Labor costs are typically estimated as the number of workers and hours worked multiplied by (the average cash compensation plus average benefit costs). However, this is a simplification of the actual workplace. In companies which have a flat hourly rate of pay, it helps to know how productive employees are. In organizations which have salary ranges, it is beneficial to know where employee salaries fall within the range.
Explain how this information may help you plan salary negotiations.
What difference does this information make in response to the suggestion that management cut labor costs by laying off employees??