Many companies have difficulty ensuring that issues identified during their environmental, health, and safety (EHS) audits get resolved in a timely fashion. This can be particularly difficult in the utility industry, where a number of different activities may be conducted at a facility, each managed by a different part of the organization (such as generation, transmission, and temporary storage of transformers brought in for repair). A number of factors promote effective and responsible completion of EHS audit action plans, with the most important being the proper alignment of responsibility and authority for developing and implementing the audit action plan.
Measuring On-Time Completion Performance
Generally, organizations understand the need to assign specific corrective and preventive actions to specific persons. Ensuring that the periodic review of implemented lockout/tagout procedures is conducted might be assigned to the facility’s maintenance manager. The environmental manager is the probable choice for realigning written procedures for equipment calibration found in the continuous emissions monitoring plan with current practices. The person most closely aligned with responsibility for implementing the requirement usually ends up with the assignment and the deadline.
But how do you ensure that the actions do get completed this time? After all, the item may have been on that person’s list all along, and somehow the responsible person missed it. The answer is that in addition to assigning responsibility for an action to the right person, that person and his or her supervisor need to be held accountable for completing the action.
While managing an EHS audit program at a major waste and recycling services company that conducts more than 100 audits a year, the corporate managers devised a simple way to monitor progress on audit action plans. This successful EHS audit program is outlined in “Case Study: Browning-Ferris Industries’ Computerized System for Managing Audit and Environmental Performance” in Auditing for Environmental Quality Leadership: Beyond Compliance to Environmental Excellence, John T. Willig, Editor, 1995.
Rather than distributing lengthy reports to management describing actions planned and actions completed, EHS auditors distilled their progress into one-page reports detailing completion performance, showing:
- Total number of findings and actions.
- Number and percentages of actions completed.
- Number and percentages of actions completed on or before their respective target dates.
- Short descriptions of actions that were overdue.
Quickly, and with little need for in-depth understanding of EHS requirements, senior management could review these reports and identify which action plans were being managed well, and which facilities needed attention and assistance. Regardless of how many findings were identified or how many discrete actions needed to be tracked to resolve the findings, every manager could achieve a 100% on-time completion performance—if he or she managed the action plan effectively.
This approach adopts the principle learned from quality management programs that things that get measured are things that improve performance. For example, the Browning-Ferris Industries’ (BFI) staff achieved a near doubling of on-time completion in the first year of measurement, improving from below 40% of the items being completed on time to a nearly 80% completion rate.
Accountability of Senior Managers
Because supervisors and senior managers directly influence facility and local managers by assigning tasks, setting objectives, and approving budgets and compensation, senior managers need to be held accountable for completion of EHS audit action plans as well. This was accomplished by rolling up the on-time completion performance for all the audit action plans for facilities and activities for which a particular senior manager has responsibility.
Consider a senior manager who has responsibility for all the service centers in a particular geographic area. That manager would receive a copy of the individual reports showing performance levels for all the action plans for service centers for which the manager was responsible. That senior manager would also receive a rating compiled from the on-time performance for all the action items for all of those service centers. The more activities and properties under a senior manager’s direction, the greater the number of audit action plan items compiled into that senior manager’s rating.
In the example shown in Figure 7, the compiled on-time completion performance for the two action plans for activities under the control of Senior Manager A is 100%, because all actions for both sites were completed on time. Senior Manager B, however, has an on-time completion performance of only 60%, because 5 of 10 items were completed on time at one site and 10 of 15 actions were completed on time at the other site (Figure 8). Managers in the “A” grouping receive congratulations, while managers in the “B” grouping need assistance and/or attention.
Linking On-Time Completion Performance to Compensation
Encouraged with the improvement in on-time completion performance that resulted from measurement and reporting, the company linked measurement to bonus compensation to promote further improvements. Other operational measures determined the potential bonus for a manager and the percentage of actions completed on time was then multiplied by the potential bonus. Because on-time completion performance could range from 0% to 100%, managers worked hard to complete all their actions on time so they could receive their full bonus. Senior managers wanted to receive 100% of their potential bonus as well, so they made sure their facility managers completed their action plans on time. Predictably, as shown in Figure 9, on-time completion performance of EHS audit action plans approached 100% after being linked to senior managers’ compensation.
A concern heard too often during EHS audits of utilities is that the particular manager initially assigned to implement an action item doesn’t have responsibility for certain equipment or activities. The manager might say, “The transformer may be located on this property, but the transmission operations group takes care of it, not me,” or “The laboratory is managed by the shared services group. They essentially lease office space from the generating plant.”
If a responsible manager can be identified, then responsibility for the action item can be assigned, and, consequently, on-time completion performance can be measured to hold that manager (and his or her supervisor) accountable. If a management responsibility gap is uncovered (such as no one was assigned responsibility for the action), then the manager with authority for the property should be accountable for completing the action. This makes sense because a third party or an agency would reasonably assume that the manager who has authority over that property would also be responsible for the action related to that property.
Additional Benefits of Measuring On-Time Completion Performance
Audit programs that measure performance by the number and severity of findings inevitably turn contentious. Facilities may even conceal failures to conform to approved action plans from internal auditors and thereby allow problems to continue unabated.
By measuring performance based on the ability to complete the action plan, the audit program profiled in the BFI case study evolved to one of resolution and improvement. Appropriately, pressure remained on auditors to be correct and to distinguish findings of nonconformance from opinions and improvement opportunities, but there were fewer disagreements between auditors and facility personnel about whether identified issues were findings to be included in the report.
With the organization focused on resolution and improvement, more managers collaborated on solutions. Whereas previously it seemed that every site was on its own, once management compensation was impacted by the on-time completion performance measure, senior managers were much more likely to lend support staff, form teams, and coordinate budgets so as to design and implement solutions that could be applied across the organization, reducing overall costs.
Regardless of whether EHS audit action plan completion performance can be linked to compensation in your organization, assessing your senior staff’s management abilities by measuring their on-time completion performance will improve your organization’s ability to resolve audit findings and help achieve the fundamental auditing goal of improving your organization’s overall performance in a timely and effective way.
—Contributed by Curt Johnson (firstname.lastname@example.org), a senior program director with Specialty Technical Consultants (www.specialtytechnicalconsultants.com), with more than 30 years’ experience in compliance and management systems auditing and improving organizations’ EHS compliance assurance systems.