This measure calculates total personnel expense forecasting percentage error. It is calculated as the absolute value of ((Projected – Actual personnel expense) / Actual personnel expense) * 100. This Process Efficiency measure is intended to help companies minimize waste and refine resource consumption related to the process "Perform planning/budgeting/forecasting".
Percentage error for the personnel cost forecast
Personnel cost is the cost associated with personnel compensation and fringe benefits of employees (i.e., those classified as FTEs which includes both full-time and salaried/hourly employees) contributing to each respective process. Personnel cost should include all of the following costs.
Employee Compensation: Includes salaries and wages, bonuses, overtime and benefits.
Fringe: Includes contributions made towards the employees' government retirement fund, workers compensation, insurance plans, savings plans, pension funds/retirement plans, and stock purchase plans. This should also include special allowances, such as relocation expenses and car allowances.
Process efficiency represents how well a process converts its inputs into outputs. A process that converts 100% of the inputs into outputs without waste is more efficient than one that converts a similar amount of inputs into fewer outputs.