Calculate Investing in Productivity Improvements
Part 1: Using this week’s course readings and supplemental readings, summarize (1-2 paragraphs) the importance of reviewing ROI for investments in human resources
Part 2: How much of a cost savings might you expect in the seventh year? What are the savings for all 6 years? What are the Recruiting and Training costs? Would the total cost savings justify the necessary expenditures in recruiting and training made over time?
Part 3: Assume your turnover rate doubles and no increase in workforce size. Are the Recruitment and training costs still justified?
Week 3 Assignment 1-
Complete Round 2 of CAPSIM and Assess Company Performance
Review your results from Round 1 (year 1) of the CAPSIM simulation. You really want to dig deep into the data that you have and review the performance measures that you chose in Assignment 2 to determine whether your decisions in Round 1 (year 1) positively affected those performance measures. Based on that information, you will complete Round 2 of the CAPSIM simulation, making decisions to again try to increase performance in those key areas you are measuring.
Examine your results from Round 1 in the Courier and the Balanced Scorecard. Compare your results with the competition and the customer’s need (Customer Buying Criteria; Courier, pp. 5-9) and make adjustments that will grow your simulated company.
Note: This round will introduce the Human Resources module within the simulation, so that is something to consider as you are making your decisions. Your written assignment this week will examine the efficiency of those HR decisions.
If you need technical assistance for CAPSIM, please call the student support number (877-477-8787) or email support at support@capsim.com.
Once you have completed Round 2, update your Financial Measures Template from the prior round. Select a different financial measure from prior week/s and write one to two paragraphs describing how that financial measure is created (e.g., ROS=Profit/Sales) and cite your source, what this measure tells a firm about its performance, and how your performance compares with the competition and over time.
Length: 1-2 Paragraphs: See directions in Financial Measures Template
Upload the updated Financial Measures Template and click the Submit to Dropbox button.
Week 3 Assignment 2 –
Calculate Investing in Productivity Improvements (HR)
Bottom of Form
Prepare a policy position that addresses the issue, “Does it make sense to invest in the productivity improvements offered by the HR module?” Access the Spreadsheet in this week’s Resources titled Activity 3 ROI Analysis.
For this exercise, you need the spreadsheet and both the Capstone Courier and Annual Report. Use the Round 2 reports for the analysis. Human Resources statistics like workforce complement and turnover rate are on Courier page 12. Use Annual Report Income Statement’s total Labor cost to estimate payroll costs.
Listed below are the assumptions for this exercise:
1. These are the maximums for recruiting and training costs:
a. Recruiting costs per new worker are $5000.
b. Each employee trains 80 hours per year at $20 per training hour.
c. Workforce complement increases by 4.2% to cover the 80 hours people are in training.
2. Assume the following productivity payoffs:
a. Round 2 – 102%
b. Round 3 – 105%
c. Round 4 – 108%
d. Round 5 – 112%
e. Round 6 – 115%
f. Round 7 – 118%
Therefore, in Round 7 each worker would be 1.18 times as effective as the beginning worker, and your workforce complement would fall to 1/1.18 or 85% of its current level.
For a quick evaluation, assume your total labor expenditure from the Annual Report Income Statement will stay flat for the next 6 years.
Part 1: Using this week’s course readings and supplemental readings, summarize (1-2 paragraphs) the importance of reviewing ROI for investments in human resources
Part 2: How much of a cost savings might you expect in the seventh year? What are the savings for all 6 years? What are the Recruiting and Training costs? Would the total cost savings justify the necessary expenditures in recruiting and training made over time?
Part 3: Assume your turnover rate doubles and no increase in workforce size. Are the Recruitment and training costs still justified?
Length: 1 – 2 pages of analysis. Please submit a copy of your spreadsheet as well.
Resources: Supplement this weeks’ readings with a minimum of one additional scholarly article.
Your presentation should demonstrate thoughtful consideration of the ideas and concepts presented in the course and provide new thoughts and insights relating directly to this topic. Your response should reflect scholarly writing and current APA standards. Be sure to adhere to Northcentral University’s Academic Integrity Policy.
Chattopadhyay, D., Biswas, D. D., & Mukherjee, S. (2017). A new look at HR analytics. Globsyn Management Journal, 11(1/2), 41–51.
Dutton, G. (2016). The Roi of virtual training. Training, 53(5), 34–36.
Varney, J. (2018). The trend for just-in-time learning. Human Resources Magazine, 23(1), 4–6.
Dutton, G. (2016). The Roi of virtual training. Training, 53(5), 34–36.
Financial Measures Template
Week 2 Assn 1
Meghan Brown
10/04/20
Financial Measures Template
From the Capstone Courier – Update this weekly and submit to the course Dropbox.
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Financial Measures |
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CR8 |
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Weekly Financial Analysis
Financial Analysis is a comparative process. These numbers on their own do not always have a lot of meaning on their own. For example, Cumulative Profits has meaning on its own, but it has greater meaning when compared against the competition or when looking at your own trends over time. Your analysis in Week 1 of the Practice Rounds or Competition Rounds will have to be made against the other 5 companies. After that, consider your trends over time as well as the other companies.
Scoring
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Week 1 – Practice Industry |
Weeks 2-7 – Competition Industry |
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Completing the Financial Measures Template accurately |
2 points |
1 point |
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Defining and Describing a Financial Measure |
4 points |
Define & Describe a Financial Measure
Select a different financial measure (from the table above) for each round and write one to two paragraphs describing:
· how that financial measure is created (e.g. ROS=Profit/Sales) and cite your source and include References (25% of grade),
· what this measure tells a firm about its performance (25% of grade), and
· how your company’s performance in CAPSIM on that particular measurement compares with the competition and over time (50% of grade).
· Note: there are a total of nine templates to complete, but only eight financial measures. For Round 8 in Week 7, please select one of the other financial measures from the Courier or Annual Report that you are interested in learning more about.
Details for each measure can be found under in CAPSIM under Reports, Industry Reports and then Capstone® Courier. You may also wish to review Reports, Debrief Reports, and then any of the available reports. You can also find supplemental analysis for each Round by going to Reports, Debrief Reports, Debrief, and then Round Analysis.
Begin Your Analysis Here:
R
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Scenario
| Northcentral University | |||||||||
| M | B | A | |||||||
| Assignment 3.2 | C | H | |||||||
| INPUTS | |||||||||
| Total labor expenditure (direct labor) from Annual Report Income Statement | $ | 14 | |||||||
| # of employees – | Round 2 | 692 | |||||||
| Turnover | 6.6% | ||||||||
| RECAP | |||||||||
| SAVINGS | $ 7,765,123 | ||||||||
| COSTS | |||||||||
| RECRUITING COST | 32 | ||||||||
| $ 965,000 | |||||||||
| TRAINING COSTS | |||||||||
| $ 308, | 80 | ||||||||
| WORKFORCE COMP | L | ||||||||
| $ 3, | 35 | ||||||||
| TOTAL COSTS | $ 4,629,889 | ||||||||
| NET SAVINGS | $ 3,135,235 | ||||||||
| C = B / A | D = B – C | ||||||||
| Productivity Payoffs | Total Labor Complement | Savings | |||||||
| 1.02 | $ 14,325,490 | $ 286,510 | |||||||
| Round 3 | 1.05 | $ 13,916,190 | $ 695,810 | ||||||
| Round 4 | 1.08 | $ 13,529,630 | $ 1,082,3 | 70 | |||||
| Round 5 | 1.12 | $ 13,046,429 | $ 1,565,571 | ||||||
| Round 6 | 1.15 | $ 12,706,087 | $ 1,905,913 | ||||||
| Round 7 | 1.18 | $ 12,383,051 | $ 2,228,949 | ||||||
| $ 87,672,000 | $ 79,906,877 | ||||||||
| E = # employees/A | F = | Difference in # employees | G = F/E | I = (H-G)*E | J | K = I x J | |||
| # of employees given increase in productivity | # Employees need to hire | Recruiting cost per employee | Total Recruiting cost | ||||||
| – 0 | $ – 0 | ||||||||
| 678 | 2% | 45 | $ 5,000 | $ 225,000 | |||||
| 64 | 5% | 43 | $ 215,000 | ||||||
| 598 | 48 | 8% | 39 | $ 195,000 | |||||
| 534 | 12% | $ 175,000 | |||||||
| 464 | 15% | 31 | $ 155,000 | ||||||
| N = I x L x M | |||||||||
| # Hours | Cost per hour | Total Training Costs | |||||||
| $ 20.00 | |||||||||
| $ 72,000 | |||||||||
| $ 68,800 | |||||||||
| $ 62,400 | |||||||||
| $ 56,000 | |||||||||
| $ 49,600 | $ 308,800 | ||||||||
| WORKFORCE COMPLEMENT TO COVER TRAINING COSTS | |||||||||
| P = C x O | |||||||||
| Increase to cover employees training | |||||||||
| 0.042 | $ 601,671 | ||||||||
| $ 584,480 | |||||||||
| $ 568,244 | |||||||||
| $ 547,950 | |||||||||
| $ 533,656 | |||||||||
| $ 520,088 | $ 3,356,089 |
Insert these three numbers from CAPSIM
* Total Labor for Round 2 Income Statement in the Annual Report (not the Courier)
* # of Employees from Complement # on HR Summary, p.12 of the Courier
* Turnover Rate from Round 2, p.12 of the Courier