What is meant by wastage analysis in human resource planning?
Wastage analysisConcept, meaning and definition- It is an element of labour turnover- It is severance from the organization, which includes voluntary retirement, normal retirement, resignations, deaths and dismissals.- It decreases with the increase of length of service.- It also decreases with increased skill exercise and age.- In human services, turnover, or employee withdrawal behavior, has become a serious personnel problem.- Turnover creates consider¬able costs for the organization, decreases productivity, disrupts worker relationships, and can increase waste and accidents.- Thus turnover must be considered during human resource planning es¬pecially in regard to supply forecasting.- Organizations must expect a certain amount of turnover, but they must also be able to calculate and evaluate their turnover rate.- To calculate turnover rates, administrators must first define a "turn¬over." Discharges, retirements, and deaths may be areas that create problems in the definition. Once a definition is determined, however, data collection and calculation of turnover rates is relatively straight¬forward: Count the number of turnovers and then compare that number with the total number of employees. From this, a percentage rate is determined.- Evaluation of turnover is a bit more complex. There are a number of ways to conduct turnover analysis;o comparison studies are among the simplest.o Administrators may want to compare the turnover rate in their organizations with that of other organizations, with data presented by government agencies or trade organizations, or with organizational objectives.o Although these comparisons can be valuable, they provide little information in regard to the organization's indi¬vidual situation.o Thus administrators might also want to compare the rate internally (Watts & White, 1988). Internal turnover comparisons often involve the dividing of em¬ployees who have left by a variety of factors: department, supervisor, performance level, length of employment, and career path (external hire or internal hire/promotion). The division of employees in this way can provide insight into the causes of turnover.o Qualitative information to supplement the analysis can be obtained by job satisfaction surveys or exit interviews. Ultimately, solutions or pre¬ventative strategies can be sought.Difference methods of Wastage Analysis- Labour Turnover Index:- It indicates the number of leavers as percentage to average number of employees.- Labour Turnover = Number of employees leaving/Average number of employees employed * 100.Stability indexConcept, meaning and definition:- Stability Index = number with more than 1 year service now / total employed 1 year ago * 100