3.6 Decision making to improve human resource performance Flashcards
Name effective ways of measuring the workforce
- Staff Turnover
- Labour Productivity
- Absenteeism
- Retention Rate
Operational ways of measuring the workforce effectively
- Capacity utilisation
- Quality reports
- Waste levels
- Environmental targets
Marketing ways of measuring the workforce effectively
- Market share
- Customer satisfaction
- Recognition levels
- Customer loyalty
Why may a member of staff leave their employment?
- Lack of authority
- Bad working conditions
- Competitors offer better pay
- Stress / Mental Health / Personal
Define Retention Rate
Ability for a business to persuade its staff to stay with them
Define Labour Turnover
The percentage of the workforce (employees) that leave a business within a given period
Equation for Labour Turnover
Number of employees during period
/
Average number employed during period
(x100)
Why is high staff turnover a problem?
- Higher costs, for re-recruitment
- Increases pressure on remaining staff
- Disruption to production and productivity
Factors that may cause high staff turnover
- Pay
- Working conditions
- Lack of promotion
- Competition poaching staff
- Poor communication
- Economic conditions (e.g. during recession)
How to improve staff turnover
- Effective recruitment and training
- Competitive pay and benefits
- Job enrichment
- Reward staff loyalty / incentives
Define labour productivity
How much employees produce in a given time period, the more productive the better
Why does labour productivity matter?
- Labour costs are normally a very high % of total costs
- The efficiency of a business relies on how productive the workforce is
- Competitiveness depends on keeping unit costs down
Factors affecting labour productivity
- Extent and quality of fixed assets (e.g. equipment and IT)
- Ability to motivate the workforce
- Methods of production used
- External factors (e.g. reliability of suppliers)
How to improve productivity
MOTIVATE !
- Measure performance and set targets
- Invest in better equiptment
- Simplify products
- Improve employee training
Define Absenteeism
Measure people who are absent
Equation for Absenteeism
Number of staff absent during period
/
Number employed during period
(x100)
- or -
Number of days taken off for unauthorized absence (during period)
/
Total days worked by workforce over the period
(x100)
How to tackle absenteeism
- More days off
- Investigate the cause
- Set targets
- Have clear absence policies
- REWARD GOOD ATTENDANCE
Problems of bad absenteeism
- Costly
- Business will need to investigate which will be time consuming
- Productivity down
How is absenteeism predictable?
Often highly predictable because occurs at certain points in the year
Define ‘Human Resource Management’
Design, implementation and maintenance of strategies to manage people for optimum business performance
Why is HRM important?
- People are a critical resource in the quality and customer service level
- Competitiveness requires a business to be efficient and productive- workforce needs to be motivated; right skills and organised
- Flatter organisational structures place greater emphasis on delegation and communication
Suggest strategic methods of HRM
- Workforce planning
- Recruitment and training/development
- MOTIVATING STAFF
- Organisational structures (hierarchy etc)
How would a business…
Ensure human resources are employed cost effectively
(HR Actions)
- Pay rates should be competitive but not excessive, can cause loss
- Achieve acceptable staff utilisation
- Measure returns on investment in training, see if its worth it
How would a business…
Make effective use of workforce potential
(HR Actions)
- Ensure jobs have suitable, achievable workloads
- Avoid under-utilising or over-stretching staff potential
- Make best use of employee skills, don’t waste on unnecessary tasks