Analysing HR performance

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Define labour turnover (attrition rate) and its formula
The proportion of employers leaving a business over a period of time. No. of employees leaving over a given period / Avg no employed over a given period X 100.
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Define retention rate and its formula
The proportion of employees with a specified length of services (normally 1 or more years) as a proportion of the total workforce - how many leave each year. No. of employees with one or more years' services / Overall workforce no. X 100.
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What are the problems associated with high labour turnovers and low retention rates.
High recruitment+selection costs, high induction+training costs, a need to redesign jobs to keep the job as simple as possible so its easier to replace staff that leave. Reduced productivity, and low morale (constant change of work colleagues).
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What are the typical internal and external causes of high labour turnover and low retention rates
Internal-ineffective leadership+management, poor communications, too low wages+salaries compared to competitors, poor select procedures, low morale, poor working conditions. External-other jobs could be more attractive, more employment opportunities.
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How can a business improve labour turnover and retention rates?
Monitoring+benchmarking-how firms labour turnover compares with the industry average. Exit interviews-iestablish characteristics that may be common in leavers. Effective recruitment+selection. High quality induction+training.
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Define labour productive and its formula
A measure of the output per worker in a given time period. Output per period / No. of employees per period.
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Define labour cost per unit and its formula
A measure of the average labour costs involved in producing one uint of output in a given time period. Total labour costs / Total units of output.
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How can a business improve labour productivity and reduce labour costs per unit
Recruitment+selection of suitably skilled+trained employees. Provision of training to enhance skills+attitudes. Appropriate payments+non-finanical benefits to improve motivation+effort. Improved technology+capital equipment.
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Define employee costs as a % of revenue and its formula
The % of sales revenue needed to cover employee or labour costs. Employee costs / Sales turnover X 100
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Define absenteeism
The proportion go employees not at work on a given day. Important work may not be completed due to an employee absence, leading to possible delays in production.
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State how absenteeism can be minimised
Introducing more flexible working practices (i.e. working from home, part-time or job sharing). Ensuring that jobs are interesting+challenging. Improved working conditions+employers/employees relations (so the latter feel valued).
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Why may absenteeism occur
May be unavoidable, i.e. illness or transport strike. Or due to poor levels of motivation+commitment or ineffective management+communication in business.
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What does data suggest that shows employee costs as a % of revenue as too low
May reflect a poor service, incomplete work, delays+poor workmanship. This may be due to insufficient staff employed or staff being paid below the industry average so the firm doesn't attract high quality workers.
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What does data suggest that shows employee costs as a %of revenue is too high
Reflected in low profit margins or prices that are too high for the products nature offered in relation to competitors. Also labour productivity might not be as high as it could be (too many staff). Employees are paid well above the industry average.
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Card 2

Front

Define retention rate and its formula

Back

The proportion of employees with a specified length of services (normally 1 or more years) as a proportion of the total workforce - how many leave each year. No. of employees with one or more years' services / Overall workforce no. X 100.

Card 3

Front

What are the problems associated with high labour turnovers and low retention rates.

Back

Preview of the front of card 3

Card 4

Front

What are the typical internal and external causes of high labour turnover and low retention rates

Back

Preview of the front of card 4

Card 5

Front

How can a business improve labour turnover and retention rates?

Back

Preview of the front of card 5
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