The departmental manager should prepare a list of overtime workers and pass it to the personnel department for approval. To do away with this, all overtime working should be sanctioned by the proper authority. As overtime is paid for at higher rates than normal day work, most workers are only too anxious to take advantage of opportunities to undertake it, and the overtime develops among the workers. The personnel department will normally maintain detailed records of overtime and shift work. Of these, 25 workers were recruited in the vacancies of those leaving, while the rest were engaged for an expansion scheme. Labour turnover rate can be measured by the application of any one of the following three methods:įrom the following data given by the Personnel Department calculate the labour turnover rate by the application of above three methods:Īt the beginning of the month Jan, 91 900ĭuring the month 10 workers left, 40 persons were discharged and 150 workers were recruited. (vi) Labour cost increases because of lower productivity of newly recruited workers as they do not possess the same expertise as the old workers who have left the organisation. (v) Labour turnover causes increased replacement cost. (iv) The organisation has to incur extra cost for workers’ training. (iii) Newly recruited workers are likely to mishandle tools and equipment which results in breakages.

(ii) Since the new workers have no previous experience in production there is loss arising out of defective work, increased spoilage and wastage resulting in high cost of production. (i) With frequent changes in labour force, production planning cannot be properly executed resulting in substantial loss in production. It results in increased cost of production due to the following reasons:

Job turnover definition