03 measuring effectiveness of workers (1)
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People in Business
Measuring the Effectiveness ofthe Workforce
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Measuring the Effectiveness of the Workforce
In this topic you will learn about:
Methods of measuring workforce
performance
Labour turnover
Labour productivity
Absenteeism Calculatorsneeded!
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Labour Turnover
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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
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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 :50 x 100 = 5%
1000
Do you think this is high
or low?
What are the advantages
of labour turnover?
What are the disadvantages
of labour turnover?
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Labour turnover
You will need access to the
internet to watch this video
clip
Same clip on PC
http://localhost/var/www/My%20Videos/Buss2/productivity.flvhttp://www.youtube.com/watch?v=YQsTzbd9P24 -
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Labour Productivity
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Labour Productivity
This can be measured in 2 ways.
1. Output per worker
2.
Labour costs per unit of output
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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
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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 = 100 cars per worker
1000
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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
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Labour Absenteeism
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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
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Absenteeism
Worked example:
A car firm has 1000 full time employees
Of these, 40 employees did not turn up for workon a Friday
What is the absenteeism rate for that Friday
Using the formula then:40 x 100 = 4%
1000
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You need to know
these formulas!
Remember to show formulas
as well as calculating the
answers
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Summary of formulas needed:
Labour Productivity
Labour productivity perworker
Total value of Output
Total Number of workers
Labour cost per unit
= Total Labour Cost
Number of units produced
Labour turnover
= number of leavers p.a. x 100
Average number of employees p.a.
Absenteeism
Number of staff absent per time period x 100
Total number of staff days worked per timeperiod
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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?
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Your Task
Complete the
Qs on
Measuring staffproductivity
worksheet.
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Worksheet task
1.Labour Turnover for a double glazing company. It introduced a new training programme and bonus scheme in Year 2.
Year 1 Year 2 Year 3 Year 4
Average number of
employees
42 41 42 43
Number of leavers 3 6 2 2
Value of output 1,500,000 1,300,000 1,600,000 1,800,000
Total labour costs 948,000 951,200 948,600 962,400
Average number of
staff absent on one
day
5 6 2 1
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Questions.
Calculate the labour turnover for each year. ( 5 marks; 1 for formula and1 x 4 per calculation)
Calculate the labour productivity per year, using the output per employeeformula. . ( 5 marks; 1 for formula and 1 x 4 per calculation)
Calculate the labour productivity using labour costs per unit method. . ( 5marks; 1 for formula and 1 x 4 per calculation)
Calculate the percentage absenteeism rate for years 1 4. . ( 5 marks; 1for formula and 1 x 4 per calculation)
How has the new training programme and bonus scheme affected theperformance of labour in the company? (10 marks; C = 3 A = 4 E = 3)
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Homework.
Textbook p 150 DO Analysis & Evaluation Q 2Vals Bakery
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