Class NameInstructor NameDate, Semester

Foundations of Cost ControlDaniel Traster

Employee Organization and Scheduling

chapter 10

Opening Question

2

How do human resources differ from other resources?

Employee Turnover

3

Lost worker

Lost skill and

knowledge that

must be trained

into replacem

ent

Employees must have the right caliber skill

set.

Turnover Rate (TR)

4

Turnover Rate

Total employees for a year

Average on staff during the year

=

# still working-

Example 10a

=1.52 or 152%

5

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?

TR198-8177

=

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.

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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

7

Types of Employees

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Full-time• work 40 or more hours weekly

Part-time• work less than full-time schedule

Salaried• set compensation regardless of hours worked

Hourly• get paid an hourly rate for the number of hours worked

Overtime pay• 1 ½ times the regular hourly rate; paid on hours above 40 per week

Full Time vs. Part Time

Highly committedWork full scheduleLots of practice at jobIf exempt, work extra time w/o compensationReceive same compensation no matter how low business dropsOften receive benefits

Can fill in a vacancy without requiring overtime or a full dayEasier to schedule as business changesWilling to work less than 8 hour shiftsGet less practice at jobMay not always be available when needed

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Full-Time vs. Part-Time

10Part-TimeFull-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

Benefits

• Vacation• Holidays• Sick Leave• Health Benefits

(medical, vision, dental)

• Bonuses• Retirement• Meals • Workers’

Compensation (legally required)

• Social Security (legally required)

• Pre-tax savings account• Life and disability

insurance• Transportation subsidy• Maternity/Paternity• Education/Training

subsidy• Health/Wellness program• Profit Sharing

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Full set of benefits can add 35-40% to a salary.

Fixed vs. Variable Costs

12

FixedDo not change as business volume

changes.vs.

VariableFluctuates as

business volume changes

Labor is a mixed cost: part-fixed, part-variable

Defining a Job

• For each employee, have

13

-a job description-performance standards-job specification-reporting hierarchy

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

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.

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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

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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

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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

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Variable Staffing Needs

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# of employees# of Guests

Production Standard(in guests)

=

Performance standards and forecast business determine number of employees needed at a given time. This formula is redone for each position type.

Example 10b

= 2.4 Always round up to maintain quality

Answer is 3 servers.20

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 employeesGuests

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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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 timeEvaluate schedule efficiency in the real world to

see how to improve in the future

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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).

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