A company finds that its labour turnover and labour absenteeism have both gone up sharply this year.
In which functional area does this show a fall in performance?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Human Resource Management
Option (1) Production — Incorrect. Production standards deal with output: quantity, quality, cost and individual job performance.
Option (2) Human Resource Management — Correct. Labour turnover is how many workers leave the firm. Labour absenteeism is how often workers stay away from work. Both are standards used to judge human resource management, so a sharp rise shows a fall in this area.
Option (3) Marketing — Incorrect. Marketing standards deal with selling, such as sales volume, sales expense and advertising.
Option (4) Finance and Accounting — Incorrect. Finance standards deal with money, such as capital expenditures, flow of capital and liquidity.
NCERT (2026-27 Edition):
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