Aqa bus2-peopleworkforceeffectiveness


Published on

Published in: Education
1 Like
  • Be the first to comment

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Aqa bus2-peopleworkforceeffectiveness

  1. 1. Main Measures of Employee Effectiveness Absenteeism Percentage of staff who are absent from work Labour Productivity Output per Employee Staff Turnover Percentage of staff who leave during a period
  2. 2. Staff Turnover
  3. 3. Measuring Workforce Effectiveness
  4. 4. What this topic is about <ul><li>Methods of measuring workforce effectiveness </li></ul><ul><li>Calculation and interpretation </li></ul><ul><li>Measures to improve workforce effectiveness </li></ul>
  5. 5. Employee Retention <ul><li>All businesses lose staff </li></ul><ul><ul><li>Retirement / Maternity / Death / Long-term Illness </li></ul></ul><ul><ul><li>Unsuitability </li></ul></ul><ul><ul><li>Changes in strategy (e.g. closure of locations) </li></ul></ul><ul><li>Staff turnover needs to be managed if the business is to succeed </li></ul><ul><li>Employee retention = the ability of a business to convince its employees to remain with business </li></ul>
  6. 6. What is Labour Turnover? The percentage of the workforce (employees) that leave a business within a given period (usually a year)
  7. 7. Labour Turnover Formula Labour turnover is calculated using this formula: Number of employees leaving during period Average number employed during period X 100
  8. 8. Labour Turnover Example Surridge Porridge is a manufacturer of breakfast cereals. In 2008 it employed an average of 80 staff. During 2008, the business recruited 12 staff to replace 15 who left. = 18.75% Labour turnover = Number of employees leaving (15) Average number employed (80) X 100
  9. 9. Problems of High Staff Turnover <ul><li>Higher costs </li></ul><ul><ul><li>Increased recruitment & training costs </li></ul></ul><ul><li>Increased pressure on remaining staff </li></ul><ul><li>Disruption to production / productivity </li></ul><ul><li>Harder to maintain required standards of quality and customer service </li></ul>
  10. 10. Factors that Affect Staff Turnover (1) <ul><li>Type of business </li></ul><ul><ul><li>Some businesses have seasonal staff turnover (e.g. holiday parks) </li></ul></ul><ul><ul><li>Some businesses employ many temporary staff (e.g. hotels) </li></ul></ul><ul><li>Pay and other rewards </li></ul><ul><li>Working conditions </li></ul><ul><li>Opportunities for promotion </li></ul><ul><li>Competitor actions </li></ul><ul><li>Standard of recruitment </li></ul>
  11. 11. Factors that Affect Staff Turnover (2) <ul><li>Quality of communication in business </li></ul><ul><li>Economic conditions </li></ul><ul><ul><li>Downturn often leads to lower staff turnover </li></ul></ul><ul><ul><li>Buoyant economy – staff more likely to leave </li></ul></ul><ul><li>Labour mobility </li></ul><ul><ul><li>How transferable are staff skills </li></ul></ul><ul><ul><li>What other jobs are available? </li></ul></ul><ul><li>Employee loyalty </li></ul>
  12. 12. Ways to Improve Staff Turnover <ul><li>Effective recruitment and training </li></ul><ul><ul><li>Recruit the right staff </li></ul></ul><ul><ul><li>Do all you can to keep the best staff (role for training & other motivation tools) </li></ul></ul><ul><li>Provide competitive pay and other incentives </li></ul><ul><ul><li>Competitive pay levels & non-financial benefits </li></ul></ul><ul><li>Job enrichment </li></ul><ul><li>Reward staff loyalty </li></ul><ul><ul><li>Service awards, extra holiday etc </li></ul></ul>
  13. 13. Why Labour Productivity Matters <ul><li>Labour costs are usually a significant part of total costs </li></ul><ul><li>Business efficiency and profitability closely linked to productive use of labour </li></ul><ul><li>In order to remain competitive, a business needs to keep its unit costs down </li></ul>
  14. 14. Labour Productivity
  15. 15. Factors influencing labour productivity <ul><li>Extent and quality of fixed assets (e.g. equipment, IT systems) </li></ul><ul><li>Skills, ability and motivation of the workforce </li></ul><ul><li>Methods of production organisation </li></ul><ul><li>External factors (e.g. reliability of suppliers) </li></ul>
  16. 16. Labour Productivity Formula Labour productivity is calculated using this formula: Output per period (units) Number of employees at work The answer from the formula is usually expressed in terms of output per employee e.g. 1,000 units per employee
  17. 17. Labour Productivity Example (1) Marcouse Plastics makes 5,000 widgets each month. Total monthly labour hours are 1,250. What is labour productivity (hours per unit)? = 0.25hrs / unit Labour productivity = Labour hours per month (1,250) Units produced per month (5,000)
  18. 18. Ways to Improve Labour Productivity <ul><li>Measure performance and set targets </li></ul><ul><li>Streamline production processes </li></ul><ul><li>Invest in capital equipment (automation + computerisation) </li></ul><ul><li>Invest in employee training </li></ul><ul><li>Make the workplace conducive to productive effort </li></ul>
  19. 19. Absenteeism
  20. 20. Absenteeism Formula (1) Absenteeism calculated using this formula: Number of staff absent during period Number employed during period X 100
  21. 21. Absenteeism Formula (2) Number days taken off for unauthorised absence (during period) An alternative formula uses the total number of days worked over a period (usually a year) Total days worked by workforce over the period X 100
  22. 22. Comments on Absenteeism (1) <ul><li>A significant business cost </li></ul><ul><ul><li>Sickness absence costs UK businesses around £600 for each worker per year (BusinessLink) </li></ul></ul><ul><li>Key to understand reasons (genuine / not) </li></ul><ul><ul><li>Genuine sickness, bereavement, bullying, stress </li></ul></ul><ul><ul><li>Some employees simply “playing the system” </li></ul></ul><ul><li>Often predictable </li></ul><ul><ul><li>Monday / Friday or End of Shift Pattern </li></ul></ul><ul><ul><li>Main holidays </li></ul></ul>
  23. 23. Tackling Absenteeism <ul><li>Understand the causes </li></ul><ul><li>Set targets and monitor trends </li></ul><ul><li>Have a clear sickness & absence policy </li></ul><ul><li>Provide rewards for good attendance </li></ul><ul><li>Consider the wider issues of employee motivation </li></ul>
  24. 24. Absenteeism Example Anderton Alarms employs 20 staff and makes ready-meal pies for supermarkets. In 2008, the total available working days were 4000. Unauthorised absence for 2008 was recorded at 560 days = 14.0% Absenteeism = Days Absent (560) Total potential working days (4000) X 100
  25. 25. Measuring Workforce Effectiveness