Advantages of Labour Hours Saved Calculation

Advantages of Labour Hours Saved Calculation

Advantages of Labour hours saved includes the following

1.    Efficiency of Employee

Labour hours saved shows the efficiency or performance of the employees. Therefore labour hour saved is important controlling tool of performance.

2.    Reward Announcement

Labour hours saved calculation may be used to determine the rewards for employees. Labor Hours saved can be calculated by the following formula

Hour Saved= Expected Hour > Actual Hour

Hour Saved = Expected Hour – Actual Hours

Example

Hours of Labour for a unit produced= 8 Hrs

Unit produced during the week =2000

Actual Labour during the week = 4000

Calculate hour saved on project?

Solution

Expected Hours = units x hour required per unit

=2000 x8

= 16000

Actual Labour hours on project= 12,000

Hour saved= Standard hours – actual hours

= 16000-12000

=4000 Hours Saved