Theme 3.5.3 - Human Resources

Question 1

What is labour productivity?

Answer 1

Measures how efficient a workforce is

Question 2

Why should the labour productivity of different businesses be interpreted carefully?

Answer 2

• Differenced in equipment
  
  • Factories with newer machinery are likely to hard higher productivity than one using older equipment
• Different industries and processes
  
  • Labour intensive industries tend to have lower productivity compared to highly automated manufacturing

Question 3

How to calculate labour productivity

Answer 3

Total output / Avg. number of employees

Question 4

How can a business knowing they have a high productivity rate help with decision making?

Answer 4

Suggests the business is using its workforce effectively. Company may decide to maintain or even expand the team

Question 5

How can a business knowing they have a low productivity rate help with decision making?

Answer 5

Could indicate inefficiencies such as poor training, inadequate tools or low employee motivation.
Business might consider improving employees skills, investing in better equipment, increasing pay or changing work processes to boost output

Question 6

How can a business knowing its productivity rate help it to compare themselves to industry standards?

Answer 6

Businesses can identify areas where they are lagging and implement strategies to improve performance and competitiveness

Question 7

How can a business knowing its productivity rate help it to make comparisons within the business itself?

Answer 7

Compare the productivity of different areas of the business.
However, this may be misleading and could be due to the quality of equipment or other production areas of the firm having more time intensive tasks

Question 8

What is labour turnover?

Answer 8

The rate at which employees leave a business and are replaced over a specific period

Question 9

What is labour retention?

Answer 9

The rate at which employees stay in the business

Question 10

What do labour turnover and retention affect?

Answer 10

• Workforce stability
• Employee morale
• Productivity
• Recruitment and training costs

Question 11

How to calculate labour turnover (%)

Answer 11

(No. of staff leaving during period of time) / (Avg. no. of staff in post during period of time) x 100

Question 12

How to calculate labour retention (%)

Answer 12

(No. of staff staying/Avg. no. of staff in post) x 100

Question 13

What percentage is considered high labour turnover?

Answer 13

> 25%

Question 14

What percentage is considered typical labour turnover?

Answer 14

15% - 25%

Question 15

What percentage is considered low labour turnover?

Answer 15

< 15%

Question 16

How can labour turnover and retention help to make business decisions?

Answer 16

• Investing in retention strategies or focusing resources on improving workplace culture and employed development
• Adjusting salaries, benefits or perks to align with or exceed industry standards in an attempt to reduce turnover and increase retention
• Conduct employee surveys to identify areas of dissatisfaction and implement strategies based on feedback
• Revamp recruitment and onboarding processes and to provide clear role descriptions and expectations during hiring if labour retention is low and turnover is high with new employees

Question 17

What is absenteeism?

Answer 17

Absenteeism refers to the habitual or excessive absence of an employee from work without valid reasons or prior approval

Question 18

Possible reasons for absenteeism

Answer 18

• Health issues
• Workplace environment
• Personal issues
• Job dissatisfaction
• Lack of engagement

Question 19

How to calculate absenteeism (%)

Answer 19

(Total no. of staff absence days a year/Total no. of staff day that should have been worked) x 100

Question 20

What percentage is considered to be low absenteeism?

Answer 20

< 2%

Question 21

What percentage is considered to be moderate absenteeism?

Answer 21

2% - 5%

Question 22

What percentage is considered to be high absenteeism?

Answer 22

> 5%

Question 23

Ways to manage rate of absenteeism

Answer 23

• Monitor absence trends
• Improve workplace culture
• Provide support
• Set clear absence policies
• Recognise good attendance

Question 24

What are some human resource strategies?

Answer 24

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

Question 25

Why may a business use human resource strategies?

Answer 25

- Used to increase productivity and retention - Each strategy works best when tailored to the organisations needs and culture - Combination of these can create a supportive and motivating workplace

Question 26

What are financial rewards and how can financial rewards benefit a business?

Answer 26

Monetary incentives to motivate employees - Increased productivity - Reduced turnover

Question 27

What is employee share ownership and how does it benefit a business?

Answer 27

Offering employees the opportunity to own shares in the company through share save schemes or offering profit sharing schemes can help with aligning employee interests with the success of the business - Increased retention - Reduced turnover

Question 28

What are consultation strategies and how do they benefit a business?

Answer 28

Involving employees in decision making processes to give them a voice and show their opinions are valued - Increased retention - Reduced absenteeism

Question 29

What are empowerment strategies and how to they benefit a business?

Answer 29

Giving employees more autonomy, responsibility and trust in their roles to foster a sense of ownership and accountability - Increased productivity - Increased retention