Managing Labor Cost Analysis

Budget management analysis is used by mangers as a tool and helps determine that all resources available are being used efficiently. The budgets are determined yearly and are based upon the previous year’s budget and variances. This paper will discuss specific strategies to manage budgets within forecast, compare five to seven expense results with budget expectations, describe possible reasons for variances, give strategies to keep results aligned with expectations, recommend three benchmarking techniques, and identify those that might improve budget accuracy, and justify the choices made.

How this system works is employees are paid a standardized salary which entitles extra benefits and or bonuses on the side. The main focus of benefits is to focus on stability, health, wellness, and lifestyle. These benefits are there to make the employees life’s more comfortable and enjoyable, not necessarily cash incentives. However, there are cash incentives offered as-well. Incentives are the drivers of employee performance, as short term incentives are cash bonus based on performance, or rather long term incentives being stocks in the company you work for. How we will implement this is through transferring your average paycheck to a salary. Meaning a 40-hour work week at 11.40 is $456 a week before deductions. The math equates to a base salary of 21,888. From there employees will be able to receive benefits or incentives based upon work efficiency. We will have assigned goals to achieve by set deadlines to determine employee efficiency. All employees in this system are inclined to do more work at a more efficient rate since they are now being rewarded further than their salary or prior their hourly wage. This business function being salary based with incentives and bonuses will take a greater toll on management. Management will be deemed in charge of bonuses and benefits. It will be their responsibility to determine whether said employee deserves certain benefits or certain incentives based on their work efficiency. As management takes on a heavier role in the company it is better for the greater good and is a sacrifice they will have to be willing to

Each employee will be paid based on their capabilities rather than on the characteristics of their job. This will provide an incentive for employees to develop their skills and move into other roles.

carefully planned out and considered, the total closure or failure of the organization could be at hand in the near future. In our modern age, employers know that salary is not the only factor that should be considered and that salary alone will not lead to better or more highly profitable workers alone. This is why compensation planning is important and why pay should have some connection between performance and compensation. This is why the human resources department should consider many monetary and non-monetary factors when considering how to properly compensate and motivate employees (Dessler, 2013).

This research paper is a brief discussion of budget management analysis. Budgeting is the key to financial management, and is the key to translates an organization goals or plan into money. Budgeting is a rough estimate of how much a company will need to get their work done, and provides the basis for evaluating performance, a source of motivation, coordinating business activities, a tool for management communication and instructions to employees. Without a budget an organization would be like a driver, driving blinded without instructions or any sense of direction, that’s how important a budget is to every organization and individual likewise (Clark, 2005).

This strategy helps us cover the revenue shortfall. Based on the spreadsheet the compensation categories, including salaries and wages, account for 60% of the spending reductions. As a matter of fact, we hired 10,000 employees in 2015 with the high salary, which caused the revenue shortfall. Now, we need to reduce our employees number to 9000 to cover the revenue shortfall. We know how difficult this news may be, but we know that we have to act under cost savings in the coming months and years. I believe that this budget is a vital and responsible action in the short time to manage the immediate required budget shortfall as well as enable us to prepare for the uncertainties of the

A company's budget serves as a guideline in planning and committing costs in order to meet tactical and strategic goals. Tactical goals such as providing budgetary costs for daily operations, and strategic objectives that include R&D, production, marketing, and distribution are all part of the budgeting process. Serving as a guideline rather than being set in stone, the budget is a snapshot of manager's "best thinking at the time it is prepared." (Marshall, 2003, p.496) The budget is a method in which to reign-in discretionary spending, and will likely show variances between what costs have been anticipated and what costs are actually incurred.

The next lever, the management control process, consists of four sections. The first of these is programming, which must come from strategy and be monitored to remain consistent with the firm’s objectives. The second process is budgeting, which need to fit with strategy formulation and programming. The last two of the four sections is measuring and reporting. These two sections focus on the “need for activities that measure and report both financial and nonfinancial information” . The measuring and reporting of a firm’s management control can be related to budget information and the motivation process. What a firm spends to drive motivation, and the amount of motivation that comes from it, can create contrasting cultures that needs information to why that is the result. Since this lever can be manipulated quickly, it is one that managers should focus on.

Supervisors must understand the incentive pay process in order to support and administer it. Oftentimes, a lack of understanding causes managers to ignore or adapt the process as they see fit. Moreover, if supervisors are not trained on how to measure performance, the process will not be standardized across the company. (Gordon, Kaswin)

I think the overall idea sound great but the performance appraisal system need to enforce at the same standard for all employees. If an employee is consistently performing and producing stellar result, there should be a type of incentive in place to award employees. This type of incentive motivates employees to do their very best to accomplish daily task at a higher level. I think adopting new labor-management procedures at a time when the United States is deeply involved with homeland

Budget formulation and use are tools that guide many decision making strategies in business. The measures that are least effective could create an avalanche of catastrophic events that can negatively impact the decision making strategies. It is in the best interest of the pertinent parties to draft an operating budget based on a collective set of information relating to organizational vision and mission. Ineffective measures can be catastrophic based on the foundation for measures used in creating the budget. Among the many issues organizations face that relates to creating an effective operating budget results from poor

* Since management compensation is tied to firm performance, managers are incentivized to keep costs under control and maintain profitability. However, it is important to balance cost-controls with

Budgeting is crucial in the well-being of a company especially the financial health status of a company. In fact, no professionally managed firm would fail to budget, since the budget establishes what is authorized, how to plan for purchasing contracts and hiring, and indicates how much financing is needed to support planned activity. It is routine for a company to budget for its expenses. Expense budgets act as a guideline of how much revenue a company would require keeping the activities running. It is used to set the company’s targets for a certain period.

Firstly, according to the needs theories, “behavior as being directed toward the satisfaction of human needs” (p.166). Salary is one of the employees’ needs, but not all of the needs. As Maslow 's Hierarchy of Needs (1943) stated, people has different kinds of needs which motivate human behavior, such as physiological needs, safety needs, love needs, esteem needs and self-actualization. High payment could satisfy the physiological needs, but when an employee is satisfy with his/her salary, he/she will pursue other levels need, such as

Many businesses expect employees to achieve budget targets as part of their overall performance. While the specifics requirements of each employee differ with the position and nature of the company, it is common for employees to be expected to sell a certain number of items, control costs versus a budgeted amount or reduce waste compared with a benchmark. A potential downfall of using budget information for performance evaluation is that employees may be so concerned with making budget targets that they may do so at the cost of other parts of the business.