Unit 2: People in Business Flashcards
Taylor’s theory of scientific management
Frederick Taylor’s theory of scientific management describes motivation and employee productivity as a factor directly linked to economic reward such as salary. He noticed that employee’s output increased when they were offered a greater pay, whereas their output reduced when their pay was reduced. Hence, Taylor came to the conclusion that employees are only motivated by money. While it reduces the cost of production because the fixed costs are spread over a wider number of units produced, this theory could be considered relative because it assumes that all employees are only motivated by money, which is not always true.
Frederick Herzberg’s two-factor theory
Frederick Herzberg was an American psychologist who investigated the different factors that motivate people to work. Frederick Herzberg’s two-factor theory of motivation states that, opposed to Taylor’s views, Herzberg believed employees could be motivated by various factors, and all factors directly linked to a motivated workforce could be split into two groups: Hygiene factors and Motivation factors. It’s considered more flexible and realistic than Taylorism because a wider range of factors is considered.
Hygiene factors: Pay Fringe benefits Working conditions Supervision Relationships with coworkers
Motivation factors: Meaningful or challenging work Responsibility Potential for promotion or advancement Good quality training Recognition or achievement
Maslow’s Hierarchy of Needs
Abraham Maslow, an American psychologist, developed the theory of motivation based on a hierarchy of needs. He thought that people were motivated by having needs met, so his theory revolved around the fact that people would start at the bottom of the hierarchy and move up a level as each need was met. Managers all around the world are very much in favour of this theory because it ensures that all their employees’ needs are met, which means that they become more motivated and therefore more productive. The hierarchy goes as follows:
Psychological needs. These are any things needed to survive (e.g. food, water, shelter, etc.)
Safety and security needs. These are things that provide physical safety (e.g. security guards, safety laws, health insurance, job security, etc.)
Social needs. These are things that allow people to socialize and form relationships
Esteem needs. These are things which through the recognition of others allow people find achievement and respect
Self-actualisation. Things which through the achievement of personal goals allow people to fulfil their full potential
why do people work?
money, social needs (affiliation), esteem needs (self-importance), job satisfaction, security
financial rewards
pay may be used to give incentives to encourage employees to work harder or more effectively
wage
payment per amount of time working/products made
salary
a set payment for work, paid monthly
commission
a form of payment usually given to sales staff: the more sales they make, the more they are paid
profit sharing
a system of payment in which a portion of the company’s profits are paid to emplopyees
non-financial methods of motivation
job enrichment, teamwork, opportunities for promotion, etc.
non-financial rewards (fringe benefits)
non-financial rewards given to employees (e.g. house, car, healthcare, insurance, etc.)
job satisfaction
the enjoyment derived from feeling that you have done a good job
job rotation
involves workers swapping round and doing each specific task for only a limited amount of time, then changing round again
job enlargement
extra tasks of a similar level of work are added to a worker’s job description (but should not add extra work or increased responsibility to the employee)
job enrichment
involves looking at jobs and adding tasks that require more skill and/or ability
span of control
A span of control is a concept that describes the number of people that are managed efficiently by someone within a company. It could be perceived as a chain of command notion where the number of subordinates are properly identified to understand a manager’s reach.
levels of hierarchy
Refers to the number of levels in an organization structure. Each level represents a level of management, so if there are 5 levels between a CEO and a worker, it means that there are four levels of supervision between them.
chain of command
The route by which authority is passed down the levels of hierarchy is called the chain of command. It is based on the fact that as hierarchies grow, managers will need to pass down some of their responsibilities and authority to others in levels of hierarchy below them.
functions of management
Planning – Planning requires looking at the current position of the business and identifying where it wants to be instead, then it involves developing a strategy that would help them to achieve the goal. A good manager will have clear aims or targets and be able to prepare a new strategy to achieve them.
Coordinating – Coordination is the process of bringing all resources together to authorize the business to produce more goods and services. The business’s human resources department should draw together, instructed correctly and monitored in a very motivating way.
Organising – The manager should make sure that they use time effectively so all work is completed. They should organise all assets of the business effectively in order to keep costs low.
Commanding – To carry out a good job, managers should have the respect of their personnel and should be able to direct the employees on what work they are supposed to do. They have a lot to do with keeping the staff motivated.
Controlling – Managers are responsible for decision making and making sure that employees are always working hard and that their tasks are all completed when asked for on a high level of quality.
delegation
Delegation consists of a manager passing down authority and tasks to their subordinates. This means that their subordinates need to have a higher sense of responsibility so they can carry out their assigned tasks more independently.
autocratic leadership
Autocratic leadership takes place when leaders take charge in making all the decisions. This management style does not involve employee input whatsoever, since all decisions are made by a head in charge. Communication is one way and delegation isn’t utilized.
democratic leadership
This occurs when leaders directly involve employees in decision-making, as well as encourage them into sharing ideas. Communication is two-way and delegation is used frequently in the workplace.
laissez-faire leadership
Laissez-faire leadership refers to when managers allow employees total freedom in how they complete the tasks and manage their time. This comes from the French term for ‘let them do it’, managers set the tasks and deadlines but completely delegate the process of completing the task to the employees and do not get involved; providing individuality and independence to the employees.
trade union
a group of workers who have joined together to ensure their interests are protected
