Measuring the effectiveness of the workforce

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  • Created by: Soph
  • Created on: 26-05-14 14:12

Labour Productivity

Total output/total number of employees

  • Shows how efficient staff are
  • Helps managers to see whether training is needed or how the staff are paid e.g. piece rate. Needs to be changed to increase motivation
  • Quick and easy to calculate
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Labour Turnover

(No. staff leaving during the year/average no. staff) x 100

Why a high figure is a problem:

  • Productivity will fall and actual costs will rise
  • High recruitment costs
  • Indicates low morale and motivation
  • Can lead to poor customer service
  • May damage the firms image, customer loyalty
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(average no. of staff absent/total number of staff) x100

Why it is calculated:

  • High or rising absenteeism leads to falls in productivity
  • Affects quality of the product or service and customer service
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Importance of Measuring Productivity

  • Allow firms to compare the effectiveness of staff with previous years and other firms in the industry to judge whether or not management policies and prodecures are working.
  • Shows whether the firm needs to implement changes to increase motivation and productivity e.g. piece rate systems.
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