Topic 2: People in business

Why people work

Money, job satisfaction, passion, security

Motivation in business

Want to work, look for extra work, want to improve, barely take time off

Motivational theories

Maslow’s hierarchy, Taylor and Herzberg’s theories

Maslow’s Hierarchy

Each level of the hierarchy must be achieved before an employee can be motivated by the next level.

Taylor’s theory

All individuals are motivated by personal gain, if workers are paid more, they will work more effectively

Herzberg’s theory

Humans have two sets of needs, basic needs (hygiene factors) and motivational needs (motivators)

Hygiene factors

Basic needs

Motivational needs

For a human being able to grow psychologically.

Hygiene factors e.g.

Status, security, work conditions, work/life balance

Motivational needs e.g.

Recognition, advance/promotion, personal growth/development

Motivating factors

Financial rewards, Non-financial rewards (fringe benefits)

Financial reward

Are used to provide incentives to employees to encourage them to work harder and effectively

Non-financial reward (fringe benefit)

Non-money related incentives given to employees to motivate them

Financial reward e.g.

Wages (time rate or piece rate), salaries, additional payments

Non-financial rewards e.g.

Company vehicle (car), healthcare paid for, children’s education fees paid for, free accomodation (housing allowance)

Non-financial methods e.g.

Job enrichment, job enlargement, job rotation

Job enrichment

Adding tasks that require more skill and/or responsibility

Job rotation

Workers swapping around and doing each specific task for only a limited time before swapping round again

Teamworking

Using groups of workers and allocating specific tasks and responsibilities to them

Training

The process of improving a worker’s skills

Job satisfaction

The enjoyment from feeling that you have done a good job

Promotion

The advancement of an employee in an organisation to a higher job/managerial level

Job satisfaction e.g.

Pay, opportunities for promotion, working conditions, the way the employee is treated

Organisational chart

A diagram to show the levels of management and division of responsibilities

Span of control

The number of subordinates directly under a supervisor

Chain of command

How instructions/messages are passed down the organisational chart

Flat structure

Wide span of control, a short chain of command

Tall structure

Narrow span of control, a long chain of command

Delegation

The passing down of authority to complete a task to a subordinate

Delayering

The removal of one or more layers of the organisational structure

Functions of a manager

Planning, Organising, Commanding, Coordinating, Controlling

Planning

Setting aims and targets for the future to give the organisation a sense of direction

Organising

Tasks are delegated to others in the organisation, and it is the manager’s responsibility to organise people and resources effectively

Commanding

Making sure that all supervisors and workers are keeping to targets and deadlines by guiding and supervising them

Coordinating

‘Bringing together’ by making sure that all departments in an organisation work together to achieve goals set by the manager

Controlling

Measuring and evaluating the work of individuals and groups to make sure they are on target, monitoring performance

Importance of having good managers

Motivate employees, to give guidance and advice, to keep costs under control, to increase profitability

Leader

A person who can inspire and get the best out of others, by getting them to work towards a common goal

Leadership styles

Autocratic, Democratic, Laissez-faire

Autocratic

Where the manager expects to be in charge of the business and to have their orders followed, one-way communication

Democratic

Gets other employees involved in the decision making process, two-way communication

Laissez-faire

Managers make the objectives of the business known to the employees but then employees make their own decisions and organise themselves

Trade union

A group of workers who have joined together to ensure their interests are protected

Benefits of joining trade unions

Strength in numbers, Improved working environment, Improved job satisfaction

Disadvantages of joining trade unions

Have to pay a subscription to be a member, may be forced to take industrial action (strikes) even if you don’t agree with it or can’t afford to

Recruitment

To find/attract/convince someone to come and work for you

Why businesses need to recruit

Employees leave, to cover maternity leave, an employee is promoted, business expands

Stages of recruitment

1. Identify the vacancy 2. Job description 3. Person specification 4. Job advertisement 5. Longlist and shortlist applicants 6. Interviewing the candidates 7. Selecting and appointing the candidate

Internal recruitment

Recruitment from within a firm

External recruitment

Recruitment from outside the firm

Internal recruitment benefits

cheaper and quicker to recruit, employee knows the business

Internal recruitment drawbacks

Limits number of potential applicants, creates a new vacancy which needs to be filled

External recruitment benefits

No limit to the number of potential applicants, new idea introduced

External recruitment drawbacks

Expensive and takes longer to recruit, business doesn’t already know the strengths and weaknesses of candidates

Longlist applicants

All the people that apply for the job

Shortlist applicants

The people the business wants to interview

Full-time employees

Employees who work 35-40 hours a week e.g. teachers

Part-time employees

Employees who work less than 35-40 hours a week e.g. students

Benefits of full-time employees

Need less staff, easier to manage fewer staff, more involved in the business

Benefits of part-time employees

Saves on wages, costs and additional benefits, more flexible

Drawbacks of part-time employees

Take longer to recruit as more workers are required, less committed to the business, more likely to leave

Importance of training

Better customer services, improves output and quality of products, understand the business better

Benefits of training to the employee

May get increased pay, improved chance of promotion, easier to apply for jobs at other businesses

Benefits of training to the business

Increased productivity, motivated workers, greater flexibility of the workforce

Induction training

When you are new to a job, you are introduced to the job and told of your expectations. It can last for several days

Induction training benefits

helps new employees settle into their job quickly, workers are less likely to make mistakes

Induction training drawbacks

Time consuming, delays the start of the employee starting their job

On-the-job training

A person is trained by watching a more experienced worker doing the job

On-the-job training benefits

Is tailored to the specific needs of the business, cheap

On-the-job training drawbacks

The trainee may pick up bad habits from watching the trainer, training qualifications may not be recognised outside of the business

Off-the-job training

Workers leave the workplace to learn about their job or industry

Off-the-job training benefits

Broad range of skills can be taught using these techniques

Off-the-job training drawbacks

Costs are high, wages are being paid but the worker is not working, additional qualifications make it easier for the employee to leave for another job

Dismissal

Losing your job because of something you have or have not done

Downsizing

Making the business smaller

Redundancy

Worker’s job no longer exists

When downsizing is necessary

Reduced demand for products, takeover/merger, automation

Who to make redundant

Length of time employed by the business, employment history of the worker, voluntary redundancy

Employees need protection

Against unfair discrimination at work, health and safety at work, against unfair dismissal, wage protection (minimum wage)

One-way communication

Communication that does not allow for a response e.g. television, radio

Two-way communication

Communication is a process by which to people or groups communicate with each other e.g. text message, email

Communication

To pass on or share information

For communication to be effective:

Information given should be simple and clear, should be between the right people, communication method should be appropriate

Internal communication

Communication between people in the same organisation

External communication

Communication between people in different organisations

Methods of communication

Written, Verbal, Visual

What to consider when communicating

The cost, how detailed the message is, who the receiver is, the urgency in getting the message to the receiver

Verbal communications

Speaking on the phone, meeting, telephone conferences, face-to-face conversations

Written communications

Emails, financial documents, minutes taken in meetings, letters, reports

Visual communications

Graphs and charts, advertisements, catalogues and brochures, videos and powerpoints

Communication barriers

Factors that stop effective communication

Barriers to communication

Time differences, language barriers, chain of command is too long, method of communication

Formal communication

Messages are sent through established channels using formal language e.g. letters

Informal communication

Information is sent and received casually using everyday language e.g. worker communicating with colleague