Chapter 20: Measuring the Effectiveness of the workforce

Labour Productivity output per period . Labour Productivity = num. employees per period How to increase labour productivity: Recruitment and selection of suitably skilled and trained employees Provision of training to enhance skills and attitudes of existin employees Appropriate remuneration and non-financial benefits that improve motivation and effort Improved working practices Improved technology and capital equipment

Labour Turnover num. leaving a business over a period x100 Labour Turnover = average num. employed over a period Causes of high labour turnover: Ineffective leadership and management techniques Poor communications Wages and salaries that are lower than those being paid by firms offering comparable jobs in the area Poor selection procedures that tend to appoint the wrong people to the wrong jobs Boring / Unchallenging jobs that lack career and developmental opportunities Poor working conditions Low morale and motivation as a result of the above issues EXTERNAL Factors – other jobs are more attractive because of better pay, offer better training and working conditions, are more interesting and challenging, are closer to home or offer easier transport links

Labour Turnover Problems of high labour turnover: High recruitment and selection costs High induction and training costs A need to redesign jobs Reduced productivity Low morale among existing workers.

Labour Turnover How to improve labour turnover: Monitoring and benchmarking Exit interviews Recruitment and selection Induction and training Reducing turnover of long-term workers

Absenteeism num. of staff absent on 1 day x 100 Rate of Absenteeism = total num. of staff total num. of days lost due to Annual Rate of = absence during the year . X 100 Absenteeism total num. of days that could be worked x no. of employees

Absenteeism Strategies to reduce absenteeism: Introducing more flexible working practices Ensuring that jobs are interesting and challenging Improving working conditions Improving relations between employers and employees Introducing attendance bonuses