Managers require an objective, unbiased way to measure the performance of personnel. There are four key indicators used to do this:
- Labour poductivity
- Labour turnover
- Waste levels
Labour productivity is often seen as the single most important measure of how well a firm is doing. The higher thThe more productive a firm is, the more competitive it will be.
Labour productivity = output per period / number of employees per period.
Labour turnover measures the rate of change of a firm's workforce.