3.6.2

Question 1

why does HR review the performance of employees?

Answer 1

• meeting the expected standards of the organisation
• meeting customer needs
• adding value to their contributions

Question 2

what does staff turnover mean?

Answer 2

number of employees leaving a business

Question 3

what does staff retention mean?

Answer 3

the number of employees remaining in a business

Question 4

why do businesses need to keep staff turnover low?

Answer 4

• increases recruitment and training costs
• lost time on recruitment and training
• causes gaps in business -> can negatively impact customer experience

Question 5

what is gardening leave?

Answer 5

when an employee intends to leave and work for competitor and they are paid, but do not come in fort a set period to reduce the amount of current affairs knowledge. they are unable to work for the competitor until this ends

Question 6

how can turnover be reduced and retention improved?

Answer 6

• maintaining high levels of morale and motivation
• rewarding employees for good performance
• incentivising employees through benefit schemes
• having clear progression pathways
• valuing the opinions of employees

Question 7

how to calculate labour turnover?

Answer 7

number of staff leaving/number of staff employed by the business x100

Question 8

what does labour productivity mean?

Answer 8

measures output per worker assessing how much each individual is producing/contributing

Question 9

how to calculate labour productivity?

Answer 9

output over a time period/number of employees

Question 10

what are limitations to the labour productivity formula?

Answer 10

• doesnt consider wages/salaries given to employees
• dependant on what employee is producing as to whether it is useful
• could be impacted by internal + external disruptions

Question 11

what does unit labour costs mean?

Answer 11

measures the labour cost per unit of output produced

Question 12

what is the formula for labour cost per unit?

Answer 12

labour costs/units of output

Question 13

what are limitations to the labour cost formula?

Answer 13

• labour costs will rise if employees receive training (as well as productivity)
• lowering labour costs may be ineffective if other business costs are rising

Question 14

what does employee costs as a % of revenue mean?

Answer 14

measures employee costs in relation to business revenues

Question 15

what is the formula for employee costs as a % of revenue?

Answer 15

employee costs/turnover (sales revenue) x 100

Question 16

why do businesses use KPI’s?

Answer 16

• able to identify demand for labour, skills required and therefore existing workforce to access any shortage
• forecast for staff leaving
• identify any training requirements