The Definition of Key Performance Indicator (KPI)

Definition of Key Performance Indicator (KPI)

A key performance indicator (KPI) is a measurable value that shows how well an organization, team or process is performing against an important goal. In environment, health and safety (EHS) management, safety KPIs track how effectively a company is preventing injuries, illnesses and incidents and how well its safety program activities are being carried out.

Safety KPIs turn safety performance into numbers that leaders can review, compare and act on. They help organizations set targets, spot trends, decide where to focus resources and show progress to workers, managers, clients and regulators.

Effective safety KPIs combine two types of measures. Lagging indicators measure outcomes that have already happened, such as injuries and lost workdays. Leading indicators measure the activities and conditions that help prevent those outcomes, such as inspections completed or hazards corrected. A strong KPI set uses both.

Types of Safety KPIs

Lagging indicators

Lagging indicators measure past results. They are easy to define and compare but show problems only after harm has occurred. Many are expressed as rates per 200,000 hours worked, which represents 100 full-time employees working 40 hours a week for 50 weeks a year.

• Total recordable incident rate (TRIR): the number of OSHA recordable incidents multiplied by 200,000 and divided by total hours worked. See also incident rate.
• DART rate: the rate of recordable cases involving days away from work, restricted duty or job transfer, calculated on the same 200,000-hour basis.
• Lost time injury rate (LTIR): the rate of injuries that result in time away from work. Some organizations calculate it per 200,000 hours and others per 1,000,000 hours, so the basis should be stated.
• Severity rate: the number of lost workdays relative to hours worked, showing how serious injuries are.
• Other outcome measures: fatalities, fatal accident rate, workers' compensation costs and property damage incidents.

Leading indicators

Leading indicators measure the actions and conditions that drive future safety performance. OSHA encourages their use in its publication Using Leading Indicators to Improve Safety and Health Outcomes.

• Hazard reporting: number of near misses and hazard observations reported.
• Inspections: percentage of planned workplace inspections completed on time.
• Corrective actions: percentage of corrective actions closed by their due date and average time to close.
• Training: percentage of required training completed.
• Engagement: safety meetings held, observations performed and worker suggestions submitted.

Choosing and Using Safety KPIs

Characteristics of good KPIs

• Relevant: linked to the organization's main risks and safety goals.
• Measurable: based on consistent definitions and reliable data.
• Actionable: a change in the KPI should point to something people can do.
• Balanced: include both leading and lagging measures so the picture is complete.
• Hard to game: designed so that people improve real performance rather than just the number.

Common pitfalls

• Relying only on injury rates: low injury numbers can hide serious hazards, especially low-frequency, high-severity risks.
• Underreporting: tying rewards or penalties to injury counts can discourage people from reporting incidents.
• Counting activity without quality: completing many inspections means little if findings are not fixed.
• Too many metrics: a short list of meaningful KPIs is easier to understand and act on than a long dashboard.

Setting targets and reviewing results

KPIs are most useful when each one has an owner, a clear definition, a target and a regular review schedule. Targets for leading indicators, such as closing corrective actions within a set number of days, give teams something specific to work toward. Lagging targets should be used with care so that pressure to hit a number does not discourage honest reporting. Reviewing trends over several months is usually more meaningful than reacting to a single month's result.

KPIs and KRIs

KPIs measure performance against goals, while a key risk indicator (KRI) signals rising exposure to a specific risk, such as overdue safety-critical maintenance. Many organizations track both, reviewing them regularly with leadership and frontline teams and using results to set improvement actions.

Example of Key Performance Indicator (KPI)

A regional logistics company had tracked only TRIR for several years. Its rate looked good, but a forklift collision that seriously injured a worker prompted leaders to question whether the number reflected actual risk. The safety team found that near miss reporting was low and that many inspection findings stayed open for months.

The company added leading KPIs for near miss reports per 100 employees, percentage of corrective actions closed within 30 days and percentage of planned forklift inspections completed. Within a year, near miss reports rose sharply as workers saw that reports led to fixes, and corrective action closure improved from about half to most items on time. Over the following period, recordable injuries and DART cases declined, and leadership began reviewing the full KPI set at monthly operations meetings.

Frequently Asked Questions: Key Performance Indicator (KPI)

What is the difference between leading and lagging indicators?

Lagging indicators measure outcomes that have already happened, such as injuries and lost days. Leading indicators measure proactive activities and conditions, such as inspections and hazard reports, that help prevent future incidents.

How is TRIR calculated?

TRIR equals the number of OSHA recordable injuries and illnesses multiplied by 200,000, divided by the total hours worked by all employees during the period.

How many safety KPIs should an organization track?

There is no set number. Most organizations do best with a focused set of leading and lagging KPIs tied to their main risks, rather than a long list that is hard to act on.

Why are leading indicators important?

They give early warning of weaknesses in a safety program before someone is hurt, and they show whether prevention activities are actually being done.