Interpreting Human Resource Data

Question 1

Figures HR consider when making decisions

Answer 1

Labour productivity
Labour turnover
Absenteeism
Labour retention

Question 2

Labour productivity equation

Answer 2

Output per period / number of employees

Question 3

How may a company use HR decisions to improve labour productivity

Answer 3

• Employing a more diverse workforce and making workers feel engaged and motivated may help reduce absenteeism and increase productivity
• Increase in labour productivity may lead to employees being rewarded with bonuses and increase salaries. Keeping motivation levels high and making sure workers feel valued

Question 4

What may HR decide to do if productivity falls within a workforce

Answer 4

• HR may choose to retrain staff / offer bigger incentives or in EXTREME cases offer redundancies and replace employees with more skilled labour

Question 5

What will HR do in regards to competition

Answer 5

HR will compare their labour productivity with competitions and see if they need to improve or are ahead of the game. If productivity is low they might need to see how competitors are managing their HR - this information may be tricky to get hold of

Question 6

What two other important statistics may be used when making HR decisions? And how are they calculated

Answer 6

Labour cost per unit = Labour costs / units of output

Employee costs as a % of turnover = employee costs / sales turnover x 100

Question 7

Unless told otherwise assume labour costs are equal to …….

Answer 7

Employee costs

Question 8

What does labour cost per unit show

Answer 8

How much money the business has to pay employees to make one unit of output

Question 9

How can labour cost per unit be reduced

Answer 9

Reduce labour cost or increase labour productivity

Question 10

What does employee costs as a percentage of turnover show

Answer 10

What percentage of money made is spent on employees

Question 11

When may employee costs as a percentage be useful

Answer 11

When comparing different sized business that make similar products

Question 12

What is a main objective of the HR department and how may they be influenced by it

Answer 12

Controlling employee costs by decreasing or increasing them. E.g if they recruit more employees costs will increase but they will look at employee cost as a % of turnover and labour cost per unit to see the impact recruitment had on a business

Question 13

How can employee cost be reduced and how may it be controversial

Answer 13

Reduced by decreasing wages and benefits but HR will try and avoid this as they know it may lead to a demotivated workforce

Question 14

What does labour turnover measure

Answer 14

Measures the proportion of staff to leave each year

Question 15

Equation for labour turnover

Answer 15

Number of staff leaving / average number of staff employed x 100

Question 16

External causes of high labour turnover

Answer 16

Changes in regional unemployment levels

Growth of local firms using staff with similar skills

Question 17

Internal causes of high labour turnover

Answer 17

Poor motivation
Low wages
Lack of opportunities for promotion
Poor recruitment process

Question 18

What can reduce high labour turnover

Answer 18

Delegation, job enrichment, higher wages and better training

Question 19

Benefits of High staff turnover

Answer 19

Constant stream of new ideas
Firms can recruit staff who have already been trained by competitors - reduces costs
Enthusiasm of new staff influences other workers

Question 20

Disadvantages of high staff turnover

Answer 20

Lack of loyal and experienced staff who know the business
Firm loses staff it has trained
Training costs money and productivity drops whilst new staff gets trained
Recruitment costs are high

Question 21

What does labour retention measure

Answer 21

The companies ability to keep its employees

Question 22

Labour retention equation

Answer 22

Number of staff employed at the end of a period - number of leavers / number of staff employed at the start of period x 100

Question 23

The ……. the labour turnover the ……… the retention rate

Answer 23

The higher the turnover the lower the retention rate