measuring the effectiveness of the workforce

• LABOUR PRODUCTIVITY- a measure of the output per worker

• LABOUR TURNOVER- the proportion of employees leaving a business over a period of time (usually one year)

• ABSENTEEISM- the proportion of employees not at work on a given day. 

a business will be keen to make the most effective use of their employees. an increase in labour productivity means that more is being produced with the same number of employees.

Methods of improving productivity include:

• better training of staff
• improved staff recruitment and retention
• appropriate remuneration and benefits
• investment in more efficient technology

Efforts to improve labour productivity are much less likely to be effective if:

• jobs are lost in the process e.g. technology replaces employess
• change is imposed upon employees without any efforts at communicating the reasons for it.

A high level of labour turnover is not desirable for a business as it might indicate an unhappy and poorly workforce and it also increases your costs to recruit new staff and then to train them. 

Cause of High Labour Turnover include:

• Weak and ineffective management 
• Poor communications 
• Uncompetitive wages 
• Boring and repetitive work 
• Low levels of morale 
• A new competitor opening nearby

Methods of improving labour turnover include: 

• better staff recruitment and training
• monitoring industry averages for staff turnover figures
• conduct exit interviews for leaving staff to identify reasons why staff are leaving.

High levels of labour absenteeism are a significant opportunity cost for a business and can lower their levels of production. 

Existing staff might not be too happy to work extra hours to cover absent colleagues and they might lack the required skills to do the job properly. 

Cause of Absenteeism might include:

• genuine illness and sick leave
• poor motivation
• low commitment to the business 

Methods of Improving Labour Absenteeism Include:

• introduce flexible working practices
• provide challenging and interesting jobs 
• improve working conditions 
• attendance bonuses?