The Significance of the Determination of Employee

Contribution

Productivity, Absenteeism, Labour Turnover, Quality, Waste and Accidents

Learning Outcomes• Define, calculate and interpret• - productivity• - absenteeism• - labour turnover• - quality (waste)• - accidents• Evaluate how measures of employee contribution to objectives might

assist in managerial decision-making

How productive have you been

today?

How could you measure it?

What is Productivity?

Measurement of efficiency in relation to an organisations inputs and

outputs

Why Does Productivity Matter?

Increased output per employee

Relatively lower labour costs

Increase profit margins

Employee starts making 20 items per day rather than 10

Even if wages remain the same labour costs per item half

Lower price and sell more units or

Make higher profit margin per unit

Labour ProductivityOutput per period

Number of employees per period

20,000,000

48,000416 per tonnes per person

Increasing Productivity

How to increase productivity

Increase investment in

modern equipment

Improve the ability level of those at

work

Improve employee motivation

The role of management

What are the downsides?

How much does machinery cost?

How will your employees feel?

How would you measure teachers…. is it me, or the machinery?

What happens to quality?

Does it always matter?

Methods of monitoring productivity

• Changes over time

• Comparison against other firms

• Performance against targets

Labour Turnover

A firm has 450 employees and 36 leave in a year

Number of staff leaving per year

Average number of staff employed in year

100

36

4508%100

Causes of high labour turnover

Ineffective motivation

or leadership

External

Internal

Poor recruitment & selection

Wages levels are

low

More local vacancies

Better transport

links

Better pay being

offered

McDonalds restaurants are renowned for a high turnover of staff.

1. Why might this be?2. What problems might such a company face?3. How might they overcome the problems?

Those on this side of the room need to think of advantages of

high labour turnover

Those on this side of the room need to think about

disadvantages of high labour turnover

2:001:591:581:571:561:551:541:531:521:511:501:491:481:471:461:451:441:431:421:411:401:391:381:371:361:351:341:331:321:311:301:291:281:271:261:251:241:231:221:211:201:191:181:171:161:151:141:131:121:111:101:091:081:071:061:051:041:031:021:011:000:590:580:570:560:550:540:530:520:510:500:490:480:470:460:450:440:430:420:410:400:390:380:370:360:350:340:330:320:310:300:290:280:270:260:250:240:230:220:210:200:190:180:170:160:150:140:130:120:110:100:090:080:070:060:050:040:030:020:01End

Calculate Labour Productivity and Turnover

for each yearYear 1 Year 2 Year 3 Year 4

Average number of employees

42 41 42 43

Number of leavers 3 6 2 2

Value of output £ 1,500,000 1,300,000 1,600,000 1,800,000