Chapter 5: Managing Productivity and Controlling labor costs

Question 1

Identify the sequences of overstuffing and understaffing

Answer 1

The supervisor has an important role to manage productivity and control labour costs

Overstaffing
- it can lead to unnecessary labour cost and they need to generate additional revenue to recoup those costs

understaffing
- It can lead to increased turnover and decrease profits

Question 2

Types of standards

Answer 2

Productivity standards
- defines the acceptable quantity of work to be done by trained employees who perform their work according to established performance standards

Performance of standard
- It explains the quality of the work that must be done

Supervisors must balance quality (performance) and quantity (productivity) in relation to the volume of business and the level of service their departments provide

Question 3

Explain how supervisors determine productivity standard

Answer 3

A supervisor begins to establish productivity standards is by answering the question “how long should it take for an employee to perform a specific task according to the departments performance standards?”

Question 4

Explain how supervisors plan their stuffing needs and develop a staffing guide

Answer 4

Developing a staffing guide

1. determine total labour hours using previously established productivity standards
2. Determine the required number of employees both full-time and part-time
3. estimate labour expenses by multiplying the labour hours by the average hourly rate