## Employee Cost Control
Controlling employee cost is not just about cutting wages — it is about optimising wages per unit of output while maintaining motivation and productivity. Effective control requires coordination across multiple departments and starts at recruitment.
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## Departments Involved in Employee Cost Control
### 1. Personnel Department
- Issues employee requisitions and searches for candidates with matching skills
- Ensures qualifications match job requirements
- Conducts training programmes (new and existing employees)
- Maintains employee records and conducts performance evaluations
### 2. Engineering and Work Study Department
- Prepares job plans and specifications
- Trains and guides employees on work methods
- Supervises production activities
- Conducts Time and Motion Studies to establish standard times
- Performs Job Analysis and Evaluation
### 3. Time-Keeping Department
- Maintains attendance records (total time in factory)
- Tracks time spent on different jobs (time booking)
### 4. Payroll Department
- Prepares payroll and computes wages, overtime, and bonuses
- Disburses salary/wage payments
### 5. Cost Accounting Department
- Accumulates, classifies, and analyses employee costs
- Allocates costs to cost centres or cost objects
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## Eight Key Factors for Effective Control
1. Assessment of manpower requirements — avoid over- or under-staffing
2. Control over time-keeping and time-booking — accurate records prevent wage leakage
3. Time & Motion Study — establish realistic standards
4. Control over idle time and overtime — minimise unproductive time
5. Control over employee turnover — high turnover raises recruitment and training costs
6. Wage and Incentive systems — link pay to performance
7. Job Evaluation and Merit Rating — ensure fair and efficient wage structures
8. Employee productivity — monitor output per employee
> Exam tip: Questions may ask which department is responsible for a specific function. Memorise the department-function mapping clearly.