Economic evaluation of ergonomic solutions: Part II — The scientific basis

Abstract

Several recent studies have shown that capital expenditures in technical and organizational solutions to ergonomic problems can yield profitable outcomes through increased productivity and reduced absenteeism. The ergonomic investment project is a proposed solution to a problem that requires capital expenditures. This might involve redesigning existing machines, jobs, and tools or developing entirely new ergonomic tools, designs, and concepts. Quantitative evaluation methods and criteria are needed at several stages in the project evaluation process; in the formal accept/reject decision of an ergonomic project (a solution proposal), with respect to profitability; in choosing among several ergonomic projects (alternative solutions) that accomplish the same goal; in ranking independent ergonomic projects; in choosing between an ergonomic project and another non-ergonomic investment project; and in controlling the cost of implemented solutions. Several methods can be used for capital expenditure evaluation, including net present value (NPV), internal rate of return (IRR), annuity method (AM), and (4) the payback period method (PPM).