Labor Turnover

Labor turnover is the percentage of a business’s workforce that leaves the organization over a given time (usually a year).

Labor Turnover (Advantages/Disadvantages)

Advantages: - Establish good relationships with customers. - Establish good relationships between employees - Business is stable, training/recruiting costs is low Disadvantages: - No new and creative ideas brought into business - Ineffective employees remain until fired - Business will fire staff if they want to reduce staff

Appraisal

Regular process of evaluating the performance of an employee through two way communication between a manager and employee. Foster positive environment, motivate, and progress employees.

Formative Appraisal

- Learning process based on qualitative feedback - Focuses on positive aspects of performance and ways of improving - Supportive of the learning and growth process

Summative Appraisal

- Based on set standards of performance - A judgement about whether an employee has met given targets - Supportive of the learning and growth process

360 Degree Feedback

- Appraisal from a variety of sources both above and below in the hierarchy - Provides a range of views of the performance of employee - Difficult to create an atmosphere of trust when doing appraisals

Self Appraisal

- Employee judges their own performance - Employees can highlight accomplishments, training needs, and areas of weakness - Hard to write objective self appraisal

Salary (FR)

Motivation: receiving a regular payment provides security for the employee Disadvantage: the business must rely on the worker to work the hours expected and produce the quality needed by the business.

Wages: Time Rate (FR)

Employees are paid based on the number of hours they work. The wage is set per hour. Motivation: rewards the employee for the amount of time they spend on the task and there is no need to rush improving quality. Disadvantage: there is no incentive to work efficiently and time wasting can occur.

Wages: Piece Rate (FR)

Employees are paid based on the number of items they produce. Motivation: increased output and effort will bring more payment for the employee. Disadvantage: work is usually very repetitive and can focus on quantity over quality which is not good for the business.

Commission (FR)

Workers are paid by results through either a percentage of sales or a flat fee for each item sold. Motivation: employees are rewarded for their work. The more they sell, the more they earn. Disadvantage: Does not take into account the time or effort the employees puts in to make the sales.

Performance-Related Pay (FR)

Employees are paid a set salary and this is an extra payment for meeting or exceeding set targets. Motivation: employees receive payment based on contribution to the organization not their status in the organization. Disadvantage: this is not good for cognitive task and can cause divisions in the business.

Profit-Related Pay (FR)

This is a compensation strategy where employees receive a share of the company's profits in addition to their regular salary. Motivation: employees receive a salary, but this aligns employees' interests with the company's financial performance. Disadvantage: If profits decrease, this could be demotivating for employees as they will be receiving less.

Employee Share Ownership Scheme (FR)

Employees are allowed to purchase or given shares of the business as a reward. Or employees receive payment in share instead of cash payment. This is usually for CEOs or other high level executives. Motivation: employees become part owner of the business, success of the business helps increase their share value. Disadvantage: Rewards can be very small for employees, so they don’t feel its worth it.

Fringe Payments (FR)

Motivation: these are highly valuable and not offered by all businesses. Employees fear losing them and stay in the business. Also, these are not taxable. Disadvantage: These can be very expensive and add high costs to the business.