IGCSE Business 2. People in business

Define motivation

The reason why employees want to work hard and efficiently for a business.

Identify reasons why people go to work

Money, security, social needs, esteem needs, job satisfaction (enjoyment of the work).

Identify benefits of a well motivated workforce

High output per worker/improved productivity, lower labour turnover, less absenteeism, willingness to accept change, improved quality, less industrial action e.g. strikes and pickets,

Identify the five needs/levels in Maslow's hierarchy

1. Physiological
2. Safety/security
3. Social
4. Esteem
5. Self-actualisation

Define self-actualisation

The desire to grow personally and fulfil one's potential.

Identify physiological needs

Food, water, shelter, clothing

Give examples of how physiological needs can be met in the workplace

Money to pay for physiological needs, perks such as housing and lunch.

Give examples of how safety needs can be met in the workplace

Job security, long-term contracts, safe working environment, protective equipment.

Give examples of how social needs can be met in the workplace

Teamworking, social clubs, project work.

Give examples of how esteem needs can be met in the workplace

Employee of the week award, positive feedback, promotion to higher position.

Identify the two factors in Herzberg's motivation theory

Hygiene factors (dissatisfiers/satisfiers) and motivators

Define hygiene factors

Things at work that result in satisfaction or dissatisfaction but do not motivate to be more or less productive.

Define motivators

Job factors that cause employees to be productive.

Give examples of motivators in Herzberg's theory of motivation

Achievement, recognition, personal growth/development, promotion, the work itself

Give examples of hygiene factors in Herzberg's theory of motivation

Status, security, work conditions, company policies, relationships with managers/supervisors, relationships with subordinates, salary

Identify the main motivator in Taylor's theory of motivation

Money

Identify the main issue of the use of Taylor's theory of motivation

Many jobs in todays world, especially the service industry, have output that is difficult to measure and therefore piece rate isn't practical.

Identify financial methods of motivation

Wage, salary, time rate, commission, piece rate, bonus, profit sharing, fringe benefits.

Define wage

A payment for work which is usually paid weekly

Define time rate

The amount paid to an employees for one hour of work.

Identify issues of time rates

Good and poor worker get paid the same regardless of performance, supervisors are need to check on staff.

Define commission

Payment made to sales persons which is calculated as a % of the value of sales made by that person.

Identify issues of piece rates

Worker may focus on quantity rather than quality, if machinery breaks down workers will get paid less du to no fault of their own, may cause rivalry and friction between workers.

Define salary

A payment to an employee that is usually set as a yearly total and paid monthly.

Identify issues of salaries

Good workers are paid the same as poor workers, overtime is not paid so workers may be reluctant to work extra time.

Define bonus

An additional sum of money above basic pay which is usually paid as a reward for good work.

Identify issues of bonuses

They can become expected and cause disappointment if changes are made, can cause resentment between workers.

Define piece rate

An amount paid for each unit of output made e.g. 10p for kilo of strawberries picked or $10 for each table made.

Identify issues of commission

Sales people may use pressure to get people to buy things they don't really want giving the business a bad reputation, staff my get less pay when the economy is weak, competition between staff to the next sale may be off putting to customers.

Define profit sharing

A system whereby a proportion of the company's profits are paid out to the employees.

Identify issues of profit sharing

Good and poor workers obtain the same, workers may not understand how to increase profit, if the business make a loss due to poor economic conditions then no profit is shared leading to disappointment.

Define fringe benefits (perks)

Rewards other than cash that are given to employees on top on basic pay.

Give examples of fringe benefits

Discounts on company products, health insurance, company vehicle, children's education, free accommodation, pension contributions, free trips/holidays, share options.

Identify non-financial methods of motivation

Job rotation, job enlargement, job enrichment, teamworking, training, opportunities for promotion

Define job rotation

The practice of moving employees between different tasks to promote experience and variety.

Define job enrichment

Adding tasks and duties that require more skill and and responsibility to a job

Define job enlargement

Adding tasks and duties that require a similar skill and and responsibility level to a job

Define teamworking

Involves using groups of workers and allocating specific tasks and responsibilities towards them.

Define training

The process of improving a workers knowledge and skills

Define promotion (in human resources)

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

Define organisational structure

Refers to the levels of management and division of responsibilities within an organisation.

Define organisational chart

Refers to a diagram that outlines the internal management structure.

Define hierachy

Refers to the levels of management in a hierarchy from the highest to the lowest.

Define level of hierarchy

Refers to the managers/supervisors/other employees who are given a similar level of responsibility in an organisation.

Define chain of command

The structure of an organisation which allows instructions to be passed down the line of authority from senior managers to lower levels of management.

Define span of control

The number of employees working directly under a manger.

Identify advantages of short chains of command

Communication is quicker and more accurate, top managers are less remote from lower levels and thus have better relationships, large spans of control means more opportunities for delegation and workers feel trusted.

Define director

Senior managers who lead a particular department or region of a business responsible for high level decisions.

Define line managers

These managers deal with issues related to staff in the area below them in the hierarchy.

Define supervisor

Junior managers who have direct control over the employees below them in the hierarchy.

Identify roles/functions of management

Planning, organising, commanding, co-ordinating, controlling,

Define delegation

Giving a subordinate the authority to perform particular tasks.

Define subordinate

A person lower in the hierarchy in terms of authority and responsibility.

Identify advantages of delegation

Managers are able to focus on more important tasks, extra trust and responsibility meets the subordinates esteem needs, work is more varied and interesting for the subordinate, allows the worker to use the extra responsibility as evidence when applying for promotion.

Identify issues of delegation

Subordinates may not have the right skills and need training, manager may be concerned that the worker will do a better job or may not trust the subordinate.

Identify reasons why it is important to have good managers

To motivate employees, give guidance and advice to subordinates, inspire employees, manage resources, increase profitability of the business.

Define leadership

The ability to direct and influence others to accomplish a task.

Define autocratic leadership

Where the manager in charge makes all or most of the decisions and expects their orders to be followed.

Identify the three main styles of leadership

Autocratic/authoritarian, democratic, laissez-faire

Identify advantages of autocratic leadership

Useful when workers are unskilled, useful in a crisis situation when quick decision making is required.

Identify issues of autocratic leadership styles

Demotivating for employees looking for trust in the workplace, less input from employees who are actually doing the job can result in poor decision making.

Define democratic leadership

A leadership style that promotes the active participation of workers in the decision making process.

Identify benefits of democratic leadership style

Better decisions may be made as more ideas are put forward, motivates workers as their social and esteem needs are met.

Identify issues of democratic leadership style

Decisions can take a long time, unpopular decision such as making worker redundant could not be effectively made using this style.

Define laissez-faire leadership

A leadership style that make the employees aware of the objectives of the firm and then allows them to make their own decisions on how to organise their work to meet them.

Identify benefits of laissez-faire leadership

Encourages workers to show creativity and responsibility, works well with high qualified and experience staff, meets job satisfaction needs.

Identify issues of laissez-faire leadership

Not suitable for low skilled jobs, some people prefer to take direction.

Identify the main qualities of effective managers

Intelligence, determination, self-confidence, initiative, good communication skills, enthusiasm

Define trade union

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

Identify interests of employees

Pay, job security, holiday and sick pay, good working conditions.

Identify benefits of being in a trade union for the employee

Strength in numbers, improved conditions of employment, improvements in health & safety, redundancy packages, training.

Define closed shop

A company and a union agree that everyone must join the same union to work in the business.

Identify the disadvantages of being in a trade union

Monthly fee, the workers opinion may not always align with the union.

Identify advantages of trade unions for employers

Easier to negotiate with one or two unions than with many individual workers, they help improve communication with workers, unions are likely to take a longer term view than individual employees.

Identify actions a union can take if they are unable to agree with the company on pay an conditions

Strike, picketing, go slow, non-cooperation, sit-in.

Define recruitment

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

Define employee selection

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

Identify factors to consider when deciding which applicants to recruit

- Experience
- Qualifications
- Skills
- References

Identify roles of the human resource department

Train staff, recruit staff, discipline, staff, workforce planning, pay staff, health and safety, industrial relations.

Identify the stages in the recruitment process

identify the vacancy, draw up a job description, draw up a job specification, advertise the vacancy, shortlist suitable applications for interview, interview applicants, select the most appropriate candidate

Define job analysis

Identifies and records the responsibilities and tasks relating to a job

Define job description

A document that outlines the responsibilities and duties to be carried out by someone employed to do a specific job.

Identify items on a job description

Job title, main duties, pay and conditions, responsible to/for,

Define person/job specification

A document that outline the requirements, qualifications expertise, physical characteristics etc., for a specific job.

Identify on a person/job specification

Qualifications, skills, experience, personal characteristics

Define internal recruitment

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

Define external recruitment

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

Identify advantages of internal recruitment

Quicker and cheaper than external, person's reliability, ability and potential is already known, the person already knows what to expect from the business, promotion is a method to motivate employees.

Identify disadvantages of internal recruitment

Rivalry amongst existing staff, no new ideas are brought into the business, quality of the candidate may be low compared to potential external candidates, may create another position to be filled.

Identify advantages of external recruitment

New ideas are brought into the business, large pool of candidates to choice from.

Identify issues of external recruitment

More expensive, may obtain numerous applications which take time to go through, more business specific training is required.

Identify ways to advertise external vacancies

Newspaper, specialist magazines, online recruitment sites, recruitment agencies, government job centres,

Identify ways to advertise internal vacancies

Email, notice board, intranet (internal network), company newsletter

Define CV / Résumé

A written summary of a person's education, training, experience, and other job qualifications.

Identify two main methods of application

CV (résumé), application form.

Identify three items on a CV or application form

Employment experience, qualifications, education, contact details

Identify methods of selection

Interview, skills tests, aptitude tests, personality tests, group situation tests

Define part-time employment

When employees work between 1-30/35 hours per week.

Define full-time employment

When employees work 35+ hours per week

Identify benefits of employing part-time workers

These worker only work during bust periods, allows more people to enter the job market (people with school age children, and students), some counties have less regulation for part-time worker so they are cheaper.