Human resources

Question 1

Define PRODUCTIVITY

Answer 1

Productivity measures the relationship between inputs into the production process and the resultant outputs

Question 2

Define LABOUR PRODUCTIVITY

Answer 2

Labour productivity measures the output per worker per time period. Formula:
Output per period/number of average workers per period

Question 3

What are the factors influencing productivity?

Answer 3

• Amount/quality of training provided
• Motivation levels
• Quality of capital equipment (tools/machinery)
• Quality of raw materials
• Organisation of production (JIT or Kaizen methods)

Question 4

Define LABOUR TURNOVER

Answer 4

Labour turnover measures the rate of change in a firm’s labour force i.e. how frequently staff leave. Formula:
(Number of staff leaving in a period/average number of staff in a period) x 100.

Question 5

What influences staff turnover?

Answer 5

• Type of business
• Pay and other rewards
• Working conditions
• Opportunities for promotion
• Competitor actions
• Standard of recruitment

Question 6

What are the problems related to high levels of turnover?

Answer 6

• High costs (training and recruitment and selection)
• Increased pressure on remaining staff
• Possible disruption to productivity
• Harder to maintain levels of quality and customer service.

Question 7

Define LABOUR RETENTION

Answer 7

Labour retention measures a firms ability to keep its workforce within a business, normally for more than one year. Formula:
(number of employees serving for more than a year/ average number of staff) x 100

Question 8

Define ABSENTEEISM

Answer 8

Absenteeism measures the proportion of the workforce who miss work during a given time period. Formula:
(number of staff absent per time period/total number of staff per period) x 100
Alternative formula, for when measuring absenteeism in terms of days:
(number of days taken off during time period/total possible number of days worked) x 100

Question 9

What methods can be used to reduce turnover and absenteeism, as well as improving retention and productivity?

Answer 9

• Financial rewards (piece rate, commission, bonus, performance related pay and profit share)
• Employee share ownership, where employees are given shares or the option to buy shares of the company.
• Consultation strategies, where the thoughts and opinions of employees are sought out.
• Empowerment, where more responsibility is delegated to employees, allowing them to use their abilities and have a greater say in decision making.