3(b)
Relevant points might include:
Naga
- Most expensive wages to keep paying at $400 per week - higher wage costs
- Highest redundancy payments to make at $ 8000 but this is a one-off payment, and highest wages no longer paid each week
- Has been a supervisor for the longest time at 15 years
- Has worked for LB for the longest at 20 years since the company was first started. Very loyal employee and is unlikely to leave in the future
- Is familiar with the production tasks of all LB's bathroom products so is flexible and can be moved around the factory and supervise employees in other areas to carry out their tasks
Reeta
- Experience of 10 years working for a competitor so may bring new ideas from them - increasing efficiency in the factory
- Already familiar with the new machinery that LB has introduced - so may be able to train LB's employees reducing costs
- Lowest redundancy payment required at $ 700
- Lowest wage at $ 3 5 0 per week
- Has been employed for the least amount of time at 2 years
Amy
- Been employed for 14 years so is more
experienced than Reeta in LB's production
process
- Worked hard to get promotion and is loyal so
unlikely to leave LB in the future - keeping future
recruitment costs down
- Can repair machinery if it breaks down -reduces cost of repairs for LB
- Redundancy payments less than Naga at $ 5250
so less expensive / more than Reeta to make
redundant
3(b)
Recommendation
Justification might include:
- Naga should be made redundant as she has the highest wages and therefore will save the greatest amount of wage costs. Reeta has the lowest wages per week so is cheaper to employ and Amy is very loyal and hardworking so is unlikely to leave in the future.
- Reeta should be made redundant as she has worked the shortest time for LB, at 2 years, and therefore less experienced.
- Amy should be made redundant as she has not worked for LB as long as Naga and has only been a supervisor for 5 years which is less time than Naga so has less experience.
