3.6.2 Analysing human resource performance

Question 1

Labour turnover is

Answer 1

The percentage of the workforce (employees) that leave a business within a given period (usually a year

Question 2

Labour turnover formula is

Answer 2

employees left during period/Average number employed during period
X100

Question 3

Problems with high staff turnover

Answer 3

Higher costs
Increased recruitment & training costs
Increased pressure on remaining staff
Disruption to production / productivity
Harder to maintain required standards of quality and customer service

Question 4

Methods to improve staff turnover

Answer 4

• Effective recruitment and training
• Recruit the right staff
• Do all you can to keep the best staff (role for training & other motivation tools)
• Provide competitive pay and other incentives
• Competitive pay levels & non-financial benefits
• -Job enrichment
• Reward staff loyalty
• Service awards, extra holiday etc

Question 5

labour productivity formula

Answer 5

output/employees

Question 6

Methods to improve labour productivity

Answer 6

Invest in capital equipment (automation + computerisation)
Invest in employee training
Improve working conditions

Question 7

Issues with higher labour productivity

Answer 7

Potential “trade-off” with quality – higher output must still be of the right quality
Potential for employee resistance – depending on the methods used (e.g. introduction of new technology)
Employees may demand higher pay for their improved productivity (negates impact on labour costs per unit)