Unit 6.2- Analysing performance notes

Question 1

What data is available to managers to assess the performance of their employees?

Answer 1

Labour productivity - output per worker
Unit labour costs
Employees as a % of revenue
Labour turnover and retention

Question 2

What affects labour productivity?

Answer 2

Amount of equipment (capital)
Quality of equipment (capital)
Motivation of the workforce

Question 3

What to consider when analysing data?

Answer 3

Which part of the business is included
Labour productivity data ignores wage rates
Overall productivity depends on many factors

Question 4

What is unit labour costs determined by?

Answer 4

The cost of employing workers

Speed at which products are made

Question 5

What type of relationship is present between labour productivity and labour unit costs?

Answer 5

Inverse relationship

Question 6

What factors will influence employees cost as a % of revenue?

Answer 6

• Productivity rates of workforce
• Wage rates
• Non-wage employment costs
• The management of capacity

Question 7

What is the labour turnover equation?

Answer 7

number of staff leaving during year x 100
________________________________
average number of staff

Question 8

What would low labour turnover cause?

Answer 8

• Low wages
• Inadequate training
• Low morale / motivation
• Ineffective recruitment leading to unsuitable staff
• Redundancies
• Retirement

Question 9

What is labour retention?

Answer 9

This measures the extent to which businesses keep their employees.

Question 10

Why do businesses concern themselves with keeping hold of their employees?

Answer 10

• Recruitment costs
• Unsettling for staff / teams
• Dissatisfied customers (dealing with multiple different people)
• Time lag to recruit

Question 11

What type of businesses might be less concerned with labour turnover and retention?

Answer 11

• Lower skilled
• Easier to replace
• Part time
• Seasonal
• Lower wages
• Low cost of training and recruitment

Question 12

What internal data might be used for HR decision making?

Answer 12

• Corporate objectives
• Unit labor costs
• Labour productivity
• Skills
• Labour turnover
• Size of workforce
• Age profile of workforce

Question 13

What external data might be used for HR decision making?

Answer 13

• Unemployment rates
• Wage rates
• Employment costs e.g tax
• Tastes and fashions
• Sales forecasts
• Competitor’s actions
• Pries
• Forecast migration