People in business- Unit 2

Communication

Sending and receiving information with feedback

Internal communication

Between people within a business

External communication

Between someone within a business and someone outside, like a customer

Types of internal communication

• Downwards- managers giving instructions/ information to subordinates

• Upwards- passing information from the bottom of the company to the top.

• Horizontal- exchange of information between parties on the same level.

Formal communication

Using recognised channels to pass on information

Informal communication

Passing information using non approved or unoffcial methods to communicate

Importance of communication

• Reduces mistakes

• Costs could rise

• Decision-making slows down

• Staff motivation decreases

Face- to face communication

When spoken information is exchanged between people who can see eachother

Advantages- Face to face communication

• Allows immediate feedback

• Encourages cooperation

Disadvantages- Face to face communication

• No record of the message

• Some people may not listen

Written communication

When businesses communicate using written information (letters and reports)

Advantages- Written communication

• Record of the message is kept

• Can effectively convey data and graphs

Disadvantages- Written information

• Takes time

• Lack of direct feedback

Electronic information

when businesses can send messages instantly to anyone around the world.

Advantages- Electronic communication

• Cost effective

• can communicate with customers

Disadvantages- Electronic communication

• Connection may be lost

• Hackers may get hold of sensitive info

Barriers to communication

• Lack of clarity- If a message is vague, it may be misunderstood or ignored

• Technological breakdown- if technology is faulty, communication is unclear

• Long chain of command- if there are too many layers of management, messages will take longer to pass through the chain and may become unclear or inaccurate, along the way

Overcoming communication barriers

• Recruitment- businesses should recruit staff with good communication skills.

• Training- Businesses can train staff in communication

• Chain of command- A shorter of command means that the information can pass through the organisation quickly

Recruitment

The process of finding and appointing new employees

Why do companies recruit

• Workers going towards retirement need to be replaced

• Growth of a business

• Promotion

Types of employment

• Full time

• Part time

• Job share

• Casual employment

• Seasonal employment

Advantages of full time employment

• Loyalty

• Commitment

• Working efficiently

Disadvantages of full time employment

• Cost

• Benefits can be expensive

Recruitment process

• Identify Job and number of staff needed

• Prepare a job description- states the title of the job, outlines duties and shows what is expected

• Prepare a person specification- provides details of the qualifications, experience and characteristics.

• Advertise on suitable media

• Shortlist for interview

• Carry out interview

• Appoint best candidate and provide feedback to unsuccessful applicants

Application form

Gathers information from job applicants

Curriculum Vitae (CV) or resume?

Provided by the job seeker and contains most information found on an application

Internal recruitment

Appointing someone who already work for the business

Advantages- Internal recruitment

• Cheaper and quicker

• Individuals are already familiar with the organisation

• Motivation increases

External recruitment

Appointing someone from outside the business

Advantages- External recruitment

• More responses and more choices

• New candidates may have fresh ideas

• Avoids resentment form unseucsessful candidates.

Attracting job applicants

• Advertising- adverts in newspapers or online

• Headhunting- specific people are targeted for a vacancy

• Employment agencies- specialists that help recruit staff for a business

Disability

Employees are obliged to make reasonable adjustments to accommodate disabled employees

• improves access to the workplace by improving ramps

• Allow more time for training

Age discrimination

When a business decision based of a person’s age

Minimum wage

Governments have passed a legal minimum wage

• Reduces poverty

• Helps businesses

• Benefits disadvantaged workers

Gender

Women should receive equal opportunity as men

Race and religion

Businesses must ensure they don’t discriminate on colour, race, religion and nationality

Training

The process of increasing the knowledge and skills of workers so that they can do their jobs effectively

Induction training

Helps new staff settle into the job

On the job training

Training while working, includes:

• watching another worker

• mentoring

• job rotation

Advantages: On the job training

• Output is being produced

• Cheaper than other training

• Easy to organise

Disadvantages- On the job training

• Mistakes can be made

• Staff might get stressed

• Staff may get frustrated

Off the job training

Involves workers going to another place to receive training

Advantages- Off the job training

• Output is not affected- mistakes

• Customers will not be at risk

• Learning cannot be distracted by work

Disadvantages- Off the job training

• No output will be produced

• Can be expensive

• Takes time to organise

Herzberg’s theory

2 factors lead to employee motivation and job satisfaction-

• Hygiene factors- Without these factors- Job dissatisfaction

• Motivators- Lead to job satisfaction

Hygiene factors

• Pay

• Working conditions

• Job supervision

• Policies & rules

Motivators

• Achievement

• Recognition

• Responsibility

• Interesting work

• Growth

Advantage and Disadvantage- Herzberg’s theory

• Advantage- Improves motivation and work enrichment

• Disadvantage- All employees do not have the same needs

Maslow’s hierarchy of needs

Advantage and disadvantage- Maslow’s hierarchy of needs

• Advantage- Easy to follow- Step by step

• Disadvantage- Difficult to find worker’s level

Taylor’s theory of scientific management

Piece rate- Paying workers according to what they produce

• Use specialist tools & equipment

• Follow a strict working procedure

• Proper training

• Get breaks

Advantage and Disadvantage- Taylor’s theory

• Advantage- Increased labour productivity

• Disadvantage- Not flexible- Treats workers like machines.

2 methods of communication

• Financial reward

• Non- Financial reward

Time rates

Pay according to the number of hours the staff worked

Advantage and Disadvantage- Time rates

• Advantage- Easy to calculate

• Disadvantage- Rewards lazy workers

Piece rate

Pay according to amount of output produced

Advantage and Disadvantage- Piece rate

• Advantage- More output

• Disadvantage- Mistakes and poor quality

Performance related pay (PRP)

Rewarding non-financial workers

Advantage and Disadvantage- PRP

• Advantage- Clear targets

• Disadvantage- Targets may be unrealistic

Bonus payment

Additional payments along with salary

Advantage and Disadvantage- Bonus payment

• Advantage- Only paid if targets are met

• Disadvantage- Disagreements between workers

Promotion

Moving to a higher postion

Advantage and Disadvantage- Promotion

• Advantage- More salary

• Disadvantage- Depends on the superiors

Job enrichment

Adding more challenging or meaningful tasks to the job

Job enrichment

Allowing employees to work different jobs of the same field

Autonomy

Giving staff authority to make decisions and take action

Organisational chart

A diagram that shows different job roles and how they relate to each other

Chain of command

Route of which orders are passed down through the heierarchy

Span of control

Number of workers a person directly controls

Flat structure

Few layers of management, wide span of controls and short chain of command

Advantages- Flat structure

• Better communication

• Low management costs

Disadvantages- Flat structure

• Less chance of promotion

• Less formality

Tall structure

Lots of leaders and layers of management, long chain of command

Advantages- Tall structure

• More control

• Clear route of promotion

Disadvantages- Tall structure

• Long chain of command

• High management costs

Delegation

The authority given to subordinates to carry out certain tasks

Centralisation

When decisions are made at the highest level of management

Advantages-Centralisation

• Communication and control is easier

• Prevents workers from being independent as they may make mistakes

Disadvantages- Centralisation

• Less creativity and more ideas

• Staff may get demotivated

Decentralisation

When decisions are made at lower levels of management

Advantages- Decentralisation

• Workers have more motivation

• Decisions are made faster

Disadvantages- Decentralisation

• Senior mangers loose control

• Costs may rise