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bottom-up approach to managing labor costs

Evaluate the components of a bottom-up approach to managing labor costs.

Describe how a top-down approach to managing labor costs interrelates to a
compensation system.

Specifies which approach would have more effective and equitable compensation
consequences in a retail work environment.

Provides a rationale for your choice that accounts for the interests of managers in
the decision-making process in balancing reducing costs with incentivizing
workers.

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Managing Labor Costs

Evaluate the components of a bottom-up approach to managing labor costs.

The bottom up approach means detailer cost analysis of individual work categories at each task level. The point is that bottom up approach provides the most accurate estimates of al methods. The method requires work-definition information. Different tasks are broken down into work packages. This process of braking down tasks into work packages involves the participation of employees in the development of labor costs. It is the lower level of the laborers themselves that drive the development of labor costs. Usually the budget committee reviews the overall labor costs and it is examined for consistency and coordination. Often the process entails passing the labor budget back to the laborers for revision. The bottom-up approach is avoided because the process is time consuming and costly to develop. Even the administration of the bottom-up approach is difficult. Every time the information passes from the top to bottom or from bottom to top it gets affected by the opinions of the middle management. The use of bottom up approach affects ...

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