Risk Management

A Practical approach on Risk Management and Hazard Identification (Risk Matrix System)

Risk management is to be considered a control function focused on maintaining a particular hazardous, productive process within the boundaries of a safe operation and that a systems approach based on control theoretic concepts should be applied to describe the overall systems functions (Rasmussen, 1997).

What is a Risk

A risk is defined as a combination of the probability of a certain event occurring with an assured severity level if the event does occur. Every person on a daily bases faces some sort of risk, whether it be in the working environment, living or social environment and almost certainly within a transport environment. As we confront those risks, we weigh the risk with the potential benefits and either conclude that the risks involved outweigh the benefits (decide not to continue) or the benefits outweigh the risks (decide to continue). The level of safety in any practical aspect is also assessed in this manner (CAA, 2010).

The four types of risk categories:

1. Informed risk – A risk that has been correctly identified and assessed.
2. Uninformed risk – This is an unidentified risk as it has not been assessed, we don’t know that we are taking the risk and it’s incorrectly measured.
3. Pointless risk – These are risks that are taken without any benefits attached to them. A pilot flying underneath the bridge instead of over it.
4. Benefit-driven risk – These are the risks taken because of the perceived benefits outweighing any risk.

What is a Hazard

A hazard can be defined as a situation that poses a certain level of threat of harm to anyone interacting within the vicinity of that specific hazard.
Hazards are classified into three categories:
1. Dormant - The situation has the potential to be hazardous, but no people, property, or environment is currently affected by this
2. Armed – People or environment are in potential harm's way.
3. Active - A harmful incident involving the hazard has actually occurred. Often this is referred to not as an "active hazard".

Four step Risk and Hazard Identification Programme

Step 1. Identifying the Hazardous risk

Someone tells you about a potential risk or hazard. This can be effectively produced through a safety reporting system.
You discover a risk or hazard for yourself. This may be achieved through physical inspections of the surrounding work area, audits as well as a work process analysis.
No hazard or risk gets discovered and it produces an accident. This method of hazard identification is undesired as the initial purpose of risk management is to prevent this outcome. However, by the investigation of accidents, new processes of risk management may be established and thus provide better safety features in the future.

Step 2. Establishing Priorities of Hazards

Hazards have been identified as ‘certain aspects of an operation that may produce harm or injury to the operators or persons involved’. These hazards may be simplistic in form and may not cause a major accident such as obvious objects (tools, equipment, aircraft parts, etc.) lying around the hangar floor. The more dangerous hazards are defined as ‘root causes’ which are the intangible factors such as dangerous- anti authority attitudes within the company culture. These hazards are hard to identify and according to Reason (1990, p. 205) these are the underlying preconditions that combine with other conditions to eventually cause a major accident.
As mentioned above, it is vital for the safety coordinator of an organization to identify hazards within the operation process. It is also very important to assess the risks in a ranking order to the degree in which they pose a threat. This method complies with the efficiency and cost’s involved surrounding risks and hazards as any business, being aware of hazards, still need to be productive and efficient. One way in assessing the degree of threat, with the potential probability of the threat being exposed, is through a Risk Matrix, which follows below.

Step 3. Recommending corrective action

Can the hazard:
1. Be Eliminated? This is the first and best solution to any hazard.
2. Be Isolated? This is the second option as the hazard is still present.
3. Be Minimised? Minimise the likelihood of HARM from the hazard
A good example may be a big hole in the ground which scores a 2 on the Matrix System. It is probable that someone can fall in and it may cause critical injuries to that someone. So, the corrective action, can we Eliminate the threat? Yes, we can fill the hole in! But perhaps the hole has a purpose like it’s going to be a swimming pool, then no, it won’t be productive. Can we Isolate the threat? Yes by highlighting the danger with danger tape, or installing a fence surrounding the hole. This process will also Minimise the risk of someone getting

Step 4. Follow up

Following up on all safety recommendations that have been identified as hazards and potential risks are just as crucial as finding them. A number 6 on the Risk Matrix today may rapidly become a number 1 tomorrow and this is why the follow up aspects are just as important in Risk Management.

The Risk Matrix

Severity Likely now Probable Maybe Unlikely
Catastrophic 1 2 3 4
Critical 1 2 3 4
Marginal 3 3 4 5
Negligible 5 5 6 6

The probability scale refers to the likelihood of an event occurring such as ‘it is probable that someone can hit their head on that object’ or ‘it may be unlikely that someone can slip on the floor’.
The severity scale refers to the ‘outcome’ or consequences if the event did occur. Catastrophic events are fatal, with serious injuries and/or major damage. Negligible outcomes are not so serious with no damage or injuries.
The numbers within the matrix represent both the severity and the probability of a risk. The lower the number the higher the risk and the higher the number the lower the risk.

Priority by number:
1. Fix it now, before the next flight
2. Fix it as soon as possible- before the end of the day
3. Fix it soon- before the end of the week
4. Fix it when you are able to
5. Beware of the possible consequences
6. Don’t worry too much about it

Example 1 (severe probability)

An operator at a major airport is refuelling a Boeing 747- 400 and accidentally breaks the safety lock-pin on the fuel cap as he removes it. The safety lock-pin’s main function is to secure the fuel cap, without it, the fuel cap would still be screwed into place but without the security of a lock.

The risk (loss of fuel cap) is Likely to happen on the next flight. 1
The severity would be Catastrophic if the fuel cap dislodged during flight. 1

Clearly an immediate fix is required

Example 2 (marginal probability)

Using the same example, the operator notices rust on the safety lock-pin of the fuel cap. At this moment the pin may be safe but would need to be replaced within the next few weeks.

The risk maybe probable within the next few weeks. 3
The severity would be Critical if the lock-pin broke during flight. 3

3, Fix it soon- before the end of the week


CAA (2010). Civil Aviation Authority of New Zealand. Aviation Safety Coordinators Manual.

Reason, J. (1990). Human Error. Cambridge University Press.

Rasmussen, J. (1997). Risk Management in a Dynamic Society: A Modelling Problem. Safety Science 27 (2/3) Elsevier science Ltd.

full reference in the following format AUTHOR (date work). Title. Reference location, date publication.


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