1.4 Managing People

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  • Created by: AmyBennet
  • Created on: 09-04-17 16:57
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  • 1.4 Managing people
    • 1.4.1 Approaches to staffing
      • Staff as an asset
        • Employers are more likely to value their staff if they think of them as an asset
        • Employers may provide:
          • Reasonable holidays
          • A safe and comfortable environment
          • Training
          • Job security
      • Staff as a cost
        • Employers may try to minimise this cost by:
          • using zero-hours contracts
          • Paying minimum wage
          • No training
          • Using financial incentives
          • Using cheap recruitment methods
        • Productivity could be low due to low motivation
      • Flexible workforce
        • Multi-skilling
          • Employees have a greater variety of skills and can respond to more issues
          • Can respond more quickly and effectively to problems
          • can increase motivation
          • Individuals are expected to work harder for same pay
        • Outsourcing
          • Costs are lower
          • Capacity can be increased
          • Loss of control
          • Specialists can be employed
        • Part-time work and temporary staff
        • Flexible hours and home-working
        • Advantages
          • Businesses can expand and contract quickly
          • May be wasteful to have full-time staff for a specific task
          • Temporary staff may be cheaper
          • No training of temps
        • Disadvantages
          • Less loyalty
          • Quality could decrease
          • Communication problems
          • Can be expensive
          • Could demotivate full-time workers
      • Dismissal
        • Can be legally dismissed
          • For misconduct, incapability, with too little notice
        • Can be illegally
          • For joining a trade union
      • Redundancy
        • There is insufficient work for the employee to do
        • Get redundancy pay
        • Likely during recession
      • Employee/ employer relationships
        • Individual approach
          • Negotiation between an individual employer and employee
          • Better bargainers get better wages which could cause conflict
        • Collective bargaining
          • Employees have representative negotiators
          • Workers can strike
          • Employees must be free to join bodies like trade unions
    • 1.4.2 Recruitment, selection, and training
      • Recruitment and selection process
        • Internal recruitment
          • Cheaper to advertise
          • Recruits are already familiar with business processes
          • Employer knows the employee better
          • Can motivate staff
        • External recuitment
          • New ideas
          • Attracts a larger number of candidates
      • Recruitment and selection costs
        • Human resources costs
        • Administration costs
        • Advertisement costs
        • Time
        • Interviewing process
        • Salary negotiations
      • Training costs
        • Training courses
        • Loss of output
        • Employees leaving
      • Induction training
        • helps new employees settle in
        • Shows workers health and safety procedures
      • On-the-job training
        • Learning from other workers
        • Mentoring
        • Job rotation
        • Training apprenticeships
        • Graduate training
      • Off-the-job training
        • Training which takes place outside the business
        • Expensive
        • Can provide courses the business would be unable to offer internally
      • Benefits of training
        • Workers are more motivated and productive
        • Customers get higher quality products
    • 1.4.3 Organisational design
      • Structure
        • Hierarchy and chain of command
          • Hierarchy is the levels of management in a business
          • Hierarchy shows the chain of command, the way authority is organised
          • Orders pass down the chain and information passes up
          • Businesses try to keep chains as small as possible for highest efficiency
        • Span of control
          • The number of people a person directly controls
          • A wide span of control means a person controls more people
          • The ideal span of control s between 3 and 6 because:
            • There should be tight managerial control from the top of the business
            • There are physical and mental limitations to any single manager's ability to control people and activities
        • Responsibility and authority
          • Responsibility- Being accountable or being able to justify an action
          • Authority- The ability to carry out a task
          • Employees lower down the hierarchy have less responsibility and authority
        • Centralisation
          • Major decisions are made at the centre of the business
          • Advantages
            • Senior management has control
            • Procedures like purchasing can be standardised leading to economies of scale and low costs
            • Can make decisions about what is best for the whole business
            • Senior management may have more experience and skill
            • Communicaton may be clearer
        • Decentralisation
          • Decision making is pushed down a chain of command
          • Advantages
            • Empowers and motivates workers
            • Allows greater flexibility
            • Reduces stress on senior management
            • Greater job satisfaction
            • Subordinates have a better understanding of issues specific to their area
      • Types of structure
        • Tall
          • Narrow span of control
          • Long chain of command
          • Managers have tighter control over subordinates
          • Clear management structure and route for promotion
          • Management costs are higher
          • Communication can be poor due to long chain of command
          • Close-quarters control may be resented by employees
        • Flat
          • Fewer layers of hierarchy
          • Chain of command is short
          • Span of control is wide
          • Employees have more freedom ad responsibility
          • Communication is better
          • Management costs are lower
          • Decision making may be quicker
          • Managers may be over-burdened
        • Matrix
          • Allow businesses to connect people with particular specialist skills
          • People from different parts of the business form a project team
          • Teams are fluid
          • Individuals have responsibilty
          • Lets employees lower down the structure use their skills
          • Motivates employees
    • 1.4.4 Motivation theory in practice
      • The importance of employee motivation to a business
        • If an employee's needs aren't satisfied, they won't be motivated to work
          • Leads to high absenteeism, disputes, low productivity, reduced profit
        • Negative motivation is where employees are motivated by the negative consequences of them not working hard
      • Motivation theories
        • Taylor
          • Thought that money motivated people
          • Problems
            • Doesn't take into account individual differences
            • Doesn't think about other motivators apart from money
            • Ignores the other needs of workers
          • Wanted to work out the most efficient way to complete the task
          • Thought employees not working hard enough should suffer a pay cut
        • Mayo
          • The Hawthorne studies
            • Changes were made and new productivity was recorded
            • Output continued to rise after all the changes
            • Greater output was due to greater communication and cohesion
            • Workers were more motivated by working together and by an interest being taken in their work
          • Problems
            • Assumes workers and management have the same goals
            • Assumes communication breaks down barriers
        • Maslow
          • Physiological needs, safety needs, love and belonging, esteem needs, self-actualisation
          • Each level of needs is addressed once the levels below are met
          • Problems
            • Some levels don't apply for some people
            • Can be difficult to tell if a level has been satisfied
        • Herzberg
          • Motivators
            • Factors which give workers job satisfaction
          • Hygiene factors
            • Factors that can lead to dissatisfaction
          • Problems
            • Job enrichment is expensive
            • Things can get taken for granted
            • Can be difficult to do this in a recession
      • Financial incentives to improve employee performance
        • Piecework
          • Payment for each unit produced
          • An example of payment by results
          • Recommended by Taylor
          • Only suitable where it's easy to identify the contribution of individual workers
          • Can lower quality
        • Commission
          • Payment by results
          • Incentives people to sell more
        • Bonus
          • Paid in addition to the basic salary
          • Usually paid if targets are met
          • Help to motivate workers to meet required standards
          • Some staff are paid loyalty bonuses
        • Profit share
          • Some of the profits were distributed to workers as well as shareholders
          • Can motivate employees to meet business objectives
          • Shows staff they are appreciated- Maslow
          • No direct link between an individual's effort and their share of the profit
        • Performance-related pay
          • Designed to motivate staff
          • Extra pay is given to workers who achieve targets
          • Targets are set from appraisals where the performance of staff is reviewed
      • Non-financial techniques
        • Delegation
          • Manager passes a complex task onto a subordinate
          • Makes employees feel trusted
          • Manager has responsibility but subordinate has authority
        • Consultation
          • Employees feel their opinions are valued
        • Empowerment
        • Team working
        • Flexible working
        • Job enrichment
        • Job rotation
          • Motivates the worker
          • Can motivate the worker
          • Fall in productivity as workers get new skills
        • Job enlargement
    • 1.4.5 Leadership
      • The different types of leadership style
        • Autocratic leadership
          • Manager sets objectives
          • Manager allocates tasks and insists on obedience
          • Group is dependent on manager
          • Could lead to poor motivation
        • Democratic leadership
          • Encourages participation in decision making
          • Leader mixes informally with the group
          • Guides rather than dictates
          • Employees feel more motivated and valued
        • Paternalistic leadership
          • Similar to autocratic leaders
          • Places lots of importance on employee welfare
          • Makes all decisions and expects the subordinates to obey
          • Want to develop employee skills through regular training
        • Laissez-faire leadership
          • Set the initial agenda then give employees complete freedom
          • Trust employees to complete the task without direct instruction
          • Effective with skilled and motivated employeed
      • The difference between management and leadership
        • Leaders have people who follow them but managers have people who work for them
        • Managers need to maximise business efficiecy
        • Entrepreneurs need to be good leaders and managers
        • Encouraging staff to develop their skills is important for both leaders and managers

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