prelim 2 finance and people Flashcards
effects of the eqality act in 2010 6 marks
- any update in the equity act legislation means a company would have to update recruitment policies. this is time consuming to update. additional training may have to be provided which may reduce productivity whilst training takes place
- when advertising a position all companies must be carful of the wording used in any job advert to ensure there is no discrimination
- to provide equal opportunities all organisations must adapt to the workplace to allow employees to access the building and carry out their job. this willi lead to additional costs fro installing ramps, lifts and doors.
methods that motivate staff (9)
- fair pay
- payment methods
- incentives
- permanent contracts
- good working conditions
- staff appraisal
- recognition
- empowerment
- skill development
how does fair pay motivate staff
- to satisfy employees needs and wants
- when employees feel like they do not get paid enough or a fair amount they may feel demotivated
- productivity and quality of work willi decrease
how do payment methods motivate staff (4)
commission - gives sales people a percentage of the sales they make. motivates them to sell more
PRP - performance related pay is an extra payment on top of the basic wage for meeting agreed targets
price rate - employees are paid per item produced encouraging a higher work rate. quality of work may drop
overtime - when employees work longer then their contract for a higher pay rate encouraging extra production to meet demand
how to incentives motivate staff
financial incentives such as holidays cars or private health care may appeal to employees and motivate them to work for the company
how do permanent contracts motivate staff
employees must feel job security so organisations should avoid the use of temporary contracts
how do good working conditions motivate staff
employees must feel working conditions are safe. bad working conditions may demotivate staff. Improvement in working conditions such as new equipment may motivate staff for a short while
how does staff appraisal motivate staff
meetings with managers where employees are told what they are doing correct and are given targets to aim for willi increase motivation levels
how does recognition motivate staff
employees who want to progress in their career want to feel recognised
how do development opportunities motivate staff
employees want to develop skills so they can be up for promotion opportunities to improve their status
how does empowerment motivate staff
giving staff power to make decisions will increase job satisfaction
advantages of a democratic leadership style (2)
- employees have a say in decisions meaning they are more motivated
- managers have a final say but employees can contribute allowing for creativity and complex problem solving
disadvantages in a democratic leadership style
- mistakes can be made if workers are not skilled or experienced to make decisions
- some employees may be less productive compared to if they were under an autocratic manager
advantages of an autocratic leadership style (4)
- clear expectations are set
- decisions are made quickly
- when a manger is skilled and knowledgable it can work well
- productivity is high
disadvantages of having an autocratic leadership style (2)
- no opportunity for delegation of empowerment which may demotivate staff
- lack of creativity in decision making
advantages of a laissez faire leadership style (2)
- employees are highly empowered to make decisions motivating staff greatly
- very relaxed and clam working environment
disadvantages of a laissez faire leadership style (2)
- objections may not be met
- can only work in a high skilled and professional environment where workers are self motivated.
benefits of preparing a cash budget (4)
- a business can see when a deficit is expected. this allows the business to make financial arrangements in advance.
- a business can see when a surplus is expected as it will allow the business to invest in assets for the future. this will improve the quality of work and production.
- allow corrective action and anticipated overspend on certain payments/expenses
- present to a bank when applying for a loan
gross profit percentage formula
(gross profit/sales revenue) x 100
profit for the year percentage formula
(profit for the year/ sales revenue) x 100
Return on equity employed formula
(profit for the year/ equity) x 100
what does gross profit percentage measure
- measures profit made from buying and selling. the higher the percentage the better
- to improve percentage sales revenue can be raised
what does profit for the year percentage measure
- measures profits after expensive are deducted from the gross profit. the higher the better.
- to improve percentage you can reduce expenses such as lower wage costs by making staff redundant. increase sales revenue and improve gross profit
what does Return on equity employed measure
- measures percentage of investment that is returned to investors such as shareholders. the higher the better
- ways to improved percentage include attempting to increase profit for the year by reducing expensive
