5th week

What are the working conditions?

The quantity of work time required to complete a job is referred to as a labour standard. The
standard labour rate is a term used to describe it. When budgeting and planning, the labour
standard idea is used to determine how many people should be assigned to a task.
There are four different ways that labour standards are set.
 Historical at Experience
 Time Studies
 Predetermined time standards
 Work Sampling
Sampling of Work
In performance evaluations, the typical hour
Definition
A standard hour is defined as the quantity of work that can be completed in an hour at a given
degree of efficiency.
Illustration
Three goods (A, B, and C) are manufactured by X Co. at one of its manufacturing cost centres Per
direct labour hour, 10 units of product A, 25 units of product B, and 20 units of product C are
expected to be produced.
As a result, the standard hour for product A is 10 units, 25 units for product B, and 20 units for
product C.
The standard hour is particularly helpful for integrating heterogeneous (dissimilar) goods in order to
analyse the manufacturing performance of a cost centre (or production unit) as a whole.
Ratio of efficiency
The efficiency ratio determines whether a production cost center's output took more or less direct
labour time than predicted for a given period. It's computed as follows:
(Expected direct labour hours of actual output ÷ actual direct labour hours worked) × 100%.
A ratio of > 100% will indicate greater labour efficiency than budgeted and vice versa.
The allowance factor (AF) is the amount of time allowed for personal, fatigue, and unavoidable
delays
Standard Time=normal time x allowance factor, where:
• Elemental time data creates standards based on previously conducted time studies that are
recorded in the database of an organisation.
• Predetermined time data (e.g. MTM and MTS) is a time data element published in a database that
is used to define standard timings.
• Reaching, grasping, moving, engaging, inserting, turning, and so on.
• Work sampling is a method of measuring how much time a worker spends on a certain task.
Measurement of Work
• Work Measurement entails establishing Standard Time in order to determine how long it should
take to complete a task.
• Standard time: the amount of time it takes a qualified worker to accomplish a given job using
suitable methods and tools, taking into account personal tiredness and inevitable delays.
• Costing the labour component of items
• Tracking employee performance Standard time is used in:
• Organizing and arranging the necessary resources
Creating Time Standards
Step 1: Pick a certain career to research.
Step 2: Inform the employee whose job you will be studying that you will be learning.
Step 3: Divide the work into manageable chunks.
Step 4: Determine how many cycles you must watch.
Step 5: Time each component, keep track of data, and evaluate the worker's performance.
Step 6: Calculate the standard time.
Step 7: Calculate the average time.
Other Time Factors in Standard Time Calculation
• The performance rating factor (PRF) is a subjective evaluation of a worker's pace relative to a
typical work pace.
• The frequency of occurrence (F) is the number of times the element must be completed per cycle.
Work Procedures for Sampling
1. Determine which worker or machine will be sampled.
2. Identify the actions that will be watched.
3. Calculate the sample size based on the level of precision and confidence.
4. Create a timetable for random observation. Observe for a period of time that is indicative of usual
working situations.
5. Make your observations and keep track of the information. Check to verify if the sample size
estimate is still valid.
6. Calculate the percentage of time spent on each activity.