labour cost
- 1. LABOUR COST Dr.BELLARMIN DIANA Assistant Professor Department of Management Studies Bon Secours College for Women, Thanjavur
- 2. INTRODUCTION The human effort needed for the conversion of raw materials in to finished product is called labour. Labour is divided in to Direct labour – which is directly engaged in the production of goods and services Indirect labour- which is not directly engaged in the production of goods and services
- 3. LABOUR COST Labour costs are associated with human beings. It is an important element of cost. It also forms significant part of prime cost and total cost. There are two types of labour cost. Direct labour cost – cost of labour expended in altering the construction, composition or condition of the product. Indirect labour- amount of wages paid to workers who are not directly involved in altering the composition of the product.
- 4. TECHNIQUES FOR CONTROL OF LABOUR COST
- 5. DEPARTMENTS CONCERNED WITH LABOUR
- 6. LABOUR TURNOVER Labour turnover may be defined as change in labour force i.e., percentage of change in the labour force during a specified period. High labour turnover indicates that labour is not stabilized and there are frequent changes by way of workers leaving the organization. Low labour turnover indicates inefficient workers are being retained in the organization
- 7. CAUSES OF LABOUR TURNOVER PERSONAL CAUSES UNAVOIDABLE CAUSES AVOIDABLE CAUSES
- 8. PERSONAL CAUSES OF LABOUR TURNOVER Circumstances of family Retirement Change in marital status Dislike for the job Death of the employee Employee getting recruited in a better job Permanent disability due to accident Involvement of employee in activities of moral turpitude
- 9. Unavoidable causes Termination of workers on account of inefficiency Discharge of workers on account of irregularity or long absence Retrenchment on account of shortage of work
- 10. Avoidable causes Non- availability of promotion opportunities Dissatisfaction with incentive schemes Unhappy with remuneration Unsuitable to job due to wrong placement Unhappy with working conditions Non availability of accommodation, health and recreation facilities Lack of stability of tenure.
- 11. EFFECTS OF LABOUR TURNOVER Reduction in output due to change in labour force Increase in cost of production due to newly recruited employee who may be lack expertise and skill Newly recruited employee may be unfamiliar with the work and may cause increased loss of raw materials. Defectives, scrap and spoilage increases the cost of production Inexperienced workers may cause more damage to tools and machinery Non- availability of suitable employees may disrupt flow of production.
- 12. METHOD OF MEASUREMENT OF LABOUR TURNOVER Labour turnover under SEPARATION METHOD Number of employees left the organization during a period Labour turnover =__________________________________________________x 100 Average number of employees during a period Labour turnover under REPLACEMENT METHOD Number of employees Replaced during a period Labour turnover =__________________________________________________x100 Average number of employees during a period Number of separations during a period Labour turnover =__________________________________________________x 100 Average number of employees during a period OR
- 13. METHOD OF MEASUREMENT OF LABOUR TURNOVER Labour turnover under FLUX METHOD Number of employees left + Number of employees recruited during a year Labour turnover =__________________________________________________x100 Average number of employees during a period OR Number of Additions + Number of separations during a period Labour turnover =__________________________________________________x100 Average number of employees during a period
- 14. METHOD OF MEASUREMENT OF LABOUR TURNOVER Labour turnover under ADDITIONS METHOD Number of Additions during a period Labour turnover =__________________________________________________x100 Average number of employees during a period
- 15. REMUNERATION AND INCENTIVES TIME RATE Under this method the workers are paid on the basis of hourly, daily, weekly and monthly rate. VARIANTS OF TIME RATE
- 16. PIECE RATE SYSTEM Under this system workers are paid on the basis of output produced by them. VARIANTS OF PIECE RATE
- 17. THANK YOU