VCE Business Studies U3 AOS 2

Define objectives

The goals a business intends to achieve in a specified period of time.

Define human resource management

The effective management of the formal relationship between the employer and employees

Tasks of a human resource manager

- Recruitment and training

- Implementing strategies to motivate and retain employees

- Manage employee preformance and development

- Manage termination of an employee

Link between successful management of employees and achievement of business objectives

A successful manager can increase employee motivation, which can mean that they are better trained and preform to a higher level. Increasing sales and the objective to increase profit.

Define motivation

The individual, internal process that directs, energises, and sustains a person's behaviour.

Define Maslow's Hierarchy of needs

A motivational theory that suggests there is a sequence of human needs (5 steps) and that once a need has been achieved, it becomes obsolete as a motivating factor.

5 steps of Maslow's Hierarchy

Physiological - most basic human (air, food, water, shelter etc)

Saftey - the need for saftey and stability

Social - the need for love, belonging, inclusion, a sense of connection etc.

Esteem - the need for self-esteem, power, control, recognition, respect etc.

Self-actualisation -the need for development, creativity, growth, fullfillment etc.

Advantages of Maslow's Hierarchy

- Provides a scaffold for managers to use when motivating employees

- Easy to understand - once a need not being satisfied is identified, relevant strategies need to be implemented

Disadvantages of Maslow's Hierarchy

- Not always easy to identifiy where an individual is on the hierarchy, making it difficult to know which strategies to focus on

- A strategy will satisfy the need for some employees but not others

Define goal setting theory

Proposes that employees are motivated by clear, specific and challenging goals, as well as appropriate feedback regarding the achievement of the goals. Consists of 5 principles.

5 principles of the goal setting theory

Clarity - clear, simple and specific

Challenge - extend the employee whilst being achievable

Commitment - by having input an employee is likely to be more commited to the goal

Feedback - timely feedback provides opportunity for recognition and adjustments

Task complexity - difficult but not overwhleming

Advantages of goal setting theory

- Usually aligned with business objectives

- Promotes positive relationships between management and employees due to involvement and communication

- The challenging nature can help employees develop their skills

Disadvantages of goal setting theory

- Time consuming

- Failure to meet the goal may result in lowered esteem

- Once achieved, another must be set. This cycle can be draining.

Define the four drive theory

The four-drive theory suggests that all people are driven to balance the fundamental desires to acquire, bond, learn and defend.

List drives of the 4 drive theory

Drive to learn, aquire, bond (active drives) and the drive to defend (inactive/latent)

Explain the drive to acquire

The desire to own material goods, status, power and influence.

Such as:

- Finacial incentives (bonuses)

- Opportunities to feel proud

- Reward programs (awards)

Explain the drive to bond

The desire to form relationships with other individuals and groups.

Such as:

- Managers interacting with employees

- Developing a positive corporate culture

- Promoting teamwork/collaboration

- Personal friendships being fostered

Explain the drive to learn

The desire to understand the world around us, to be challenged mentally and be faced with interesting/varying experiences.

Such as:

- Opportunities to learn new skills

- Delatation of challenging taks

- Supporting employees gaining new skills (e.g. paying for their TAFE)

Explain the drive to defend

The desire to ensure the work environment is safe and non-threatening, with high levels of trust between employees and management.

- Inactive/latent as it becomes active only when employees feel the need to defend themselves or the business

Such as:

- Fostering an atmosphere of trust

- Rewards and recognition are fair/transparent

- Feedback is encouraged

Advantages of the 4 drive theory

- Shows there are factors other than money that drive individuals

- Can develop a positive corporate culture

Disadvantages of the 4 drive theory

- Can be challenging to satisfy all drives at the same time

- Managers may not know where to start or progress once drives have been achieved

Define extrinsic rewards and provide examples

A tangible or physical reward given to someone for achieving something. E.g. financial incentives, gifts, verbal recognition.

Define intrinsic rewards and provide examples

An intangible reward that comes from within the person achieving success or performing well. E.g. self satisfaction, sense of fulfillment etc.

Similarities of Maslows hierarchy and Goal setting theory

- Both motivational theories

- 5 principles/steps

- Can create a better relationship between management and staff

- Both focus on the achievement of one thing at a time

Differences between Maslows hierarchy and Goal setting theory

- Maslows must be meet in a sequential order, goal setting theory has no order

- Maslows focuses on needs, whereas goal setting theory focuses on achieivng goals and receiving feedback

- Maslows is long-term, whereas goal setting theory tends to be short-term

Similarities between Maslows hierarchy and four drive theory

- Both theories of motivation

- Can have positive effects on long-term motivation

- No time limit

Differences between Maslows heirarchy and four drive theory

- Maslows must be meet in order, whereas four drive theory can be met at the same time

- Maslows has 5 steps, compared to 4 drives

- In Maslows once a step is complete it becomes obsolete as a motivator, whereas there is no end to the motivation in 4 drive theory

Similarities between four drive theory and goal setting theory

- Both motivational theories

- Can positively impact a businesses corporate culture

- No sequential orders

Differences between four drive theory and goal setting theory

- 4 drives, compared to 5 principles

- Four drive theory is long-term, whereas goal setting theory is short-term

- 4 drive theory suggests drives can be met at the same time, whereas goal setting theory must be achieved one at a time

List types of motivational strategies

- Preformance related pay

- Career advancement

- Investment in training

- Support strategies

- Sanction strategies

Define preformance related pay (as a motivational strategy) and provide examples

The monetary compensation provided to employees relative to how their preformance is assessed according to set standards.

E.g. pay increase, bonuses, commission, share plans, profit charing and gain sharing

Effect on short-term motivation: Preformance related pay

Pay increases, bonuses and commission can influence short term employees motivation as they provide an immediate, tangible reward.

Effect on long-term motivation: Performance related pay

Share plans, profit sharing and gain sharing can influence long term employee motivation as the rewards may take many years to achieve.

Advantages and disadvantages of performance related pay

Advantages

- Attracts highly skilled employees, goals/targets are clear and can identify lazy workers

Disadvantages

- Assessment may be subjective/unfair, can create competition and not all employees are motivated by pay

Define career advancement (as a motivational strategy)

The assignment of more responsibilties/authority to employees or the promotion of employees.

Effect on short term motivation: career advancement

Informing employees of career advancement potiencial can motivate them to work harder

Effect on long term motivation: career advancement

Being offered a promotion/or new responsbilities can encourage employees to work hard in the long term as their skills/abilities being recognised and appreciated.

Advantages and disadvantages of career advancement

Advantages

- Reduced staff turnover, employees feel valued and can lead to long-term motivation

Disadvantages

- Only select employees can advance, employees may advance beyond their capabilities (resulting in decreased motivation)

Define investment in training (as a motivational strategy)

The direction of finances or time into the teaching of skills to employees

Effect on short-term motivation: investment in training

A quick training program can assist in improving employee preformance and confidence in the short term

Effect on long-term motivation: investment in training

Investment in ongoing training can mean employees are encouraged to continuously improve, learning new skills and knowledge. May lead to career advancement.

Advantages and disadvantages of investment in training

Advantages

- Likely to preform better, develops a learning culture, employees feel valued

Disadvantges

- Can be expensive and loss of productivity while employees are being trained

Define support strategies (as a motivational strategy)

The assistance or services (such as counselling) provided by the business to help employees cope with difficulties that may impede their work preformance

Effect on short-term motivation: support strategies

Support programs help employees feel valued within the business

Effect on long-term motivation: support strategies

A supportive environment makes employees feel asthough the business 'has their back' and while support them in challenging times.

Advantages and disadvantages of support strategies

Advantages

- Helps to improve mental wellbeing, employees feel values, can reduce turnover

Disadvantages

- Expensive and confidentiality can limit the businesses knowledge of concerns

Define sanction strategies (as a motivational strategy) and provide examples

A form of penalty or discipline imposed on an employee for poor performance

E.g. verbal warnings, demotions, reduction in salary and termination

Effect on short-term motivaiton: sanction strategies

Motivate an employee to do the right thing

Advantages and disadvantages of sanction strategies

Advantages

- Some employees are better motivated by sanctions, motivation by fear can be quicker

Disadvantages

- Short-term only and may harm the relationship between managers and staff

Define training

The process of teaching staff how to do their job more efficiently and effectively by boosting their knowledge and skills

Define on-the-job training and provide examples

The process of developing an employees skills and abilities within the workplace, often while their preforming their job.

E.g. orientations/inductions

Advantages of on-the-job training

- Cost effective

- Promotes a collaborative culture

- Employees can be productive whilst training

- Experience real scenarios

Disadvantages of on-the-job training

- Current employees may pass on bad habits

- Workplace distractions

- Waste due to mistakes

Define off-the-job training and provide examples

The process of improving an employees skills and abilities away from the workplace.

E.g. lectures, cources, simulation

Advantages of off-the-job training

- Delivered by experts

- Free from workplace distractions

- Qualifications

Disadvantags of off-the-job training

- More expensive

- Business does not have full control over what is taught

- Employee may learn on different equipment

Define performance management strategies

A focus on improving both business and individual preformance through relating business preformance objectives to individual employee preformance objectives.

Examples of employee objectives

- To increase skills/knowledge

- To be promoted within a set period of time

- To feel valued

- To improve social network

- To increase income by 5%

List the types of preformance management strategies

- Management by objectives

- Appraisals

- Employee self evaluation

- Employee observation

Define management by objectives

A process by which a manager and an employee agree on a set of goals, with these goals all contributing to the objectives of a business.

Advantages of management by objectives

- Employees understand exactly what they need to do

- Achievement of the employees objective contributes to businesses objectives

Disadvantages of management by objectives

- Time consuing

- Employees may expect pay rises etc which can be expensive for a business

- Failure to meet goals must result in demotivation/loss of confidence

Define appraisals and ways which it can be done

The formal assessment of how efficiently and effectively an employee is preforming their role in the business

- Essay method or comparison method

Advantages of appraisals

- Feedback can be used as positive reinforcement

- Constructive feedback can promote growth

- Information collected can help determine wages etc.

Disadvantages of appraisals

- Can be time consuming

- Feedback may be subjective

- Can be stressful for employees

Define employee self evaluation

A process whereby employees carry out an assessement on their own work preformance based on a set of agree criteria.

Advantages of employee self evaluation

- Allow self reflection

- Provide managers insight to how employees view their own preformance and the support required

Disadvantages of employee self evaluation

- May not be a true reflection

- Employees may misinterpret question or respond with self serving biases

Define employee observation

A strategy where employee preformance is witnessed and assessed so feedback can be provided to the employee.

- Such as receiving diverse feedback from colleges, superiors, customers to have a 360 approach.

Advantages of employee observations

- Different perspectives = comprehensive review and a range of suggestions on how an employee can improve preformance

Disadvantages of employee observations

- Can be overwhelming for the employee

- Can damage an employees relationship with the person that reviewed their work

Define termination

Where an employee leaves a workplace, ending the employment relationship.

Explain retirement

A voluntary termination when an employee decides to give up work and are no longer apart of the labour force.

Explain resignation

The voluntary ending of employment of an employee by 'quitting' their job.

Explain redundancy

Occurs when a persons job no long exists. Can be voluntary or involuntary.

Compare voluntary redundancy to involuntary redundancy

Voluntary redundancy occurs when employees are informed of the situation and given the opportunity to nominate themselves for redundancy, whereas involuntary redundancy is when an employee is asked to leave as their job no longer exists.

Explain dismissal

Occurs when the behaviour of an employee is unacceptable and a business terminates their employment involuntarily.

Define entitlement considerations and provide examples

The legal right to benefits that employees have when leaving the workplace

E.g. written notice, being paid owing wages, paying out annual leave

Define transitional considerations and provide examples

Issues relating to the process of changing from one job to another or from one set of circumstances to another

E.g. providing support such as counselling, acting as a reference

Define workplace relations

The interactions between employers and employees, or their representatives, to achieve a set of working conditions that will meet the needs of employees, as well as allowing the business to achieve its objectives.

Define human resource managers and their role in terms of workplace relations

Managing the relationship between the business and employees.

Role:

- Negotiating employment agreements, admistering training, implement agreements and disputes/conflict/complaints.

Define employees and their role in terms of workplace relations

People who work for the business in exchange for remuneration such as a wage.

Role:

- Demanding more challenging work, increased involvement in decisions.

- Negotiating employment arrangments

- Seeking improved conditions

Define employer associations

An organisation that provides advice and support to employers in order to help them better understand their obligations in the workplace.

Employer associations role in terms of workplace relations

Assisting an employer in:

- Workplace relations (resolving disputes etc)

- Changes in laws

- Networks

- Human resource management (the relationship between employees/employer)

Advocate for the employer

Define trade unions

Organisations formed by employees in an industry, trade or occupation to represent them in efforts to improve wages and the working conditions of its members.

Trade unions role in terms of workplace relations

- Securing the best wage and working conditions in employee agreements

- Organising strikes if demands aren't met

- Resolving workplace disputes

- Investigating breaches in workplace laws

Advocating for the employee

Define the FairWork commission

Australias national workplace triubunal that has a number of responsibilities under the fair work act 2009.

Fair work commissions role in terms of workplace relations

- Making industry awards

- Approving enterprise bargaining agreements

- Helping solve disputes when other options are exhausted

- Deal with 'unfair dismissal' applications

- Review/set the minimum wage

Define award

A legally binding document determined by the fair work commission that sets out minimum wages and conditions for whole industries or occupations.

- Only FairWork can alter this (generally every 4 years)

Advantages of an award

- Cost effective

- Less time consuming then developing an enterprise agreement (no need for negotiation)

- Fewer disputes over wage/conditions

Disadvantages of an award

- Struggle to attract talented staff

- Businesses can't alter wages to suit their needs

- Complex (a business may need to understand multiple award if they cover multiple industries)

Define enterprise agreements

An agreement between a group of employees and their employer that sets out wages and conditions of work.

- Involves negotiation between parties (also known as enterprise bargaining)

- FairWork must approve

Advantages of an enterprise agreement

- Attracts talented employees as wages are competitive

- Greater flexibility to tailor to a businesses needs

- May promote productivity

Disadvantages of enterprise agreements

- Time consuming

- Increased cost due to increased wages and conditions of work

- Can harm employee/employer relationships if suggestions are overlooked.

Two main types of dispute resolution

Mediation and arbitration

Define mediation

Where an independant third party will aim to facilitate the conversation between two disputing parties but does not offer suggestions.

Advantages of mediation

- Both parties are likely to be happy with the decision

- Relationships can be maintained

- Lower cost

Disadvantages of mediation

- No guaruntee that a resolution will be achieved

- Might not be legally binding

Define arbitration

Where the disputing parties present their arguments to an independant party who will then determine the outcome that will favour one party or the other.

- Legally binding

Advantages of arbitration

- Guarunteed outcome

- Legally binding

- Less time consuming