Upload
gemdeane1
View
927
Download
5
Tags:
Embed Size (px)
DESCRIPTION
Citation preview
Measuring the effectiveness of a workforce
Unit 2: people in organisations
Labour productivity is a measure of the output per worker in a given time period
Labour productivity =
Output per period/ number of employees per period
Labour productivity
If output in a given month is 20,000 units and 40 people are employed during that month to produce the goods, what is labour productivity?
LP= output per period/ no. of employees per periodLP= 20000/40LP= 500 units per worker
Example 1
LP may be increased by appropriate human resource management (HRM) policies, e.g.
• Recruitment and selection of suitable employees• Provision of training to enhance skills of existing employees• Appropriate remuneration and non-financial benefits to improve
motivationOther factors that may increase productivity;• Improved working practices• Improved technology and equipment
How to increase labour productivity
• Output will be increased using the same number of employees
• Implies a lower labour cost per unit (if wages stay the same)
• May result in lower priced goods/ higher profit margins
An increase in Labour productivity
From example 1, if improved machinery is introduced that cause output to increase to 30,000 units using the same number of employees, what is the new labour productivity figure?
LP= output per period/ no. of employees per periodLP= 30,000/40LP= 750 units per worker
Example 2
In example 1, if labour costs are £1000 per worker per month, total labour costs are £40,000 (£1000x40). What is the original labour cost per unit?£40000/20000units= £2
In example 2, if labour productivity increases to 30000 units, what is the new labour cost per unit?£40000/30000units= £1.33
Example 3
Labour turnover is the proportion of employees leaving a business over a period
of time (usually one year)
Rate of labour turnover=
x 100
Labour turnover
no. leaving over a given period/average no. employed over a given period
If the average number of staff employed in a firm last year was 250 and the number of employees who left the firm last year was 10, what is the labour turnover?Rate of labour turnover=
x 100
LT= (10/250)x100LT= 4%
Example
no. leaving over a given period/average no. employed over a given period
LT indicates how content the workforce is in a firm. If the LT is increasing this could be a sign of dissatisfied employees. Can you think of reasons why this might occur?
Causes of a high labour turnover
Internal External
Ineffective leadership/ bad management
Poor communication
Low wages/salary
Poor selection procedures
Unchallenging jobs
Poor working conditions
Low motivation/morale
More attractive jobs elsewhere- higher paid, better training and working conditions, more interesting, closer to home
• High recruitment and selection costs• High induction and training costs• Redesigning the job• Reduced productivity• Low morale among existing employees
Problems of a high LT
• Monitoring and benchmarking• Exit interviews• Recruitment and selection• Induction and training
How to improve Labour Turnover
Can you think of ways in which businesses can improve labour turnover?
Absenteeism is the proportion of employees not at work on a given day
Rate of absenteeism= no. of staff absent on 1 day/
total no. of staff
x100
Absenteeism
If 21 people out of a workforce of 300 are absent on a given day, what is the rate of absenteeism?
Rate of absenteeism= no. of staff absent on 1 day/ total no. of staff
x100RA= (21/300)x100RA= 7%
Example 1
total no. of days lost due to absence in the year/(total no. of days that could have been worked
x no. of employees)
X 100
Annual rate of absenteeism
If the total no. of days that could be worked is 250, the total no. of employees is 80 and the number of days lost due to absence is 600, what is the absenteeism rate for the year?
ARA= (600/ (250x80)) x100ARA= 3%
Example 2
Causes of absenteeism
Can you think of ways businesses can reduce absenteeism?
Strategies to reduce absenteeism
Flexible working practices Making jobs interesting Improving working conditions Improving employee/employer relations Introducing attendance bonuses
Rate of absenteeism due to health and safety=
No. of working days lost per year due to health and safety/Total no. of possible working days
X 100
Health and Safety
1. Outline 2 ways in which a firm might increase its labour productivity (4)
2. In a firm output in a particular month is 60,000 unit, 75 workers are employed and labour costs are £1000 per worker per month. Calculate labour productivity and labour cost per unit (6)
3. Explain two causes and two consequences of a high rate of absenteeism for a firm (10)
Questions