IGCSE Business Studies - Unit 2 Human Resources Management - Key Terms

Commission

A type of payment to an employee who is responsible for completing a sale or performing a service. They are typically a percentage of the monetary value of the transaction. For example, real estate agents (estate agents) typically receive a commission based upon the sales value of a house they sell.

Fringe benefit

Any kind of compensation that an employee receives other than their salary. These might be the use of a company car, life insurance coverage or, in countries without a national health insurance, health insurance coverage.

Job enlargement

A technique of job design whereby many tasks associated with a job are officially added to the job description. Unlike job enrichment, the additional tasks are horizontal in terms of skill and difficulty level.

Job enrichment

A motivational technique that occurs when a job is given additional tasks that are challenging and are usually done by managers. These extra tasks make the work more interesting, lead to professional growth, and can eventually lead to higher pay or promotion.

Job rotation

When employees are regularly rotated into different positions in an organization, which allows the employees to gain experience and acquire new skills. It gives employees a broader perspective about how the various positions fit into the whole organization.

Salaries

A fixed, regular payment to employees, typically on a bi-weekly or monthly basis. They are typically paid to white-collar workers and expressed on an annual basis.

Wages

The monetary compensation paid by an employer to an employee for work completed. They are usually paid on a time basis (for example, $15 per hour).

Bonuses

Any form of compensation above salary or wages that is based upon the performance of an individual, a unit or even an entire company. Typically,certain targets or criteria are established, and exceeding the targets or the criteria results in additional compensation.

Piece Rate Pay

A form of payment where employees are paid for each item produced that meets the desired quality standard

Profit-related pay

A bonus for employees based on the profits of the business - usually paid as a proportion of basic salary

Overtime pay

Pay received for hours worked in addition to regular hours, this is often paid at a higher hourly rate

Physiological needs (basic needs)

The most basic human needs to be satisfied- water, food, shelter, and clothing

Safety needs

A person's needs for security and protection from physical and emotional harm

Love and belonging needs (Social Needs)

A person's need to have affectionate relationships with people and to have a place in a group

Esteem needs

A person's need for self-esteem, achievement, competence, and independence; need for recognition and respect from others

Self-actualization

A person's need to be the best one can be; at the top of Maslow's hierarchy

Hygiene factors

The factors that eliminate job dissatisfaction but don't motivate according to Herzberg. Examples include working conditions, adequate rest breaks, quality of supervision, fair pay etc.

Motivators (Herzberg)

Factors that according to Herzberg increase job satisfaction and motivation levels, such as praise, recognition and responsibility

Motivation

The reason or reasons one has for acting or behaving in a particular way.

Span of Control

the number of subordinates who report directly to a line manager

Chain of command

The line of authority and communication that moves from the top of a hierarchy to the lowest level

Levels of hierarchy

The number of layers of management and supervision existing in an organisation

Delegation

The process of assigning managerial authority and responsibility to managers and employees lower in the hierarchy

Flat (horizontal) structure

An organisation with a structure which has a wide span of control and few levels in the hierarchy

Tall (vertical) structure

An organisation structure that is characterized by a narrow span of management and a relatively large number of levels in the hierarchy

Organisation chart

A visual representation of the structure of an organisation. It shows the chain of command and span of control

Board of Directors

A group of individuals, elected to by the shareholders of a business. The board is responsible for protecting shareholders' interests, establishing policies for management, and making strategic decisions.

Recruitment

The process from identifying that the business needs to employ someone up to the point at which applications have arrived at the business

Selection

The process of evaluating job applicants to determine who is most qualified for and likely to be successful in a vacant position.

Job Analysis

a purposeful, systematic process for collecting information on the important work-related aspects of a job

job description

A written description of the basic tasks, duties, and responsibilities required of an employee holding a particular job

job specification (person specification)

A document which outlines the requirements, qualifications, expertise, characteristics, etc. for a specified job.

Internal recruitment

When a vacancy is filled by someone who is an existing employee of the business

External recruitment

When a vacancy is filled by someone who is not an existing employee and will be new to the business

Curriculum Vitae / Resume

A document that lists personal details, qualifications, work experience, referees and other information about a potential employee

Part-time employee

An employee that works less than 35-40 hours each week for their employer

Full-time employee

An employee that works 35-40 or more hours each week for their employer.

Induction training

The training given to new employees to familiarise them with the work environment, the requirements of the job and their colleagues.

On-the-job training

Training that takes place in the immediate work setting. This can involve shadowing a more experienced worker, or being mentored as the employee performs their job tasks

Off-the-job training

Internal or external training programs away from the immediate workplace. These training sessions are usually run by specialist trainers/experts

dismissal

When the employment of an employee is terminated against the will of the employee. This is usually for not working in accordance with the contract of employment, eg. misconduct, gross misconduct or incompetence.

redundancy

When the employment of an employee is terminated due to them no longer being needed by the business. It is not due to any aspect of their work being unsatisfactory

unfair dismissal

Ending a worker's employment contract for a reason that the law regards as being unfair. This is illegal and the employee can take their case to an industrial tribunal to get compensation or their job back.

Discrimination

Unfairly treating a person or group differently based on certain characteristics

Equality

Treating people equally, especially in terms of status, rights, pay and opportunities.

Equity

recognising that each person has different circumstances and allocating resources and opportunities needed to reach an equal outcome

minimum wage

The minimum rate that businesses are allowed to pay workers (per hour or day) set by the government

Health and Safety Legislation

The laws that govern that businesses must ensure that the workplace and working practices are safe and healthy, in order to reduce the chance of illness or injury.

Internal communication

Communication between people inside the business, eg. employees and managers

external communication

Communication between the business and those outside such as customers, investors or the authorities

Medium of communication

The method used to send a message, for example, a letter, text message or face-to-face meeting

Transmitter/sender

the person starting off the communication process by sending the message

receiver

the person who receives a message from a receiver

Communication

A process through which messages are sent from a sender to a receiver

Feedback

The reply from the receiver which shows whether the message has been received and understood.

One-way communication

A process in which information flows in only one direction—from the sender to the receiver, with no feedback loop.

Two-way communication

A process in which information flows in two directions—the receiver provides feedback, and the sender is receptive to the feedback.

communication barriers

the obstacles to effective communication, that can include problems with the sender, receiver, message or choice of medium.