U3 AOS2 Business Revision set

VCE Business management Unit 3/4 flashcard set

Human resource management

the organisation of employee roles, pay and working conditions. They are responsible for ensuring employee satisfaction, and are key to connecting employees with the business.

Maslow’s Hierarchy of Needs

a psychological theory which categorizes human needs into a five-tier model including pysiological needs, safety needs, love and belonging, esteem needs, and self-actualization.

physiological needs (Maslow)

the basic human needs. In a workplace, it includes providing employees with a job, payment and good employment conditions

safety needs (Maslow)

security and protection. In a workplace, this includes creating job security, following and exceeding OH&S, and fair management

Social needs/love and belonging (Maslow)

need for interpersonal relationships. In a business, this involves social gatherings, open work spaces, friendly work associates and organised employee activities

Self-esteem needs (Maslow)

Need for self-respect and recognition. In a business, this involves promotions, job title and task responsibilities, and merit rewards

Self-actualisation needs (Maslow)

Need to achieve full potential and personal growth. In a business, this involves challenging tasks, opportunities for creativity, and professional development.

Extrinsic motivators

things given to the employee in order to motivate them.

Intrinsic motivators

motivation that comes from within the employee

Advantages of Maslow’s hierarchy

• gives managers a clear path to motivate employees

• helps managers identify and manipulate motivators

• reaching self-actualisation improves business performance

• can come at no cost

• motivation occurs quickly

Disadvantages of Maslow’s hierarchy

• difficult to measure its success

• not all employees will be motivated by the same thing at the same time

• assumes all employees are motivated in the same order

• assumes no other motivating factors

• could be time consuming

• higher order needs may take more time to fulfil

Locke and Latham’s goal setting theory

a motivational theory consisting of setting and achieving goals based on 5 key principles

5 goal setting principles (Lock and Latham)

• clarity

• commitment (employees should be involved in setting goals, which should be relevant to their personal interest

• challenge

• task complexity

• feedback

Advantages of Locke and Latham’s goal setting theory

• likely to improve achievement of business objectives

• process of goal setting can build trust with managers

• expectations are explained by clear goals

• higher motivation

Disadvantages of Locke and Latham’s goal setting theory

• difficult to align personal and business goals

• could cause pressure and stress, which demotivates

• could be time consuming to set goals

• failure to meet goal decreases motivation

4-drive/contingency/Lawrence and Nohria theory

a motivational theory based on the concept of four main motivational drives existing in all individuals, namely the drive to acquire, learn, bind and defend.

Drive to acquire (4-drive theory)

The motivational to receive rewards and high status, whether financial or non-financial

Drive to bond (4-drive theory)

Creating relationships, through potential activities such as workplace celebrations and social events

Drive to learn (4-drive theory)

the motivation to gain knowledge in a business

Drive to defend (4-drive theory)

a motivation reflecting pride, involving a connection to the business and willingness to protect it. The business can support this by developing a vision and building trust with employees

Advantages of the 4-drive theory

• simple approach for motivation

• improves performance, motivation and profits

• all 4 can be obtained simultaneously

Disadvantages of the 4-drive theory

• could be difficult to manage all 4 simultaneously

• some drives can be overlooked

• may lead to unhealthy competition

• employees may not value all drives equally

• could be costly

List of motivational strategies

• performance-related pay

• career advancement

• investment in training

• support

• sanction

performance-related pay

a short-term extrinsic motivator where an employee receives a financial reward for meeting or exceeding work, job or performance standards and/or benchmarks.

Advantages of performance-related pay

• provide fast and immediate motivation

• should improve productivity, engagement and commitment

• rewards best performing employees, which increases overall performance

Disadvantages of performance-related pay

• generate unhealthy competition

• costly

• pay isnt a motivator for everyone

• mainly short term

• resent at missing rewards

career advancement

a long term motivator involving opportunities provided to employees to take on further responsibility in the organisation

advantages of career advancement

• retain valuable employees

• helps business succession planning

• rewarded for past achievement and performance

• increases productivity, engagement and commitment

Disadvantages of career advancement

• increased jealousy

• cant promote everyone

• no new external talent

• promotion beyond capacity may occur

Investment in training

A long term motivator involving the investment in improving the current skills of employees so that they can perform their job to a higher level

advantages of investment in training

• increases staff morale, showing organisational values

• build adaptable employees

• boosts sense of job security

• increased employee retention

disadvantages of investment in training

• expensive and time consuming

• not all employees will value it

• no guarantee of employee retention

Support

long or short-term motivation through the assistance given to individual employees to help them cope with problems at work

advantages of support

• improves employee mental wellbeing

• retain and attract quality employees

• improved business culture

• some can be provided at no cost

• certain services can assist employees in developing meaningful relationships

Disadvantages of support

• confidentiality of some programs meaning issues wont be solved

• employees may become too dependent on it

• dependent on management style and a positive corporate culture

Sanction

short term motivation through penalties for poor work performance or behaving outside of current policies, including loss of benefits, demotions and written or verbal warnings

advantages of sanction

• clear and easily understood

• brings other employees behaviour into line

• motivates some workers to improve their work performance

Disadvantages of sanction

• short term

• when excessive, can reduce employee motivation and belonging

• resentment between managers and staff

The employment cycle

• establishment phase

• maintenance phase

• termination phase

Training

the process of teaching staff to perform their job more productively. can be on or off the job

on-the-job training

where employees learn by performing tasks, providing practical, hands-on experience

off-the-job training

employee learning conducted outside the workplace in a classroom or workshop style

Benefits of training for employees

• opportunity for promotion and self-improvement

• adds challenge

• improved satisfaction through better performance

• increases adaptability

benefits of training for the business

• higher productivity

• reduced errors and costs

• more effectively meet goals and objectives

• more capable, mobile workforce

Development

the process of providing employees with better knowledge and skills as they gain more experience in their position in the business and take on more responsibility

Succession planning

ensuring that there are managers in the business who are able to step into senior management positions if a vacancy occurs.

off-the-job training advantages

• new perspective from professionals

• likely in a distraction free environment

• employability may improve

• doesn’t take more experienced employees away from their job to train others

• errors that may occur are not onsite, and dont impact the business

off-the-job training disadvantages

• workflow may be disrupted

• employees may look for a job elsewhere with their new qualifications

• may struggle to apply information-based knowledge to the workplace

• travel time may be long

• could be expensive to pay external organisations

on-the-job training advantages

• minimises loss of productivity

• can develop strong relationships with trainers

• avoid additional hours outside of work

• quickly become familiar with equipment

• quickly adapt to workplace

• less expensive

on-the-job training disadvantages

• may lack experienced staff who can train

• employees not being trained may be disrupted by the process

• distractions may occur in the workplace

• may learn bad habits

• takes trainers away from other work duties

performance management

a focus on improving both business and individual performance through relating business performance objectives to individual employee performance objectives

performance management strategies

• appraisal

• management by objectives

• employee self-evaluation

• employee observation

performance appraisal

the formal assessment of how well an employee is performing in their role in a business in a set period. typically set out in advance and matching business culture

methods of performance appraisal

• essay method. manager keeps a journal on each employee being appraised

• critical incident method. only extremely good and bad instances are recorded in an essay method

• comparison method. each employee is ranked according to a list of predetermined performance criteria

advantages of performance appraisal

• facilitates communication

• feedback improves performance

• develops positive relationships between employees and managers

disadvantages of performance appraisal

• time consuming

• stressful for both parties

management by objectives

a process by which management and employees agree on a set of goals for each employee, with these goals contributing to the objectives of the business as a whole

advantages of management by objectives

• improved communication

• increased employee awareness of business objectives

disadvantages of management by objectives

• costly and time consuming

• not always useful

• meetings and reports put extra stress on managers and employees

employee self-evaluation

a process whereby employees carry out a process of self-assessment, based on a set of agreed criteria. It should also account for their individual career aspirations and be documented.

advantages of employee self-evaluation

• active involvement helps employee better understand their job role

• helps understand their strengths and weaknesses

• gains insight into how employees perceive their performance

• highlights potential need for training, which can be requested

disadvantages of employee self-evaluation

• may overstate performance

• may feel ill-equipped to complete

• management may need to take on some responsibility for performance management

Employee observation

a strategy where a variety of opinions on the performance of employees is sought with the aim arriving at a more comprehensive picture of past and current performance

advantages of employee observation

• identifies strengths and weaknesses

• evaluates leadership, teamwork and interpersonal skills

• gives comprehensive picture of staff performance

disadvantages of employee observation

• doesn’t asses technical skills and achievement of business objectives

• expensive and time consuming

• must be applied in a business with a high degree of trust

• could be swayed by personal opinions

termination management

the process by which either an employee or employer ends the employment contract and stops working at the business

voluntary termination

where the employee decides to leave the business

involuntary termination

where the business decides to terminate the employee

retirement

a form of voluntary termination where an individual decides to leave the workforce permanently as they no longer wish to work. They are entitled to their super

resignation

involves an employee voluntarily terminating their own employment, usually to take another job elsewhere. They are entitled to any accrued and long service leave

voluntary redundancy

employee no longer working due to insufficient work, cant be paid or job no longer existing. the business will then allow employees to nominate themselves after announcing that this process will occur. They are entitled to all remaining pay and leave

involuntary redundancy

manager notifies employees that their position in the company is no longer relevant. employees are entitled to redundancy pay, a valid reason, and all remaining pay and leave

dismissal

involuntary termination of an employee who fails to meet required work standards or displays unlawful or acceptable behaviour. pay and accrued leave is owed to the employee

termination considerations

the social and ethical practices that a manager can consider implementing when terminating employment

employee notice for termination

• working at the business for less than a year = 1 week notice

• 1-3 years = 2 week notice

• 3-5 years = 3 weeks notice

• 5+ years = 4 weeks notice

for voluntary termination each employee MUST provide 2 weeks notice

participants in the workplace

human resource managers, employees, employer associations, unions and the fair work commission

human resource managers

individuals who coordinate the relationship between employees and management within a business.

employees

individuals who are hired by a business to complete work tasks and support the achievement of objectives

employer associations

advisory bodies that assist employers in understanding and upholding their legal business obligations.

Unions

organisations comprised of individuals that represent and speak on behalf of employees in a particular industry to protect and improve their wages and working conditions

Fair work commission (FWC)

Australia’s independent workplace relations tribunal that has a range of responsibilities outlined by the fair work act.

National employment standards (NES)

11 minimum entitlements that apply to all employees (such as hours, leave and pay) under the fair work act. These standards cannot be removed by any award or agreement

better off overall test (BOOT)

a test used by the fair work commission to check if a new enterprise agreement is better overall than the relevant current award.

Good faith bargaining

the notion when negotiating a business agreement employees and employers (or unions) must both act in good faith, meaning they actively participate in discussions, considering and responding to proposals, and providing relevant information

dispute resolution

a formal process to resolve conflicts between employers and employees, preventing strikes, lost productivity and legal issues

mediation

a neutral third party helping both sides negotiate and form a non legally binding solution. It is used for minor disputes

arbitration

a formal legal process where an independent third party hears both sides and makes a legally binding decision. This is used for severe disputes.

award

a legally binding document that sets the minimum employment standards for wages and working conditions in a specific industry or occupation

enterprise agreement

a workplace-specific agreement negotiated between an employer and employees (or union) outlining wages and working conditions beyond the award

dispute resolution stages

1. attempt to solve dispute internally

2. if internal resolution fails, engage a 3rd party

3. utilise mediation

4. if mediation fails, use arbitration

advantages of mediation

• promotes positive working relationships

• less expensive

• both parties have control

• communications breakdown is unlikely

disadvantages of mediation

• final decision can’t always be reached

• could waste time

• unbalanced power dynamic creates potential bias

• parties could go back on agreement in future

advantages of arbitration

• guarantees a final decision

• likelihood of power imbalance is reduced

• decision is legally binding

disadvantages of arbitration

• may harm workplace relations

• time consuming

• both parties have reduced control

• expensive