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Measuring the effectiveness of the workforce

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Lani Douangchak

on 23 January 2013

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Transcript of Measuring the effectiveness of the workforce

Measuring the Effectiveness of the Workforce Unit 2.2 People in Business Recap from last lesson From the previous lesson we covered the following areas:

We identified the key elements of an organisational structure.
The different types of organisational Structures a business can adopt.
We identified real life business examples using these structures.
The key terms and characteristics of each structure. We will now continue to look at the Roles and responsibilities involved within these structures. Quick Test! Can you remember?... 1. Organisational structure shows a number of important aspects about a business, can you name 2 key aspects?

2. What does an organisation chart illustrate?

3. Can you name the 3 types of organisational structures?

4. Can you provide an example of a type of business that might use those structures?

5. Can you remember the 5 characteristics of what an organisational structure shows?... (here is one of them - Levels of hierarchy) Key aspects of an organisational structure shows:

Structure of authority, which is in charge of who.
The roles and title of an individual, who is responsible for different areas.
The staff to which individual employees are accountable.
The route by which communication passes through the business. Can you name the 3 types of organisational structures?

1. Hierarchy and Pyramid Structures
2. Matrix Structures
3. Entrepreneurial Structures Did you get the answers right?... What does an organisational chart illustrate?

It shows links between people and departments within the firm.

Also, shows communication channel, lines of authority and layers of hierarchy. Can you provide an example of a type of business that might use that structure.

1. Hierarchy and Pyramid Structures e.g. Supermarket, Retail store, College

2. Matrix Structures e.g. Production Company, Advertising Agency, Engineering company (Apple)

3. Entrepreneurial Structures e.g. Hairdressers, Small newsagents. What are 5 characteristics of what an organisational structure shows?

1. Level of Hierarchy
2. Chain of Command
3. Span of Control
4. Centralisation and Decentralisation
5. Delayering What other ways do you think a business can structure themselves?... Different ways a business may structure By function - this is where a business is arranged according to what each section or department does
e.g. Finance, HR, IT, Sales & Marketing etc


By Product - organising according to the different products made e.g. Apple - iPad, iPods, Macs,
iPhone 3, 4 & 5.


By Area - geographical or regional structure e.g. geographical or regional structure e.g. USA, Europe
and Asian. Common Workforce Roles Now you are aware of the various organisational structures, we will begin to look at the different job roles within these structures. When we looked at the advantages and disadvantages of a wide and narrow span of control, one of the points highlighted was, would it be easier or harder to delegate tasks to the employees.

In your own words, what does delegation mean to you?... Key Term Delegation is...

The assignment to others of authority for particular functions, tasks and decisions. Activity In pairs, can you think of the key issues relating to the advantages and disadvantages of delegation within an organisation. You have 5 minutes to complete this task http://www.online-stopwatch.com/countdown-clock/full-screen/ For example: The amount of work required to be completed. How important do you think within an organisation is it to allow for Employee Empowerment? Discussion Key Term Employee Empowerment

Giving employees the power to do their job. Empowerment This concept is closely linked to motivation and customer service.

Employees need to feel that their actions count.

Empower covers areas such as:
Giving authority to make decisions to front-line staff (e.g. hotel receptionist)
Encouraging employee feedback
Showing more trust in employees. Why is organisational Structures so Important?... As a firm grows, more people will become involved, so to ensure that the different tasks are fulfilled. It will be vital that every person is clear about their roles involved.

As a company expands it must insure that its organisational structure accommodates the growth. Changing the Organisational Structure 1. Why would an organisation change their structure?...

2. What challenges would the organisation face?... Discussion - Wrap up on Organisational Structure's Topic 1. Why change the structure? Growth of the business means a more formal structure is appropriate
Reduce costs and complexity (key)
Employee motivation needs boosting
Customer service and/or quality improvements 2. Challenges Manager and employee resistance
Disruption and demotivation = potential problems with staff retention
Costs (e.g. redundancies)
Negative impact on customer service or quality Focusing on the
workforce The three areas we will be looking at are: 1. Workforce Roles
2. Work Loads
3. Job Allocations Workforce Roles Focusing on the Workforce Work Loads Job Allocation Managerial and supervisory roles within the hierarchy. The task an individual employee has to complete within a period. The way in which tasks are allocated to certain jobs. Key Terms Director Managers Team Leaders Supervisors Aims & Objectives Aims Objectives For a business to operate efficiently it needs to have a range of job roles and skills.

These will range from people running the business and making the strategic decisions to the employees carrying out the day to day tasks and functions. Effective Workforce Activity Using iPads and the worksheet provided.

Research the roles of responsibility of a:

Director
Manager
Team Leader
Supervisor You have 10 minutes
to complete the task. http://www.online-stopwatch.com/countdown-clock/full-screen/ How Organisational Structure affects business performance A variety of factors can influence the way in which a business chooses to be structured.
These include the following: Management Style - Direct control or delegation of work.
The size of the business - larger business more formal control.
The market in which it operates - frequent change: the need for speed in communication. A business must take all these factors and more into account when considering how it should be organised.

However, each type of structure will have its definite advantages and disadvantages e.g. the speed decisions can be made or how communication flows around the business. On a post it note, can you all write one factor that you think influences the way a business chooses its organisational structure.

We will create a class mind map on the board. Activity Measuring the effectiveness of the workforce Recognition that the employees are a businesses most valuable asset has lead to the emergence of HRM (Human Resource Management).

HRM focuses on managing and developing people to help achieve the business's overall aims.

The success of HRM can be assessed in relation to a range of specific targets and measure and these are:

Labour Productivity
Labour Turnover
Absenteeism Main Measures of Employee Effectiveness Labour Productivity Labour Turnover Absenteeism How effective employees are at producing goods and how many units an employee produces over a set period of time. How good a company is at keeping its staff and the percentage number of staff who have left the business over a set period. The percentage rate of staff who have taken days off work over a set time period. Labour Productivity - Why does labour Productivity Matter?... Is often seen as the single most important measure of how well a firms workers are doing.

In order for a business to remain competitive, a business needs to keep its unit costs down. Therefore, the higher the productivity of the workforce, the better it is performing e.g. each worker is producing more units of output.

Any increase in productivity suggests improvement in efficiency = increase in profit margins.

Also reflects the skills, attitudes and motivation of staff. Labour Productivity Formula Labour productivity is calculated using this formula: Output per period (units) Number of employees at work Example: If a window cleaner employs 15 people and in a day and will normally clean the windows of 150 houses, then the productivity is: 150 10 = 15 Houses per worker per day. Now lets all try individually to calculate another example of Labour Productivity. Labour Productivity Calculation for you to try Marcouse Plastics makes 5,000 widgets each month. Total monthly labour hours are 1,250.

What is the labour productivity (hours per unit)? Answer from the formula is usually expressed in terms of output per employee. E.g. 1,000 units per employee The formula is: Labour hours per month Units produced per month Answer = ?? hours/Unit Labour Productivity Answer The Answer Labour hours per month Units produced per month 1,250 5,000 = 0.25 hrs/unit Did you all get that right? In pairs, can you think of ways a business can improve their Labour Productivity? Increase employee skills levels through training.
Measure performance and set targets.
Increase investment in production machinery - update faster equipment.
Increase workforce motivation.
Streamline production processes Improving Labour Productivity Employee Retention Employee retention = the ability of a business to convince its employees to remain with business. Can any one remember what Labour Turnover means?... How good a company is at keeping its staff and the percentage number of staff who have left the business over a set period. Labour Turnover is defined as... All businesses lose staff. Can you think of any ways that a business might lose its staff?... Ways a business might lose its staff?... Retirement
Maternity
Death
Long-term illness
Unsuitability
Promotion
Changes in strategy (e.g. closure of location)
Change in career aspirations Measuring Labour Turnover The labour turnover is calculated using the following formula: Number of employees leaving during period Average number employed during period x 100 Labour turnover is a measure of the rate of change of personnel within a company's workforce. Labour Turnover Calculation For you to try Surrey Porridge is a manufacturer of breakfast cereals. In 2011 it employed 80 staff. During 2011, the business recruited 12 staff to replace the 15 that left. Number of employees leaving during period Average number employed during period x 100 What is the labour turnover for Surrey Porridge?... The labour turnover answer is as follows: Number of employees leaving during period Average number employed during period x 100 15 80 x 100 = = 18.75% Did you get the answer right? = Cause of Labour Turnover Activity On the post it note, write one reason for the cause of labour turnover for organisations.

We will create a class mind map and discuss your suggestions. If the rate of labour turnover is increasing, it may be a sign of dissatisfaction within the workforce.

Factors that may affect labour turnover are as follows:

Type of business - Seasonal staff, Temporary staff
Pay and other rewards
Working conditions
Opportunities for promotion
Competitors actions
Standard of recruitment
Quality of business communication
Economics conditions
Labour mobility - Transferable skills
Employee loyalty Now we have looked at the cause of labour turnover. What ways do you think a company could improve their turnover of staff.

In pairs, imagine you were in charge of the HRM (Human Resource Management) department of the organisation.

You are promoting the company's reputation to current and potential employees. Think of 5 ways your company would make ensure their staff turnover would remain stable. Activity What problems do you think an organisations would have if they were suffering
high turnover of staff?... Problems of high staff turnover Higher costs - recruitment & training.
Increased pressure on remaining staff.
Disruption to production / productivity.
Harder to maintain required standards of quality and customer service. Absenteeism is another area that businesses measure on how effective their workforce is. Absenteeism Refers to the number of staff who takes days off work compared to the overall size of the workforce. It is measured as: Number of staff absent during that period Average number of staff employed during period x 100 E.g. If over the period of one month 25 employees had time off due to illness or medical appointments and on average the business employed 275 full time staff what is the rate of absenteeism for that month? Rate of absenteeism Example E.g. If over the period of one month 25 employees had time off due to illness or medical appointments and on average the business employed 275 full time staff what is the rate of absenteeism for that month? Number of staff absent during that period Average number of staff employed during period x 100 25 275 x 100 = = 9.09% This means on average 9.09% of staff are absent from work at some point during that month. Activity - Causes and Solutions to Absenteeism In pairs, create a table one columun - Possible causes of absenteesim and the other Appropriate solutions. POssible Causes Appropriate Solutions Boring, Stressful and unrewarding Job redesigned to include enrichment and opportunities for staff. There is no 'ideal' organisation structure or span of control. What works for one company may fail for another, even if they are the same size. Finally you will be able to... To finalise your understanding of the role the workforce play within an Organisational Structures from the previous lesson. Also, understanding the impact of different types of organisations have on business performance. 1. To be able to define the term delegation and employee empowerment, which relates to employees within an organisation.
2. To be able to state the 4 common workforce roles and explain their roles of responsibility within the organisation.
3. To be able to explain how organisational structures can affect a business performance and challenges a business will could face. Objective Check You will be able...

To be able to define the term delegation and employee empowerment, which relates to employees within an organisation. Objective Check You will be able...

To be able to state the 4 common workforce roles and explain their roles of responsibility within the organisation. Objective Check You will be able...

To be able to explain how organisational structures can affect a business performance and challenges a business will could face. Organisational Structures Aims & Objectives Measuring the effectiveness of the Workforce Aims Objectives To understand how businesses can see if their workforce is happy and productive and if they are becoming more or less efficient over time. Also, understanding the three key workforce performance indicators that can intrepret the state of the employees within a business. 1. To be able to define the term Labour Productivity, explain how this is applied to a business and to use the formula to calculate the labour productivity for a business.
2. To be able to define the term Labour Turnover, explain the effects of this to a business (also how it can be prevented) and to use the formula to calculate the labour turnover for business.
3. To be able to define the term absenteeism, use the formula to calculate a real life example and to identify the causes and solutions for businesses suffering from this.
4. To be able to apply the 3 key measures of the workforce to a real life organisation and discuss the advantages and disadvantages of these effects to the business. Objective Check You will be able...

To be able to define the term Labour Productivity, explain how this is applied to a business and to use the formula to calculate the labour productivity for a business. Objective Check You will be able...

To be able to define the term Labour Turnover, explain the effects of this to a business (also how it can be prevented) and to use the formula to calculate the labour turnover for business. Objective Check You will be able...

To be able to define the term absenteeism, use the formula to calculate a real life example and
to identify the causes and
solutions for businesses
suffering from this. To be able to define the term Labour Productivity, explain how this is applied to a business and to use the formula to calculate the labour productivity for a business.

To be able to define the term Labour Turnover, explain the effects of this to a business (also how it can be prevented) and to use the formula to calculate the labour turnover for business.

To be able to define the term absenteeism, use the formula to calculate a real life example and to identify the causes and solutions for businesses suffering from this.

To be able to apply the 3 key measures of the workforce to a real life organisation and discuss the advantages and disadvantages of these effects to the business. Finally you will be able to... To be able to define the term delegation and employee empowerment, which relates to employees within an organisation.


To be able to state the 4 common workforce roles and explain their roles of responsibility within the organisation.


To be able to explain how organisational structures can affect a business performance and challenges a business will could face. Activity Pick an organisation of your choice and look at the following areas:

Labour Productivity
Labour Turnover
Absenteeism

Explain the advantages and disadvantages of how the above areas can affect their business. If they have been affected within any of these areas: Labour Productivity, Labour Turnover and Absenteeism, think of ways it can be improved. You have 10 minutes to do this task http://www.online-stopwatch.com/countdown-clock/full-screen/ Objective Check To be able...

To be able to apply the 3 key measures of the workforce to a real life organisation and discuss the advantages and disadvantages of these effects to the business. Advantages Disadvantages Delegation Frees up managers time, therefore
allowing a wider span to be managed. Motivates other workers Allows other employees to develop
higher skills Delegating authority can be risky if staff are untrained or lack skills. Managers may only delegate dull or impossible tasks. Some staff may not want extra authority or responsibility and so be demotivated. Q: How do Organisational Structure affect business performance? Briefly jot some answers down and we will share these
with the class. Briefly jot some answers down and we will share these with the class. Labour Turnover Calculation Example Number of employees leaving during period Average number employed during period x 100 = So, if during one year, five members of staff left out of a workforce of 50 people, the rate of labour turnover would be: 5 100 x 100 = = 10%
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