1.4 - Managing People Flashcards
Treating staff as an asset
Treating employees as the most important resource in the business, planning their needs accordingly
Features of treating staff as an asset
- Strong and regular two way communication with staff
- Employees are empowered and encouraged to take responsibility
- Focus on the needs of the employee such as their roles, rewards and motivation
Benefits of treating staff as an asset
- Lower staff turnover
- Motivated employees making them more productive
- Lower hiring and advertising costs for replacments
Drawbacks of treating staff as an asset
- Higher costs of wages and providing benefits
- Lower staff turnover could result in fewer new ideas coming into the business
Treating staff as a cost
Treating employees simply as a resource of the business
Features of treating staff as a cost
- Minimal communication
- Paying just enough to recruit and retain staff
- Little empowerment or delegation
Benefits of treating staff as a cost
- Lower cost of wages and providing benefits
- Higher staff turnover could bring new ideas into the business
Drawbacks of treating staff as a cost
- Higher staff turnover
- Demotivated employees who are less productive
- Higher hiring costs to replace leavers
Flexible working
Where there are a variety of options offered to employees in terms of working time, working location and the pattern of working
Ways to increase workforce flexibility
- Multiskilling
- Part time and temporary staff
- Zero hour contracts
- Flexible hours and home working
- Outsourcing
Multiskilling
Process of increasing the skills of employees
Zero hours contract
A contract that doesn’t guarantee any particular number of hours’ work
Outsourcing
Practice of hiring a party outside a company to perform services or create goods, doing work that was originally done in house
Benefits of a flexible workforce
- Saving on overheads as no need to provide an office
- Staff retention through higher job satisfaction and staff morale
Drawbacks of a flexible workforce
- Additional administrative work is required in setting up and running flexible working
- Potential loss of customers if key employees reduce their working hours
- Potentially lower employee productivity
Benefits of outsourcing
- Enables specialist skills and resources at a lower cost than maintaining in house operations, improving cost efficiency
- Outsourcing non core functions can allow organisations o focus on their core competencies and strategic activities
- Provides access to global pool of talent and expertise
Drawbacks of outsourcing
- Loss of control can impact quality and reliability, affecting the business’ brand image
- Communication barriers may lead to misunderstandings or delays in outsourced tasks
- Concerns of data security, confidentiality and quality control
Dismissal
Termination of the employment by the employer due to gross misconduct or ongoing performance issues
Redundancy
When an employer eliminates a job role or reduces the workforce leading to termination of employment
Employee representation
When employees are part of a formal structure for involving them in the decision making process of a business
Advantages of employee representation
- Increased empowerment and motivation of the workforce
- Employees become more committed to the objectives and strategy of the business
- Better decision making employee experience and insights taken into account
- Lower risk of industrial disputes
Disadvantages of employee representation
- Time consuming
- Conflicts between employer and employee interests may be a block to change
- Managers may feel their authority is being undermined
Main roles of trade unions
- Protect and improve the real incomes of their members
- Provide or improve job security
- Protect workers against unfair dismissal
- Lobby for better working conditions
Methods of industrial action
- Work to rule
- Overtime ban
- Go slow
- Strike
Work to rule
When employees the strict conditions of their employment contract
Overtime ban
When employees refuse to work overtime
Go slow
When employees work at the slowest or least productive pace that is allowable under their employment contract
Damage for the business from industrial action
- Lost sales and profit from the lost output
- Damage to customer satisfaction
- Internal distraction for management
- Damaged relationship with staff may affect motivation and productivity
Damage for the employee from industrial action
- Lost pay
- Potential loss of jobs if the action results in action to cut costs
- Possible loss of customer and public support
- Risk that illegal action will result in legal proceedings
Typical agenda for a works council
- Business objectives and performance
- Workforce planning issues
- Employee welfare issues
- Training and development programmes
- Compliance with legislation
Mediation
Involves an independent, impartial person helping two or more individuals or groups to reach a solution acceptable to everyone, with an aim to restore and maintain the employment relationship wherever possible
Conciliation
Used when an employee is making or could make a specific complaint against their employer to an employment tribunal, conciliator discusses the issues with both parties to help them reach a better understanding of each other’s position
Arbitration
An alternative to a court of law, involving an impartial outsider being asked to make a decision on a dispute
Internal recruitment
Process of filling job vacancies within an organisation by considering existing employees
External recruitment
Process of filling job vacancies by seeking candidates from outside the organisation
Benefits of internal recruitment
- Cheaper and quicker to recruit
- People already familiar with the business
- Provides opportunities for promotion
Drawbacks of internal recruitment
- Limits number of potential applicants
- No new ideas from outside the business
- May cause conflict over who was chose for the promotion
- Creates another vacancy that needs to be filled
Benefits of external recruitment
- Outside people can bring in new ideas
- Larger pool of candidates
- People have a wider range of experience
Drawbacks of external recruitment
- Longer process
- More expensive due to costs of advertising and interviews
- Selection process may not be effective to reveal the best candidate
Potential benefits of training
- Better productivity
- Higher quality
- More flexibility through better skills
- Less supervision required
- Improved motivation through greater empowerment
- Better recruitment and employee retention
On the job training
When an employee receives training whilst remaining in the workplace
Methods of on the job training
- Demonstration
- Job rotation
- Projects
Benefits of on the job training
- Most cost effective
- Employees are productive
- Training with real colleagues
Drawbacks of on the job training
- Quality depends on trainer and time available
- Bad habits might be passed on
- Potential disruption to production
Off the job training
Employee training that takes place away from the work place
Methods of off the job training
- Day or part time attendance at college
- Professional development courses or conferences
- Online training
Benefits of off the job training
- Wider range of skills can be obtained
- Can learn from outside experts
- Employees can be more confident when starting the job
Drawbacks of off the job training
- More expensive
- Lost working time
- New employee may still need some induction training
Span of control
The number of employees a manager is responsible for
Chain of command
The lines of authority within a business, those at the top have more authority and can delegate tasks to subordinates
Levels of hierarchy
Number of layers of management or supervision in the organisation structure
Features of a tall structure
- Many layers of hierarchy
- Narrow spans of control
- Less delegation
- More opportunities for promotion
- Takes longer for communication to pass through the layers
- More layers means there is more staff increasing costs
Features of a flat structure
- Few layers of hierarchy
- Wide spans of control
- More delegation and empowerment
- Fewer opportunities for promotion
- Faster communcation
- Fewer layers means there is less staff reducing costs
Matrix structure
Individuals work across teams and projects as well as within their own department or function
Benefits of a matrix structure
- Helps break down traditional department barriers improving communication
- Individuals get to use their skills within a variety of contexts
- Likely to result in greater motivation amongst team members
- Encourages sharing of good practices and ideas across departments
- Good way of sharing resources across departments
Drawbacks of a matrix structure
- Members of project teams may have divided loyalties as they report to two line managers
- May not be a clear line of accountability for project teams
- Difficult to co-ordinate
- Team members may neglect their functional responsibilities
- Takes time for matrix team members to get used to working in this structure
Delayering
Removing layers of management from the hierarchy of the organisation
Benefits of delayering
- Lower labour costs
- Faster decision making
- Shorter communication paths
Delegation
The assignment to others of the authority for particular functions, tasks and decisions
Advantages of delegation
- Reduces management stress and workload
- Allows senior management to focus on key tasks
- Subordinates are empowered and motivated
- Better decisions or use of resources
- Good method of on the job training
Drawbacks of delayering
- Reduced promotion opportunities
- Resistance to change
- Increased workload for remaining staff
Disadvantages of delegation
- Should not delegate responsibility
- Depends on quality and experience of subordinates
- Harder in a small firm
- May increase workload and stress of subordinates
Employee empowerment
Giving employees the power to do their job
Centralisation
When decision making is firmly kept at the top of the hierarchy
Benefits of centralisation
- Easier to implement common policies and practices for the whole business
- Prevents other parts of the business from coming too independent
- Easier to co-ordinate and control from the centre
- Economies of scale and overhead savings are easier to achieve
- Usually quicker decision making
Drawbacks of centralisation
- More bureaucratic as often extra layers in the hierarchy
- Local or junior managers are likely much closer to customer needs
- Lack of authority down the hierarchy may reduce manager motivation
- Less flexibility and slower speeds of local decision making
Decentralisation
When decision making is spread out to include more junior managers in the hierarchy as well as individual business units or trading locations
Benefits of decentralisation
- Decisions are made closer to the customer
- Better able to respond to local circumstances
- Improved level of customer service
- Consistent with aiming for a flatter hierarchy
- Good way of training and developing junior management
- Should improve staff motivation
Drawbacks of decentralisation
- Decision making is not necessarily strategic
- Harder to ensure consistent practices and policies at each location
- May ne some diseconomies of scale
- Harder to achieve tight financial control
Financial incentives to improve employee performance
- Wages and salaries
- Bonus system
- Commission
- Profit sharing
- Performance related pay
- Fringe benefits
- Share options
- Piece rate payment
Non-financial incentives to improve employee performance
- Empowerment
- Praise
- Promotion
- Job enrichment
- Job enlargement
- Better communication
- Team working
- Job rotation
Piece rate payment
Pay per item produced in a period of time
Advantages of piece rate payment
- Requires low level of management supervision
- Encourages high speed production
- Provides good incentive for workers who are mainly motivated by pay
Disadvantages of piece rate payment
- Workers are focused on quantity not quality
- It is repetitive for workers and can be demotivating
- Workers are only used to one set method of production and may resistant change
Job enrichment
Giving employees more challenging and interesting tasks
Job enlargement
Giving employees more tasks of a similar complexity
Job rotation
When employees are regularly moved between different tasks, roles or departments within a company
Taylor’s scientific management
Theory that workers are motivated mainly by money and that businesses should use financial incentives (e.g., piece-rate pay) to increase output
Mayo’s human relations management
Theory that employees are motivated more by social factors (teamwork, communication, and recognition) than by financial incentives. His research, known as the Hawthorne Studies, showed that improving working conditions and fostering good relationships increased productivity
Maslow’s hierarchy of needs
Theory that suggests employees have different levels of needs that must be fulfilled in a specific order. Once a lower-level need is satisfied, individuals seek to fulfill the next level
The five levels in Maslow’s hierarchy of needs
- Physiological, basic needs like food and shelter
- Safety, a safe working environment and job security
- Social, sense of belonging and being part of a team
- Esteem, self respect and level of status
- Self-actualisation, intellectual needs and fulfilling potential or achieving targets
Herzberg’s two factor theory
Theory that employee motivation depends on two factors, hygiene factors and motivators
Hygiene factors in Herzberg’s two factor theory
Factors that can demotivate employees if not present but don’t actually motivate employees to work harder, such as pay and working conditions
Motivators in Herzberg’s two factor theory
Factors that directly motivate employees to work harder, such as responsibility at work and recognition
Roles of leaders
- Inspire people
- Build relationships
- Take risks
- Have followers
Roles of managers
- Enact the plan
- Use their authority
- Manage risks
- Have subordinates
Types of leadership style
- Autocratic
- Democratic
- Paternalistic
- Laissez faire
Features of autocratic leadership
- Focus of power is with the manager
- Communication is top down and one way
- Formal systems of command and control
- Use of rewards and penalties
- Very little delegation
Features of democratic leadership
- Focus of power is more with the group as a whole
- Leadership functions are shared within the group
- Employees have greater involvement in decision making
- Emphasis on delegation and consultation
Features of paternalistic leadership
- Leader decides what is best for employees
- Links with mayo addressing employee needs
- Similar to a parent and child relationship
- Softer form of autocratic leadership
Features of laissez faire leadership
- Leader has little input into day to day decision making
- Conscious decision to delegate power
- Managers and employees have freedom to do what they think is best
- Effective when staff are ready and willing to take on responsibility
Advantages of autocratic leadership
- Quick decision-making
- Clear direction
- Effective in low-skill workforces
Disadvantages of autocratic leadership
- Low employee motivation
- Lack of creativity
- High staff turnover
Advantages of democratic leadership
- Higher employee motivation and satisfaction
- Stronger teamwork and collaboration
- Encourages creativity and innovation
Disadvantages of democratic leadership
- Not effective for unskilled workers
- Slower decision-making
- Risk of poor decisions
Advantages of paternalistic leadership
- Increases employee loyalty
- Decisions benefit employees and business
- Clear direction and structure
Disadvantages of paternalistic leadership
- Employees have little say
- Can lead to over-dependence
- May not work in large businesses
Advantages of laissez faire leadership
- Works well with highly skilled teams
- Flexible work environment
- Encourages fast decision-making
Disadvantages of laissez faire leadership
- Lack of direction can lead to chaos
- Risk of inconsistent quality
- Lower productivity in some cases
Factors affecting leadership style
- Managers experience
- Confidence in subordinates
- Size and structure of the organisation
- Skills and experience of subordinates
- Effectiveness of teams and groups
