Section 2 People in Business Flashcards
Why do people work?
- Have a better standard of living: by earning incomes they can satisfy their needs and wants
- Be secure: having a job means they can always maintain or grow that standard of living
- Gain experience and status: work allows people to get better at the job they do and earn a reputable status in society
- Have job satisfaction: people also work for the satisfaction of having a job
What is motivation?
The reason why employees want to work hard and work effectively for the business.
What are the benefits of a well-motivated workforce?
When workers are well-motivated,
- they become highly productive and effective in their work
- become absent less often
- less likely to leave the job,
thus increasing the firm’s efficiency and output, leading to higher profits.
What is Maslow’s hierarchy?
Abraham Maslow’s hierarchy of needs shows that employees are motivated by each level of the hierarchy going from bottom to top.
What are the levels of Maslow’s hierarchy?
Physiological needs -> Safety/security needs -> Social needs -> Esteem needs -> Self-actualization
What are the two motivational theories?
- F.W. Taylor’s Theory
- Herzberg’s 2 Factor Theory
What is Taylor’s theory?
Taylor based his ideas on the assumption that:
- workers were motivated by personal gains, mainly money and that increasing pay would increase productivity (amount of output produced).
- Therefore he proposed the piece-rate system, whereby workers get paid for the number of output they produce.
- So in order, to gain more money, workers would produce more.
What is Herzberg’s 2 Factor Theory?
Frederick Herzberg’s two-factor theory, he states that people have two sets of needs:
1. ‘hygiene factors’
- status
- security
- work conditions
- company policies and administration
- relationship with superiors
- relationship with subordinates
- salary
- ‘motivators’
- achievement
- recognition
- personal growth/development
- promotion
- work itself
What are wages?
Payment for work, usually paid weekly
What are 2 ways to calculate wages?
- Time rate
- Piece rate
What is a time rate?
The amount paid to an employee for one hour of work
What is a piece rate?
The amount paid for each unit of output
What is a salary?
Payment for work, usually paid monthly
What is a bonus?
An additional amount of payment above basic pay as a reward for good work
What is a commission?
Payment relating to the number of sales made
What is profit sharing?
A system whereby a proportion of the company’s profits is paid out to employees
What is job satisfaction?
The enjoyment derived from feeling that you have done a good job
What is job rotation?
Involves workers swapping and doing each specific task for only a limited time and then changing around again
What is job enrichment?
Involves looking at jobs and adding tasks that require more skill and/or responsibility
What is teamworking?
A group of workers is given responsibility for a particular process, product or development. They can decide as a team how to organize and carry out the tasks
What is training?
The process of improving a workers skills
What is promotion?
The advancement of an employee in an organization
What is an organizational structure?
Refers to the levels of management and division of responsibilities within a business. They can be represented on organizational charts
What are the advantages of an organizational structure?
- All employees are aware of which communication channel is used to reach them with messages
- Everyone knows their position in the business. They know who they are accountable to and who they are accountable for
- It shows the links and relationship between the different departments
- Gives everyone a sense of belonging as they appear on the organizational chart
What is the span of control?
The number of subordinates working directly under a manager in the organizational structure
What is the chain of command?
The structure of an organization that allows instructions to be passed on from senior managers to lower levels of management
What is the link between the span of control and the chain of command?
The wider the span of control the shorter the chain of command
What are the roles and responsibilities of directors?
They are senior managers who lead a particular department or division of a business
What are the roles and responsibilities of line managers?
They have direct responsibility for people below them in the hierarchy of an organization
What are the roles and responsibilities of supervisors?
They are junior managers who have direct control over the employees below them in the organizational structure
What are the roles and responsibilities of staff managers?
They are specialists who provide support, information and assistance to line managers
What are the roles and functions of management?
- Planning
- Organizing
- Coordinating
- Commanding
- Controlling
What is delegation?
Giving a subordinate the authority to perform particular tasks
What are the advantages of delegation for managers?
- Managers cannot do all the work by themselves, therefore when delegating, managers are able to concentrate their time on other important management functions
- Managers can measure the efficiency and effectiveness of their subordinates’ work
What is the disadvantage of delegation for managers?
Managers may be reluctant to delegate as they may lose their control over the work
What are the advantages of delegation for subordinates?
- The work becomes more interesting and rewarding- increased job satisfaction
- Employees feel more important and trusted– increasing loyalty to the firm
- Can act as a method of training and promotion opportunities, if they do a good job
What are the 3 main leadership styles?
- Autocratic leadership
- Democratic leadership
- Laissez-faire leadership
What is autocratic leadership?
Where the manager expects to be in charge of the business and to have their orders followed
What is a potential advantage of autocratic leadership?
- Quick decision-making
What is a potential disadvantage of autocratic leadership?
- No opportunity for employee input into key decisions which can be demotivating
What is democratic leadership?
Gets other employees involved in the decision-making process
What is a potential advantage of democratic leadership?
- Better decisions could result from consulting with employees and using their experience and ideas
- Also being a motivating factor
What is a potential disadvantage of democratic leadership?
Unpopular decisions such as making workers redundant could no effectively be made using this style of leadership
What is laissez-faire leadership?
Makes the broad objectives of the business known to employees but then they are left to make their own decisions and organize their own work
What is a potential advantage of laissez-faire leadership?
Encourages employees to show creativity and responsibility
What is a potential disadvantage of laissez-faire leadership?
Unlikely to be appropriate in organizations where a consistent and clear decision-making structure is needed
What is a trade union?
A group of employees who have joined together to ensure their interests are protected
What are the effects of employees being union members?
- Strength in numbers when negotiating with employers
- Improved conditions of employment
- Improved environment where people work
- Improved benefits for members who are not working because they are sick
What is the role of the Human Resources department?
- Recruitment and selection
- Wages and salaries
- Industrial relations
- Training programmes
- Health and Safety
- Redundancy and dismissal
When do businesses need to start the process of recruitment and selection?
- When an employee leaves their job and need to be replaced
- When a new business is starting up and needs employees
- When a business is successful and wants to expand by employing more people
What are the steps of the recruitment process?
- Vacancy arises
- Job analysis
- Job description
- Job specification
- Job advertised in appropriate media
- Application forms and shortlisting
- Interviews and selection
- Vacancy filled
What is a job analysis?
Identifies and records the responsibilities and tasks relating to a job
What is a job description?
Outlines the responsibilities and duties to be carried out by someone employed to do a specific job
What is a job specification?
A document which outlines the requirements, qualifications, expertise, physical characteristics, etc., for a specified job
What is internal recruitment?
When a vacancy is filled by someone who is an existing employee of the business
What are the advantages of internal recruitment?
- Quicker and cheaper than external, which may involve expensive advertising
- The person is already known to the business
- The person also knows how the organization works
- Very motivating for employees to see their colleagues being promoted which makes them work harder to ensure that promotion is possible for them
What are the disadvantages of internal recruitment?
- No new ideas or experience come into the business
- Rivalry among existing employees and jealousy towards the worker who gains promotion
- Quality of internal candidates may be low
What is external recruitment?
When a vacancy is filled by someone who is not an existing employee and will be new to the business
What is the difference between internal and external recruitment?
- Internal recruits candidates from inside the business
- External recruits candidates from outside the business
How do you recommend which workers to employ?
Based off of these factors:
- Work experience
- Educational and other qualifications
- Age
- Internal
- External
What is part-time employment?
Often considered to be between 1 and 30-35 hours a week
What are the advantages of a business employing part-time employees?
- More flexible in the hours of work
- Easier to ask employees just to work at busy times
- Easier to extend business opening/operating hours by working evenings or at weekends
- Fits in with looking after children and therefore employee is willing to accept lower pay
- Reduces business costs compared to employing a full-time employee
- In some countries, it is easier to make part-time workers redundant
What are the disadvantages of a business of part-time employees?
- Less likely to seek training because the employee may see the job as temporary
- Takes longer to recruit two part-time workers than one full-time employee
- Part-time employees can be less committed to the business and may be more likely to leave to get another job
- Less likely to be promoted because they will not have gained the same skills and experience as full-time employees
- More difficult to communicate with part-time employees when they are not in work
What is full-time employment?
Employees that usually work 35 hours or more a week
Why is training important to a business?
- Introduce a new process or new equipment
- Improve the efficiency of the workforce
- Provide training for unskilled workers to make them more valuable to the company
- Decrease the supervision needed
- Improve the opportunity for internal promotion
- Decrease the chances of accidents
Why is training important to employees?
- To increase skills
- To increase knowledges
- To improve employees’ attitudes
What is induction training?
An introduction given to a new employee, explaining the business’s activities, customs and procedures and introducing them to their fellow workers
What are the advantages of induction training?
- Helps new employees to settle into their jobs quickly
- May be a legal requirement to give health and safety training at the start of a job
- Means workers are less likely to make mistakes
What are the disadvantages of induction training?
- It is time-consuming
- Means wages are paid but no work is being done by the worker`
- Delays the start of the employee commencing their job
What is on-the-job training?
Occurs by watching a more experienced worker doing the job
What are the advantages of on-the-job training?
- Individual tuition is given and it is in the workplace so the employee does not need to be sent away (travel costs are expensive)
- It ensures there is some production from the workers while they are training
What are the disadvantages of on-the-job training?
- The trainer will not be as productive as usual because they are showing the trainee what to do instead of getting on with their job
- The trainer may have bad habits and they may pass these on the trainee
- It may not lead to training qualifications recognised outside the business
What is off-the-job training?
Involves being trained away from the workplace, usually by specialist trainers
What are the advantages of off-the-job training?
- A broad range of skills can be taught using these techniques
- Employees may be taught a variety of skills and they may become multi-skilled which can allow them to do various jobs in the company when the need arises.
What are the disadvantages of off-the-job training?
- Costs are high
- It means wages are paid but no work is being done by the worker
- The additional qualifications means it is easier for the employee to leave and find another job
What is dismissal?
When employment is ended against the will of the employee, usually for not working in accordance with the employment contract
What is redundancy?
When an employee is no longer needed and so loses their job. It is not due to any aspect of their work being satisfactory
Why is reducing the size of the workforce necessary?
This can be because of:
- Introduction of automation
- Falling demand for their goods or services
- Factory/shop/office closure
- Relocating their factory abroad
- A business has merged or been taken over and some jobs have become surplus to requirements in the newly combined business
Which workers in a business should be made redundant?
- Some workers may volunteer and be happy to be made redundant
- Workers who have worked for the business for a long time are often retained and are the most expensive to make redundant
- Workers with essential skills that are needed by the business or whose skills could be transferable to other departments are often retained
What legal control areas are employees protected in?
- Against unfair discrimination
- Health and safety at work (protection from dangerous machinery, safety clothing and equipment, hygiene conditions, medical aid etc.)
- Against unfair dismissal
- Wage protection
What is a contract of employment?
A legal agreement between an employer and employee, listing the rights and responsibilities of workers
What is the impact of employment contracts on employers and employees?
- Both employers and employees know what is expected of them
- It provides some security of employment to the employee
- If the employee does not meet the conditions of the contract then legal dismissal is allowed
- If the employer fails to meet the conditions of the contract, then the employee can seek legally binding compensation
What is an industrial tribunal?
A type of law court that makes judgements on disagreements between companies and their employees
What is unfair dismissal?
This is when an employer ends a worker’s contract of employment for a reason that is not covered by that contract
What is the impact of unfair dismissal on the employer and employee?
- Employers must keep very accurate records of a worker’s performance if they want to claim that the employee
- Employees have security of employment
- Allows employees to take their employer to an industrial tribunal if they feel they have been treated unfairly
What is the impact of health and safety on the employers and employees?
- Cost to the employer of meeting the health and safety regulations
- Time needs to be found to train workers in health and safety precautions
- Workers feel ‘safer’ and more motivated at work
- Reduces accident rate and the cost of compensation for workers injured at work
What is the impact of legal minimum wage on employers and employees?
- It should prevent strong employers from exploiting unskilled workers who could not easily find other work
- As many unskilled workers will now be receiving higher wages -> it might encourage employers to train them to make sure that they are more productive
- It will encourage more people to seek work -> fewer shortages of workers
- Low-paid workers will earn more and will have higher living standards -> they will be able to afford to buy more
What is communication in business?
The transferring of a message from the sender to the receiver, who understands the message.
What is a message in business?
The information or instructions being passed by the sender to the receiver
What is the purpose of communication?
- To provide info about the business
- To collect information
- To give instructions
- To coordinate different functions of the business
What is internal communication?
Communication between members of the same organization
What is external communication?
Communication between the organization and other organizations or individuals
What does effective communication involve?
- A transmitter
- A medium of communication
- A receiver
- Feedback
What is a transmitter in business?
The personal starting off the process by sending the message?
What is the medium of communication in business?
The method used to send a message
What is the receiver in business?
The person who receives the message
What is feedback in business communication?
The reply from the receiver which shows whether the message has arrived, been understood and if necessary acted upon
What is one-way communication?
Involves a message which does not call for or require a response
What is two-way communication?
When the receiver gives a response to the message and there is a discussion about it
What are the advantages of two-way communication?
- It should become absolutely clear to the send whether or not the person receiving the message has understood it and acted upon it
- Both people are now involved in the communication process -> therefore the receiver feels more a part of the process -> he/she can make a real contribution to the topic
How to choose the most appropriate communication method?
- Speed
- Cost
- Message details
- Leadership style
- The receiver
- Importance of a written record
- Importance of feedback
What are examples of verbal methods?
Telephone conversation, face-to-face conversation, video conferencing, meetings, etc.
What are the advantages of verbal communication?
- Quick and efficient
- There is an opportunity for immediate feedback and two-way communication
- Speaker can reinforce the message- change his tone, body language etc. to influence the listeners.
What are the disadvantages of verbal communication?
- Can take long if there is feedback and therefore, discussions
- In a meeting, it cannot be guaranteed that everybody is listening or has understood the message
- No written record of the message can be kept for later reference.
What are examples of written communication?
Letters, memos, text-messages, reports, e-mail, social media, faxes, notices, signboards
What are the advantages of written communication?
- There is evidence of the message for later reference.
- Can include details
- Can be copied and sent to many people, especially with e-mail
- E-mail and fax is quick and cheap
What are the disadvantages of written communication?
- Direct feedback may not always be possible
- Cannot ensure that message has been received and/or acknowledged
- Language could be difficult to understand.
- Long messages may cause disinterest in receivers
- No opportunity for body language to be used to reinforce messages
What are some examples of visual communication?
Diagrams, charts, videos, presentations, photographs, cartoons, posters, etc.
What are the advantages of visual communication?
- Can present information in an appealing and attractive way
- Can be used along with written material (eg: reports with diagrams and charts)
What are the disadvantages of visual communication?
- No feedback
- May not be understood/ interpreted properly.
What is formal communication?
When messages are sent through established channels using professional channels
What is informal communication?
When information is sent and received casually using everyday language
What are communication barriers?
Factors that stop effective communication of messages
What are barriers to communication in terms of the sender?
- Poor attitude/body language wrong
- Unclear message
- Message too long
- Sent to wrong person
What are barriers to communication in terms of the receiver?
- Lack of trust
- Poor attitude
- Does not listen
What are barriers to communication in terms of the communication medium?
- Too many people pass on the message
- Message may be lost
- Wrong channel used
- Technical breakdown
What are barriers to communication in terms of the feedback?
- Not sent
- Unclear
- Not asked for
