Human Resource Performance 1 Flashcards
What are the downsides with labour productivity calculations?
- Does not take into account wage rates (key factor of employees performance)
- Does not take into account technology used in the production process
Unit costs have an ……………. relationship with labour productivity
inverse, as labour productivity rises unit costs should go down.
When may labour costs rise?
When receiving training, however this may be beneficial in the long term
Equation for employee cost as a percentage of revenue
employee cost /
sales turnover x 100
What does employee cost as a percentage of total revenue measure and when may it be useful?
it compares employee cost against the total business revenue. may be useful when label costs are high as a percentage of total costs
What factors can influence employee cost as a percentage of total revenue?
- High labour productivity can lead to higher sales revenue therefore lowering the percentage costs compared to revenue
- Human resource capacity must be maximised to lower the percentage costs
-Any increase in wages must have an impact
in labour productivity otherwise the labour cost would rise