3.5.3 Human Resources

Question 1

human resources data can be used to …

Answer 1

• help make decisions about recruitment and employees
• measure how effectively a business is using their human resources

Question 2

what can a business calculate to reflect the effective use of human resources

Answer 2

1 labour productivity
2 labour retention
3 labour turnover
4 retention

Question 3

what is labour productivity

Answer 3

• output per worker
• total output (per period of time) / average number of employees (per period of time)

Question 4

how may labour productivity data be interpreted and how does it impact a business

Answer 4

• used to make decisions about training, recruitment and pay
• if productivity is high HR may reward this with bonuses or pay rises
• if productivity decreases HR may retrain employees or offer redundancy and higher better staff
• they will also compare to other businesses to see if they need to improve

Question 5

what is labour turnover

Answer 5

• the proportion of staff leaving over a period of time
• number of staff leaving (in a time period) / total staff (in a time period)

Question 6

what are the impacts of high labour turnover

Answer 6

• this increased costs as a business is constantly training and recruiting new staff
• can break cohesion of corporate culture and teams
  + Some firms may want a higher labour turnover as they need new creative ideas constantly
  + If a business is trying to shrink it may want high labour turnover and low retention

Question 7

why may a business have high labour turnover and low labour retention?

Answer 7

• if there are other businesses looking for people with a similar skill set
• nothing motivating for staff, low wages, no promotion opportunities
• poor recruitment that hires people that aren’t good for the job

Question 8

how can a business reduce labour turnover and increase staff retention

Answer 8

• delegation and increased responsibility
• higher wages
• better training
• HR must work out specifically why labour turnover is high

Question 9

what is labour retention

Answer 9

• this is a business’s ability to keep their employees
• number of employees at the start - number of leavers / number of staff at the start of the period

Question 10

what is absenteeism

Answer 10

• percentage of the labour workforce that is absent over a period of time
• number of days absent (in a period of time)
  / number of staff x time period X100

Question 11

what causes absenteeism

Answer 11

• physical or mental illness
• high stress
• low morale/motivation
• bullying/harassment
• dangerous work

Question 12

how can absenteeism impact a business

Answer 12

• costly as business may have to pay sick pay or hire temporary staff
• productivity is disrupted

Question 13

what strategies can be used to reduce labour turnover and absenteeism and increase staff retention and productivity

Answer 13

• financial rewards
• employees sharing ownership, offering shares to employees keeps them motivated and invested within the business
• consultation strategies, involving staff in decision-making to make staff feel more valued HOWEVER this could make decision-making more time-consuming or costly
• empowerment strategies, giving employees more control and responsibilities will increase morale, HOWEVER, this may be difficult if managers struggle with delegation