1.4 Managing People

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Staff as an asset; staff as a cost

  • Asset~ something if value e.g. cash, equipment inventory, outstanding debts due to be paid (accounts receivable) or buildings.
  • Liability~ something that has a negative effect on the value of the business e.g. a loan that must be repaid or outstanding invoices for supplies.
  • Some managers believe that staff are crucial to the business (asset). Others see them as a major item of expenditure.
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Staff as an Asset

  • Staff seen as a valuable and skilled resource capable of developing either by themselves or with help from management.
  • Their value to the business increases and they become more efficient and productive. More likely to care about the business and work well with customers.
  • There may be short term costs however investment in staff is more likely to be productive and cost effective in the long run.
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Staff as a Cost

  • Labour seen as a resource and used cheaply as possible. 
  • Pay may be minimum wage level, sometimes involving zero-hour contracts, providing very little security.
  • Pay may be at the lowest level that will attract people with the necessary skills.
  • Some businesses prefer to get part or all production carried out abroad where the wage rates are lower. This is known as outsourcing.
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Flexible Workforce

  • Can adapt quickly: there may be a sudden change in customer demands and employees have to adjust to this.
  • May be able to move easily from one task to the other or may be asked to work more or fewer hours.
  • Some businesses may use part-timers.
  • In today's highly competitive markets, having a flexible and responsive workforce may be essential.
  • Restictive working practices and a lack of flexibility can increase production costs and reduce competitiveness, leading to a decline in the business.
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Multi-Skilling

  • The practice of training employees so that they have the ability to do a range of tasks, or of recruiting employees who have several skills.
  • Staff absences can be covered easily without any loss of production.
  • Business can respond to unexpected changes in demand and special orders.
  • Business becomes more flexible.
  • Employees may find that their jobs are less tedious or repetitive and respond to increased responsibility.
  • Provides a competitive advantage.
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Part-Time and Temporary Work

  • Many businesses are not suited to having full-time and permanent staff.
  • Demand varies according to the time of day or the season.
  • Pubs, farmers and many other employers want help just when they need it.
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Advantages and Disadvantages of Part-Time Work to

  • Pay forstaff only when needed, reducing labour costs.
  • Less costly in terms of employment rights.
  • Employees may not be as comitted or motivated.
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Advantages and Disadvantages of Part-Time Work to

  • May suit some workers e.g. parents with school age children or students.
  • Flexible working hours suit some employees.
  • Lack of job security and full employment rights.
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Zero Hours Contracts

  • Increasing numbers of people are offered zero-hours contracts.
  • The employer does not have to provide any particular number of working hours.
  • The employee is not obliged to accept the hours offered.
  • This ensures great flexibility for both.
  • However this leaves emploees without the security of a reliable income.
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Flexible Hours

  • Require the employee to work a certain number of hours in a given time period but mostly there are no fixed hours when they have to be on site.
  • So an employee could start early and finish late and vice versa; by working an hour or two extra each day they can take a day off when it suits them.
  • Sometimes known as flexi-time.
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Home Working

  • Means working from home in office type jobs, or roles involving travel where home is used as a base
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Advantages and Disadvantages of Home Working to Em

  • Less office space and other overheads means lower costs.
  • Productivity can increase when away from workplace distractions.
  • Employers must trust that the employee will work efficiently without supervision.
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Advantages and Disadvantages of Home Working to Em

  • Reduces the time and cost of commuting. 
  • Working hours may be more flexible and suit other lifestyle requirements.
  • Can be lonely without the company or fellow workers.
  • The home needs to be equipped as a workspace.
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Outsourcing

  • Refers to the situation where business tasks or processes are undertaken by an external provider. Inputs are bought in from another business that may be local or overseas.
  • Cover's a variety of business needs from office cleaning-highly skilled consultancy outputs. 
  • May involve some or all of the production of a finished good.
  • Business can take advantage of the specialised knowledge of the other company~ may be more experienced/more cost-effective.
  • Enables a business to concentrate on what it does best and leave some aspects to somebody else.
  • Business can reduce it's labour costs and only buy in extra help as and when needed.
  • Main disadvantage~ business may not have full control over the quality of the outsource's work and it requires very good communication.
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Dismissal

  • Means a worker is told to leave the job because their behaviour is unsatisfactory or they have repeatedly failed to work to the required standard.
  • Has to be fair and correct procedures must be followed.
  • Occurs when an employee is dismissed immediately, without notice or pay in lieu of notice, usually because of gross misconduct (e.g. theft, fraud or violence)
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Redundancy

  • Occurs when a worker is told to leave the job because their skills are no longer of use to the organisation.
  • Is not the fault of the employee. 
  • May happen for many reasons e.g. mergers and takeovers may mean that fewer people are required, the business may be failing or automation may mean less labour is needed.
  • Can be voluntary or compulsory. 
  • The right procedures must always be followed.
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Individual Approach

  • Refers to direct discussions between an employer and an individual.
  • Suits many employees nowadays, because many people with scarce skills find that they can benefit from dealing independantly with their employers.
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Collective Bargaining

  • Refers to discussions between employers and representitives of employees.
  • Suits employees in large organisations where the employer is likely to treat all employees doing the same kind of work in the same way.
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Trade Union

  • Represents workforce in collective bargaining.
  • Exist to represent employees in situations where group action is more effective than any individual can be.
  • Typically represent's specific occupations e.g. RMT, which includes many people working on the railways and London Underground, or certain types of work- Unison represents mostly public sector employees.
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Employer/Employee Relationships

  • Discussions usually focus on pay, the working environment and conditions, hours, production levels, working procedures and health and safety.
  • Employers and employees have different aims in their relationships and may disagree.
  • Outcome may be a collective agreement but disputes may be very hard or impossible to resolve.
  • Union may undertake industrial action, involving restrictions on what work will be done and when, or a strike.
  • Disputes may be referred to ACAS (The Advisory, Conciliation and Arbitration Service) a public body that exists to meditate and may be trusted on both sides.
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What Employers Want...

  • A secure future for the business.
  • Enough profit to keep the owners/shareholders happy.
  • BUT need the co-operation and motivation of the workforce to ensure a long term future or enough profit.
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What Employees want...

  • A good level of pay and good working conditions.
  • BUT they know that if the business is not successful, then there will be fewer or no jobs.
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