Production economics analysis of investment initiated to improve working environment

This article describes the results of an evaluation of a new work place for ladle preparation at Swedish Steel in Lulea, Sweden. The company initiated a development project related to ladle service work, in order to come to grips with the difficult working environment and problems associated with absenteeism due to illness and occupational injuries. The evaluation was performed for the first three years after implementation of the project and it shows that the new work place considerably improved working conditions and increased both the quality and efficiency of production. The purpose of this article is also to discuss some methodological problems. The follow-up of the various changes in working environment and personnel statistics was fairly simple to carry out. But in terms of production effects, the company's in-house production follow-up system proved to be too unspecified and oversimplified. It was also difficult to decide which changes should count as effects of the new work place and to value these in monetary terms. The profitability calculation shows that an investment initiated to improve the working environment can yield good profitability. (C) 1999 Elsevier Science Ltd. All rights reserved.