Overtime ratio (or percentage) is a metric used to measure the amount of overtime worked by employees compared to their regular working hours. It is used to measure the efficiency of the employee management process and to identify areas where improvements can be made.
The formula for Overtime ratio is:
Overtime ratio = (Total Overtime Hours / Total Regular Working Hours) * 100%
It is calculated by dividing the total overtime hours worked by employees by the total regular working hours and expressing the result as a percentage.
For example, if a company has 100 employees, who work an average of 40 hours per week, and the total overtime hours worked is 800 hours, the Overtime Ratio would be 20% (800 / (40*100) = 0.2 x 100%).
It’s important to track the Overtime Ratio over time, compare it against industry benchmarks and historical data, to identify areas where the employee management process can be improved. It’s also important to track the Overtime Ratio by different segments, such as by different teams, positions, or locations, in order to identify where the problem is and take action to reduce the Overtime Ratio.
Overtime Ratio is an important metric for companies, as it allows them to evaluate the efficiency of their employee management process and make decisions about employee policies, employee engagement, and employee retention.
It’s also important to keep in mind that the Overtime Ratio should be aligned with the business requirements and the needs of the end-users, a low Overtime Ratio can indicate a strong employee management process, but it can also mean that the company is not investing enough in employee development or employee career opportunities.
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