Presentation on

1
Presentation


on

• Labour cost

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Introduction

• Labour cost represent the human contribution to
  production is an important cost factor which
  requires constant control, measurement, and
  analysis.
• Types of labour
• Direct labour
• Indirect labour

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• How to control labour cost
• To attain the objective of controlling and
  reducing labour cost the following factors must
  be kept in mind
• Appointment and selection of employees
• Maintain labour records
• Control over arrival and departure time of
  employees
• Labour cost analysis
• Determination and payment of wages

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Major deptt.for effective conrolover labour cost
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• Personnel deptt.
• Main function of personnel deptt is
  recruitment and selection of works providing
  training and placing them to jobs.Following are
  the two important documents used in connection
  with appointment placement
• a)Employee placement requisition
• b)Employee history card

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LABOUR TURNOVER

• Labour turnover denotes the percentage change in
  labour force of an organization.The ratio of
  replaced workers to the total no of workers is
  the labour turnover ratio

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Causes of labour turnover
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MEASUREMENT OF LABOUR TURNOVER

• 3 methods are there-
• 1)Seperation method-
•  
• Labour turnover no of employee left
  during period
• 
  ____________________ 100
• Avg. no
  of employees
• 
  During period

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• 2)Replacement method-
• 
  
• Labour turnover No of workers replace
  during a period
• 
  _______________________ 100
• Avg. no
  of workers during a period

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3)flux method - Labour turnover no of
separations no of addition
_________________________
100
Avg no of
employees
during period
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EFFECTS OF LABOUR TURNOVER

• The turnover below normal rate is low
  turnover and turnover in excess of normal rate is
  high turnover
• So, high labour turnover has following reasons-
• a)intruption in production
• b)time wastages
• c)cost increase
• d)faulty handling of machines
• e)more accidents

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REDUCTION OF LABOUR TURNOVER 

• creation of distinction between efficient and
  inefficient workers
• good working conditions
• non monetary benefits

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Engineering deptt-

• This deptt maintain control over the product
  methods and working conditions for each job,
  deptt and process.
•  

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FUNCTIONS OF ENGINEERING DEPTT.

• preparation of production peans
• inspection of production process
• undertaking research
• maintain safety conditions to prevent accidents
• conduct time and nation study
• determination of rates according to time

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TIME KEEPING DEPTT-
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• it records the arrival and depature time of
  each workers .Time keeping is concerned with
  attendance wage calculation of employees.Time
  booking means recording the time actually spent
  by a worker on various job done by him.

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Labour time records used for time booking are-

• a)Daily time sheet
• b)Weekly time sheet
• c)job card
• d)combined time job card
• e)piece work card

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PAY ROLL DEPTT-

• Responsible for making payment of wages salary
  to each employee
• Functions are-
• 1)to keep wage record for each worker
• 2)to verify time
• 3)to calculate wages earned by each employees
• 4)to make payment of wages

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COST A/C ING DEPTT-

• responsible for collection and classification of
  all labour costs with the help of time cards,
  labour cost of various jobs, work orders etc.

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IDLE TIME

• It is that time for which employees pay,but from
  which he obtains no production.in other words
  idle time is time when the worker does no work
  and remains idle.

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CAUSES OF IDLE TIME

• lack of proper planning
• bad management
• serve competition
• trade depression
• time lost between gate and place of work
• waiting for rawmaterials etc.

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Types of IDLE TIME

• NORMAL IDLE TIME
• ABNORMAL IDLE TIME

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NORMAL IDLE TIME-

• normal idle time is one which is incidental to
  production. it represents the time ,wastage of
  which cannot be avoided.
• E..g.s-1)time lost between gate place of work
• 2)time lost between one job and other
• 3)time lost in setting machine
• 4)time require for tea-breaks etc.

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ABNORMAL IDLE TIME-

• the idle time which can be avoided it proper
  precautions are taken .
• E.g.s-
• 1)idle time wasted due to strikes
• 2)idle time wasted due to power failure
• 3)idle time wasted due to machine breakdown.
• 4)idle time wasted due to time two,flood or storm

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OVERTIME-

• The time worked over and above normal hours is
  overtime
• NEED OF OVERTIME
• 1)overtime may be needed for execution of urgent
  orders
• 2)due to break down of machinery during normal
  hours
• 3)for utilizing perishable raw material by
  working overtime
•  

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DISADVANTAGES OF OVERTIME

• a)it increases cost of production as overtime is
  paid ,at higher rate
• b)Workers health is adversely affected
• c)workers will adopt the habit of postponing the
  work to be done in overtime just to earn more
  wages

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METHODS OF WAGE PAYMENT

• Wage means the payment made to a worker for his
  work
• CHARACTAISTICS OF GOOD WAGE SYSTM
• 1)simple
• 2)incentive oriented
• 3)flexible
• 4)minimum wage guaranteed

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• 5)related to efficiency
• 6)quality output
• 7)minimum absentism
• 8)equality

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TIME WAGE RATE SYSTEM-

• TOTAL EARNINGS HOURS RATE
  PER
• 
  WORKED HOUR
• ADVANTAGES
• a)simple
• b)guranteed minimum wage
• c)no differentiation between efficient
  inefficient workers

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DISADVANTAGES

• 1)no distinction between efficient
  inefficient workers
• 2)more supervision expenses to stop misuse of
  time
• 3)decrease in productivity
• 4)discourage efficient workers
•  

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 PIECE WAGE RATE SYSTEM-

• In this workers are paid on the basis of work
  done irrespective of time taken by worker.
• EARNINGS No of rate per
• Units
  unit

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ADVANTAGES

• 1)It is simple to understand opuate
• 2)payment according to work done
• 3)increase in production
• 4)idle time is reduced as workers are not
  paid for time wasted on the job
• 5)reduces supervision cost

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DISADVANTAGES-

• a)quality of work will suffer
• b) insecurity in wages if workers not due to some
  reason
• c)bad effect on workers health because they work
  more hours for more wages
• d)trade union often oppose this system
•  

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INCENTIVE WAGE RATE SYSTEM-

• In incentive wage rate system each workers gets
  not only wages at normal rate but also receives
  bonus or premium for his efficiency .this system
  induces worker to work more and earn more.
• Bonus means benefits to workers.

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conclusion