ME CEM

1. UNIT –II
LABOUR
MANAGEMENT
Presented by
Jothilekshmi.M
AP/CIVIL

2. Labour definition
■ Labour is the amount of physical, mental, and social
effort used to produce goods and services in an
economy. It supplies the expertise, manpower, and
service needed to turn raw materials into finished
products and services.

5. ■ In return, laborers receive a wage to buy the goods
and services they don't produce themselves. Those
without desired skills or abilities often don't even get
paid a living wage. Many countries have a minimum
wage to make sure their workers earn enough to cover
the costs of living.

6. ■ Labor is one of the four factors of production that drive supply.
The other three are:
■ Land. This is short for the natural resources or raw materials in
an economy.
■ Capital. This is an abbreviation of the capital goods, such as
machinery, equipment, and chemicals that are used in
production.
■ Entrepreneurship.This is the drive to profit from innovation

10. ■ What is Labour cost?
■ Labour cost represents human contribution.
Labour cost is sensitive in nature. The reason is
that the labour cost is fully based on the human
behavior i.e. labour behavior.

11. ■ Classification of Labour Cost
■ The labour cost may be classified in the following ways.
■ 1. Direct Labour Cost
■ Direct Labour cost is that portion of salary or wage, which
can be identified with and charged to a single unit cost of
production.
■ Characteristics of Direct Labour Cost:
■ The direct labour cost has the following characteristics

12. ■ It has direct relationship with the product or process
or cost unit.
■ It can be measured quantitatively.
■ It is sufficiently material in amount.

13. ■ 2. Indirect Labour Cost
■ It is not identifiable within the production of
goods and services even though directly incurred.
These costs are incurred in the production place.
Sometimes, some cost center may render service to
the production departmentsor production
activities. Such cost centerspurchase,engineering
and time keeping.

14. ■ Controllable Labour Cost
■ A labour cost can be controlled by the
management during production period and even
during absence of production. A standard time
and time rate may be fixed and request the labour
to complete the job or order within such time. If
so, the labour cost can be controlled to some
extent

15. ■ Non-Controllable Labour Cost
■ A labour cost, which cannot be easily controlled
by the management. A job or order can be
completed by a group of labours. The efficiency of
such group of labours differ in nature. A labour
can use his/her efficiency in full as per the
prevailing environment in the product place. If so,
the cost cannot be controlled by the management.