Section 2 - People in Business Flashcards
Why do people work?
Money; security; social needs (feeling part of a group); self esteem; job satisfaction
Motivation
The reason why employees want to work hard and work effectively for the business
Why do businesses care about motivating workers?
well motivated workers -> high productivity -> increased output -> higher profits!
unhappy workers -> do not work very effectively -> low output -> low/ no profit :(
What are the three motivation theories?
Taylor, Maslow and Herzberg
What was Taylor’s motivational theory?
Taylor believed people were motivated by the idea of a higher wage. Taylor calculated ‘target outputs’ and if people met this, then they were paid more. He viewed employees as machines. This worked very well in the 1880’s.
What were the criticisms of Taylor’s theory?
- his ideas were too simplistic (people are motivated by other things besides money)
- if employees are unfulfilled in other ways, paying them more won;t increase effectiveness
- it may be difficult to measure an employee’s output
What was Maslow’s theory?
Maslow believed that there was a hierarchy of needs: the lower ones must be met before the higher ones. Managers must tend to the higher ones as well as the lower ones. The hierarchy goes: physiological needs (living wage); safety/ security needs (job security); social needs (friendly work colleagues); esteem needs (recognition for a job well done); self actualisation (being promoted/ given more responsibility)
What are criticisms of Maslow’s theory?
- some levels of the hierarchy are not important for some individuals
- sometimes rewards may not fit cleanly into certain levels (eg higher wages tend to physiological needs AND esteem needs eg fancy cars)
- Managers must identify which level each employee is at and find a way to offer the next level
What was Herzberg’s theory?
Herzberg believed that there were two sets of needs. ‘Hygiene’ needs must be met or else they can become demotivating, however having them doesn’t necessarily motivate workers. These include: salary, security, good work conditions, company policy, relationship with people, status. True motivators encourage workers to work more effectively. Eg achievement, recognition, personal growth, promotion, work itself.
Salary
A salary is a payment for work, usually paid monthly
Commision
Commission is payment relations to the number of sales one made.
Profit sharing
Profit sharing is a system whereby a proportion of the company’s profits is paid out to employees
Bonus
A bonus is an additional amount of payment above basic pay as a reward for good work
Performance-related pay
Performance-related pay is pay which is related to the effectiveness of the employee where their output can easily be measured
Share ownership
share ownership is where shares in the company are given to employees so that they become part owners in the company
Appraisal
a method of assessing the effectiveness of an employee
What are the three motivating factors?
Financial rewards, non-financial rewards and introducing ways to give job satisfaction
financial rewards: Wages
Workers get paid on a regular basis and doesn’t have to wait long for money. Tend to be paid to manual workers. If an employee works longer than normal, they can be paid overtime. This is an incentive to work extra. -wages must be calculated every week which takes time -wage clerks must be employed to do this which costs money
financial rewards: time rate
Time rate is a form of calculating wages. Workers get paid by the hour.
+very easy to calculate wage +good for when it is hard to calculate output eg hotel manager
-hours must be recorded on a time sheet -good and bad workers get paid the same -supervisors are required to make sure workers are working effectively -a clocking in system is neede to determine the no. of hours worked
financial rewards: piece rate
when workers are paid depending on quantity of products made. A basic rate is usually paid additional to quantity. +encourages workers to work faster to produce more goods
-workers may ignore quality -a quality control system is expensive -workers who are careful with their work may feel undervalued -if machinery breaks down, employees earn less money
financial rewards: salaries
salaries are paid monthly, straight into a bank-account. Usually for ‘white-collar’ workers. Calculated yearly and divided into 12 payments.
+employer has better cash flow because the money is in their bank account for longer +only must be calculated once a month
-paid for doing the job, extra work not paid for
Workers can get more money, in addition to their salary through other means.
Fringe benefits
non-financial rewards given to employees. vary according to seniority. eg company vehicle, health care, discount of firm’s products, children’s education fees paid etc.
job satisfaction: job rotation
job rotation involves workers swapping round and doing each specific task for only a limited time and then changing round again. +increased variety +easier for managers to cover sick workers -tasks are still as dull as ever.
job satisfaction: job enlargement
job enlargement is where extra similar tasks of a similar level of work are added to a worker’s job description. The extra tasks do not increase responsibility or add extra work, they only increase variety. eg a shelf stocker now must also put price labels on product
job satisfaction: job enrichment
job enrichment involves looking at jobs and adding tasks that require more skill and/or responsibility
job satisfaction: autonomous work groups or teamwork
where a group of workers is given responsibility for a particular process, product or development. They decide as a group how to carry out the task. Gives feeling of control over jobs/tasks and employees fell more commited. Working as a group creates a feeling of belonging.
Organisational structure
organisational structure refers to the levels of management and division of responsibilities.
Chain of command
chain of command is the structure in an organisation which allows instructions to be passed down from senior management to lower levels of management.
span of control
span of control is the number of subordinates working directly under a manager.
Advantages of an organisation chart
+The chart shows how everyone is linked together
+every individual can see their position
+it shows the links and relationship between departments
+everyone is in an apartment which gives them a sense of belonging
Delayering
when an organisation removes ‘layers’ of management for a larger span of control and a shorter chain of command
Advantages of short chain of command
+communication is quick/accurate
+Top manager are less remote
+span of controls will be wider, managers more motivated
+less control of workers, so they feel more trusted
-if the span of control is too broad, managers may lose control of workers
Line managers
line managers have direct responsibility over people below them in the hierarchy of an organisation
Staff managers
staff managers are specialists who provide support, information and assistance to line managers
What are the roles of management?
Planning (setting aims, finding ways to achieve them); organising (managers must delegate tasks); coordinating (making sure all departments are working together); commanding (validating deadlines etc.); controlling (making sure everyone is following targets)
Delegation
giving a subordinates the authority to perform particular tasks.
+managers cannot do everything themselves +less likely to make mistakes +managers can measure success more easily
+the work is more interesting for subordinate +the employee feels important/ trusted +helps trains= career oppurtunities
leadership styles
the different approaches to dealing with people when in a position of authority. There is autocratic, laissez-faire and democratic
Autocratic leadership
autocratic leadership is where the manager expects to be in charge of the business and to have their orders followed. Communication in the business is only one way: top-down.
Democratic leadership
democratic leadership gets other employees involved in the decision making process. Information about future plans will be openly discussed
Laissez faire leadership
laissez faire leadership is really hard to spell. laissez faire leadership makes the broad objectives of the business known to employees, but then they are left to make their own decisions and organise their own work.
Trade unions
a trade union is a group of workers who have joined together to ensure their interests are protected. >influence government decisions eg on minimum wage
>improve communication between workers and management
why do workers join trade unions?
+strength in numbers +improved conditions +improved wages +improved satisfaction +advice/ financial support +employment where there is a closed shop
-costs money to be a member -may be required to take action even if they don’t agree
closed shop
when all employees must be a member of the same trade union
recruitment
recruitment is the process from identifying that the business needs to employ someone, up to the point at which applications have arrived at the business
What does the human resources department do?
recruitment, wages, industrial relations, training department, health and safety, redundancy and dismissal
job analysis
a job analysis identifies and records the responsibilities and tasks relating to a job
job description
outlines the responsibilities and duties to be carried out by someones employed to do a specific job
job specification
a document which outlines the requirements, qualifications, expertise, physical characteristics etc. for a specified job.
internal recruitment
when a vacancy is filled by someone who is an existing employee of the business
+saves time and money +they are already known to be a good employee +person understands the organisation’s way of working +motivating for other workers to see their peers promoted
-no new ideas/ experience enter the business -jealousy/ rivalry among employees
external recruitment
when a vacancy is filled by someone who is not and existing employee and will be new to the business
ways to advertise external recruitment
local newspapers, national newspapers, specialist magazines/ journals, recruitment agencies, centres run by the government
application forms and CVs/ resumes
requires applicant to apply in writing by filling out an application form, a curriculum vitae or resume. The business uses these to see which applicants would be the best fit for the job
interviews
> to assess the applicant’s ability to do a job
any personal qualities that are an advantage or a disadvantage
general character of applicant
when an applicant is asked to provide a referee (a previous employer being asked to provide information on the applicants personality).
some businesses include tests eg skill tests, aptitude tests, personality tests, group situation tests
what is the 8 step recruitment and selection process?
- Analyse the exact nature of the program 2. Design a job description 3. Design a job specification 4. Advertise the vacancy 5. Send out application forms 6. produce a short list 7. hold interviews and selection tasks 8. select suitable applicants
part time
describes people who work between 1 and 30 to 35 hours a week
+more flexible +easier to ask employees to work at busy times +easier to extend business operating hours +less expensive
-less likely to be trained -takes longer to recruit two part time workers -less committed -less likely to be promoted -more difficult to communicate with
full time
full time employees will usually work 35 hours or more a week
induction training
an introduction is given to a new employee, explaining the firm’s activities, customs and procedures and introducing them to their fellow workers
+helps employees settle in faster +legal requirement of Health and Safety fulfilled +less mistakes
-time consuming -wages are paid but no work is done -delays start of job
on the job training
occurs by watching a more experienced worker doing the job
+training worker is productive +costs less +traiining is more specific +employee does not need to travel
-trainer not as productive -trainer may have bad habits -not recognized as training qualifications
off the job training
involves being trained away from the work place, usually by specialist trainers in a class room setting \+can teach a lot of things this way +employees still work at least part time +employees more versatile +the trainers are experts -high costs -wages are paid but little work is done -the really good training makes it easier for employees to find other jobs
workforce planning
establishing the workforce needed by the business for the foreseeable future in terms of the number and skills of employees required. due to automation, falling demand, retail closure, relocating factory, takeover.
Can be achieved by dismissal and redundancy and counting out workers who may retire or resign soon
dismissal
when a worker is told to leave their job because their work or behavior is unsatisfactory. The worker can take the business to court so businesses must be prepared to have valuable reasons to dismiss and employee.
Redundancy
when an employee is no longer needed and so loses their job. It is not due to any aspect of their work being unsatisfactory. Workers are more likely to be made redundant if they: volunteer, are newer, have fewer transferrable skills, have a poor attendance, are in a department that needs to workers
legal controls over employment issues
governments have passed laws that require businesses to follow certain regulations regarding: unfair discrimination, health and safety, unfair dismissal, wage protection
Protection against unfair discrimination
Occasionally employers will avoid accepting applicants based on their race, religion, sexual orientation, sex, age and disability status; or employers will offer them a lower wage. This is illegal in a lot of places and if an employee feels they have been discriminated against they can appeal to an equal opportunities commiteee
Health and safety at work
Employers are often required to ensure that employees are protected from dangerous machinery, receive regular breaks, do not have to work excessively long hours, provide safety equipment, maintain a healthy temperature, provide hygienic facilities. In some countries these are not required. Employers may follow them anyway to better motivate employees, or they may ignore them to keep costs low.
industrial tribunal
a legal meeting which considers workers’ complaints of unfair dismissal or discrimination at work
contract of employement
a legal agreement between employer and employee listing the rights and responsibilities of workers
Protection against unfair dismissal
This protects workers from being dismissed for joining a trade union, being pregnant or personal reasons. It also protects employees from being dismissed without a warning. If a worker feels they have been dismissed unfairly they can take their case to an industrial tribunal.
Wage protection
Most countries have a recognized legal minimum wage.
+prevents employers from exploiting employees +encourages employers to train workers +encourages people to seek work +low paid workers have a better quality of life
-increases business costs/ prices -unemployment may rise -other workers will ask for raises as well
Communication
the transferring of a message from the sender to the receiver who understands the message
internal communication
communication between members of the same organisation
external communication
communication between the organisation and other organisations or individuals. (eg orders for goods from suppliers, asking customers to pay, advertising etc.)
transmitter
the transmitter of the message is the person starting off the process by sending the messages. Also known as sender.
Medium of communication
the method used to send a message eg a letter
receiver
the person who receives the message
Feedback
the reply from the receiver which shows whether the message has arrived, been understood and, if necessary, acted upon.
one way communication
involves a message which does not require a response
two way communication
when the receiver gives a response to the message and there is a discussion about it.
+clear to the sender whether or not the receiver has understood
+the receiver feels more involved, more motivated.
What are the methods of communication?
verbal, written, visual
methods of communication: verbal
talking, calls, video conferencing, meetings
+information given out quickly +opportunity for immediate feedback +body language helps understand message (NA for telephone)
-not as effective in a big meeting -may be difficult to find time -a permanent record is difficult to obtain
methods of communication: written
business letters, memorandums, reports, notices, faxes, texts, emails
+‘hard’ evidence of message +helps clarify certain details, more organised +can be copied/sent to multiple people +electronic communication is cheap
-direct feedback not always possible -difficult to know if receiver has received message -reading is hard -no body language
methods of communication: visual
films, videos, powerpoints, posters, charts, diagrams, photographs
+appealing/attractive +help convey information easily
-no feedback -some people don’t know how charts work
formal communication
when messages are sent through established channels using professional language
informal communication
when information is sent and received casually with the use of everyday language
how to choose an appropriate method of communication
speed, cost, message details, leadership style, the receiver, importance of written records, importance of feedback
downward communication
when messages are sent from managers to subordinates. No feedback, used for instructions, statements, decisions. Message may become distorted if it has to pass through many levels of hierarchy.
upward communication
when a message or feedback is passed from subordinates to managers. very important.
horizontal communication
when people of the same level of an organisation communicate with each other (eg. ‘Anarchy!’) can be informal or formal.
communication barriers
factors that stop effective communication of messages. Problems with sender, problems with medium, problems with receiver, problems with feedback.
communication barrier: problems with sender
language too difficult? use more understandable language.
sender speaks too quickly/ not clearly? make message super clear. Ask for feedback regularily
wrong message/ wrong receiver? double check which message goes to who(m)
too long/ too much detail? be more brief.
communication barriers: problems with medium
message lost? insist on feedback
wrong channel used? fix it
original message distorted via long chain of command? use shortest channel possible
no feedback received? next time use a meeting
medium breaks? use other mediums
communication barriers: problems with receiver
not listening? emphasize importance, insist on feedback
doesn’t like/ trust sender? use another sender
communication barriers: problems with feedback
No feedback? ask for feedback. ensure medium allows feedback
feedback received too slowly? create more direct lines of communication
