Activity Based Costings
Annex 2 - The Allowances attached to ABC Timings
Relaxation allowance
Relaxation allowance is the allowance of time made to a worker for personal needs and for recovery from fatigue caused by doing a job.
A principle of work is that the worker should be able to achieve standard performance as an average over a day or shift without becoming more than reasonably tired - the period of rest is calculated on that basis.
Relaxation allowance is set as a percentage of the average basic time for each element, and is considered to compensate for;
- Posture
- Motions
- Visual fatigue
- Energy output
- Personal needs
- Thermal conditions
- Atmospheric conditions
- Other environmental influences
In the past within the Civil Service, Relaxation Allowance was calculated as an average by Treasury (see also the Shops and Factories Acts), and stood at 12.5% of all work totals for direct work. A 5% allowance was attached to all indirect work. This enhances job timings by 12.5% or 5%. Relaxation Allowance can vary dependant upon the nature of the work and working environment, and is a matter for each organisation to assess.
Rating
Standard work performance results when the work in a job is done at an ideal degree of effectiveness and the appropriate relaxation allowance is taken in full. A scale has been fixed giving this ideal of effectiveness a value of 100 and complete inactivity a value of 0. The 100 is designated as the optimum standard rate of working which is not usually attainable by a human being, as observed speed and effectiveness demonstrates. Accordingly, most workers achieve lower readings, which in the case of the civil service, were set some years ago by HM Treasury at 85%. The impact of 85% rating is to enhance job timings by 17.5% (100/85).
Indirect work
In all jobs, a workers task will include a number of elements that interrupt the core task, and a number of minor activities that may be so spasmodic or infrequent that precise work measurement cannot be undertaken economically. To provide for such situations, an Indirect Work Allowance, expressed as a percentage of the basic times, is included in the work content for the job. These are always measured separately for each organisation under analysis, and often for each task. This enhances job timings between 10% and 40%, dependant on staff level and function.
Management
Management allowance in the CPS model is calculated as a percentage allowance and allocated to Level D lawyers, as the key management level for prosecutors within the ABC system, and Level B2 and B1 managers of administrative and casework staff. Within the ABC models management time and posts are earned via a straightforward multiplier based on the number of staff under supervision and is measured for each section under analysis. In broad terms, for every 8 level C lawyers earned through the ABC timings, a Level D lawyer manager is generated in the models. Similar multipliers apply for B2 staff - based on the number of B1caseworkers generated, and at B1 - based on the number of Level A staff generated.
Productivity
Productivity is the quantative relationship between what we produce and the resources which are used in that production. Input consists of labour, materials, plant, land, buildings and energy, while output consists of product, services and information. For measurement purposes, the value of productivity is usually set at 100%.
Absence factor
Absence factor is an allowance to take account of the fact that staff do not work every day of the calendar year. It allows for absences due to major elements such as:
- Annual leave - averaged at 26 days
- Public and privilege holidays - 10.5 days
- Average sick absence - 10 days
- Training - 4 days
- Special leave with pay
- Maternity leave, paid
- Casual staff
- Relief staff
- Facility time
- Unpaid absences
- Days lost "other absences"
There could also be minor adjustments for elements such as:
These elements combine to produce a total absence factor of 50.5 days applicable to the calculation of core workload requirements, which equates to 209.5 days worked in the normal working year of 260 days.