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People in Business Measuring the Effectiveness of the Workforce

Measuring the Effectiveness of the Workforce In this topic you will learn about:

Methods of measuring workforce performance


Labour

turnover Labour productivity Absenteeism

Calculators needed!

Labour Turnover

Labour turnover

Labour turnover (staff turnover) can be defined as the rate of change in a firms labour force.
You need to know the following formula: Number of staff leaving x 100 Total Number of staff

Labour turnover
Worked example:

A car firm has 1000 full time employees in 1 year Of these, 50 employees leave the company What is the labour turnover for the company?
Using

the formula :

Do you think this is high or low?

50 1000

x 100 =

5%

What are the advantages of labour turnover? What are the disadvantages of labour turnover?

Labour turnover
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Labour Productivity

Labour Productivity

This can be measured in 2 ways.


Output per worker Labour costs per unit of output

1.

2.

Labour productivity - output per worker

You need to know the following formula: Total value of Output Total Number of workers

We would look at labour productivity over a period of time e.g. 1 year

Labour productivity
Worked example:

A car firm produces 100 000 cars per year It has a labour force of 1000 workers What is the labour productivity (output per worker) Using the formula then:
100 000 1000
= 100 cars per worker

Labour Productivity cost per unit

You will also need to be able to calculate the financial aspect of labour productivity:
Labour Productivity cost per unit =
= Total Labour Cost Number of units produced

Labour Absenteeism

Absenteeism

Absenteeism can be defined as the number of staff who miss work as a proportion of the total number of staff
You can use the following formula
Number of staff absent per time period x 100 Total number of staff days worked per time period

Absenteeism
Worked example:
A car firm has 1000 full time employees Of these, 40 employees did not turn up for work on a Friday What is the absenteeism rate for that Friday Using the formula then: 40 x 100 = 4% 1000

You need to know these formulas!


Remember to show formulas as well as calculating the answers

Summary of formulas needed:

Labour turnover

Labour Productivity
Labour productivity per worker

= number of leavers p.a. x 100 Average number of employees p.a.

Absenteeism

Total value of Output Total Number of workers Labour cost per unit = Total Labour Cost Number of units produced

Number of staff absent per time period x 100 Total number of staff days worked per time period

What can a Manager do.

To improve the labour productivity of the workers?


To reduce the labour turnover statistics?

To reduce the number of absenteeism days?

Your Task

Complete the Qs on Measuring staff productivity worksheet.

Worksheet task
1.Labour Turnover for a double glazing company. It introduced a new training programme and bonus scheme in Year 2.

Year 1 Average number of employees Number of leavers Value of output Total labour costs Average number of staff absent on one day 42 3 1,500,000 948,000 5

Year 2 41 6 1,300,000 951,200 6

Year 3 42 2 1,600,000 948,600 2

Year 4 43 2 1,800,000 962,400 1

Questions.

Calculate the labour turnover for each year. ( 5 marks; 1 for formula and 1 x 4 per calculation)
Calculate the labour productivity per year, using the output per employee formula. . ( 5 marks; 1 for formula and 1 x 4 per calculation)

Calculate the labour productivity using labour costs per unit method. . ( 5 marks; 1 for formula and 1 x 4 per calculation)
Calculate the percentage absenteeism rate for years 1 4. . ( 5 marks; 1 for formula and 1 x 4 per calculation) How has the new training programme and bonus scheme affected the performance of labour in the company? (10 marks; C = 3 A = 4 E = 3)

Homework.

Textbook p 150 DO Analysis & Evaluation Q 2 Vals Bakery