do employees often not do what is asked or expected of them, and what can companies do to gain a better understanding of human behaviour in the workplace?

Cognisco has found that in various sectors 30% of employees have no understanding of at least one aspect of their role, while 50% are confident they know their role, but actually misunderstand what they need to do. This is placing many organisations at a huge disadvantage.

Analysis and measurement of People Risk has been largely centred on areas that can be easily quantified, such as performance and reward, staff engagement and competence. Other measurable staff factors, such as attrition, overtime and the results of employee surveys, provide information that can be used to gauge the ‘people’ aspect of risk.  However, it can be far more difficult to measure how employees’ behaviour at work can contribute to operational risk or the impact it can have on organisational culture.

Workplace Culture

When asked how they would define ‘culture’ within an organisation, employees will often say that it is ‘the way we do things around here’.  Culture, however, covers many elements of human behaviour and interaction driven by the organisation and its staff, such as a set of commonly shared ideologies, values, assumptions, beliefs, stories and ideas that shape behaviour.

An organisation’s culture dictates whether employees will follow the procedures when their manager or supervisor is not around. It dictates whether a new employee will carry out their work from the best practice learned in training or induction, or even what the leadership of the company expects to be the norm.  It’s also about how employees perceive their relationship with the company and whether or not there is a “them versus us” relationship between management and employees.  Culture also determines whether the company cares about and looks after its employees and whether the employees do the same for the company.

To ensure a positive work culture companies need a better understanding of staff behaviour. Knowing how different people will behave in different situations can help to reduce People Risk and operational risk. Systems, processes and controls are designed to reduce risk but employees find ways of getting round them.  Companies need robust and repeatable measurement of staff attitudes to risk to cut People Risk even further.

Unique Measurement Measuring competence

In recent years situational judgement tests have changed the way we measure how individuals think in any given situation. However, if extended to the specific job requirements and design the scenarios to identify and measure specific People Risks stemming from human behaviour, we have a unique measure of how people are likely to behave.

This unique approach can therefore look at employees’ understanding, knowledge and confidence and how this is applied in real-life situations on the job, providing organisations with a unique insight into behaviour and likely risk areas. This kind of knowledge helps organisations offer tailored training, rather than a ‘one-size fits-all’ approach, which is often a waste of money.

By using this unique approach you can  accurately measure what employees understand about their job, and draw out information on the level of employees’ understanding and decision-making. By measuring key factors of an employee’s understanding and how likely they are to apply that understanding to their role, this information gives a better measure than just assessing employees’ memory of their role, which is a common flaw many organisations make today, as memory alone cannot determine if a task will be completed correctly.

Another factor to successfully measuring People Risk is to use multiple response questions as opposed to multiple choice questions. With multiple choice questions individuals are likely to guess the answers while using multiple response questions individuals need to draw upon their knowledge base to correctly answer the questions. By also measuring how confident they are in their understanding, a more insightful view can be gained into how this knowledge will be applied and how likely decisions will be correctly made, which gives a more rounded measure to that individual’s overall level of knowledge.

By revealingwhat people know, what they don’t know and what they think they know identifies specific training needs as well as highlighting areas that might put an organisation at risk: operational and reputational risk.

Combining objective measurement of employee risk and performance measurement assessments with analysis for targeted enhancements, can deliver a complete solution that helps in both evaluation and foresight of People Risk. This can ultimately help companies shift from a risk culture to an organisation with positive behavioural and cultural values, where People Risk is at a minimum.

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Download your PDF version here: Guest Blog – Cultural & Human Factors in Identifying and Reducing People Risk

Andrew Davidson

By Andrew Davidson

Andrew Davidson, BA (Hons), MA

Consulting Manager

Andrew Davidson graduated with a BSc (Hons) Sociology and Social Anthropology degree and is a trained psychotherapist with an MA in Relationship Therapy, both from the University of Hull. Andrew is also a member of the British Association of Counsellors and Psychotherapist.

Andrew joined Cognisco in March 2007 as Production Manager where he enhanced the development of assessment content. In August 2008 Andrew was promoted to Consulting Manager where he is now responsible for development, research and management of Cognisco’s global assessment consultancy solutions, while managing a highly skilled team of consultants. He is also a senior consultant to the business providing advice and guidance on potential solutions including the scoping and development of innovative psychological and organisational developmental solutions and has written workshops on the interpretation of assessment data and on how to write effective assessments. Andrew’s interest in relationships has extended to organisational relationships including how assessments, values and policies affect personal and professional performance and the impact this has on revenue and customer relationships.

An example of Andrew’s projects include:

Designing health and safety assessments for QinetiQ, Virgin Media and CSX

Training BT and Network Rail to write and design role-based knowledge test question sets

Designing a research project for Union Pacific on understanding the behavioural decisions managers make in safety critical situations.

Designing a Sales assessment for BT and Lloyd’s Register on their sales force capability.

Designing a customer service assessment with Cognisco’s Partner, Huthwaite, on the service capability of employees managing inbound customer calls.

Designing a behavioural assessment with Cognisco’s Partner, Develop Training, on understanding how to avoid striking underground apparatus for street work operatives.

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