Risk Management, 5th Edition

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Rating Schemes

Every risk event has both probability and impact. In most organizations, those values are established qualitatively rather than quantitatively. That creates problems because perceptions frequently differ as to what constitutes a “high” probability or a “moderate” impact. Driving those differences in perception is, in part, the lack of organizational standards or schemes to determine those values.

Technique Description

Rating schemes are standardized and are applied on either a project-wide or (ideally) an organization-wide basis to clarify the relative magnitude in terms of impact and probability for a given risk. They define terms like “high,” “medium,” and “low” for those risk considerations. Clear definitions and the means ...