Production and Human Resources
Domain 10: Production and Human Resources. Tests production methods and productivity, plus the recruitment, training, motivation and legal treatment of employees.
Production
Job production makes one-off custom items; batch production makes groups, such as bakery trays; mass or flow production is standardised and high volume. Capital-intensive methods cut unit cost at volume but raise fixed costs and risk; labour-intensive methods suit low volumes and small markets. Productivity = output / input, and economies of scale reduce unit cost as volume rises.
Human resources cycle
Human resource planning, then a job description (duties, reporting lines) and person specification (qualifications, skills, experience), advertise, shortlist against the specification, interview and check references, select, contract, induct, train (on or off the job), appraise and reward. Motivation theories: Maslow's hierarchy, Herzberg's hygiene factors versus motivators, Taylor's scientific management. Namibian law: the Labour Act 11 of 2007 governs contracts, hours, leave, discipline, grievances and fair dismissal; employers register with the Social Security Commission and the Employees' Compensation Fund.
Worked example
Five bakery assistants each work eight hours at N$20 an hour and produce 400 units a day. Reasoning: labour cost = 5 x 8 x 20 = N$800, so cost per unit = 800 / 400 = N$2.00 before SSC and compensation-fund contributions. If a mixer raises output to 520 units, cost per unit falls to N$1.54, but the machine's depreciation and maintenance must be added before calling it cheaper.
Traps
- Mixing up the job description and the person specification.
- Quoting gross pay as take-home pay, ignoring PAYE and SSC deductions.
- Dismissing without a hearing or written procedure, which is automatically unfair.
- Assuming capital-intensive is always cheaper, ignoring fixed costs and idle capacity.