Foundations of cost control by daniel traster chapter10

chapter 10 Employee Organization and Scheduling Class Name Instructor Name Date, Semester Foundations of Cost Control Daniel Traster Opening Question How human resources differ from other resources? Employee Turnover Employees must have the right caliber skill set Turnover Rate (TR) Total employees for a year Turnover Rate - # still working = Average on staff during the year Example 10a A company averages 77 employees throughout the year It has 81 employees at year’s end and had 198 employees work there all year What is the turnover rate? 198-81 TR = 77 =1.52 or 152% 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 Types of Employees Full Time vs Part Time Highly committed Work full schedule Can fill in a vacancy without requiring overtime or a full day Lots of practice at job Easier to schedule as business changes If exempt, work extra time w/o compensation Willing to work less than hour shifts Receive same compensation no matter how low business drops Get less practice at job Often receive benefits May not always be available when needed Full-Time vs Part-Time • Highly committed • Work full schedule Can fill in a vacancy without requiring overtime or a full day • Easier to schedule as business changes • Willing to work less than hour shifts compensation • Get less practice at job Receive same compensation no matter • May not always be available when needed • Lots of practice at job • If exempt, work extra time w/o • • how low business drops • Often receive benefits Full-Time Part-Time 10 Benefits Full set of benefits can add 35-40% to a salary • Vacation • Holidays • Sick Leave • Health Benefits (medical, vision, dental) • Bonuses • Retirement • Meals • Workers’ Compensation (legally • Social Security (legally required) • • • • • • • Pre-tax savings account Life and disability insurance Transportation subsidy Maternity/Paternity Education/Training subsidy Health/Wellness program Profit Sharing 11 Fixed vs Variable Costs Fixed Variable Do not change as business volume changes vs Fluctuates as business volume changes Labor is a mixed cost: part-fixed, part-variable 12 Defining a Job • For each employee, have Data for these comes from a job analysis – interviewing and observing employees and their supervisors 13 Job Description • Outlines the tasks an employee must perform • Includes: – – – – • job title, supervisor’s title, position summary, and specific duties Should be realistic and complete 14 Performance Standards • Observable and measurable • 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 16 Organizational Charts • Visual depiction of company’s reporting hierarchy • Should match hierarchy in job descriptions • Employees should not report to more than one person 17 Scheduling Employees • Easier for businesses with consistent business levels • Restaurants and hotels are most challenging due to daily and hourly business shifts 18 Variable Staffing Needs Performance standards and forecast business determine number of employees needed at a given time This formula is redone for each position type # of Guests # of employees = Production Standard (in guests) 19 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? Guests # of employees = 60 = Production 25 Standard = 2.4 Always round up to maintain quality Answer is servers 20 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 21 Scheduling (cont.) Scheduling Guide helps with scheduling tasks that don’t fluctuate greatly with business Schedulers must factor in employee skill level, vacation requests, and wage rates Should try to minimize idle employee time Evaluate schedule efficiency in the real world to see how to improve in the future 22 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) 23 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) 24 ... available when needed • Lots of practice at job • If exempt, work extra time w/o • • how low business drops • Often receive benefits Full-Time Part-Time 10 Benefits Full set of benefits can add 35-40%... Health/Wellness program Profit Sharing 11 Fixed vs Variable Costs Fixed Variable Do not change as business volume changes vs Fluctuates as business volume changes Labor is a mixed cost: part-fixed, part-variable... standards and forecast business determine number of employees needed at a given time This formula is redone for each position type # of Guests # of employees = Production Standard (in guests) 19