IGCSE Business Studies Definition - Unit 2

Motivation

The factors that influence the behaviour of employees towards achieving set business goals

Wage

Payment for work, usually paid weekly

Time rate

Amount paid to an employee for one hour of work

Piece rate

Amount paid for each unit of output

Salary

Payment for work, usually paid monthly

Bonus

Additional amount of payment above basic pay as a reward for good work

Commission

Payment relating to the number of sales made

Profit sharing

System whereby a proportion of the company's profits is paid out to employees

Job satisfaction

Enjoyment derived from feeling that you have done a good job

Job rotation

Involves workers swapping around and doing each specific task for only a limited time and then changing around again

Job enrichment

Involves looking at jobs and adding tasks that require more skill and/or responsibility

Teamworking

Involves using groups of workers and allocating specific tasks and responsibilities to them

Training

Process of improving a worker's skills

Promotion

Advancement of an employee in an organisation

Organisational structure

Levels of management and division of responsibilities within an organisation

Organisation chart

Diagram that outlines the internal management structure

Hierarchy

Levels of management in any organisation (from the highest to the lowest)

Levels of hierarchy

Managers/supervisors/other employees who are given a similar level of responsibility in an organisation

Chain of command

Structure in an organisation which allows instructions to be passed down from senior management to lower levels of management

Span of control

Number of subordinates working directly under a manager

Directors

Senior managers who lead a particular department or division of a business

Line managers

Have direct responsibility for people below them in the hierarchy of an organisation

Supervisors

Junior managers who have direct control over the employees below them in the organisational structure

Staff managers

Specialists who provide support, information and assistance to line managers

Delegation

Giving a subordinate the authority to perform particular tasks

Leadership styles

Different approaches to dealing with people and making decisions when in a position of authority

Autocratic leadership

Manager expects to be in charge of the business and to have their orders followed

Democratic leadership

Gets other employees involved in the decision-making progress

Laisssez-faire leadership

Makes the broad objectives of the business known to employees, but then are left to make their own decisions and organise their own work

Trade union

Group of employees who have joined together to ensure their interests are protected

Closed shop

When all employees must be a member of the same trade union

Recruitment

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

Employee selection

Process of evaluating candidates for a specific job and selecting an individual for employment based on the needs of the organisation

Job analysis

Identifies and records the responsibilities and tasks relating to a job

Job description

Outlines the responsibilities and duties to be carried out by someone employed to do a specific job

Job specification

Document which outlines the requirements, qualifications, expertise, physical 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

Part-time

Employment is often considered to be between 1 and 30-35 hours a week

Full-time

Employees will usually work 35 hours or more a week

Induction training

An introduction given to a new employee, explaining the business's activities, customs and procedures and introducing them to their fellow workers

On-the-job training

Occurs by watching a more experienced worker doing the job

Off-the-job training

Involves being trained away from the workplace, usually by specialist trainers

Workforce planning

Establishing the workforce needed by the business for the foreseeable future in terms of the number and skills of employees required

Dismissal

When employment is ended against the will of the employee, usually for not working in accordance with the employment contract

Redundancy

When an employee is no longer needed and so loses their job. It is not due to any aspect of their work being unsatisfactory

Contract of employment

Legal agreement between an employer and employee, listing the rights and responsibilities of workers

Industrial tribunal

Type of law court that makes judgement on disagreements between companies and their employees (workers complaints, unfair dismissal, discrimination)

Ethical decision

Decision taken by a manager or a company because of the moral code observed by the firm

Communication

Transferring of a message from the sender to the receiver, who understands the message

Message

Information of instructions being passed by the sender to the receiver

Internal communication

Between members of the same organisation

External communication

Between the organisation and other organisations or individuals

Transmitter or sender

Sender of the message is the person starting off the process by sending the message

Medium of communication

Method used to send a message (eg, letter as written and meeting as verbal)

Receiver

Person who receives the message

Feedback

Reply from the receiver which shows whether the message has arrived and understood

One-way communication

Involves a message which does not call for or require a response

Two-way communication

When the receiver receives a response to the message and there is a discussion about it

Formal communication

Messages are sent through established channels using professional language

Informal communication

When information is sent and received casually using everyday language

Communication barriers

Factors that stop effective communication of messages

Labour turnover

The rate at which employees leave a business

Taylor - scientific management theory

Reduces inefficiency in the workplace by finding the quickest method of performing each task (motivated by only money)

Fredrick Herzberg - two factor theory

Hygiene factors & motivators