A risk assessment matrix is used when evaluating the level of risk for a given event. It maps the probability of the risk occurring on one axis against the severity of the consequences if it does on the other. It is a visual aide that helps to increase the visibility of possible risk factors and is used when making risk management decisions.
Risk refers to the lack of certainty that the outcome of a making a particular choice will occur. Some organizations use standardized risk matrices for these purposes (for example, the Department of Defence and NASA). When people ask, ‘What is a risk assessment matrix?’ in a business setting it often depends on the individual project and the organization’s specific risk factors. Harm severity can be categorized into four categories, for example: catastrophic, critical, marginal or negligible. The likelihood of the risk factor in this example might be defined as: certain, likely, possible or unlikely.