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