Business Studies

Unit 4 A level business studies - workforce performance management

Labour Productivity

Total output / Average number of employees

E.g 200 employees produce 8000 cups of tea in a day

8000 / 200 = 40 cups of tea a person

Measures the efficiency of the workforce

Depends on:
What is being produced
Industry average
Previous figures
Situation eg weather

High productivity increases competitiveness

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Labour Turnover

Number of employees leaving during year / Average number of employees during year

Shows the proportion of staff leaving during the year

High labour turnover can be caused by:
Low pay
Poor working conditions
Low training and promotion opportunities

New staff does mean new ideas and you may only be losing inadequate staff

It's costly to recruit and train new staff who take time to get up to speed

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Number of staff absent / Number of staff that should've worked X 100 = %

Can be worked out for a day or for the year

Calculates the rate of absenteeism

High absenteeism is costly due to sick pay and replacement

Absenteeism may be due to:
Poor health and safety
Dull repetitive tasks
Business culture

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Total number of late arrivals / Total number of scheduled arrivals X 100 = %

Lateness needs to be investigated

Late workers reduces productivity

May be late due to similar reasons as absenteeism

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Holiday Entitlement

Annual leave / 365 X Number of days worked so far that year

Used when an employee leaves

If too much holiday has been taken for the year so far it must be repayed

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Health and Safety

Number days lost due to health and safety / total number of workers X 100 = %


Number days lost due to health and safety / total possible working days X 100 = %

Can be due to:
Dangerous equipment
Poor working conditions
Lack of heath and safety training

De-motivates staff
Increases absenteeism
Slower production
Poor reputation

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