LABOR WASTAGE

SUBMITTED BY
Raeeza N M
3rd sem
 LABOR WASTAGE
 The term wastage of human resources is the loss of employees other than by redundancy.
 In an organization, the wastage of human resources is mainly caused by the factors Labor
turnover, Idle Time and Absenteeism.
 1. LABOR TURNOVER
 The change in workforce is known as labor turnover. It is the rate of change
in the composition of the labor force in the organization.
 Whenever an employee leaves the organization, the management, has to
sustain loss and wastage arising from the replacement of the leaving
incumbent, by inexperienced new labor force. This replacement cost also
includes cost of recruitment, selection and training of new employees.
 In order to keep the workforce satisfied and to prevent or discourage them
from leaving the organization, the management incurs the following costs:
 Cost of welfare activities
 Cost of medical services
 Pension Schemes
 Extra bonus
In order to avoid wastage, by turnover the management should take
the following steps:
 Suitable and satisfactory wage policy: When the management is
suitably rewarding the labor by devising a satisfactory wage policy,
the turnover may be low.
 Proper work conditions: The management should see that the
workers are provided proper working conditions to ensure their
health and safety.
 Sympathetic attitude of personnel department: To prevent
turnover, the personnel department should have positive and
sympathetic attitude towards the workers and motivate them in
the right perspective.
 Financial and non financial incentive plans: To recognize both
efficient and normal work, the management must frame both
financial and non financial incentive plans.
 Promotion opportunities: Majority of the workers will be on the look-
out for an opportunity to quit the organization when there is no scope
or little scope for promotion in spite of satisfactory remuneration.
When the opportunities for promotion are more, the turnover may be
low.
 Labor participation in management: This is one of the recognized
ways of recognizing labor, since it gives the worker a sense of
involvement in management and his participation in managerial affairs
will give him the sense of responsibility and he will not think of leaving
the organization.
 Effective grievance procedures: The workers must be given explicit
and vivid procedures to represent their grievances so that the
grievances could be redressed immediately and reduce the depression
of workers. Consequently, his idea to quit on this reason may be
dropped by him.
 Welfare measures: Strengthening the welfare measures in general will
improve the morale and motivation of the workers and will reduce
turnover.
 2. IDLE TIME
 When workers are paid on time basis, there may arise a difference
between the time for which they are paid and that which they actually
spend on production.

 The difference between the time they spend on the work and the time
for which they are paid represents idle time.

 Example: Time lost between the factory gate to the production

department, Tea breaks, Machine maintenance etc
Production causes of idle time: The human resources are wasted to a
greater level at the production point, due to many reasons.

 When there is a breakdown of machine, then there is idle time of

workers for which they are paid.
 Power failure is also another reason for idle time in which the wastage
is caused by frequent power failure.
 This problem could be managed by installing electric power generators.
 Sometimes the workers have to be idle for want of instructions from the
foreman or factory engineer.
 They may also wait for tools or for the arrival of raw materials. Idle
time can be reduced by the strict supervision and proper maintenance
of plant and machinery.
Administrative causes of idle time: Idle time may also be caused by
administrative decisions.

 When there is a surplus capacity of plant and machinery which the

management decides not to utilize there may be idle time due to
administrative reason.

 This will happen during depression period in which some machines are
used below capacity and the regular workers are paid full amount of
wages.

 This type of idle time arises out of abnormal situations and is generally
not controllable by the management.
 Economic causes of idle time: Idle time may also be caused
when there is a fall in demand for the product, seasonal
nature of certain industries etc., in which production can’t be
engaged, and the surplus labor (permanent) ought to be
utilized for doing some other jobs.

 If the management is not utilizing the manpower in

alternative employment, then there will be idle time.
 Control of Idle Time
 Controllable causes for idle time should be properly analyzed and responsibility should
be fixed on appropriate individuals.

 Production ought to be planned in proper manner so that imbalances in production are

avoided or reduced.

 Repairs and maintenance of plant and machinery should be regularly undertaken to

avoid their breakdown.

 There should not be any interruption in the supply of raw materials.

 Right tools along with work instruction at the right time will avoid idle time.

 There must be rigid control and strict supervisory measures to make the work to move
without idle time.
 3. ABSENTEEISM

 Absenteeism is another way in which human resources are wasted. It is a major

concern in most organizations
 The formula suggested by U.S Department of Labor for computing absenteeism rate is
as
follows:
 Number of person days lost through job absence during period
————————————————————————— x IOO
Average number of employees x Number of work days
 Reasonable absenteeism: When a laborer or personnel absents him with proper
reasons, (illness, death of relatives, urgent personal work, etc.) then the employer
could bear with such absenteeism.

 Unreasonable absenteeism: When a laborer or personnel absents himself from work

without genuine reasons, then it is called unreasonable absenteeism
Steps to Achieve Effective Absence Control
 There must be commitment on the part of management to reduce the cost
of absenteeism.
 Another controlling measure of absenteeism is to trust the employees and
provide sickness benefits on the strength of this trust. Yet they should not
accept claims of sickness benefit when the level of sickness absence is
unacceptable.
 Computerized information system is necessary for the successful
functioning of the ‘trust’ system.
 Absenteeism must be accepted on the basis of a documented attendance
policy.
 In order to increase the responsibility of the managers and team leaders to
deal with the problem of absenteeism, regular and proper training must be
given.
 Counseling facilities must be given to employees on attendance problems
THANK YOU