3.5.3 Human Resources

Question 1

Human resource data

Answer 1

Many figures that HR consider when making decisions about recruitment snd how they treat employees are:
- Labour productivity
- Labour turnover
- Labour retention
- Absenteeism
These figures are also compared next to competitors

Question 2

Labour productivity formula

Answer 2

Output per period / Number of employees

Question 3

Labour productivity

Answer 3

Depends on how engaged and motivated employees are
Make sure employees are in the right role
May reward employees if labour productivity is high
If it is decreasing they may offer bigger incentives or offer redundancies to employ more skilled staff
Can compare with competitors

Question 4

Labour turnover formula (%)

Answer 4

(Number of staff leaving / Average number of staff employed) X100

Question 5

Labour turnover

Answer 5

Higher labour turnover = more workers leaving the firm
This also increases the firms costs and they need to recruit and train more staff

Question 6

What can cause high labour turnover ?

Answer 6

External causes; The growth of other firms using staff with similar staff
Internal causes; poor motivation, low wages, lack of opportunities for job responsibilities.
Staff will join other firms for higher benefits

Question 7

What can reduce labour turnover ?

Answer 7

• Increased delegation
• Job enrichment
• Higher wages
• Better training

However, some firms may encourage higher turnover EG: creative firms bring on new staff for new ideas

Question 8

Labour Retention formula (%)

Answer 8

((Number of staff employed at start of period - number of leavers) / Number of staff employed at the start of period ) X100

Question 9

Labour Retention

Answer 9

Measures a firms ability to keep its employees
- Higher turnover = lower retention rate
- Low retention rate means a business only keeps a small number of employees

Question 10

Ways to keep a low retention rate

Answer 10

Improving the induction process
- Make sure employees feel included and valued

Question 11

Absenteeism formula (%)

Answer 11

(Number of days of staff absent in a time period / (Number of staff employed x time period)) X100

Question 12

Reasons for absenteeism

Answer 12

• A physical or mental illness
• High levels of stress= cause illness or avoidance of work
• Low staff morale and motivation
  -Bullying or harassment
  -Dangerous work
• Culture of using absenteeism to increase holidays

Question 13

Absenteeism

Answer 13

The proportion of days missed by employees
- Can be costly (Sick pay or hire temp staff)
- Can compare with competitors to see if rates are high or low

Question 14

Strategies to improve human resource management

Answer 14

• Financial rewards
• Employee share ownership
• Consultation strategies
• Empowerment strategies

Question 15

Financial rewards

Answer 15

Motivates employees to work harder
However, if employees have valid reasons for absenteeism it can be seen as unfair

Question 16

Employee Share Ownership

Answer 16

Reward staff with shares of the company
Can increase productivity and reduce staff turnover

Question 17

Consultation Strategies

Answer 17

Involve employees in decision making
Reduces worker absenteeism and increase labour retention and productivity
Can make decision-making longer and more costly

Question 18

Empowerment Strategies

Answer 18

Empower employees
Give them more power and responsibility = increases motivation and productivity
Reduces absenteeism and turnover