The Relation between Labor Force Profitability and the Firm's Personnel Policy

Gabriel Sorin Badea, Constanta Popescu and Silvia Elena Iacob

Chapter 35 in Challenges, Performances and Tendencies in Organisation Management, 2016, pp 319-328 from World Scientific Publishing Co. Pte. Ltd.

Abstract: Often, in the economic practice, when the decision to diminish the number of employees is not substantiated using calculations and analyses, the increase of both labor productivity and labor volume do not succeed. So, frequently, a firm's leadership — without adequate analyses — believe that they will increase their labor productivity by lowering their number of employees. Applying a personnel policy without rigorous analyses, such leaderships have found themselves faced with an unfavorable situation: both their labor productivity and the physical volume of their production decreased. The evolution of the production process is explained by the fact that the physical production volume largely depends on the labor force volume. The high degree of dependence of the labor productivity and of the physical production on the labor force factor can be the effect of an inadequate technical endowment, i.e., the result of a low level of investments in the modernization of the production process. Labor productivity is a partial efficiency indicator, being considered a main element of the system of economic efficiency indicators. The main flaw of this kind of indicator consists in the fact that it attributes the global result (output), obtained by the combined action of different factors, to a partial effort (input) expressed by one of the production factors that were combined.

Keywords: Management; Organisation Management; Innovation; Knowledge; Intellectual Capital; Information System; Enterprise; International Management; International Conference; SME; Entrepreneurship; Leadership; Strategy; Social Enterprise; Governance; Romanian Scientific Management Society (search for similar items in EconPapers)
Date: 2016
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