19. Human Resources

Question 1

<p>How is Labour Productivity defined</p>

Answer 1

<p>Output per worker in a given time period.</p>

Question 2

<p>How is Labour Retention defined?</p>

Answer 2

<p>The number of employees that remain in a business over a period of time.</p>

Question 3

<p>How is Labour Turnover defined?</p>

Answer 3

<p>The rate at which staff leave a business.</p>

Question 4

<p>How is Rate of Absenteeism defined?</p>

Answer 4

<p>The number of staff who are absent as a percentage of the total workforce. This can be calculated for different periods of time.</p>

Question 5

<p>What is Labour Productivity?</p>

Answer 5

<p>- Productivity is an important measure is an important measure of the efficiency of a workforce.
<br></br>- If 2 identical teams, with the same equipment, worked for the same period of time, the group that makes the most would be deemed to be more productive.
<br></br>- However, it not so easy when comparing businesses. A company’s figures may be distorted if they have a large amount of robotics involved in their production as workforce would be lower, but the infrastructure costs would be far higher.
<br></br>- Increasing labour productivity can be seen as increasing competitiveness. This is because increased production will allow a business to drive down its unit cost.
<br></br>- This would allow them to either reduce prices and potentially gain more sales, or keep prices the same and increase the profit per unit.</p>

Question 6

<p>How do you calculate Labour Productivity?</p>

Answer 6

<p>Labour productivity is defined as the output produced per worker.
<br></br>
<br></br>- LP = Total output (per period of time)/ Average No. of employees (per period of time)</p>

Question 7

<p>Why may a Business become Less Competitive despite increasing their Labour Productivity?</p>

Answer 7

<p>- Rivals may improve productivity even faster
<br></br>- New businesses may set up again, with lower wage costs, reducing cost per unit
<br></br>- Other factors – a business may produce a new, more attractive product, which customers prefer to buy</p>

Question 8

<p>How do you calculate Labour Turnover?</p>

Answer 8

<p>- Staff turnover can be another method of measuring a businesses effectiveness.
<br></br>- It measures the number of staff leaving a business, relative to the whole workforce over a period of time.
<br></br>
<br></br>Its calculated as follows:
<br></br> (No. of Staff Leaving (per period of time))/(Average No, of Staff (per period of time)) x 100</p>

Question 9

<p>What are some Reasons for High Turnover?</p>

Answer 9

<p>- Relatively low paid jobs mean employees leave for higher paid jobs
<br></br>- Little training or promotion opportunities may lead people to leave to further their careers
<br></br>- Poor working conditions, low job satisfaction, bullying or harassment in the workplace
<br></br>- Poor recruitment selection mean staff are not suited to the role
<br></br>- Economic cycles – in recession, people are afraid to leave their jobs in case they don’t get another. In a boom, more opportunities are created, which leads to greater turnover.</p>

Question 10

<p>What are the Problems with high labour turnover?</p>

Answer 10

<p>- Staff recruitment is costly
<br></br>- New staff need to become familiar with procedures and practices, this reduces productivity
<br></br>- Larger companies will usually provide corporate inductions, which increase costs further.
<br></br>- If internal appointment, training may be needed for a worker moving from a different role.</p>

Question 11

<p>Why is some Turnover needed?</p>

Answer 11

<p>- New staff bring fresh ideas and experience
<br></br>- Some old staff may need to leave – getting rid of ineffective staff will increase turnover, but may also increase productivity
<br></br>- If a business is shrinking, it will need to lay ff staff, this will increase turnover.
<br></br>- In low skilled jobs, it may be more effective to have a high turnover of low paid staff, than increase wages and working conditions</p>

Question 12

<p>What is Labour Retention?</p>

Answer 12

<p>The opposite of labour turnover, labour retention measures how many people stay with an organisation over a period of time. It is calculated as follows:
<br></br>
<br></br>- (No. of staff staying (per period of time))/(Average No. of Staff (per period of time)) x 100</p>

Question 13

<p>What are the benefits of high retention rate?</p>

Answer 13

<p>The benefits to a business of a high retention rate are the same as the advantages of a low staff turnover rate, such as lower recruitment and selection costs, more continuity and a stable workplace</p>

Question 14

<p>What is Absenteeism?</p>

Answer 14

<p>Absenteeism is linked to the number of staff taking time of work through sickness or injury. This is a problem because:
<br></br>- If staff are off ill, the business needs to pay sick pay
<br></br>- If temporary staff are recruited to cover, this increases costs further.
<br></br>- Equally, permanent staff working overtime to catch up will increase wage costs
<br></br>- Output can fall if those replacements are not as effective as the original worker
<br></br>- There may be quality issues
<br></br>Can be a symptom of low morale and demotivated staff
<br></br>- The higher the absenteeism, the more people report as ill. It may lead to a culture of people taking “sick days” for holiday</p>

Question 15

<p>How do you calculate Rate of Absenteeism?</p>

Answer 15

<p>(Number of staff absent on a day)/(total number of staff employed) x 100</p>

Question 16

<p>Why are there different rates in Absenteeism?</p>

Answer 16

<p>Differences in rates can occur for different reasons:
<br></br>- Smaller businesses tend to have lower rates of absenteeism as there is much more teamwork and commitment. Workers in larger businesses will feel there’s less issue if they’re off.
<br></br>- Health & safety. Businesses with good H&S procedures tend to suffer less absenteeism. However, some jobs are inherently more dangerous than others.
<br></br>- Nature of the job can lead to increased absenteeism. Boring repetitive jobs can lead to low job satisfaction and motivation.
<br></br>- Workplace culture will have an impact. Overworked employees tend to suffer from work-related stress, which can lead to long term absence.
<br></br>- Stress related illness can also occur more frequently where staff are over-supervised and feel like they’re not trusted to do a job.
<br></br>- Poorly paid workers tend to have higher absenteeism as they feel undervalued.</p>

Question 17

<p>What are Strategies to increase Productivity and Retention and to reduce Turnover and Absenteeism?</p>

Answer 17

<p>- Financial Rewards
<br></br>- Share Ownership
<br></br>- Consultation
<br></br>- Empowerment</p>

Question 18

<p>How can Consultation Strategies increase Productivity and Retention and to reduce Turnover and Absenteeism?</p>

Answer 18

<p>- Employees who are involved, or feel they are involved, in the business’ decision making will feel more motivated and as such, tend to be more productive.
<br></br>- Staff will feel demotivated if they are given tasks to do, or decisions are made, without consultation or explanation.
<br></br>- If staff are consulted when decisions are being made, they are more likely to accept it, even if the decision is contradictory to their own idea.</p>

Question 19

<p>What are the different methods of Consultation?</p>

Answer 19

<p>- Psuedo Consultation
<br></br>- Classical Consultation
<br></br>- Integrative Concultation</p>

Question 20

<p>What is Psuedo Consultation?</p>

Answer 20

<p>- Managers make decisions and workers are informed about it through representatives, such as unions.
<br></br>- Employees have no influence over the process
<br></br>- Some would say it more giving information than consultation</p>

Question 21

<p>What is Classical Consultation?</p>

Answer 21

<p>- Is a method that involves employees giving their views to a representative, who collates and reports those views to the management.
<br></br>- This allows the views of the employees to be heard and may influence management decisions</p>

Question 22

<p>What is Integrative Consultation?</p>

Answer 22

<p>- The other methods do not directly involve the employees whereas this method is about a more open democratic process.
<br></br>- Whist every employee may not be directly consulted, management and representatives may consider solutions and then put it to the staff for consideration.</p>

Question 23

<p>What are Empowerment Strategies?</p>

Answer 23

<p>Empowerment is about allowing the employees to make the most of their knowledge, experience and creative talents. It is also a way of improving morale, which can have a positive effect on productivity.
<br></br>
<br></br>- Training
<br></br>- Providing Resources
<br></br>- Delegation
<br></br>- Inspire Confidence
<br></br>- Positive Feedback</p>

Question 24

<p>How can Training be used as a an Empowerment Strategy?</p>

Answer 24

<p>It is not really possible to empower staff effectively without first equipping them with the skills needed to take on more advanced tasks
<br></br>- A business needs to identify any 'skills gap'
<br></br>- This is this difference between an employee's current skills and those required to undertake new tasks
<br></br>- This gap can be bridged by training</p>

Question 25

<p>How can Providing the Necessary Resources be used as an Empowerment Strategy?</p>

Answer 25

<p>There is little point empowering staff if they are not given the resources and information needed to undertake more complex task
<br></br>- For example, if an employee is tasked with leading a small team to solve a problem, such as improving the response time to customer complaints, they will need a range of information and enough resources to make improvement</p>

Question 26

<p>How can Handing over Authority be used as an Empowerment Strategy?</p>

Answer 26

<p>- Once employees have been empowered they must be confident they have complete authority to make decisions
<br></br>- The methods they choose and approaches they take must not be questioned
<br></br>- If employees are challenged or asked to explain themselves each time they make a decision, empowerment is not likely to work</p>

Question 27

<p>How can Inspiring Confidence be used as an Empowerment Strategy?</p>

Answer 27

<p>If employees are being empowered it is important that they feel confident about their new role
<br></br>-A lack of confidence can lead to anxiety, hesitancy and mistakes
<br></br>- Senior managers can help to inspire confidence by emphasising the strengths that an individual has, showing trust, and by recognising and praising achievements</p>

Question 28

<p>How can Providing Feedback be used as an Empowerment Strategy?</p>

Answer 28

<p>- At an appropriate time it will be necessary to provide positive feedback to empowered workers
<br></br> - Workers need to know how they have performed in their new roles
<br></br>- Feedback will help you guide them in the future and build more confidence</p>

Question 29

<p>what is a perfomance indicator</p>

Answer 29

<p><span>a type of performance measurementthat evaluates the success of an organisation or of a particularactivity</span></p>

Question 30

<p>Limitations of labour productivity calculations + one eval</p>

Answer 30

<ol><li><span>The method used to calculate labourturnover may not be very effective as it can be difficult tomeasure the output of workers accurately. This is particularlythe case when trying to measure the output of some serviceproviders. For example, how do you measure the output ofthose working in research and development, product creation,healthcare and maintenance? Their output is often intangible(i.e, not a physical thing) and so very difficult to quantify.</span></li><li><span>There may also be problems in manufacturing when severalpeople are involved in the production of a single unit. Forexample, how do you measure the output of a dozen differentworkers all contributing to the construction of a house?</span></li><li><span>Calculating labour productivity is also limited in highlyautomated businesses that employ large quantities of plantand machinery. One problem is that different plants are likelyto be at different technological stages. Labour productivity ina brand-new car plant will be much higher than that in an oldplant. Labour productivity is not likely to be very meaningfulin business activities such as oil refining, chemicalprocessing and food processing.</span></li><li><span>Another problem with measuring labour productivityis that it usually ignores the quality of work, Workers maybe able increase their output by working faster.</span></li><li><span><i>However,if they make mistakes then the quality of output declines.This is likely to have a negative impact on sales,</i></span></li></ol>

Question 31

<p>limitations of labour turnover and retention calculations</p>

Answer 31

<ol><li><span>The method used above to calculate labour turnover may be limited. One reasonis because of the difference in labour turnover between part-time and full-time workers, Labour turnover amongst part-time workers will be higher than that of full-time workers, even whendoing the same job. This may be because many part-timeworkers are looking for a full-time job and will leave as soon as they get one.</span></li><li><span>Alternatively, some part-time workers leave their part-time jobs regularly, One example might be students at the end of the college year. This means the labour turnover forbusinesses that have more part-time workers will be distorted.</span></li><li><span>Similar distortions may arise if businesses use more temporary or seasonal staff. These workers are only employed for short periods. This means that the labour turnover of seasonally or temporary workers will be high</span></li></ol>

Question 32

<p>limitations of absenteeism rate calculation</p>

Answer 32

<ol><li><span>Absenteeism rates can becomedistorted very easily. For example, a small businessmay have a very low rate of absenteeism. However, if a single member of staff is of on long-term sickness due aserious illness, this will raise the absenteeism rate.</span></li><li><span>The way absenteeism is defined or recorded by abusiness may also distort calculations. For example, ifan employee leaves work at lunchtime to collect a sickchild from school, some businesses might ignore that absence. However, others might record this as a half dayabsent. This means an employer's policy or culture willhave an effect on the official absenteeism rates,</span></li></ol>

Question 33

<p>how can financial rewards help increase productivity and reduce turnover and absenteeism: theory</p>

Answer 33

<ol><li><span>F.W. Taylor (an Americanengineer and businessman), outlined his theory ofscientific management. Taylor suggested identifyingthe best way to carry out a task then paying workersaccording to what they produce. He suggested thatpeople should be paid 'a fair day's pay for a fair day'swork'.</span></li><li><span>He argued that people are motivated mainly by money and would work harder to earn more.</span></li><li><span>Therefore,employees should be paid piece rates (i.e. an amount of money paid for the amount of work produced).</span></li><li><span>The mainbenefit of piece rates for businesses is that it rewardsproductive workers. Slow or lazy workers will not earn asmuch as those who work hard and are more productive.</span></li><li><span>This system helps to motivate workers, and businessesare likely to get more out of their employees.</span></li></ol>

Question 34

<p>other financial rewards to increase productivity and retention and reduce turnover and absenteeism</p>

Answer 34

<ol><li><span>performance-related pay</span></li><li><span>bonus systems</span></li><li><span>profit-related pay</span></li><li><span>commission systems</span></li></ol>

Question 35

<p>Benefits of the other financial rewards to increase productivty and retention and reduce turnover and absenteeism</p>

Answer 35

<ol><li><span>All of these methods reward employees for their effort —both in terms of results and attendance. It is <strong>unlikely that staff will want to leave a business if the financial rewardsare large, so staff turnover will be lower.</strong> For example, bonuses can be paid in addition to the basic wage or salary.Operatives may be paid a bonus if they reach a weeklyproduction target.</span></li><li><span>The main advantage to businesses ofbonus payments is that they are<strong> only paid if targets are met.</strong>This means that money is only paid if it has been earned. Some businesses pay their staff loyalty bonuses that areusually paid annually.</span></li><li><span>Such bonuses are not necessarilylinked to productivity but they are designed to <strong>rewardworkers for their loyalty and to help to reduce staff turnover</strong></span></li></ol>

Question 36

<p>example of the costs of absenteeism</p>

Answer 36

<p><span>For example, inAustralia absenteeism is a major problem. In 2016 it wasestimated that the cost to the Australian economy of lostproductivity through absenteeism was AUS$33 billion. Atotal of 92 million working days were lost throughunexpected absences.</span></p>

Question 37

<p>how does employee share ownership help increase productivity and retention and to reduce turnover and absenteeism</p>

Answer 37

<ol><li><span>These schemes are often used toreward senior managers and executives in plcs. The ideais that certain employees will be paid a portion of shares(sometimes in addition to cash bonuses). This happensif the business reaches important performance targets, such as growth in turnover, profit or share price.</span></li><li><span>Some businesses offer shares to a wider range of employees. A common method of share distribution is to use a</span><span><strong> sharesave</strong></span><span><strong> scheme,</strong></span><span> sometimes called a savings related share option scheme. These involve employees saving someof their monthly pay for a fixed number of years. At the endof the period, employees can use the money saved to buy shares at a price that was fixed from the beginning, often at a discount. If the share price has increased over the timeperiod, employees can often make a</span><span><strong> capital gain.</strong></span><span></span></li><li><span>However, if the share price has fallen to below the price that was fixedat the outset, employees get their cash back, perhaps with asmall cash bonus. Such schemes are considered to be safe and so are very popular with employees.</span></li><li><span>The benefit to employers is that workers are likely to be</span><br></br><span>better motivated and more loyal to the company if they own</span><br></br><span>shares. They may work harder, take less time off sick and are</span><br></br><span>less likely to leave. For example, once staff have signed up</span><br></br><span>for a five-year sharesave scheme, they may not want to leave</span><br></br><span>halfway through the term and miss out on possible gains</span></li></ol>