People In Business

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  • Created by: Chantelle
  • Created on: 22-05-13 17:04

Recruitment

The process of establishing the need for a new employee for a job requirement

Internal - Filling a job vacancy by selecting a person who is already employed in the business

Benefits

  • Reduced risk of employing the wrong person
  • Faster recruitment & selection - less applicants to screen
  • Less expensive 
  • Shorter induction
  • Increased motivation of staff

Drawbacks

  • Limited choice
  • Lost opportunity to bring in fresh perspective
  • Creates vacancy down the hierarchy
  • Possible de-movtivation of internal candidates
  • Training and development cost
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Training

the process of developing knowledge, skills and attitudes required for a member of staff to carry out a job

  • helps new employees reach the level of performance expected of experienced workers
  • ensures the employee has necessary skills, knowledge and qualifications for the job
  • develops knowledge & committed workplace
  • increase efficiency and productivity
  • identify employee potential and increase employees job prospect
  • reduces cost - in long term
  • encourages employees to deal with change more effectively and be more flexible
  • improves image of company

Induction - education for new employees, involves learning about the way the business works

On the job - where employees learn a job by seeing how it is carried out

Off the job - all forms of employee education apart from at the immediate workplace

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Recruitment

External - filling a job vacancy by advertising outside the firm

Benefits

  • Greater choice
  • Fresh perspective - can be motivating for others, who's worked there for several years
  • Bring in expertise from other firms
  • Lower training cost

Drawbacks

  • Greater risk
  • Slower recruitment & selection
  • More expensive
  • Longer induction
  • Problems in gaining support of existing staff.
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Motivation

the causes of peoples actions, why people behave as they do

motivation theory - the study of factors that influence the behaviour of people in the workplace

Motivation Theories

  • Taylor's Scientific Approach to Management -Treating workers like machines - people work for money
  • Mayo's Hawthorne Effect - Relationship between working conditions and output
  • Maslow's Hierarchy of Needs - Individual acts to satisfy needs
  • Herzberg's Two Factor Theory - Providing long term job satisfaction, design jobs which provide growth
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Motivation - Financial Methods

Time Based - salary and wage payment system are time based payment system

Advantages

  • Guaranteed income - saftey needs, hygiene factor
  • Total wage bill for year

Disadvantages

  • Little incentivte to work hard
  • Supervisors more likely to be required
  • Staff who work harder than others may resent being paid the same
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Motivation - Non-Financial Methods

Job Enrichment - providing employees with more challenging tasks or greater responsibility 

Job Enlargement - providing employees with more task of the same or similar nature

Job Rotation - providing employees with job variety by changing their job or task at various intervals

Team Working - production is organised into large units of work and a group of employees work together in order to meet shared objectives

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Organisational Structure

The relationship between the different people and functions in an organisation

Hierarchy - the order of levels of management or supervision within a business from lowest to highest

Span of Control - the number of people reporting directly to a particular manager or supervisor 

Job Allocations - involves assigning specific task to individuals within the organisation

Work Loads - tasks and duties that individuals are expected yo carry out in a given time period 

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Organisational Structure - Delegation

passing responsibility for undertaking a task or decision to subordinates

Advantages

  • Management time
  • Motivation
  • Local knowledge
  • Flexibility
  • Staff development

Disadvantages

  • Small firms
  • Customer expectations
  • Attitudes and approach to management
  • Quality of staff
  • Crisis situations
  • Confidentiality 
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Organisational Structure - Communication Flow

The process of exchanging information or ideas between two or more individuals or groups

Internal - exchange of information takes place within an organisation

External - exchange of information takes place outside the business

Vertical - information floes from upper levels to lower levels of hierarchy

Horizontal - communication across the organisation

Diagonal - communication between people are different levels within different sectors

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Organisational Structure

Workforce Roles

  • Supervisor - has authority over one or several individuals within an organisation
  • Team leader - member of staff who has authority over a group of individuals within an organisation, required to work together
  • Manager - had authority over a number of individuals or groups within an organisation - responsibility for planning, organising, monitoring and control
  • Director - one of the senior member of staff in an organisation who is elected by shareholders to represent their decisions and run the business on their behalf
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Measuring The Effectiveness

Labour Productivity - Output per period / no. of employees per period 

Causes

  • Investment in education & training
  • Workforce morale and motivation
  • Quality of management

Effects

  • Reduce price - increase competiviness, sales, share
  • Enjoy higher profits
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Measuring The Effectiveness

Absenteeism - total no. of working days lost in the period / total no. of potential working days in the period X 100 (%)

Causes

  • Lack of interest
  • Lack of confident
  • Too much work
  • Poor commitment

Effects

  • Loss of production
  • Missed deadlines
  • Increased labour cost - overtime, agency staff, sick pay
  • Management time organising cover & extending deadlines
  • Lower morale
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Measuring The Effectiveness

Labour Turnover - no. of staff leaving per year / average no. of staff employed during the year X 100 (%)

Causes

  • Other job opportunities
  • Low pay
  • Irregular work - Boredom or stress
  • Poor recruitment & selection
  • Poor working conditions

Effects

  • Recruitment costs
  • Drop in productivity
  • Cost of mistakes - inexperienced employees
  • Low morale
  • Drop in image to customers and potential employees
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Measuring The Effectiveness

Health & Safety - total no. of working days lost due to accidents / total no. of potential working days in the period X 100 (%)

Causes

  • Failure of employers to carry out legal duties, due to ignorance
  • Failure of employees to carry out legal duties, due to poor informations, instruction, training or supervision
  • Failure of either party could stem from low morale, motivation, pressure to meet deadlines, work overload

Effects

  • Injury and distress
  • Lost production/ lower productivity
  • Closure by Local Authority H&S Officer
  • Fines & compensation from legal action
  • Labour turnover & cost
  • Poor reputation
  • Poor public image
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Motivation - Financial Methods

Piece Rate - payments based on the number of items each worker produces

Advantages

  • Increase incentive to work hard
  • Less supervision required
  • Group schemes may encourage teamwork - minimise conflict

Disadvantages

  • Staff no basic pay if encounter problems outside their control e.g machine breakdowns
  • Supervision may be needed to ensure quality, safety
  • Group schemes may be unfair if some memeber put in less effort
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Motivation - Financial Methods

Performance-related Pay - a bonus or increase salary usually awarded for above average employee performance

Advantages

  • Opportunity to earn moore money, may increase staff motivation, performance
  • Less supervision

Disadvantage

  • Rewards indivduals, does little to promote team work
  • Unhealthy rivarly
  • Can damage relationships, team spirit
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Motivation - Financial Methods

Profit Share - proportion of a firms profit is divided among its employees in a form of bonus paid in addition to an employee salary

Advantages

  • Encourages employees to put forward cost saving, revenue generating ideas
  • Work collectively
  • Increase work effort
  • Less resistant to change
  • Remain loyal - minimising labour turnover
  • Attract good staff

Disadvantages

  • Reduces profit for re-investment, distribution to shareholders
  • profit depends on activity of others
  • Only motivating if profit awarded is a worthwhile sum of money
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Motivation - Financial Methods

Share Ownership & Share Option Schemes - employees have the opportunity to be part owners of the firm & receive a variable dividend

Advantages

  • Encourges employees to work collectivily
  • Increase work effort
  • Remain loyal
  • Less resistant to change

Disadvantages

  • Managers and staff often sell shares at first opportunity
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Motivation - Financial Methods

Fringe Benefits - benefits provided to employees in addition to pay

Advantages

  • Help attract good staff
  • Keep staff loyal
  • Cheaper than higher pay
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