Foundations of cost control by daniel traster chapter10

Part TimeHighly committed Work full schedule Lots of practice at job If exempt, work extra time w/o compensation Receive same compensation no matter how low business drops Often receiv

Opening Question

How do human resources differ from other resources?

Employee Turnover

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Employees must have the right caliber skill

set.

Turnover Rate (TR)

Turnover Rate

Total employees for a year

Average on staff during the year

=

# still working -

Costs of Turnover

• Administrative time for exit interview and paperwork.

• Vacant positions may lead to overtime for others covering.

• Insufficient staff can lead to reduced quality.

• Advertising for new employees.

• Time spent interviewing candidates.

• Wages for the new hire and a trainer.

• Time spent processing new-hire paperwork.

To Reduce Turnover

• Look for a good fit when hiring

• Conduct a proper orientation and training

• Motivate and empower employees to help them feel valuable

• Terminate bad fits quickly

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Types of Employees

Full Time vs Part Time

Highly committed

Work full schedule

Lots of practice at job

If exempt, work extra time w/o

compensation

Receive same compensation no

matter how low business drops

Often receive benefits

Can fill in a vacancy without requiring overtime or a full day Easier to schedule as business changes

Willing to work less than 8 hour shifts

Get less practice at job May not always be available when needed

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Full-Time vs Part-Time

• Highly committed

• Work full schedule

• Lots of practice at job

• If exempt, work extra time w/o

compensation

• Receive same compensation no matter

how low business drops

• Often receive benefits

• Can fill in a vacancy without requiring overtime or a full day

• Easier to schedule as business changes

• Willing to work less than 8 hour shifts

• Get less practice at job

• May not always be available when needed

• Pre-tax savings account

• Life and disability insurance

Fixed vs Variable Costs

Fixed

Do not change as business volume changes

vs.

Variable

Fluctuates as business volume

changes

Defining a Job

• For each employee, have

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Data for these comes from a job analysis – interviewing and observing

employees and their supervisors

Performance Standards

• Outline quality and quantity standards for each bullet point on a job

description

• Facilitate fair employee evaluation

• Help determine staffing levels for given business volume

• Can be improved by changing work environment, tools, or training

15

Job Specification

• Lists required abilities and qualifications needed to perform a job

• Must relate to job description

• Sets criteria for screening job applicants

• Should not be written too narrowly

Organizational Charts

• Visual depiction of company’s reporting hierarchy

• Should match hierarchy in job descriptions

• Employees should not report to more than one person

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Scheduling Employees

• Easier for businesses with consistent business levels

• Restaurants and hotels are most challenging due to daily and hourly business shifts

Variable Staffing Needs

Example 10b

A café forecasts 60 guests per hour for lunch Standards state a server can handle 25 guests per hour How many servers should be scheduled for this lunch shift?

# of employees

Guests

Production Standard

=

60

25

=

Scheduling (cont.)

• Forecasts should be broken down by hour or quarter-hour to determine

employees needed each hour (not just all day).

• Business history helps forecast hourly volume.

• Final schedule balances employee constraints (full vs part-time, available hours, etc.) with hourly forecast; also accounts for additional work like prep and clean-up time.

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Fixed Staffing Needs

• Salaried staff scheduled based on when duties should be performed, not on business volume.

• Multiple supervisors should not oversee the same group simultaneously.

• At least one manager should be available when customers or employees are present.

• Salaried employees should always be scheduled for 40+ hours weekly (unless taking vacation).

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Scheduling Advice

• Post schedules one week in advance, so employees can plan personal life to avoid conflict with work.

• Advance posting allows time to correct errors.

• Last minute scheduling changes should not impact the same employee every week (or that employee will get frustrated and may quit).