1. No category

People in Business
Measuring the Effectiveness of
the Workforce
Measuring the Effectiveness of the Workforce
In this topic you will learn about:

Methods of measuring workforce
performance
 Labour
turnover
 Labour productivity
 Absenteeism
Calculators
needed!
Labour Turnover
3
Labour turnover

Labour turnover (staff turnover) can be
defined as the rate of change in a firm’s
labour force.

You need to know the following formula:
Number of staff leaving x 100
Total Number of staff
Labour turnover
Worked example:



A car firm has 1000 full time employees in 1
year
Of these, 50 employees leave the company
What is the labour turnover for the company?
Do you think this is high
or low?
 Using
the formula :
50
1000
x 100 =
5%
What are the advantages
of labour turnover?
What are the disadvantages
of labour turnover?
Labour turnover
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Same clip on PC
Labour Productivity
7
Labour Productivity

This can be measured in 2 ways….
1. Output per worker
2. Labour costs per unit of output
Labour productivity - output per worker

You need to know the following formula:
Total value of Output
Total Number of workers

We would look at labour productivity over
a period of time e.g. 1 year
Labour productivity
Worked example:



A car firm produces 100 000 cars per year
It has a labour force of 1000 workers
What is the labour productivity (output per
worker)
Using the formula then:
100 000
1000
=
100 cars per worker
Labour Productivity cost per unit

You will also need to be able to calculate
the financial aspect of labour productivity:

Labour Productivity cost per unit =
= Total Labour Cost
Number of units produced
Labour Absenteeism
12
Absenteeism

Absenteeism can be defined as the
number of staff who miss work as a
proportion of the total number of staff

You can use the following formula
Number of staff absent per time period
x 100
Total number of staff days worked per time period
Absenteeism
Worked example:
A car firm has 1000 full time employees
 Of these, 40 employees did not turn up for work
on a Friday
 What is the absenteeism rate for that Friday
Using the formula then:
40 x 100 =
4%
1000

You need to know
these formulas!
Remember to show formulas
as well as calculating the
answers
15
Summary of formulas needed:

Labour turnover

Labour Productivity

Labour productivity per
worker
 Absenteeism
Total value of Output
Total Number of workers
Labour cost per unit
= Total Labour Cost
Number of units produced
= number of leavers p.a. x 100
Average number of employees p.a.
Number of staff absent per time period x 100
Total number of staff days worked per time period
What can a Manager do….

To improve the labour productivity of the
workers?

To reduce the labour turnover statistics?

To reduce the number of absenteeism
days?
Your Task

Complete the
Q’s on
Measuring staff
productivity
worksheet.
Worksheet task……
1.Labour Turnover for a double glazing company. It introduced a new training programme and bonus scheme in Year 2.
Year 1
Year 2
Year 3
Year 4
Average number of
employees
42
41
42
43
Number of leavers
3
6
2
2
1,500,000
1,300,000
1,600,000
1,800,000
948,000
951,200
948,600
962,400
5
6
2
1
Value of output £
Total labour costs
Average number of
staff absent on one day
Questions….

Calculate the labour turnover for each year. ( 5 marks; 1 for formula and
1 x 4 per calculation)

Calculate the labour productivity per year, using the output per employee
formula. . ( 5 marks; 1 for formula and 1 x 4 per calculation)

Calculate the labour productivity using labour costs per unit method. . ( 5
marks; 1 for formula and 1 x 4 per calculation)

Calculate the percentage absenteeism rate for years 1 – 4. . ( 5 marks; 1
for formula and 1 x 4 per calculation)

How has the new training programme and bonus scheme affected the
performance of labour in the company? (10 marks; C = 3 A = 4 E = 3)