Wastage analysis

Concept, 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 considerable costs for the organization, decreases

productivity, disrupts worker relationships, and can increase waste and
accidents.

- Thus turnover must be considered during human resource planning

especially 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 "turnover."

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 straightforward: 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 individual situation.
o Thus administrators might also want to compare the rate internally
(Watts & White, 1988). Internal turnover comparisons often involve the
dividing of employees 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 preventative
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 index

Concept, meaning and definition:

- Stability Index = number with more than 1 year service now / total
employed 1 year ago * 100