Human resources — Edexcel A-Level Business
Test yourself on Human resources with PEARSON EDEXCEL A-Level practice questions.
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Human resources explained
Three workforce measures that tell a manager whether people are working, staying and turning up.
Read the full explanation
Output per period divided by the number of employees gives productivity, and a rise in it cuts labour cost per unit even when hourly wages increase, which is the link to competitiveness and to a cost leadership strategy. Leavers in a year divided by the average number employed, as a percentage, gives the turnover figure, and its mirror image is the share of staff still in post at the end of the period. Staff days lost divided by staff days available, again as a percentage, gives absence. What counts as good is sector specific, since hospitality lives with annual turnover above thirty per cent while a law firm would treat that as a crisis, and the evaluative move is to ask whether the cause is pay, management style or the local labour market.
b) Human resource strategies to increase productivity and retention and to reduce turnover and absenteeism: financial rewards; employee share ownership; consultation strategies; empowerment strategies
A business chooses between paying people more, giving them a stake in the firm, listening to them or handing them real authority, and the choice is a cost and control decision as much as a motivation one. Piece rate, commission, bonus and performance related pay lift effort where output is measurable, but Herzberg treats pay as a hygiene factor that removes dissatisfaction without creating satisfaction. Giving staff shares, as John Lewis Partnership does, ties reward to long run results and cuts leaving rates, though it dilutes ownership and means little when the share price falls. Works councils, quality circles, delegation and autonomous teams are cheap in cash and expensive in management time, and all of them fail where staff are untrained or where decisions still route through one person.
Your focus
- a) Calculate and interpret the following to help make business decisions: labour productivity; labour turnover and retention; absenteeism
- b) Human resource strategies to increase productivity and retention and to reduce turnover and absenteeism: financial rewards; employee share ownership; consultation strategies; empowerment strategies
Human resources exam tips
Marking Points
- Selecting the right denominator for each measure, employees for productivity, the average number employed for turnover, and available staff days for absence.
- Converting the result into money for the business, for example multiplying the number of leavers by a stated recruitment and training cost to show the annual bill.
- Explaining that higher productivity reduces labour cost per unit, which widens the contribution per unit and strengthens a low price position.
- Judging the figure against the sector and against the previous year rather than against an abstract ideal, and saying why the comparison is fair.
- Diagnosing the cause using a named theorist, such as Herzberg on the motivators absent from routine work or Mayo on the effect of team relationships on attendance.
- Naming the approach and then applying it to the named business, for example arguing that commission suits a sales team whose output is individually measurable while a staff forum suits a factory where quality problems are shared.
- Using the people measures properly: labour turnover = (number of staff leaving / average number employed) x 100, absenteeism = (days lost / total days available) x 100, and labour productivity = output per period / number of employees, then saying what a rising figure costs in recruitment and retraining.
- Linking the approach to a named motivation theorist and using it, so Taylor for piece rate, Herzberg for job enrichment, Maslow for esteem through a stake in the business, and Mayo for involvement.
- Evaluating with a trade-off and a condition, weighing the cost per employee against the saving in recruitment and asking whether this workforce actually wants more responsibility.
Examiner Tips
- 💡Show the formula, the substitution and the units, because the calculation marks are usually split between method and answer.
- 💡Follow the number with one sentence on what it costs the business, since applied consequence is what separates the middle band from the top.
- 💡In longer questions, offer two remedies with different costs, such as a pay review against improved induction and job rotation, then recommend one and say why.
- 💡Longer questions in this theme usually name one approach and ask you to assess it, so build two developed arguments in favour, one against, then a supported judgement about which matters most for this business.
- 💡Use the data you are given: a turnover figure, an absence rate or a wage bill in the extract is there to be calculated with or compared, and an answer that ignores it drops the application marks.
- 💡Judgements score higher when they are conditional, for example that a share scheme holds staff while the business is growing but does nothing for retention in a downturn.
Common Mistakes
- Dividing by the number of leavers instead of the average number employed, which inverts the turnover figure entirely.
- Mixing units in the productivity calculation, using revenue for one year and physical output for the next, so the trend is meaningless.
- Assuming all turnover is harmful, when losing poor performers, or the natural churn of a seasonal business, can be planned for and even useful.
- Blaming absence on laziness rather than investigating working conditions, shift patterns or management style, which produces a recommendation that fixes nothing.
- Comparing productivity across firms without allowing for capital intensity, so an automated rival looks like a better employer of people.
- Writing that higher pay always motivates, when Herzberg's evidence is that pay prevents dissatisfaction while recognition, responsibility and achievement are what drive effort.
- Confusing empowerment with handing out extra tasks; empowerment transfers the authority to decide, so an answer where managers still sign off every decision has not described it.
- Quoting labour turnover as a raw count of leavers rather than a percentage of the average workforce, which makes a large employer look worse than a small one for no reason.