The Risk of Perceived Risk - Part 1: What is Perceived Risk?
All jobs involve hazards and risks. In acknowledging the presence of risk, we establish the need for safety. This is why safety plans are required for all organizations and roles. One big question, however, is how does our perception of risk influence safety and the effectiveness of safety procedures?
Accuracy of Perceived Risk
Risk is defined as the expected loss due to a negative event. There are two kinds of risk we experience: perceived risk and actual risk. Actual risk refers to the quantifiable aspects of risk. It includes aspects such as the likelihood, the impact, and the severity of the risk. Perceived risk is a subjective judgement of an individual. It combines factors such as emotion, contextual factors, and personal experiences. Our perceived risk is not always in line with the actual risk. For example, more people die each year from falling vending machines than shark attacks. This means the actual risk of death by vending machine is higher than shark attack, however many people would perceive greater risk from the shark than from the vending machine.
There is some trend to the risks we over- or underreact to. We tend to overreact to risks that are spectacular, but rare (such as the shark attack). We also overreact to risks that are immediate or that are the result of intentional actions. As a whole, we typically underreact to accidents (such as a falling vending machine), abstract events, and natural phenomena. We also underreact to risks we willingly take, such as extreme sports or speeding while driving.
When calculating risk, we rarely rely on rational calculations, but instead are influenced by emotional perceptions. In particular, this can cause an overreaction to risks that trigger us emotionally, and underreact to risks that do not.
Additionally, perceived risk is impacted by culture and norms. This can be the greater societal culture or norms, but it can also refer to micro cultures, such as those found in a workplace. The cost-benefit analysis can also sway risk-taking behaviour, where if the perceived benefit of the action outweighs the perceived risk, the person is more likely to act in a risky manner.
Even when presented with risk information by expert systems, some people may see those statistics as blanket responses that don’t account for the circumstances, or may not view the data as applicable to their situation. Also, if a risk is not reported by others, this can influence the perception of that risk as the individual making the decision does not have all of the information.
Risk Tolerance
Although everyone experiences perceived risk, it is not an absolute value. It is different for each individual. Perceived risk can be summarized as the difference between risk tolerance and expected loss. If the loss outweighs the tolerance, the perceived risk is higher. Higher risk tolerance will lead to more risk behaviour, as the difference between tolerance and expected loss is larger.
Risk tolerance can be affected by a multitude of factors. From the cultural level, the presence of positive safety culture and buy-in from leadership, as well as the presence and enforcement or regulations will all result in lower risk tolerance. At the social level, the presence of peer or community pressure to engage in risky behaviour will increase risk tolerance. From an individual level, perceived knowledge and optimism bias will impact risk tolerance. For perceived knowledge, when people are less informed about a situation, they are more likely to take risks. With optimism bias, people believe that negative events are more likely to happen to others than to themselves.
Risk Normalisation
Another factor influencing perceived risk and safety behaviour is risk normalisation. Risk normalisation is a psychological process that happens to everyone as we become more familiar with something, including risks and hazards. Risk normalisation can also lead to us changing our behaviour over time, and potentially making more risky choices. While the level of risk present has not changed, our perception of the risk decreases over time.
Recency bias comes into play with risk normalisation. If a worker has recently received safety training, or the workplace has experienced an incident, the risk will be front of mind, and the risk normalisation will be mitigated. This indicates that feedback, training, or automatic alerts can help combat risk normalisation in the workplace.
Risk normalisation can also extend to cultural and social normalisation. People tend to blur “desirable” (in the case of risk, safe behaviour) and what is average (or an existing acceptable behaviour) into the same thing. This happens naturally over time, resulting in the average behaviour being seen as normal. In the case of the social normalisation of deviance, where employees become so accustomed to deviant (unsafe) behaviour that they don’t consider it such, this can result in risks being taken without employees realising that it goes against safety regulations.
This clear disconnect between actual risk and perceived risk, as well as risk normalisation and risk tolerance, can all have big implications for safety planning and compliance. Subjective judgement is inherent in risk assessment, and if this judgement is faulty, it can result in misdirected risk management efforts. In our next post we will explore further how perceived risk impacts safety behaviours in the workplace, and what can be done to combat the negative impact.