In this 10 part series of Reducing Risk Tolerance we will explore each of the ten factors that influence risk rolerance and provide more details about each.  When taken together, this series should provide a more comprehensive review of the factors that influence risk tolerance so action can be taken to reduce risk toerlance and keep people safer. The factors that influence personal risk tolerance are:

• Overestimating one’s own capability and experience (increases risk tolerance)
• Familiarity with the task i.e. complacency (increases risk tolerance)
• Seriousness of the potential safety outcome (decreases risk tolerance)
• Voluntary actions and sense of being in control (increases risk tolerance)
• Personal experience with an outcome (decreases risk tolerance)
• Cost or implications of non-compliance (decreases risk tolerance)
• Confidence in the equipment (increases risk tolerance)
• Confidence in PPE and rescue (increases risk tolerance)
• Potential profit / gain from the action (increases risk tolerance)
• Role models accepting risk (increases risk tolerance)

This chapter discusses how the Potential for Profit / Gain from the action tends to increase risk tolerance.  This may seem absolutely obvious, and it is, but if there is a financial incentive or potential for personal gain / benefit from the action there is a propensity for more risk to be taken.  As part of the rationale for this increase in risk tolerance is that people complete an internal benefit / cost analysis and given some of the other risk tolerance factors people can quickly justify the risky action because of the potential for finanical gain.  This factor is also similar to the organizational challenges associated with safety versus production challenges.  

As a result, make sure that any variable pay schemes, profit sharing, or financial incentives don’t create a situation where riskier actions are taken.  When money is involved people tend to take more risk so incentive packages need to consider this factor and be planful in their construction.  Additionally, making the “right way” the easy way or only way possible to do the work also helps.  The more we make the right way the only way to do the work helps to keep people focused on a singular way of working rather than looking for ways to “game” the system to maximize their financial benefit.