Introduction and Purpose
In some companies, labor costs are greater than all other costs combined. Even when this is not the case, effective planning and systematic control of labor costs are essential. Planning and controlling labor costs involve major and complex problem areas: (1) personnel needs, (2) recruitment, (3) training, (4) job description and evaluation, (5) performance measurement, (6) union negotiations, and (7) wage and salary administration. Each of these problems may dominate in various situations. A comprehensive profit planning and control program should incorporate appropriate approaches applicable to each problem area. A profit planning and control program cannot resolve special personnel problems, but it directs careful consideration to them and aids in placing them in perspective. Effective planning and control of long-term and short-term labor costs will benefit both the company and its employees.