Unit 1 - People In Business

Question 1

What is the difference between full time, part time and temporary employees?

Answer 1

FULL TIME - work between 35 and 40 hours each week, will get to know business

Question 2

Why do businesses recruit staff?

Answer 2

1. Entrepreneur’s cannot carry out all tasks and duties themselves
2. Entrepreneurs do not have all the skills needed to run business

Question 3

What happens if the wrong people are recruited?

Answer 3

A business is likely to suffer and customers may leave as employees can’t do their job properly and this impacts upon quality or speed of service.

Time and money must be spent recruited replacement staff.

Question 4

What 2 ways are there to recruit staff?

Answer 4

Internal and external recruitment

Question 5

What is meant by internal recruitment?

Answer 5

This takes place when a job vacancy is filled from within the existing workforce

Question 6

What is meant by external recruitment?

Answer 6

This is filling a job vacancy from any suitable person not already employed by the business

Question 7

What is meant by training?

Answer 7

This means giving job-related knowledge and skills to an employee - for example, teaching a new employee to drive a fork lift truck

Question 8

How does a business recruit internally?

Answer 8

1. Place a job vacancy on a staff notice board
2. A senior employee recommends someone
3. Management approach an employee and offers them the role
4. In larger businesses an advert is put on the intranet (internal website)
5. In very small businesses the owner may simply tell staff about the vacancy

Question 9

What 4 advantages are there to internal recruitment?

Answer 9

1. Candidates will have experience of the business and will be familiar with the methods of working
2. Candidates will know many of the people they will be worked with.
3. Internal recruitment provides employees with the chance of promotion, which may help to motivate them
4. Internal recruitment is cheaper as it avoids the need for expensive advertising.

Question 10

What is meant by external recruitment

Answer 10

This means that a business looks to hire employees who do not already work for the business.

Question 11

How does a business normally recruit externally?

Answer 11

1. ADVERTISING in newspapers and magazines, on the web or radio and invite people to apply by a certain date.
2. JOB CENTRE - these are run by the governments Department for Work and Pensions and can put business in touch with suitably skilled unemployed workers.
3. EMPLOYMENT AGENCIES -these are privately owned businesses that help to choose the most suitable employee for a business. They are paid for their services.

Question 12

What are the advantages of external recruitment?

Answer 12

1. Wider choice of employees and possibly higher quality employees.
2. Businesses sometimes recruit external candidates in the hope they will be more enthusiastic and bring new ideas
3. External employees have the right skills so no need for much training

Question 13

Name two types of selection process to recruit new employees?

Answer 13

1. Interviews

Candidates are interviewed by one or more interviewers. Cheap and easy to do and it allows a two way exchange of information.

However, interviews can be unreliable in terms of getting the best employee

2. Psychometric tests

Psychometric tests reveal the personality of a candidate for recruitment or promotion. Usually the tests are multiple choice and it provides a more objective personality profile than an interview.

Question 14

What is meant by remuneration?

Answer 14

Remuneration is a term that means the payment to employees in accordance with their contract of employment.

Question 15

What is meant by wages?

Answer 15

Wages is the money paid by the business to employees in return for work and are normally paid each week.

Question 16

What is meant by salaries?

Answer 16

Salaries are money paid by business to employees in return for work and are normally paid monthly

Question 17

How does salary differ from wages?

Answer 17

Salaries are normally paid monthly and they usually are stated as a figure that a person earns over a whole year. Therefore a manager of Pizza Hut may receive a salary of £24000 each year and be paid £2000 each month.

Question 18

Please provide 3 important factors that influence how much someone is paid?

Answer 18

1. Skills of employee
2. Experience of employee
3. Market rate of pay for industry

Question 19

Why is an employee’s skills important ?

Answer 19

Highly skilled employees are likely to be paid more money because a business wants an employee with those skills.

By way of example a skilled chef might earn £500 each week whereas a less skilled employee who just washes the dishes might get £100 a week

Question 20

Why is an employee’s experience important?

Answer 20

An experienced employee is unlikely to need any training and will fit into the work place much quicker. This means a business will be prepared to pay more for him.

Question 21

What is meant by the market rate in terms of salaries?

Answer 21

All businesses have to take account what other firms are paying their employees. If lawyers in Northampton are being paid on average £35,000 then a business (law firm) will need to take this into account when seeking to employ a lawyer.

If they offer £25,000 then it is unlikely they will find anyone or certainly not anyone who is very good. However, if they offer £45,000 it is likely that more lawyers will apply for the job and there will be a better choice.

Question 22

Describe what is meant by monetary and non monetary benefits for employees.

Answer 22

Monetary benefits include salary, bonuses, payment to employees pensions and profit sharing.

Non-monetary benefits include flexible hours, free lunches (or subsidised restaurants where employees pay much less), parties and other outings and feeling being part of a team.

Question 23

Explain in brief detail 4 monetary benefits

Answer 23

1. Bonuses - some employees will receive extra money if they or their team achieve certain targets in their jobs or perform to set standards.
2. Pension contribution- an employee may receive payments into their pension from the employer
3. Profit sharing - employees in certain businesses will share in the profits that the business makes. John Lewis is a good example of where all employees share in the profit of the business.
4. Commission - an employee such as a salesman may get paid a percentage of the value of the sales he makes. By way of example a double glazing sales rep may get 5% of any sale so if he makes a sale worth £10,000 he will get £500 commission.

Question 24

Describe 5 non monetary benefits

Answer 24

1. FLEXIBLE HOURS - employees may be able to work more flexible hours than from 9 to 5. They may be able to come in earlier or later than 9 and leave earlier or later than 5pm. This could make a big difference with child care etc.
2. FREE LUNCHES - this can save an employee the cost of paying for lunches and it can also assist with employees socialist with other employees and feeling they belong.
3. HEALTH CARE - an employer may pay for the employee and his family to have private medical cover rather than rely upon the NHS.
4. PARTIES AND OUTINGS - some businesses will pay for Christmas parties or for them to go on an outing

Question 25

How do you motivate staff?

Answer 25

There are two theories on motivation of staff:

Motivation comes from within employees - so if they enjoy their job and workplace they will work hard

Motivation from outside employee - so you will motivate employees by the promise of a reward (bonus, promotion) or the threat of a punishment (no bonus or no promotion or pay rise)

In reality what motivates someone is down to the individual. However by adopting both approaches it is more likely staff will be motivated.

Question 26

Why will businesses benefit from motivated employees?

Answer 26

Motivated employees work hard, are less likely to go sick and try to do their best.

Motivated employees are more likely to be LOYAL to a business and to remain with it even if there are tempting jobs available with other businesses. This means costs of replacing staff are minimised.

Motivated staff offer support to the entrepreneur and will be willing to assist in many ways and offer help and advice on how to do things better. They go that “extra mile”.

Question 27

What methods do SMALL businesses use to motivate employees

Answer 27

1. JOB ENRICHMENT - a job may be boring so job enrichment makes changes to the job so it is more challenging and less boring.
2. TRAINING - training may required before an employee’s job can be enriched. The training is also likely to motivate the employee as it shows the employer values the employee
3. Working in Teams - employees may be motivated because they develop good working relationships with the other members of their team. Teams may also be given more power to make decisions which can help to motivate employees through improved self esteem.
4. Financial rewards - increase in pay, bonuses or allowing employees to share on the profits

Question 28

What is meant by training?

Answer 28

Training is giving people the chance to increase their job related skills and knowledge