Labour

What do we need to labour

• Pricing of Labour – Time Rate and Piece Rate
• Pricing of Bonus Element – Rowan Hasley and
Hasley Weir
• Labour Turnover – Separation, Replacement
and FLux
 Time Rate
•  Time based rate is found where;
– Quality of work is important
– It is difficult to measure the output of a worker
– The work can be closely supervised
– An increase in output is negligible compared to
the incentive
 Piece Rate
• Number of unit produced * rate per unit
 Rowan Plan
• Bonus = time saved/ standard time * time
taken * Time rate
 Halsey Plan
•  *(Time Rate
 Halsey Weir Plan
•  *(Time Rate
 Labour Turnover
• Labour Turnover is calculated by three methods:
• Separation Method = No. of Separation / Average
number of employees
• Replacement Method = No. of Replacement / Average
Number of Employees
• Flux Method = No. of Separation + No. of
Replacement/Average Number of employees
Labour Turnover leads to high cost of replacement, loss of
trained and experienced people, cost of training a new
employee and low efficiency due to fall in motivation level.
• Just how do IT cos measure attrition?
Aug 10, 2006, 02.35am IST
• During an analyst call of a major IT
services company, a question was raised
about its attrition rate. The query was
directed at the differing number which
was arrived at by the company and the
analyst, though both were right in their
own way of calculating the figure.
http://articles.economictimes.indiatimes.c
om/2006-08-
10/news/27466764_1_attrition-
calculation-formula
• This illustrates best the dilemma
the industry faces in arriving at the
attrition number. The calculation of
attrition has been a subject of much
debate for the IT industry as
different numbers can be arrived
from the same data, using different
formulas. Broadly, there are two
main methods of calculating
attrition – one which is based on
the last 12 month while the other
being the quarter figure arrived at
on an annualised basis.
Nitin Sethi, industry leader, IT &
ITeS, Hewitt Associates, says:
"Calculation of attrition rates in
the Indian industry has been a
source of much debate. There
has been no consistent approach
or method to calculate attrition