3.6.2 Analysing HR Performance Flashcards
3 How is Performance measured?
you cannot measure motivation directly
use a series of indicators like
labour productivity, absenteeism, labour turnover, and waste levels
3 Why do we need to analyse HR performance?
managers require an objective, unbiased way to measure the performance of personnel
firms need to know about motivation,
productivity, and if policies are being met.
3 what is labour turnover?
measure the rate of change within a workforce
measure numbers of employees leaving given a time period
3 What is the equation for labour turnover?
(number of staff leaving per year)/(average number of staff) x 100 = %
3 what are internal causes of labour turnover?
not happy with pay
lack of motivation
lack of proportional opportunity
reitirement
job insecurity
not happy with management
poor recruitment
3 what are external causes of labour turnover?
retirement
change of role
promotion at another form
local vacancies
better transport links
3 what are positive consequences of a high labour turnover?
better employees who are skilled with new ideas
can create high efficiency
no training necessary
new solving problems3
3 what are negative consequences of a high labour turnover?
bad reputation
recruit new staff is costly
low retention shows low efficiency
training is expensive
lack of production during adjustment period
takes time to adopt business cultures
3 how do you improve labour turnover
motivate via pay, responsibility etc
staff training and promotion
staff exit feedback
still all expnsive
3 what is Labour Retention?
the extent to which a business holds onto its employees
measured a sa proportion of employees with specified service length
3 what is the equation for Labour Retention?
(no of employees employed for 1+ years)/(average no of employees) x 100 = %
3 Why do you avoid a High Labour Turnover?
increase recruitment and training costs
maybe unsettling for staff and teams as groups are disrupted
3 Why are customers dissatisified?
regularly dealing with different employees
turnover rate will depend on business or product
3 What does High Produtcivity result in?
lower labour cost per unit
means greater competitiveness
3 What does High Labour Turnover result in?
expensive to train new recruits, but new workers lead to new ideas and skills
3 What is Labour Productivity?
compares workers with output
most important measure
measures output per worker
3 What is the equation for Labour Productivity?
(output per period)/(no of employees) = LP
3 Higher productivity = ?
Increase productivity = ?
better performance
increased efficiency
3 Why is competition a problem?
if they are able to produce more of anything cheaper, it will give a cost advantage
improves financial position
improves UK Economic position
3 What is Unit Labour Costs
measure labour cost per unit of output
based on labour costs including non wages, like national insurance and pensions
3 What is the equation for Unit Labour Costs
(total labour costs per period)/(output per period)
4 How do you increase labour productivity and decrease labour cost per unit?
recruitment and selection of suitably skilled employees and training
provisions training to advance skills and attitudes of employees
improved technology and machinery
non-financial methods to improve motivation
4 how do you specifically reduce labour cost per unit?
holding down wages
replacing workers with technology
outsourcing production to other firms.
4 How do you work out ‘employees as a percentage of turnover’?
(employee costs)/ (sales turnover) x 100 = %
4 How do you interpret employee costs?
want to keep them at an acceptable level
varies business to business
capital intensive business wants a low percentage- automated factories
labour intensive will have a higher percentage- hotels, restaurants etc
4 What is absenteeism
measures percentage of staff who are absent/ off for any reason
4 What is the equation for absenteeim?
(number of staff absent)/(number of total staff) = absenteeism
4 why are people absent often?
poor working conditions
ill from work conditions
demotivation
industrial action/striking
bad management
no teamwork
over supervision
low pay
inappropriate tasks
4 what is a negative of absenteeism
lost production
extra overtime
increased level of absenteeism
4 how can you reduce absenteeism
flexitime: relives pressure of childcare and transport costs
job enrichment
improved working conditions and HR
4 what do you do with all this data collected?
Figures on their own say very little
comparisons are needed
- over time (year periods)
- against similar firms
- with targets
once problems are identified, solutions can be found
