A 'heat map' is primarily used in operational risk management to visualize risks and their potential impacts. This tool allows organizations to represent various risks on a grid, typically plotting the likelihood of occurrence against the potential impact those risks could have on the organization.
By using color-coding—often from green (low risk) to red (high risk)—the heat map provides a clear and immediate visual representation of risk exposure across different areas of the business. This enables risk managers and decision-makers to quickly identify areas that require attention and prioritize risk management efforts effectively. The ability to see which risks are most critical helps in focusing resources and implementing controls to mitigate those risks proactively.
In contrast, tracking market share and illustrating company growth are more aligned with performance metrics rather than risk understanding. Similarly, assessing employee satisfaction pertains to human resources and organizational culture rather than the assessment or management of operational risks. Therefore, the function of a heat map distinctly centers on risk visualization, making it an invaluable tool in operational risk management.