Labour Flashcards
CHAPTER 7
1
Q
2 types of remuneration
A
- Time-based
- Output/performance based (incentive)
2
Q
Time-based scheme
A
Payment is based on the time employees work
- Salary
- Wages
- Overtime premium
3
Q
Incentive scheme
A
Encourage employees to work harder or more efficiently
- Piecework
- Bonuses (time-saved, discretionary,etc)
- Commission
- Proft-sharing scheme
4
Q
What does the efficiency ratio measure?
A
Production output for a period took more or less direct labour time than expected
> 100% = great efficiency
5
Q
What does the capacity utilisation ratio measure?
A
Total direct labour hours worked were greater or less than budgeted
6
Q
What does the production volume ratio measure?
A
How the actual production output for a period (in direct labour hours) compares with the budgeted output.
7
Q
Relationship between labour ratios =
A
Efficiency ratio × capacity utilisation ratio = production volume ratio
