Unit 2: People in business

6. Motivating employees

Benefits of a well-motivated workforce

• Improved productivity

• Lower rate of absenteeism

• Lower rate of employee turnover (less employees leave the business)

• Better quality of goods and services

• More internal competition 

Maslow’s hierarchy of needs

• Physiological needs (shelter, food, drink)

• Safety needs

• Social needs (a sense of belonging)

• Esteem needs

• Self-actualisation

F. W. Taylor theory: employees are motivated by money alone

 Herzberg

• Hygiene: factors that must be present in the workplace to avoid job dissatisfaction (basic working conditions)

• Motivation: factors that influence a person to put in more effort (achievements,...)

Financial rewards

• Hourly wage: employees are paid a fixed amount for the no. of hours they work

(the pay they receive is not linked to the work they put in)

• Salary: employees are paid annually

• Piece-rate: payment to employees based on their work output (fluctuating pay)

• Commission: payment based on the value of items they sell

• Bonus-scheme: bonuses for employees who achieve the goal set my managers

• Fringe benefits: non-cash rewards used to retain employees (e.g. company discounts,...)

• Profit sharing: additional pay based on profit made by business

Non-financial rewards

Job rotation: employees given new tasks

Job enrichment: satisfaction

Job enlargement: increasing task importance

Quality circle: grp of employees who meet to discuss work-related issues

Delegation: passing on responsibility

7. Organisation and management

Hierarchy: the number of levels in a business structure

Chain of command: the line in which instructions are passed down

Span of control: the number of employees under a manager’s command

• Wide span of control

• Advantages: cost effective (less supervisors required), less supervision → increase motivation

• Disadvantages: reduce  promotion opportunities, less control over employees

• Narrow span of control (vice versa)

Tall organisational structure (hierarchy)

Has many layers of management, middle managements → narrow span of control, maximise specialisation, slow communication

Flat organisational structure

Few layers of middle management (managers are directly responsible for employees) → wide span of control, could cause disagreements, skill-based (employees need to be well-rounded), effective communication

Delayering: reducing the size of a business structure by removing levels (middle management)

Centralised organisation: executives makes all the decisions without input from employees → autonomy of employees restricted

Decentralised organisation: employees are involved in the decision making process → increased autonomy 

Leadership styles

Autocratic: executives make all decisions without employee input → autonomy restricted (strict supervision)

Democratic: employees take part in the decision making → increase autonomy and responsibilities of employees

Laissez-faire: most of the authority are left to the employees, leaders act as a supporting role

Roles of a manager

• Planning (setting objectives)

• Organising

• Commanding/Controlling (include motivating)

• Coordinating (communication)

Delegation: give tasks/authority to employees, manager still responsible for the task

Trade unions: an group of employees aimed at improving working conditions (also provide legal advice)

8. Recruitment, selection and training of employees

Internal recruitment: filling a vacant position with an employee already in the company (e.g. promotion, job rotation)

External recruitment: filling a vacant position with someone from outside the company

Stages of recruitment process:
→ business identify a position needed to be filled

→ produce job description

→ job is advertised

→ receive job applications

→ business shortlists from all the application forms received 

→ candidates are interviewed

→ the right candidate is selected

Job description: a detailed document about the requirements and responsibilities of the job

Methods of employee training:

• Induction training: a training program to help new employees familiarise themselves with the job and their working environment

• On-the-job training: training conducted inside the workplace (e.g. following an experienced worker)

• Off-the-job training: training conducted outside the workplace (trained by a specialist) 

Resignation: termination of an employee by their own volition 

Retirement: termination of employee due to their age

Redundancy: termination of employee since the job is no longer needed

Dismissal: termination of employee due to the employee not meeting the job’s requirement

Legal controls over employment issues (law preventing businesses from exploiting employees)

• Unfair dismissal

• Minimum wage

• Contracts of employment (a legally binding contract between the employer and employee)

• Discrimination

• Health and Safety

9. Internal and external communication

Effective communication:

• Reduce mistakes

• Fast decision making

• Improve coordination

• Improve morale → employee retention

• Improve customer service

Types of communications:

• Electronic

• Oral (spoken words, two-way communication)

• Written (permanent record of message)

• Visual (vid, photos)

Barriers of communication:

• Problems with communication channel

• Problems between sender and receiver (conflict)

• Problems with physical environment (problem with the location the conversation is held in)