I am working for a trading firm. The management now wants to control the employee cost by reducing manpower (salary reduction not required). Please let me know what the HR department should do to control the employee cost. Other benefits to employees include health insurance for the family, incentives, and yearly increments. Please help me out in framing and submitting a good proposal.
From India, Kochi
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1From India, Kochi
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Dear Sumitha,
If you are from a trading firm, then the employee cost would be the maximum cost of your business. But then what is the percentage?
Management's penchant for cost-cutting is not new. However, what is important is to deprive them of what had been given earlier. By reducing the perks, will their motivation level also go down or remain the same? As an HR professional, this study has to be done. In this connection, I have given my reply earlier. You may go through that reply:
https://www.citehr.com/468695-cost-cutting-measures.html
If you wish to do real cost-cutting, then the scientific way of doing it is by raising the productivity levels of the employees. Therefore, the following questions are relevant in this context:
a) Have the measures of performance been designed for all the employees? Is the performance measured accurately, i.e., how do you check that the performance meter is not faulty?
b) Do you measure what deserves to be measured? Have you done the third-party audit of the measures of the performance of the employees?
c) Do you maintain records of performance in a systematic and organized manner?
d) After measurement, what do you do with the gap in performance? Are there multiple standards or only one standard? What is the cost of underperformance?
e) To bridge the gap between actual and desired levels of performance, do you train the employees? If yes, then do you have evidence of the increase in performance because of this training?
f) On what parameters do you measure customer satisfaction? What is the Customer Satisfaction Index (CSI)? What is the cost of customer dissatisfaction? What efforts have you taken to reduce this cost?
In the reply to the previous post whose hyperlink is given above, I have written that there is a cost of cost-cutting measures also. Leadership lies in ensuring that this cost does not exceed the cost-cutting measures themselves!
My reply could take you to a new direction altogether. However, this is what public forums are for. Divergence of the thoughts is the essence of the forums. Hence, my quaint reply!
Thanks,
Dinesh V Divekar
From India, Bangalore
Acknowledge(0)Amend(0)
If you are from a trading firm, then the employee cost would be the maximum cost of your business. But then what is the percentage?
Management's penchant for cost-cutting is not new. However, what is important is to deprive them of what had been given earlier. By reducing the perks, will their motivation level also go down or remain the same? As an HR professional, this study has to be done. In this connection, I have given my reply earlier. You may go through that reply:
https://www.citehr.com/468695-cost-cutting-measures.html
If you wish to do real cost-cutting, then the scientific way of doing it is by raising the productivity levels of the employees. Therefore, the following questions are relevant in this context:
a) Have the measures of performance been designed for all the employees? Is the performance measured accurately, i.e., how do you check that the performance meter is not faulty?
b) Do you measure what deserves to be measured? Have you done the third-party audit of the measures of the performance of the employees?
c) Do you maintain records of performance in a systematic and organized manner?
d) After measurement, what do you do with the gap in performance? Are there multiple standards or only one standard? What is the cost of underperformance?
e) To bridge the gap between actual and desired levels of performance, do you train the employees? If yes, then do you have evidence of the increase in performance because of this training?
f) On what parameters do you measure customer satisfaction? What is the Customer Satisfaction Index (CSI)? What is the cost of customer dissatisfaction? What efforts have you taken to reduce this cost?
In the reply to the previous post whose hyperlink is given above, I have written that there is a cost of cost-cutting measures also. Leadership lies in ensuring that this cost does not exceed the cost-cutting measures themselves!
My reply could take you to a new direction altogether. However, this is what public forums are for. Divergence of the thoughts is the essence of the forums. Hence, my quaint reply!
Thanks,
Dinesh V Divekar
From India, Bangalore
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