Risk Assessment Matrix: Definition & Examples

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  • 0:05 Risk Assessment Background
  • 0:38 Risk Assessment Definition
  • 3:17 Risk Assessment Example
  • 4:41 Lesson Summary
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Lesson Transcript
Instructor: Audrey Brown

Dr. Audrey E Brown’s Mastery in Program/Project Management consists of five certifications, along with 15+ years of experience in the field.

A risk assessment matrix i is a project management tool that helps determine which risks to the project warrant preparation of a response plan. The purpose of this lesson is to help you understand the risk assessment matrix and to provide examples.

Risk Assessment Background

Would your professional career would be different if you computed the potential impact of the professional risks you've encountered and the probability of each?

For example, let's say you're a junior project manager deciding whether to earn your Project Management Professional (PMP) certification. You need to compute the probability and impact of possible consequences. One of these may be earning a promotion to senior project manager and increasing your income by 10%; another may be that perhaps there's no promotion or raise after earning the credential.

Risk Assessment Definition

The risk assessment matrix process is one of the tools and techniques for controlling risks in the project risk management phase. It falls under the qualitative and quantitative risk analyses process, according to the Project Management Institute's (PMI) and their Project Management Body of Knowledge (PMBOK).

Let's imagine that the matrix you create shows that by earning your PMP, there's a pretty high probability your manager will promote you to a senior project manager position and a medium to high likelihood your income will increase by 10%. The chances of not earning a promotion or raise are low. However, the consequence could be significant because of the time and money required to earn certification. Based on your risk assessment results, you can make an educated decision about pursuing your PMP certification.

After you've created or retrieved your risk register (log), the next step is to identify your project risks. After project risks have been identified, you're ready to proceed with computing your risk assessment. The risk assessment matrix is a project management tool used to assess each risk to determine if you and your project team should take action on a particular risk. This is the reason for rating and ranking each risk. As a friendly reminder, your list of risks may or may not occur and if you and your team decide it's impossible for a risk to occur, then you should not waste your efforts creating a response plan for it.

The risk assessment matrix typically looks like a chart and contains the following columns:

  • Probability
  • Impact
  • Ratings
  • Rankings

The probability rating means the likelihood the risk will occur. The impact refers to how much the risk, if it occurs, will affect the project scope, schedule, and cost. Additionally, in your risk assessment matrix, you and your team need to rate the probability and impact of each risk on a scale from low to high. Keep in mind that your risk rankings are subjective, which means it's possible for your manager to challenge a few of your risk assessments.

The ultimate purpose of completing the risk assessment matrix is for you to prioritize or rank and rate your risks in order to determine if further action is required. That translates to a risk response plan, which means a corrective action plan may not be required. In other words, a risk ranked with low probability and low impact does not require any further actions.

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