Human resources 3.5.3

Question 1

What are 3 quantitative measures of HR performance?

Answer 1

• Labour productivity
• Labour turnover and retention
• Absenteeism

Question 2

What are 4 strategies to improve HR performance?

Answer 2

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

Question 3

What are the functions of a HR department?

Answer 3

• Identify workforce requirements (“hiring and firing”)
• Designing the jobs which people do
• Developing reward systems
• Developing communication systems

Question 4

What is labour productivity?

Answer 4

Labour productivity is a measure of economic performance that compares the amount of output with the amount of labor used to produce that output.

Question 5

What is the equation for labour productivity?

Answer 5

Output per period
/ Number of employees per period

Question 6

Why is labour productivity important?

Answer 6

• Often seen as the single most important indicator of how a firm’s employees are performing.
• An increase in labour productivity suggests an increase in efficiency.
• The importance lies in the effect of productivity on labour cost per unit.

Question 7

What is the labour turnover formula?

Answer 7

Number of staff leaving / average number of staff x 100

Question 8

Why should we analyse the labour turnover ratio?

Answer 8

• Like any ratio this figure is best compared with previous years or competitors.
• Identifying Internal and external causes.
• Analyse positive and negative effects of staff turnover.

Question 9

What are the internal causes of high labour turnover?

Answer 9

• Poor recruitment
• Ineffective motivation/leadership
• Higher wage levels available elsewhere

Question 10

What are the external causes of high labour turnover?

Answer 10

• Increase in number of local employment opportunities
• Improved transport links
• Increase in ability of workers to work from home

Question 11

What are the positive and negative effects of high labour turnover?

Answer 11

• Increased cost of recruitment
• Increased training costs
• Disruption
• Loss of productivity

+ New ideas and enthusiasm
+ Opportunity to recruit staff with specific skills
+ New approaches to problem solving

Question 12

What is labour retention?

Answer 12

The extent to which an employer retains its employees and may be measured as the proportion of employees with a specified length of service (typically one year or more) expressed as a percentage of overall workforce numbers.

Question 13

What is the labour retention formula?

Answer 13

(Staff not leaving in the past year x
Average number of staff employed
in the previous year) x 100

Question 14

What is absenteeism?

Answer 14

• A measurement of the number of days staff are absent each year.
• Pays no attention to “sickies” vs genuine reasons for absence

Question 15

What is the absenteeism formula?

Answer 15

(Total days absence in the period /
Total possible days) x 100

Question 16

What are the advantages and disadvantages of absenteeism?

Answer 16

• Lost productivity of the absent employee
• Overtime for other employees to fill in
• Decreased overall productivity of those employees
• Any temporary help costs incurred
• Possible loss of business or dissatisfied customers
• Problems with employee morale

Question 17

What are the HR advantages and disadvantages of employee share ownership?

Answer 17

+ Give staff a stake and they feel part of the whole
+ Reduces the “them and us” divide
+ LSE research: “Ownership is positively correlated with productivity”

• Share values could drop - risking losing the value of their shares if the business runs into difficulty, which increases their financial dependence on the business.
• Lower salary - sometimes being expected to take a lower salary in return for receiving shares.

Question 18

What are consultation strategies?

Answer 18

It is the person who provides consultancy services for companies in managing the process of recruiting personnel and applying the right methods. In addition, human resources consultants provide performance and talent management.

Consultation is when an employer talks and listens to employees or workers and any trade union or other relevant employee representatives about organisational issues and changes which affect them.

Question 19

Are consultation strategies a good HR technique?

Answer 19

They can be…they provide employees with a platform from which their voices may be heard
- yeah…. heard and ignored!!!

Question 20

What are empowerment strategies?

Answer 20

• Empowerment means not only delegating the power to decide how to tackle a task, but it means delegating the power to decide which task to tackle.
  E.g. Google: 20% personal projects

Question 21

What is human resource planning?

Answer 21

Activities that managers engage in to forecast their current and future needs for human resources