Characteristics of a good measurement tool

Purpose of this module

The purpose of this module is to provide you with an understanding of and insight into the measuring and monitoring of risk control.  

    Learning outcomes and objectives

    The aim of this module is to provide you with the necessary information and activities to enable you to: 

     

    6. Measure and monitor risk control by:

    6.1 Inspecting the characteristics of a good measurement tool.

    6.2 Examining the measurements of consequences.

    6.3 Examining the measurements of causes.

    6.4 Examining the measurements of control.  

      Characteristics of a good measurement tool

      Introduction

      There are a number of tools available to an organisation to measure various aspects of its risk control process.  However, it is important to understand exactly what is being measured and how to use that information to produce the desired results. 

      Today’s leading authorities clearly show us the importance of measurement in managing control of losses. 

      “If you can’t measure it, you can’t manage it.” (Peter Drucker)

      “Management will attach an increased dimension of importance to anything that is quantified.” (Frank E. Bird)

      “Performance measurement and motivation are almost synonymous.” (Dan Peterson)

      “What gets measured gets done.” (Thomas J. Peters)

       

      One of the biggest roadblocks to progress in establishing measurement tools to help management has been the long search by risk control leaders for one universal measurement that would answer all needs.  

      This quest for a measurement that would reflect the degree of safety or risk control for an organisation has been one of the most perplexing problems throughout the entire history of the organised risk control movement.  

      The important thing is that everyone recognise exactly what’s being measured and what significance the use of the measurement will have on producing the results desired. 

        Characteristics of a good measurement tool

        Regardless of the specific factor that is being measured, there are certain desirable characteristics that the user should keep in mind when selecting measurement tools.  Several of special importance is briefly discussed here.  

        1. It should be administratively practical.

        2. The measurement criterion should be quantifiable.

        3. It should be a valid measurement of what it is supposed to represent.

        4. It should be as objective and error-free as possible.

        5. It should be understandable.

        6. It should be sensitive to change.  

        Over the years, three types of loss control measurements have evolved.  They are measurements of consequences, causes and control.