Factors for labour-cost control
For labour-cost-control, the following factors should also be kept in view while devising the system:
- Production Planning:
Production should be so planned as to have the maximum and rational utilization of labour. The product and process engineering, programming, routing, and direction constitute the production-planning.
- Setting up of standards
With the help of work study, time study and motion study are set up for production operations. The standard cost of labour so set is compared to the actual labour cost and the reasons for variations, if any, are looked into.
- Use of labour budgets:
Labour budget is prepared on the basis of production budget. The number and type of workers needed for the production are provided for along with the cost of labour in the Labour budget. This budget is a plan for labour cost and is based on the past data considered in future perspective.
- Study of the effectiveness of Wage-policy:
How far the remuneration paid on the basis of incentive plan from the departments help the managerial control on labour and exercise labour cost control.
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