Marks: 3.0 2.5 2.0 1.

0
1. The work is well introduced The work is well The work is The work is not so well
Introduction about the company, no introduced and no introduced well but written, misses a lot of
alignments problem and if alignment problem but if some errors and key information, errors
there is no error. some errors are found. alignments are not and alignments is not
done as per the done as per the
guidelines. guidelines.
Marks: 8.0 6.0 4 2.0
2. Analysis of Suitable organization is Suitable organization is Suitable organization Though the suitable
impact of chosen, causes of labour chosen, causes of labour is chosen, causes of organization is chosen but
COVID 19 turnover is mentioned turnover is mentioned labour turnover is the work that is done is
clearly, the proper clearly, the proper mentioned but not so not complete and not
relationship is established relationship is established clear, the proper satisfactory work.
and suitable method of but the suitable method relationship is not
suggestion is provided. of suggestion is not established and
provided. suitable method of
suggestion is
provided.
Marks: 6.0 4.0 3.0 2.0
3.Suggest the Excellent and all required The suggested measures The suggested The suggested measures
measures to suggested measures are are provided but still measures are are provided but still
minimize labor provided with proper some good suggestions provided but still many good suggestions
turnover supporting statement. are missing and proper many good are missing and there is
supporting statement for suggestions are no proper supporting
written suggestions. missing and there is statement for written
proper supporting suggestions.
statement for written
suggestions.
Marks: 2 1.5 1 0.5
4. Conclusion Well concluded and proper Well concluded but Some errors found in Conclusion are full of
and references are been given. proper references are not conclusion and even errors and no references
References been given. referencing was done are provided.
but not proper.

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 Assignment on Labor Costing
(DRUK WANG ‍ALLOY’S
LIMITED)

Name: Sonam Peldon

Enrolment number: 107258
Module Tutor: Arindam Ghosh
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Introduction

Druk wang Alloys is a leading company in Bhutan located at Pasakha which is about 19
kilometers away from Phuentsholing’s main business center under Chhukha dzongkhag. It was
started and promoted by Dasho Dorji Norbu, Gup Thinley Dorji and Mr. Samdrup Norbu in
2005. Druk Wang Alloy is registered under Companies Act of the Kingdom of Bhutan 2000 to
produce Ferro Silicon. Ferrosilicon is an iron-silicon alloy with a silicon content varying from 15
to 90% by weight. It can be used to deoxidize steel and other ferrous alloys, as well as a source
of silicon for reducing metals from oxides and producing other ferroalloys.

The company has revealed the total production of 13,673.52 MT of Ferro-silicon in Fiscal Year
(FY) 2020 which has decreased as compared to 15,193.46 MT in FY 2019. The Company has
realized revenue of Nu 1,601.11 Million this year compared to Nu 1,307.66 Million in the
previous year.

As of the 31st of December 2019, there were 195 people working under the company. This
includes 175 regular employees and 20 muster roll employees. However, owing to the pandemic,
46 individuals have left the company the year in 2020 voluntary or involuntary. For that reason,
this research is being conducted to identify and evaluate the primary reasons for employee
turnover, develop a relationship between labor turnover and replacement cost, and proposes a
labor turnover control plan for Druk Wang Alloy.

Causes of labor

Druk Wang Alloys limited is engaged in the manufacturing of ferrosilicon. At the end of year
2019, they had 175 regular and 20 muster roll employees, in total they had 195 employees,
out of that 21 number are non-national and 174 numbers are national employee. However
due to the pandemic 31 employees has left the company meaning he or she chose to leave of
his own accord. Additionally 15 employees have been discarded from jobs

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 The cause of labor turnover in Druk Wang Alloy was due to:

 Employment of non-national

Hiring non-national employees have been one of the causes of labor turnover in Druk Wang
Alloy Company. The company is located in Pasakha and it has been an advantage for the
company to hire employees from India at lower wages. They had 21 employees recruited under
them to perform the blue color job. However, when the border gates were first sealed in response
to the Covid-19 pandemic 16 employees had involuntarily left the job since they are non-national
and there was an inconvenience in transportation and housing. Thus, company being a
manufacturing company they faced the problem of shortage of labor to perform blue color jobs.

 Inadequate Pay and Benefits

People who are paid very well are likely to depart a company less frequently than those who are
not highly compensated. Managers, on the other hand, have frequently misunderstood the
importance of salary. According to Rai (2020), the ferrosilicon price was Nu 61,500 per MT
from November to December 2019. When the border gates were originally closed on March 23
in reaction to the Covid-19 epidemic, the price climbed to Nu 89,000. This has been blessing in
disguise for the industry to produce more. However, the existing/remaining employee in the
industry has been burden with lots of heavy work and long working hour. For that no additional
pay towards them has been made. Thus, it has result in 8 employees leaving the job.

 Employees Perception towards Work Environment

Employees' perceptions of the work environment vary; there is a specific sort of work
atmosphere that is harmful, and this has forced 5 employees (non-national) to leave Druk Wang
Alloy. Some non-national employees (residing in Bhutan) claimed that they did not receive a fair
amount of incentives, status, workload, or opportunity, and that the work climate was hostile to
them. Despite managers' commitment to "equal treatment" for all employees, many thought
supervisors were unjust.( the Bhutanese, 2020)

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Relation between labor turnover and replacement cost for the selected organization.
Measurement of Labor Turnover (With Accession)

Average Number of Workers = Number of workers at the beginning+ Number of workers at

the end
2
= 195+149
2
= 344
2
= 172 Employees

1. Separation Method
Number of workers separated during the period
Labor Turnover RatioAverage
= number of workers during the period × 100
31 + 15
172 × 100
27 %
2. Replacement Method

Number of Workers joined for expansion ×100

LTR Replacement = Averages Number of workers
10
(Only the new recruit) 172
5.8 % × 100

Number of Workers joined × 100

LTR Replacement = Averages Number of workers × 100
(Total Number of recruit 62
172
Including accession) 36 % × 100

Employees quit firms for a variety of reasons, and replacing just one employee may be costly
enough for the company. Labor turnover and replacement cost are strongly intertwined. When
there is more labor turnover in a company the higher will the company incur replacement costs
and the lower the labor turnover ratio lesser the replacement cost will be incurred. Usually, labor
turnover up to 3% and 4% is considered to be normal but for the Druk Wang Alloy labor
turnover using the separation, the method was 27% due to the pandemic which has resulted in
higher replacement costs for them that is 5.8 % for only the new recruit for expansion program
and 36% for total Number of recruit including accession.

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The suitable method of remuneration

There are two fundamental methods of labor remuneration for employees. The first is the time
rate system, in which workers are paid according to the time they work and their payment is
provided on an hourly, daily, or monthly basis. A price rate system, on the other hand, indicates
that wages are paid based on the amount of labor done.

Druk Wang Alloy being a manufacturing company I personally feels that piece-rate system
would be a better and suitable method of remuneration. Under the time rate system, there is no
distinction between efficient and inefficient work and there is need for constant checks on
workers so that workers do not waste their time. Whereas, if workers are paid on a piece basis it
will encourage and motivates the workers in putting more effort and it will result in increased
production and ultimately lead to higher profit for the company. Thus, it can be a win-win
situation for both the workers and the company.

Measures to minimize labor turnover

Suggestion 1

The cause of labor turnover faced by Druk Wang alloy was due to its employee being non-
national of the country and employees had to leave involuntary due to housing and transporting
inconveniences. For that reason, I suggest the company hire an employee who is national of the
country. Bhutanese youths can be encouraged to get engaged in the Bhutanese labor force by
providing a better working environment and high wages.

Suggestion 2

Pay plays a very vital role in labor turnover Therefore; Employees should know their pay, and
why he is paid the amount at least be made to understand it is fair and equitable. Since workers
who feel they are not well paid tend to become hostile and quit. Management should also revise
the pay for all employees as it could motivate and encourage the employees.

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t
0
2
s
y
o
p
m
la
u
g
e
r
5
7
1
Suggestion 3

Different employee perceives the situation differently. Therefore Management should pay close
causes of dissatisfaction in the job environment. The reduction of job dissatisfaction will create a
more than stable and efficient work group which will be more productive for the employer.

Conclusion

In conclusion, Druk Wang Alloys is a leading manufacturing company in Bhutan that was
founded in 2005 to produce Ferro Silicon with a total of 195 workers with 175 regular and 20
muster roll employees. As of 31st December there were 149 workers during the year 2020 due to
the pandemic. The reason behind the labor turnover was due to more employees performing blue
color jobs being non-national, increase in demand has to lead to more burdens on existing labor
and no extra pay or benefit has been made to the individual employee's perception were the main
cause. For that reason after completing the analysis of impact of covid-19 on labor turnover I
suggested price rate system to minimize the lobar turnover owing to its benefits. lastly I
concluded my assignment with a recommendation of employing Bhutanese national especially
Bhutanese youths. Revising the pay and letting them know their pay to encourage and motivate
them and impotence understanding employee’s job satisfaction.

Appendices:

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 Numbers of workers as on 31st December 2019 195 employees
Numbers of workers as on 31st December 2020 149 employees
Numbers of workers left the company during the year 31 employees
Numbers of workers discharged the company during the year 15 employees
Numbers of workers replaced due to left and discharged 52 employees
Additional worker employed for expansion 10 employees
Reference

Bassett, G.A. "A Study of Factors Associated With Turnover of Exempt Personnel."

Croftonville, New York: Behavioral Research Service General Electric Company, 1967

DRUK WANG ALLOYS LIMITED. (2019). https://www.rsebl.org.bt/:

https://www.rsebl.org.bt/uploadfiles/DWAL/DWALAR2019.pdf?fbclid=IwAR0rXkg2cL

pR2KWTNLlKiZJzTuY4eKAtqZqy6hqOGkIVEPl7N92PP0

Druk Wangs Alloys Limited © 2019. (2019). Retrieved from http://dwal.com.bt/:

http://dwal.com.bt/investor-relations/

Rai, R. (2021, May, 30). Ferrosilicon price hits a record high. Kuensel, p.1.

kuenselonline.com
Lamsang, T (2020, April, 24). Exploring the reasons behind the COVID breach in Thimphu and

Phuentsholing. The Bhutanese, p.1. thebhutanese.bt/

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 THANK YOU

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