People In Business

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

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

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.

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

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

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

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 

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 

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

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

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

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

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

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

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

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

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

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

Fringe Benefits - benefits provided to employees in addition to pay

Advantages

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