Unit 3 - management of people and fianance Flashcards
The role of Human resource management
- Recruiting and selcecting employees
- Motivating and training staff
- Providing safe working conditions
- Ensuring employees get paid properly
- Promoting good working relationships
The recruitment process
- Identify a job vacancy
- Carry out a job analysis
- Prepare a job description
- Prepare a person specifaction
- Advertise the job
- Send out applications
selection
- Reading applications/CVs
- Shortlisting candidates
- Interviewing candidates
- Testing candidates
- Notifying successful candidates
Methods of training
- Induction training
- On-the-job
- Off-the-job
Induction training
Provides an introduction to the business
Employees learn about health and safety procedures, tasks, fire evacuation politcies ect.
Pros of induction training
- Employees become familiar with the organisation and job role more quickly
- Allows the employee to feel part of the business from day one
- It shows the employee that the business is interested in the new employee
Cons of induction training
- Could be overwhelming for the new employee
- Time consuming for both the new employee and the person carrying out the training
On-the-job training
Training takes place within the business. A more experienced employee might show someone how to carry out a task
Pros of on-the-job training
- Less expensive than off-the-job taining
- Creates a good working relationship between the employee and the employer
- Training is tailored to the businesses objectives and needs
Cons of on-the-job training
- The employee is still expected to carry out their normal duties
- The quality of training might not be as a high as off-the-job training
Off-the-job training
Training takes place outside of the business. might be provided by a college or specialist training company
Pros of on-the-job training
- qualifacations can be gained
- Training provided by experienced trainers
- Often provides the opportunity to ‘network’ - talking to people from other organisations
Cons of on-the-job training
- No work is done when people are undergoing training
- Can be expensive
- Some off-the-job training can take a long time
Benefits of having a motivated work force
- Staff turnover is lower
- The quality of the product will be higher
- Better customer service is provided
- The reputation of the business is improved
Fianancial incentives
- Salary
- Time rate
- Overtime
- Piece rate
- Bonus
- Commision
Salary
Paying a fixed amount of money per year in 12 equal installments
No incentive to work harder
Time rate
Paying per hour worked. More hours worked the more pay recieved
Overtime
Working more than whats required, often paid at a higher rate. Optional but isn’t always avaliable
Piece rate
Amount of money for each item produced in addition to salary. Encourages people to work hard for money but they can become sloppy if they work too fast.
Bonus
Additonal payment on top of a salary. Encourages people to work hard
Commision
Percentage of money paid based on the value of sales a person makes. Encourages employees to sell more but could cause them stress
Non-fianancial incentives
- Offering flexible working practices
- Giving people extra responsibilities to encourage them (provides promotion opportunities)
- Praising peopel for a job well done
- Allowing people to wrok in teams and/or take part in team-building tasks
- Providing training opportunities
- providing social events
Working practices
- Part-time
- Temporary contracts
- homeworking
- teleworking
- jobshare
Part-time
Allowing people to work less tahn full-time hours
Temporary contracts
Employing people for a short period of time, perhaps to cover busy periods or to cover absences
Homeworking
Allowing people to wrok from home, using technology to communicate with the busines
teleworking
Allowing people to work away from the office, using technology to communicate with the business
Job share
Two people sharing one full-time job
Benefits of flexible working practices to the employee
- Personal commitments are easier to juggle
- Start and finish times can be reduced
- Less stress as people are in control of their own working time and other commitments
- Improved happiness and productivity when at work
Benefits of flexible working hours to the employer
- Employees are happier at work
- Attendance at work will be improved and staff turn over reduced
- Can attract more potential employees
- Space and money can be saved on desks and other facilites
Methods of creating good working relationships
- Consulting with employees on matters relating to them
- Involving employees in decision making
- Having an appraisal system
- Having an ‘open door’ policy
- Folowing the terms and conditions of each employees contract
Methods of industrial acction
- Strike
- Work to rule
- Sit in
- Go slow
- Overtime ban
- Boycott
- Demonstration
Strike
EMpoyees refuse to enter the workplace. They might have a picket line or demonstration to raise awareness
Work to rule
Employees only carry out the tasks and duties written in their job description and no other tasks are performed
Sit in
Employees refuse to work and ‘sit in’ the workplace
Go slow
Employees work slower than normal in order to reduce productivity
Ovetime ban
No hours above the minimum required are worked
Boycott
Employees refuse to carry out a new task or to use a new piece of machinery
Demonstation
A gathering of people raising awareness of a particular issue
Impact of industrial action on a business
- Production can stop or be slower and this might give the business a bad repuation
- Customers might be lost to competitors
- The image and reputation of the business might be damaged
Impact of industrial action on employees
- No pay is recieved for taking part in industrail action
- It can be an unsettling and worrying time for employees
- Relations between the employee and the emplyer could be damaged
9 protected characteristics
(equality act)
- Age
- Disability
- Gender reassignment
- Marriage and civil partnership
- Pregnancy and maternity
- Race
- Religion or belief
- Sex
- Sexual orientation
Employers must
(The health and safety work act)
- Provide relecant health and safety training to employees
- Provide any necessary equipment and clothing to employees
- Provide toilets and clean drinking water
Employees must
(The health and safety work act)
- Comply with the training given by the employer
- Take care of themselves and other people they work with
- Report any hazards or accidents that occur
Database
(Technology in HRM)
Used to record employee personal details. This database would have different fields for each specific piece of information. A database allows you to seach for information quickly and to prepare differnt reports
Speadsheet
(Technology in HRM)
Used to record employee pay details
Data protection act
Data must:
1. Be obtained fairly and lawfully
2. Be used for the registered purpose only
3. Not be used or given to any other person without permission
4. Be relevant, adequire and not excessive for the required purpose
5. Be kept accurate and up-to-date
6. Not be kept for longer than necessary
7. Be available to the person who it relates to
8. Be kept secure
The role of fianance
- Record and maintain financial records e.g cash budgets, income statements
- Pay bills, eg. electricity, insurance, advertising
- Pay wages and salaries to employees
Sources of fianance
- Bank loan
- Loan from family and friends
- Government grants
- Bank overdraft
- Hire purchase
- Mortgage
Bank loan
Loan of money repaid over time with interest
Pros of bank loands
- Quick and easy to set up
- Can be repaid over a long period of time
Con of bank loans
- Interest can be expensive
Loan from family and friends
A lon of money from family or friends that does not have interest added
Pros of loan from family and friends
- No interest is added
Cons of loan from family and friends
- Arguments over the borrowed money might occur
Government grants
Money from the government what does not have to be paid back
Pros of government grants
- Does not need to be paid back
Cons of government grants
- Usually has conditions attached
- Can take time to get as requires many forms to be completed
Bank overdraft
Taking more money out of a bank account than is available
Pros of bank overdraft
- Easy and quick to arrange for a shot period of time
Cons of bank overdraft
- Usually only for a small amount of money
- Daily charges and/or interest applied
Hire purchase
Buying an item now and paying for it at a later date (often over a period of time)
Pros of hire purchase
- Can receive item immediately without paying
Cons of hire purchase
- Interest could make the item expensive
- Item not owned until all payments made
Mortgage
A special type of loan used to purchase property or land
Pros of Mortgage
- Can be taken out over a long period of time (e.g 25 years)
Cons of mortgage
- If interest rates change, repayments might increase
Poor cash flow is caused by
- Spending too much money on stock that has not sold
- Giving customers too long to pay their debts
- Not receiving enough money from sales
- Not receiving enough time to pay bills from suppliers
- Owners taking too much money out of the business
Businesses can improve cash flow by
- Looking for cheaper supplies of raw materials as this would reduce the variable costs of making a product
- Selling equipment or machinery no longer needed as this will bring in cash that can be used to fund other activites
- Increasing marketing activites as this will raise awareness of the products the business has to sell and increase sales
- Offering discounts to customers who pay on time as this will encourage them to pay more quickly
- Taking out a bank loan and paying it back over a period of time
Benefits of preparing a cash budget
- To show if the business with have a surplus or deficit
- It can show if additional fiancance is required eg. overdraft or loan
- It can help control expenses by highlighting periods when expenses could be high
- It can help in making decisions
Technology in finance
Speadsheet could be used to:
* Record cost information and calculate break-even
* Prepare cash budgets
* Prepare income statements
* Create graphs showing income and expenditure
* PRepare information that can be exported into other packages
