success of organizations depend mainly on optimum utilization of its available resources. Companies follow various methods to reduce its costs and ensure effective utilization of its resources. The article looks at the cost--benefit analysis with respect to various functions of the organizations.
Whenever we talk about cost reduction or improvement in manufacturing concerns the tools that come to our mind are Six Sigma, Total Quality Management (TQM) Kaizen, and Cost--benefit Analysis. But the fact is that, the human resource in any company is the core factor for production and competition as well as the health of the organization. Thus, the most important concern for a competitive company is to hire the most relevant and talented human asset for its competitive edge. Every effort needs to be made for planning the recruitment, training and development and motivation of the employees. Lot of expenditure is made for hiring the human asset. It is quite sad to observe that most of the companies fill in the positions and have yet to bother for their contribution and matching returns to the company. It is high time that a focus is made on calculating the returns of the human factor vis--à--vis the amount of time and effort spent on their recruitment.
A poor asset becomes a liability of the company and its replacement requires huge cost. Recruitment, training, performance appraisal etc. all these involve a high cost but to what extent or to what percentage do they bring returns is a matter of concern. We may feel that calculating returns is a bit difficult but have we ever tried for alternative approaches which can reduce cost? Now let us try to understand how can we calculate return on investment or achieve cost reduction by finding alternatives. |
