Definition: Behavioral Risk Management

Behavioral Risk Management is the component of Risk Management that deals with managing risks that are result of the organizational behavior.

The main focus of the Behavioral Risk Management is to mitigate risks that arise due to employee and organization behavior. Thus individual and organization behavior has to be studied from the perspective of Risk Management and Organization Behavior. 

Workplace behavior and conditions such as stress, conflicts, violence, substance abuse, retaliation, work overload, work insecurity, organizational changes etc. can lead to poor communication, decrease in motivation, emotional reactions, poor quality of work, absenteeism and cost employers due to lost productivity and legal expenses, as well as company’s reputation getting tainted.

The main components that could comprise a behavioral risk management program are:

1. Identifying the risks in the organizations

2. Monitoring the processes and services that affect those risks

3. Taking preemptive action in order to ensure organizational well being

One example of such a procedure to is to evolve strong organizational norms that define the culture and then using them as the basis for recruitment. Once the organizational values and cultures are well defined then the organization can decide to use various testing/selection procedures to identify candidates who best fir the values of it and are culturally attuned to the goals and ways of the organization thereby reducing the risk of negative impacts to a great degree.

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