TSR Wiki > Study Help > Subjects and Revision > Revision Notes > Business Studies > AQA A2 Business Studies Unit 4 - Performance Measurement
There are a variety of ways by which the performance of a business can be measured with regard to its employees and equally they measure how well the employees themselves are performing. These are called Personnel Indicators and they measure how effect personnel are.
Absenteeism
This is the (number of people absent/total number of employees) x100
Ideally absenteeism would be low because it means that few staff are skipping work and therefore productivity will be high and the business will be running to the best of its ability. However, if absenteeism is too high there are several things that can be done about it. It might be necessary to take disciplinary action against individual if they are found to skip work regularly, however, this is a rather extreme approach. It might be that there is a problem with morale in the workforce and therefore people are not motivated to come to work hence morale needs to be increased. Perhaps it would be a good idea to satisfy some of Hertzberg’s hygiene factors. More innovative ideas can also be used, if many employees are absent because of young children, the business might benefit from starting up an on sight crèche. Also, allowing for flexi-time working may reduce absenteeism as people can fit work in around their schedules.
Labour Turnover
This is the (number of people leaving the business/total number of employees) x 100
People will leave a business for a variety of reasons. It may because of poor management styles at the company, it might be because there are better prospects elsewhere and therefore the business needs to look into creating a clear career path within the company. It may be as simple as people wanting a change in their jobs, there is little a company can do to stop this really. Poor recruitment policies may also be a factor, it might be necessary to select more carefully people who are less likely to leave the business if they are even slightly unhappy or people dedicated to the company.
The consequences of high labour turnover are considerable. Firstly there is the financial cost of having to recruit and train people to do the jobs that have been vacated therefore eating into a business’s profit margins. Furthermore, there is a loss of efficiency because of the constant changing of the workforce. Also the business will lose the skills of the employees leaving and may suffer with a loss of quality as a result. High labour turnover can also have a negative effect on morale if many people feel that the business should be doing more for them. Furthermore, it is hard to create a team spirit if people keep leaving because there is no continuity in the workforce. However, having some labour turnover is good because it brings fresh ideas to the business and possibly new skills.
Also See
Read these other AQA A2 Business Studies Unit 4 revision notes:
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These notes are aimed at people studying for AQA A2 Business Studies Unit 4, but will also be suitable for other courses and exam boards.
Originally submitted by eksman on TSR Forums.
