Business - theme 1 - HR

Employees as an asset

they are valuable

Employees as a cost

they are seen as an expense to the organization, impacting profitability and budget.

remuneration

An amount of money that is paid to somebody for the work they have done

wage

paid to a worker based ln the amount of work that they have done

Salary

A fixed amount that is usually paid monthly

National minimum wage

UK government set a national minimum wage which is the legal minimum wage that businesses must pay their employees per hour

contract of employment

a legally binding agreement between the employer and the employee

Dismissal

happens if an employee has breached their contract of employment - employers decision to end contract not employees - often known as fired

redundancy

Occurs when the employees job role is no longer required

flexible working

business can match the work done by employees to the needs of the business

outsourcing

when a business hires out some activities to other businesses rather than doing them in house

individual bargaining

a process where employees negotiate their terms and conditions of employment on a personal basis rather than through collective agreements or unions.

collective bargaining

when a group of employees is represented by workforce representative who negotiate with employers on issues such as pay and working conditions

work councils

This is a group of employers and employees who meet to discuss work related issues

recruitment

The process of finding and hiring someone for a job role that needs filing

Internal recruitment

When a business recruits from someone who already works for them

External recruitment

When a business hires someone from outside the business

job description

Details of job title, main roles and responsibilities, working hours and salary

person specification

details the personal characteristics needed to do a particular job

Induction training

To introduce new staff to their workplace and their new role

On the job training

Training given in the workplace by the employer like mentoring, shadowing or apprenticeships

Off the job training

Training that takes place outside the business by an external provider like a local college e.g. a trainee accountant might attend night classes before taking professional exams

organisational structures

traditional business structure where there is a series of levels where each level has responsibility and authority over the levels below

hierarchy

The arrangement of individuals within an organization according to power, authority, and responsibilities, often depicted as a pyramid.

tall structures

Organizational structures with many levels of hierarchy, resulting in a long chain of command and narrow spans of control.

flat structures

Organizational structures with few levels of hierarchy, promoting a wider span of control and quicker decision-making processes.

delayering

removing one or more levels of hierarchy from the organisational structure

centralised structures

Organisations where decisions are made by senior managers at the top of the business

decentralised structures

Organisations where authority is shared out to more junior employees

matrix structure

Staff are organised by two different criteria - normally used if operations are product based

Authority

the right or power assigned to a particular role in an organisation in order to achieve organisational objectives

Delegation

The process of passing authority down the hierarchy from a manager to a subordinate

motivation

A force that makes people act, set goals and achieve them - it is a process that controls human behaviour, as well as setting direction and action

piecework

workers are paid per unit produced (no fixed salary

commission

workers are paid on completing a task

performance related pay

workers are paid based on their performance or the businesses performance

bonus schemes

paid on top of their salary once an agreed target has been met

profit sharing

workers are paid a proportion of profits if business targets are met

fringe benefits

workers are given extra rewards on top of their normal pay

leaders

have a vision and often think long term, think of ways to improve and innovate, look to inspire others and constantly wanting to move forward

managers

make decisions that affect day to day, set objectives for departments and staff, allocate resources and staff, aims to meet targets and maintain stability

autocratic leadership (think pe)

the leader makes decisions on their own. They will identify the objectives of the business/department and say exactly how they are going to be achieved

paternalistic leadership

A softer form of autocratic leadership and is used in similar situations. It is more about wellbeing, motivation and employees will be consulted in decisions

democratic leadership (think pe)

A leader encourages employees to participate in the decision making. They will discuss and listen to advice and will delegate responsibilities

Laissez-faire leadership (think pe)

A hands off approach to leadership. Support and coaching may be offered but the leader rarely interfere in the running of the business.

transformational leadership

Used when a business needs change. Highly innovative style which encourages ideas on how to improve and then inspire employees to make changes.

entrepreneur

A person who sets up a business - taking on the risks of a new business activity with the aim of gaining a reward

intrapreneurship

when an employee shows entrepreneurial skills within a business e.g. ideas for a new product

financial motives

Reasons for pursuing profit, growth, or investment in a business.

non financial motives

Reasons for pursuing goals other than profit, such as social impact, employee welfare, or environmental sustainability.

aims

are what the business want to achieve in the long term.

objectives

are the goals or targets in the short term that need to be met in order to achieve an aim

SMART

specific, measurable, achievable, realistic and timed

profit maximisation

process of a business finding the optimal level of output and pricing to achieve the highest possible profit

sole trader

an individual trading in their own name, or under a suitable trading name. They are self employed but they dont necessarily work alone and can employ staff

partnership

when between 2-20 people own a business.

private limited company

a business that issues shares privately - often to friends or family. LTD at end of name

public limited company

a business which issues shares on the stock market which the public can buy. they have pls or agm at the end of there name

dividends

payments made to shareholders from a company's profits, typically issued quarterly or annually.

stock market

a public marketplace where shares of publicly traded companies are bought and sold.

franchising

an agreement which allows an individual to use the business idea, name, model and reputation of an established business in exchange for an initial fee and ongoing royalty payments

online businesses

businesses that trade through the internet

lifestyle businesses

business that is designed to allow the owner to live a particular lifestyle of their choosing

social enterprises

businesses that are set up with a core aim to use its profits to benefit society in some way

trade off

the balance between potential benefits and drawbacks in business decisions.

opportunity costs

the value of the next best alternative that has been given up

emotional intelligence

the ability and manage of your own emotions, as well as to recognise the emotions of others and be able to respond to them appropriately