Business - Unit 2 - People in Business

Motivation:

factors that influence the workers' behaviour towards achieving business goals.

Factors that inuence motivation at work:

• better standard of living

• job security

• gain experience and status

• promotion

• money

Benefits of a Well-Motivated Workforce

• Improved productivity

• Low rate of absenteeism

• Low rate of labour turnover

• Better quality goods and services

• More profit

F.W. Taylor - Scientific Management Theory

theory that money was the only motivational factor. The piece rate method of paying production came from his research.

piece rate method

workers get paid for the number of output they produce

Disadvantages of F.W Taylor’s Scientific Management Theory

• ideas too simplistic

• if employees are unfullfiled with their work, productivity won’t be gained, no matter how high the wage.

• If employees’ output can’t be measured, practical problems arise.

Maslow’s pyramid/hierarchy of needs

1. self actualisation (succeeding to your full potential, feeling that you have done a good job)

2. esteem needs (respect, recognition, status)

3. social needs (acceptance, friendships, trust)

4. safety needs (job security, physical danger)

5. physical needs (basic needs for human survival)

Disadvantages of maslow’s pyramid of needs

• difficult to identify how much of the needs have been met or which level each worker is on

• doesnt include money

• doesnt apply to every worker

advantages of maslow’s pyramid of needs

• easy to set goals and objectives

• simple to understand

Fredrick Herzberg - Two-Factor Theory

people have two sets of needs:
Basic animal needs called ‘hygiene factors’

and needs that allow the human being to grow psychologically, called the ‘motivators’:

the hygiene factors need to be satisfied, if not they will act as de-motivators to the workers. However hygiene factors don’t act as motivators as their effect quickly wear off. Motivators will truly motivate workers to work more effectively.

example of hygiene factors

• status

• security

• work conditions

• company policies and administration

• relationship with superiors

• relationship with subordinates

• salary

example of motivators

• achievement

• recognition

• personal growth/development

• promotion

• work itself

methods of motivation

• financial rewards

• non financial rewards and methods

Financial Rewards

cash and non-cash rewards paid to workers motivate them to increase their efforts.

Hourly Wage rate:

payment to workers based on a fixed amount every hour worked.

advantages of hourly wage rate

Business only pays workers for the number of hours worked

disadvantages of hourly wage rate

Pay is not linked to how much they produce or quality

salary

fixed annual payment to specifc grades and types of staff not based on hours worked or output

advantages of salary

They do not receive more payment if they have to work long hours to complete the task

disadvantages of salary

not linked to effort or the amount produced

Piece Rate:

Payment to workers based on the number of units produced.

advantages to piece rate

Workers are only paid for the number of items produced

disadvantages to piece rate

Quality of goods may vary because of the need to produce more goods to increase pay

Commission:

Paying sales staff based on the value of items they sell

advantages to comission

Pay is linked to the value of goods sold

disadvantages to commission

Workers are never sure of how much they will earn

Bonus scheme:

an additional reward paid to workers for achieving target set by managers. Method of performance-related pay.

advantages to bonus scheme

Linked to a performance target

disadvantages to bonus scheme

If the target is unrealistic, it can be demotivating

Fringe benefits:

non-cash rewards used to recruit and retain workers and recognise certain employees' status. (insurance, healthcare)

advantages of fringe benefits

Helping recruitment and retaliation of workers

disadvantages of fringe benefits

Linked to status, not performance

Profit sharing:

an additional payment to workers based on the business's profit

advantages to profit sharing

Linked to the performance of the business

disadvantages to profit sharing

Profit to employees may reduce dividends to shareholders or the amount reinvested in the business.

Non-financial rewards and methods:

methods used to motivate workers that do not involve giving any financial rewards.

examples of non financial methods for motivation

• job rotation

• job enrichment

• teamworking

• training

• opportunities for promotion

• job enlargement

job rotation

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

benefits of job rotation

• ncreases the variety in the work itself and will also make it easier for managers to move around workers to do other jobs if somebody is ill or absent

• may avoid boredom

Job Satisfaction:

: how content and happy a person is with their job

job enlargement

where extra tasks of similar level of work are added to a worker’s job description. These extra tasks will not add greater responsibility or work for the employee, but make work more interesting.

Job Enrichment:

involves adding tasks that require more skill and responsibility to a job. This gives employees a sense of trust from senior management and motivate them to carry out the extra tasks effectively.

Teamworking:

• group of workers is given responsibility for a particular process, product or development

• can decide as a team how to organize and carry out the tasks

• gives them more control over their work and thus a sense of commitment, increasing job satisfaction

training -

providing training will make workers feel that their work is being valued. Training also provides them opportunities for personal growth and development, thereby attaining job satisfaction

opportunities for promotion advantages

will get workers to work more efficiently and fill them with a sense of self-actualisation and job satisfaction

Delegation:

passing responsibility to perform a task to workers lower down in the organisation.

Benefits of decrease in labour turnover:

There is no need to hire new employees, decreasing recruitment costs, training costs, and retaining skilled employees. This improves productivity.

Organisational Structure:

refers to the levels of management and division of responsibilities within a company.

advantages of organisational structures

• All employees are aware of which communication channel is used to reach them with messages

• Everyone knows their position in the business. They know who they are accountable to and who they are accountable for

• It shows the links and relationship between the different departments

• Gives everyone a sense of belonging as they appear on the organizational chart

span of control is

the number of subordinates working directly under a manager in the organizational structure

Chain of command -

the structure of an organization that allows instructions to be passed on from senior managers to lower levels of management

The wider the span of control

the shorter the chain of command

There are two types of organisational structures of a business:

• tall structure

• short structure

tall organisational structure

the longer the chain of command is, the ‘taller‘ the organisational structure and the ‘narrower‘ the span of control.

disadvantages of tall organisational structure (long chain of command)

• communication slower and less accurate

• decision making will take longer

• More expensive because of additional management layers.

• longer lines of communication can make the firm less responsive to change

advantages of tall organisation structures (long chain of command)

• more opportunities for promotion which can lead to greater staff motivation

• higher degree of supervision as each line manager has a limited number of people they are responsible for

• staff gain more support from their line manager

• staff are closer

advantages of short/flat organisation structures (short chain of command)

• Communication and decision-making are quicker.

• Fewer management levels to build connections with by the top management.

• The span of control will be wider, encouraging managers to delegate more and allowing workers to feel trusted.

Flat/short Structure:

when a chain of command is short, the organisation will have a ‘wider’ span of control,

disadvantages of short/flat organisation structures (short chain of command)

• wide span of control means that tasks must be delegated, which can lead to employees feeling stressed and managers feeling overstretched

• less promotion opportunities within a flat structure, which may lead to the company losing staff to other organisations

Line Managers have authority over

people directly below them in the organizational structure.

Staff Managers are

specialists who provide support, information and assistance to line managers. The IT department manager in most organisations act as staff managers.

Factors acting the size of the span of control:

• Difficulty of the task

• The experience and skill of workers

• The size of the business the level of hierarchy Management style

delegation advantages

• Application of job enrichment, leading to job satisfaction

• A form of training for junior managers

• Achieving the Esteem needs

delegation disadvantages

• Some managers are reluctant to delegate, as they will be held accountable for any errors

• Managers lose some control over subordinates

primary roles of managers

• planning - setting aims and targets for the organisations/department to achieve

• organising - decide the best way of completing important tasks at the lowest possible cost to the business

• coordinating - - Making sure that all the different parts of the business are working together to achieve the business’s goals and corporate objectives.

• commanding - need to guide, lead and supervise their employees in the tasks they do and make sure they are keeping to their deadlines and achieving targets.

• controlling - must try to assess and evaluate the performance of each of their employees.

Extra functions managers do:

• Understand the people who work for them

• Set a good example

• Delegate tasks

• Treat subordinates fairly

• communicate effectively

Directors:

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

responsibilities of a director

• Setting strategy (long-term plans)

• Reviewing the performance of managers.

• Provide leadership

• Making sure resources are available

Supervisors:

junior managers who supervise and are responsible for the employees below them in the organisational structure.

delegation advantages to managers

• managers cannot do all work by themselves

• managers can measure the efficiency and effectiveness of their subordinates’ work

delegation advantages to subordinates

• the work becomes more interesting and rewarding- increased job satisfaction

• employees feel more important and feel trusted– increasing loyalty to firm

• can act as a method of training and opportunities for promotions, if they do a good job.

leadership styles

the different approaches to dealing with people and making decisions when in a position of authority.

3 different types of leadership styles

• autocratic

• democratic

• Laissez-Faire

autocratic leadership

• managers expects to be in charge of the business and have their orders followed.

• They do all the decision-making, not involving employees at all.

• Communication is one way- from top to bottom.

democratic leadership

• where managers involve employees in the decision-making

• communication is two-way from top to bottom as well as bottom to top.

• final decision is made by the manager.

Laissez-faire leadership

• makes the broad objectives of the business known to employees and leaves them to do their own decision-making and organize tasks.

• Communication is rather difficult since a clear direction is not given.

• The manager has a very limited role to play.

autocratic leadership advantages

Quick decision-making process

autocratic leadership disadvantages

no opportunity for employee input into key decisions, which can be demotivating

democratic leadership advantages

Better Decisions could result from consulting with employees using their ideas and experiences.

democratic leadership disadvantages

Unpopular decisions could not effectively be made using this style

Laissez-Faire Leadership advantages

Encourage employees to show creativity and responsibility

Laissez-Faire Leadership disadvantages

unlikely to be appropriate in organisations with a consistent and clear decision making structure.

trade union

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

role of trade unions

• Negotiating with employers to improve pay and working conditions.

• Resolving conflict by negotiating a solution on behalf of its members

• Providing legal support and advice.

Benefits to workers of joining a trade union

• strength in number- a sense of belonging and unity

• improved conditions of employment

• improved working conditions,

• improved benefits for workers who are not working, because they’re sick, retired or made redundant

• financial support

• benefits that have been negotiated for union member such as discounts, services

Disadvantages to workers of joining a trade unions:

• costs money to become a member

• Workers may be required to take industrial actions even if they disagree.

Role of H.R

• Recruitment and selection

• Wages and salaries

• Industrial relations

• Training programmes

• Health and safety

• dismissal

Recruitment is the

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

Employee Selection:

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

recruitment process

1. job analysis - identifies and records the responsibilities and tasks relating to a job

2. job description - outlines the responsibilities and duties to be carried out by someone employed to do the job.

3. job specification - document that outlines the requirements, qualifications, expertise, skills, physical/personal characteristics etc. required by an employee to be able to take up the job.

4. advertise the vacancy

5. Send out application forms to the applicants or read curriculum resumes and letters of application.

6. Produce a shortlist from the applications for interviews and take up references.

7. . Hold interviews and selection of task

8. Select suitable applicants and oer them the job. Reply to unsuccessful applicants.

functions of. a job description

• Given to applicants so they know exactly what the job entails.

• Allows a job specification to be drawn up to see if they are skilled.

• It shows if an employee is working effectively once they are employed.

The contents of a Job description:

• Condition of employment salary, hours, permission, etc.

• Training that will be offered

• Opportunities for promotion

• Purpose of the job

• Main duties/addition or occasional duties

usual requirements for a job specification

• The level of educational qualification

• Special skills, knowledge, or a particular attitude

• Personal Characteristics

Internal recruitment is when

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

advantages to internal recruitment

• Quicker and cheaper than external recruitment.

• reliability, ability, and potential of the person are known

• person is already familiar with the organisation's structure and expectations

• can be a motivator for other employees

disadvantages to internal recruitment

• No new ideas or experiences come into the business.

• rivalry or jealousy

External recruitment is when

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

advantages of external recruitment

• fresh perspectives and idea into the business

• Reduce tension between employees

• Enhancing diversity in the organisation

disadvantages of external recruitment

• increased costs due to advertising

• additional training

• transitional period

• effects on employee morale

Advertising job vacancies can be done in several ways:

• Local or national newspapers

• Specialist magazines

• Online recruitment sites

• Recruitment agencies

• Centers run by the government