Unit 2 - People in Business Flashcards
Communication
The sending and receiving of information through a channel with feedback
Features of communication
- Sender
- Message
- Channel
- Receiver
- Feedback
Downward communication
Managers giving information or instructions to their subordinates
Importance of downward communication
- Subordinates look to managers for leadership & guidance
- Allows decisions by management to be carried out by employees
- Allows managers to control, command & organize
Upward communication
Workers giving feedback back to managers
Importance of upward communication
- Helps managers to understand views of subordinates
- May make managers aware of problems
- Helps staff to feel that they are valued
- Provides managers with information to help make decisions
Horizontal communication
When workers on the same level in the organization exchange information
Internal communication
Communication within a business between employees
External communication
When businesses exchange information with people and organizations outside the business
Formal communication
Communication in a business through the recognized channels
Informal communication
Communication in a business through non-approved channels
Face-to-Face communication
When spoken information is exchanged by people who can see each other
Advantages of Face-to-Face communication
- Allows immediate feedback
- Encourages cooperation
- Allows new ideas to be generated
- Saves time
Disadvantages of Face-to-Face communication
- Negative body language may create a barrier
- A record of the message may not be kept
- Non-relevant information may be included
- Some may not listen
- Limits capacity of recipients of the message
Written communication
When information is exchanged through written information
Advantages and Disadvantages of letters
- Flexible - can send to many
- Can be used for private information
- Provides a record of communication
- Can take time and effort
- Some may have poor writing skills
Advantages and Disadvantages of reports
- Can be short, complex or detailed
- Should be concise and carefully structured
- Can contain numerical data and graphics
- Take time to research and write
Advantages and Disadvantages of memorandums
- Used for internal communication only
- Flexible with brief messages
- Used to remind people of events or pass on simple instructions
Advantages and Disadvantages of forms
- Communicate routine information
- Collect information
- Can be inflexible or become out of date
Advantages and Disadvantages of noticeboards
- Are cheap
- Information can be passed to a large number of people
- Can become untidy - are often to abuse
- Often overlooked
Advantages and Disadvantages of emails
- Can be ignored
- People might not have time or motivation to read/answer every single message
Advantages and Disadvantages of internet
- Used for internal and external communication
- Provides a wide rage of information
- Can be used for many wide variety of reasons
Advantages and Disadvantages of Mobile phones
- Useful for employees working away from the office
- Cheap
- Access to internet and images
Advantages and Disadvantages of Social Media
- Communication with customers
- Gather information
- Employees can communicate internally
Advantages and Disadvantages of intranets
- Computers in a department are linked together
- Can access common information
- Changes to information can be updates instantly
Advantages and Disadvantages of Videoconferencing
- Can access people in different locations
- Links people
Advantages and Disadvantages of Public address systems
- Messages broadcasted over a loudspeaker for everyone
Advantages and Disadvantages of Electronic noticeboards
- Can communicate to employees around a business
Communication barriers
Obstacles that prevent effective communication between the sender and the receiver
Examples of communication barriers
- Lack of clarity
- Technological breakdown
- Poor communication skills
- Jargon
- Distractions
- Business culture
- Long chain of command
- Using the wrong medium
- Different countries, languages and cultures
Ways to remove communication barriers
- Recruitment - recruiting staff with good communication skills
- Training - training staff in communication
- Written communication - standard company letters
- Technology - training for technology
- Chain of command - shortening chain of command
- Social events - colleagues bonding can improve communication
- Culture change - introducing formal communication
Full-time employment
- An employee that is expected to work a full working week (5 days, 48 hours)
- Employees may be entitled to benefits, rights alongside pay, health insurance or overtime pay
Part-time employment
- Workers that work fewer hours than full-time colleagues (under 30 hours)
Job share
- Two part-time workers that share the work and pay of a single full-time employee
Casual employment
- No guarantees of work
- Hours of work are often variable
- Employees can come to work on short notice
Seasonal employment
- Regular, full-time work for a particular season of the year
Temporary employment
- Employees that are taken to cover for absent workers
Needs for recruitment
- Business is expanding and labour is needed
- Leaving employees need to be replaced
- Positions are vacant owing to promotion
- Temporary need for absent workers
Stages of recruitment process
1- Business identifies the need for recruitment
2 - Job description and person specification created
3 - Advertising
4 - Evaluating applicants and selecting a shortlist for interviews
5 - Carrying out interviews
6 - Evaluate interviews and appoint the best candidate
7 - Provide feedback for unsuccessful applicants
Job description
A document that shows clearly the tasks, duties and responsibilities expected of a worker for a particular job
Person specification
Personal profile of the type of person needed to do a particular job
Job application form
Standard document used to collect information from a job applicant
Curriculum vitae
Document used by a job seeker that lists personal details, qualifications, work experience, referees & more
Shortlist
A list of the most suitable people for a job, chosen from all the people first considered
Induction
Introduction of someone into a new job, company, or official position
Internal recruitment
Appointing someone who already works for the business
External recruitment
Appointing workers from outside the business
Advantages of internal recruitment
- Cheaper - saves on advertising
- Recruits are familiar with policy and practices
- Staff may be more motivated with chance of promotion
Advantages of external recruitment
- Business will have a larger pool of employees to choose from
- New employee can be talented or introduce new ideas
Elements of job advertisements
- Job title
- Name, address, email, telephone number of employer
- Brief details of job description
- Skills, qualifications and work experience needed
- Salary and other benefits
- Method of application
Protected groups against discrimination in business
- Gender - Sex Discrimination Act 1975 + Equal Pay Act 1970
- Race and religion - Race Relations Act 1976
- Disability - Equality Act 2010
- Sexual preference
- Age
Minimum wage
The minimum amount per hour, which most workers are entitled to be paid
Reasons for minimum wage
- Benefit disadvantaged workers - low-income families benefit from minimum wage
- Reduce poverty
- Help businesses - promotes equality between workers
Benefits of minimum wages to businesses
- People with low pay will be better motivated with a pay raise
- More disposable income with low wage earners - demand for good and services rises
- Lower rates of staff absences - low paid workers need their jobs to survive
Role of H.R. department
- Recruitment & selection
- Wages and salaries
- Industrial relations
- Training programs
- Health and safety
- Redundancy and dismissal
Unfair dismissal
When a worker is dismissed illegally by a business
Ombudsman
Someone who deals with complaints made by ordinary people against a business
Training
The process of increasing the knowledge and skills of a worker to enable them to do their job more effectively
Inducing training
Introduction given to a new employee when they first start a job
Advantages of inducing training
- Helps new employees to settle into their jobs quickly
- Workers are less likely to make mistakes
- May be a legal requirement to give health and safety training
Disadvantages of inducing training
- Time consuming
- Wages are paid but no work is being done by the worker
- Delays the start of the employee’s work
On-the-job training
Training that takes place while doing the job
Types of on-the-job training
- Watching another worker
- Mentoring - Where people with a lot of experience and knowledge advise and help other people at work or young people preparing for work
- Job rotation - where employees alternate between different jobs during the course of their employment
Advantages of on-the-job training
- Individual tuition
- Easy to organize
- Output is being produced
- Cheaper than other forms of training
Disadvantages of on-the-job training
- Output may be lost if worker makes mistakes and time taken to learn
- Trainer will not be as productive
- Trainer may pass on bad habits to the trainee
Off-the-job-training
Training that takes place away from the work area, usually done by specialist trainers
Advantages of off-the-job-training
- Output is not affected by mistakes
- Customers are not put at risk
- Learning cannot be distracted by work
- Training can be after work hours letting the employee work
Disadvantages of off-the-job training
- No output is creates
- Costs are high especially with specialists
- Some aspects of work can’t be taught off-the-job
- May take time to organize
Benefits of training
- Keeps workers up to date
- Improves labor flexibility
- Improves job satisfaction and motivation
- New jobs in the business
- Training for promotion
Limitations of training
- High cost of training
- Learning is only really done when doing
- Loss of output
- Employees leaving
Motivation
The desire to achieve a goal
Reasons for employee motivation
- Easier to attract potential employees
- Easier to retain employees by reducing turnover rate
- High labor productivity - lower costs and better goods and services
Herzberg two-factor theory
Two factors of motivation:
- Motivators - give workers job satisfaction
- Hygiene factors - lead workers to dissatisfaction
Herzberg’s motivators
- Achieving aims
- Chance of promotion
- Responsibility
- Interesting work
- Recognition
- Personal development
Herzberg’s hygiene factors
- Pay
- Working conditions
- Job security
- Quality of supervision
- Staff relationships
- Company policy
Maslow’s hierarchy of needs in order
1 - Physiological needs
2 - Safety and security
3 - Social needs
4 - Esteem needs
5 - Self-actualization
How work can meet Maslow’s needs
1 - Adequate pay
2 - Job security & safe working conditions
3 - Team working, good communication, social facilities
4 - Praise for doing a good job
5 - Opportunities to be challenged, be creative, solve problems, make decisions
Taylor’s theory of scientific management
Worker’s should
- Use specialist tools and equipment
- Follow a strict working procedure
- Receive proper training
- Get breaks to recover form physical work
- Be paid according to what they produce
Three main ways of employee motivation
- Financial rewards
- Non-financial rewards
- Introducing ways to give job satisfaction
Financial motivators
Pay as an incentive for workers to work harder
Financial motivators; wages
Paying workers on a timely basis e.g. per hour/day
Time rate
Wages based on the amount of time worked
Advantages of time rate
- Easy to calculate
Disadvantages of time rate
- Good and bad workers are paid the same
- Constant supervision
- Expensive for employee supervision
- System takes time
Piece rate
Wages based on the amount of output/products made
Advantages of piece rate
- Encourages workers to work faster and produce more goods
Disadvantages of piece rate
- Quality of products could be compromised
- Expensive for high level of quality control
- Demotivates careful workers
- Employees can earn less if machinery breaks down
Financial motivators; salaries
Paid monthly as a calculation of money per year - goes into bank account instead of cash
Salary rewards
- Bonus
- Commission
- Profit sharing
- Performance related pay
- Share ownership
Commission
- Payment given on top of salaries based on output
- Sales increase due to want of commission
- Can damage reputation
- Employees might unnecessarily sell
- Stressful on staff - bad sales month will decrease commission
Profit sharing
- Employees share profits on top of basic salary - rest given as dividends
- Motivates workers to work harder as they receive a share in profits
Bonus
- An extra amount of money given to a worker based on good work
Performance related pay
- Pay on effectiveness of workers when output can’t be measured
- Business assesses performance by appraisal system
- Immediate supervisors observe work and carry out interviews
Share ownership
- Employees are given a share in the company
- Encourages employees to do well to receive dividends if company does well
- Share price will increase if company is doing well
- Can improve employee loyalty
Non-financial motivators
Fringe benefits:
- Children’s education fees paid
- Discounts on the firm’s products
- Health care
- Company car
- Housing allowance
- Share option
- Expense accounts
- Pension plans
- Free trips / holidays
Methods of job satisfaction
- Job rotation
- Job enlargement
- Job enrichment
Job rotation
Workers swap around doing different tasks for a limited amount of time
Advantages of job rotation
- Increases variety to job
- Makes it easier for people to cover absent workers
Disadvantages of job rotation
- Does not make the task more satisfactory
Job enlargement
Extra tasks of similar level are added to a worker’s job description
Advantages of job enlargement
- Increased motivation
- Increases earning capacity
- Flexibility
Disadvantages of job enlargement
- Lower efficiency
- Increased training costs
- Additional stress
Job enrichment
- Adding tasks that require more skills and responsibility
- Training might be needed
- Increased job satisfaction of the employee
Formal organization
Internal structure of a business as shown by an organization chart
Organizational chart
Diagram that shows the different job roles in a business and how they relate to each other
Directors
- Appointed by owners to run a business
- Board of directors is formed
- Make the important decisions
- have authority over managers and below
Managers
- Responsible for planning, controlling, organizing, motivating, problem solving, decision making
- Achieve owner’s objectives
- Accountable to directors
Supervisors
- Monitor work in a particular area
- Authority over operatives and general workers
- Carry out managerial duties at lower level
Operatives
- Skilled workers
- Involved in production process
General staff
- Employed to do specific skills
- Can be trained to earn promotions
Professional staff
- Staff that are skilled and highly trained
Chain of command
Route through which orders are passed down in the hierarchy
Span of control
The number of people a person is directly responsible for in a business
Subordinates
People in the hierarchy who work under the control of a more senior worker
Delegation
Authority to pass down work from superior to subordinate
Features of a flat hierarchal structure
- Better communication due to shortened chain of command
- Management costs are lower due to less layers
- Control may be more friendly and less formal
Features of a tall hierarchal structure
- Communication is poor due to long chain of command
- Management costs are higher
- Clear route for promotion motivates staff
- Control is more formal and less friendly
Centralized
Organization system where most decisions are made at the top and passed down the chain of command
Centralized system advantages
- Senior management has complete control over resources
- Senior managers are trained and experienced in decision making
- Prevents parts of the business acting independently
- Coordination and control is easier
Centralized system disadvantages
- Employees may be demotivated without authority
- Brings less creativity and fewer ideas
- Procedures may be needed to make decision making easier
- People at the top may be out of touch with the needs of customers served by local employee
Decentralized
Organization system where decision making is pushed down the chain of command away from the top
Decentralized system advantages
- Workers have autonomy and may be better motivated
- Speeds up decision making
- Takes pressure off senior managers and reduces workload
- Workers can be creative and share ideas
- Provides more promotional opportunities
Decentralized system disadvantages
- Senior managers may lose control of resources
- Costs may be higher due to less standardization and more variability in decision making process
- Some employees may not be able to make decisions
- Some employees may not welcome extra responsibilities
Roles of finance department
- Recording transactions- details of purchases
- Wages and salaries
- Credit control - debts
- Cash flow forecasting and budgets - controls firm’s money
- Accounts - financial statements of performance
Roles of marketing department
- Market research
- Product planning
- Pricing
- Sales promotion
- Advertising
- Customer service
- Public relations
- Packaging
- Distribution
Roles of production department
- Design
- Purchasing
- Stock control
- Maintenance
- Research and development (R&D)
