1.4 Business key terms (part 3)

Question 1

bonus

Answer 1

a payment in addition to the basic wage for reaching targets or in recognition for service

Question 2

commission

Answer 2

percentage payment on a sale made to the salesperson

Question 3

consultation

Answer 3

listening to the views of employees before making key decisions that affect them

Question 4

delegation

Answer 4

the passing of authority further down the managerial hierarchy

Question 5

empowerment

Answer 5

giving official authority to employees to make decisions and control their own work activities

Question 6

Hawthorne effect

Answer 6

the idea that workers are motivated by recognition given to them as a group

Question 7

Hygiene (or maintenance) factors - Herzberg’s

Answer 7

things at work that result in dissatisfaction if they were unkempt, but will not result in any change of productivity if improved

• payment
• work environment

Question 8

job enlargement

Answer 8

giving an employee more work to do of a similar nature; horizontally extending their work role

Question 9

job enrichment

Answer 9

giving employees greater responsibility and recognition by vertically extending their work role

Question 10

job rotation

Answer 10

periodically changing an employees’ job or tasks

Question 11

Maslow’s hierarchy of needs

Answer 11

the order of employees’ needs:
1) (bottom) physiological needs: obtaining food, drink, air, rest and activity
2) safety needs: - protection from potential work related accidents (physical)
- job security
- protection from psychological threats
3) love and belonging: - teamwork and communication
- being part of a supportive group and feeling included and loved
4) esteem needs: - given recognition for work ethics
- feeling competent
5) (top) self actualisation: realising your full potential
which Maslow argued that very few reach this level, almost figuratively unreachable

Question 12

motivated

Answer 12

the desire to take action and achieve goals

Question 13

motivators (Herzberg’s)

Answer 13

things at work that result in job satisfaction

recognizing employees’ efforts and work

Question 14

payment by results

Answer 14

payment methods that reward workers for the quantity and quality of work they produce

Question 15

performance related pay (PRP)

Answer 15

a payment system designed for non manual workers where pay increases are given in performance targets are met

Question 16

piece rates

Answer 16

a payment system where employees are paid an agreed rate for every item produced

Question 17

profit sharing

Answer 17

where workers are given a share of the profits, usually as a part of their pay

Question 18

scientific management

Answer 18

a theory that suggests there is a “best way” to perform work tasks developed by Frederick W. Taylor:

• employees’ main motivation is simply - money
• pay should be linked to output through piece rates
• exceeding target -> receiving more bonuses
• not meeting target -> resulting in loss of earnings

Question 19

self actualisation

Answer 19

a level in Maslow’s hierarchy where people realise their full potential

Question 20

teamworking

Answer 20

organising people into working groups that have a common aim

Question 21

autocratic leadership

Answer 21

a leadership style where a manager makes all the decisions without consultation:

• very little delegation
• most likely to be used when subordinates are unskilled, not trusted and their ideas are not valued
• communication is top-down & one-way
• use of rewards and penalties

Question 22

democratic leadership

Answer 22

a leadership style where managers allow others to participate in decision making:

• focus of power is more with the group as a whole
• likely to be most effective when used with skilled, free-thinking and experienced subordinates
• results in positive emotional connotations
• emphasis on delegation and consultation – but the leader still has the final say

Question 23

laissez-fair leadership

Answer 23

a leadership style where employees are encourage to make their own decisions, within certain limits:

• effective when staff are ready and willing to take on responsibility, they are motivated, and can be trusted to do their jobs
• delegation of power

Question 24

paternalistic leadership

Answer 24

a leadership style where the leader makes decisions but takes into account the welfare of employees:

• leaders decide what is best for employees
• little delegation
• softer form of autocratic leadership, which often results in better employee motivation and lower staff turnover