Section 2 - notes

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Beaconhouse School System**We aren't endorsed by this school

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BUSINESS S 221

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Management

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Dec 20, 2024

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SECTION 2CHAPTER 6 - MotivationPeople work for a number of reasons. Most people work because they need to earnmoney to survive, while others work voluntarily for other reasons. Motivation isthe reason why people work, and it drives them to work better. Therefore,managers try to find out what motivate workers and use them to encourage workersto work more efficiency. This results in higher productivity, increased output,and ultimately higher profits.Nowadays, machinery is more common in businesses which results in increasedproductivity as well. However, the amount that a well motivated workforce canproduce must still be recognised, since employees are firm’s greatest assets!Motivation theoriesPeople work very hard when they are working for themselves. When they work forother people, they might not. Managers have been looking into what makes employees contribute their fullest to the company and these studies have resulted four main theories of motivation.F.W.TaylorTheory:Money is the main motivator.If employees are paid more, they work more.Work is broken down into simple processes, and more money is paid which will increase the level of productivity an employee will achieve.The extra pay is less than the increased productivity.Cons:Workers are seen rather like machines, and this theory does not take into account non-financial motivators.Even if you pay more, there is no guarantee of a productivity rise.It is difficult to measure an employee’s output.

MaslowMaslow created what is known as the hierarchy of needs. In this diagram, there are 5 different types of motivation:Physiological needs: basic requirements for survival.Security needs: the need to by physically safe.Social needs: the need to belong and have good relationships with co-workers.Esteem needs: the need for self-respect and to be respected by others.Self-actualisation needs: the need to reach your full potential and be promoted.Businesses realise that the more levels of motivation are available to workers, the harder they will work. Maslow also suggest that each level of motivation mustbeachieved before going to the next level. Once one level of motivation is met, moreof that will no longer motivate the employee. Cons:Some levels are not present in some jobs.Some rewards belong to more than one level on others.Managers need to identify the levels of motivation in any job before using itto motivate employees.HerzbergTo Herzberg, humans have hygiene factors, or basic animal needs of humans. We also have motivational factors/motivatorsthat are required for the human to grow psychologically. Hygiene factors:Status.Security.Working conditions.Company policies and administration.Relationship with supervisor.Relationship with subordinates.Salary.Motivational factors:Achievement.

Recognition.Personal growth/development.Advancement/promotion.Job satisfaction.To Herzberg, if the hygiene factors are not satisfied, they will act as demotivators. They are not motivators, since the motivating effect quickly wears off after they have been satisfied. True motivators are are Herzberg's motivational factors.Motivating factors - financial motivatorsThere are three ways to motivate a workforce:financial motivatorsnon-financial motivators ways to increase job satisfactionFinancial rewardsPay may be the basic reason why people work, but different kinds of pay can motivate people differently. Here are the most common methods of payment:WagesWages are paid every week, in cash or straight into the bank account, so that the employee does not have to wait long for his/her money. People tend to pay wages to manual workers. Since wages are paid weekly, they must be calculated every week which takes time and money. Wages clerks are paid to do this task. Workers getextra pay for the overtime that they do. There are some ways that wages could be calculated:Time rate: Time rate is payment according to how many hours an employee has worked. It is used in businesses where it is difficult to measure the output of a worker.+ Easy to calculate the wage of the employee. A time-sheet must be filled out by the Accounts department to calculate the wage. - Both good and bad workers get paid the same wages. Therefore, more supervisors are needed to maintain good productivity. a clocking-in system is needed to know how many hours an employee has done.

Piece rate: Piece rates are paid depending on how many units they have produced. There is usually a base pay (minimum wage) and the piece rate is calculated as a bonus on how many units were created. Piece rates are found in businesses where it is possible to measure a workers productivity.+ Encourages workers to work faster and produce more goods. - Workers will often neglect quality, and businesses will need aquality control system which is expensive. - Workers who focus on quality will earn less. Tension is caused when some workers earn more than others. - If machinery breaks down, employees earn less. That is why there is a guaranteed minimum pay.SalariesSalaries are paid monthly, and normally straight into the bank account. They are usually for white collar workers. A salary is counted as an amount per year that is divided into 12 monthly accounts. They do not usually receiveovertime. Managers only need to pay their workers once a month, and since the amount is transferred by the bank, the manager loses much less time and money calculating salary.Salaries are usually a standard rate, but other rewards could be given to employees:Commission: A percentage is paid, usually to sales staff, depending on the value of goods they have sold. Workers are encouraged to sell more. However, they could persuade customers to buy products they don’t really want, making the company look bad. Just like the piece rate, in a bad month where there are little sales, worker's pay will fall.Profit sharing: Employees receive a percentage of the profits made. However, they will get nothing if the business doesn't make a profit. This is often used in the service sector, where it is hard to find an employee’s contribution to the company.Bonus: A lump sum paid to employees who have done well. It is usually paid at the end of the year or before holidays. However, this could cause jealousy between workers. Giving bonuses to a team works better.Performance related pay: Employee pay is linked to the effectiveness of their work. It is often used in organisations where it is hard to measure productivity. It uses the system of appraisal: employees are observed and

their colleagues are interviewed to determine their effectiveness. Afterwards,the immediate superior of the employee has a meeting with them to discuss their effectiveness. Share ownership: Employees receive some shares from the company. Theywill either benefit from dividends or sell the shares when their price has risen. They will be more motivated because they feel like a part of the company.Motivating factors - non-financial motivatorsThere are other factors that motivate people in a business, and they are often calledperks or fringe benefits. They may be having free accommodation, free car, etc... However, when you look at it, it is just money in different forms. Here is a list of these motivators:Children's education.Discounts on company products.Free Healthcare.Company vehicle.Free accommodation.Share options.Expense accounts.Pension.Free holidays.Job satisfaction: Employees will become more motivated by enjoying the job they do. Job satisfaction can come in different ways. However, there are some factors that demotivate employees if they are not satisfied, and must be satisfied before the motivators can take effect. Here are some things that make workers' jobs satisfying:Pay.Promotion.working conditions.Fringe benefits.ManagementWorking hours.The nature of the work itself.Colleagues, etc...

Herzberg and Maslow stresses that things such as responsibility recognition is also crucial to provide job satisfaction. Letting workers contribute to the job would also help, making jobs less boring and more creative. Here are some policiesto increase job satisfaction:Job rotation:Workers in a production line can now change jobs with each other and making their jobs not so boring. It helps train the employee in different aspects of their jobs so that they can cover for other employees if they do not show up.Job enlargement: It is adding tasks of a similar level to a worker's job. Job enlargement simply givesmore variety to employees' work which makes it more enjoyable.Job enrichment:It is adding tasks of a higher level to a worker's job. Workers may need training, but they will be taking a step closer to their potential. Workers become more committed to their job which gives them more satisfaction.Autonomous work groups or team working:This is when group of workers are given total responsibility to organise themselves and perform a task. This makes the employees feel more important, aswell as giving them asense of belonging when they are part of a team. If they organise themselves differentlyevery time, the team could get job enlargement and job enrichment too.

Chapter 6: Past paper questions1. X and Y are two car manufacturing companies. The wages rates in X are 25% higher than in Y.a. Why might these companies be paying different wage rates?………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………b. Should a business pay its workers the lowest wage possible? Justify your answer.………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

c. Sometimes a business will give fringe benefits to their employees.Give two examples of Fringe benefits.………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………2. Explain the difference between paying employees a fixed weekly wage and performance related weekly wage.………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………3. Why might the shop manager also offer non-financial rewards?………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

4. A business currently pays its employees on an hourly wage rate basis. It is thinking of changing to piece rate system. Explain the problems that such a change might cause for the business.………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………5. Explain what is meant by overtime rate of pay.………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

6a. What is meant by performance related pay?………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………b. Identify and explain two disadvantages of using performance related pay to reward employees.………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

7. The management of company A knows that motivation of employees is important for the success of their business. Explain how the manager could motivate the employees.………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

Chapter: 7Organization and managementOrganisational structure refers to the levels of management and division ofresponsibilities within a business, which could be presented in an organisationalchart.For simpler businesses in which the owner employs only himself, there is no needfor an organisational structure. However, if the business expands and employsother people, an organisational structure is needed. When employing people,everybody needs a job description. These are its main advantages:People who apply can see what they are expected to do.People who are already employed will know exactly what to do.DelegationDelegation refers to giving a subordinate the responsibility and authority to do agiven task. However, the final responsibility still lies with the person whodelegated the job to the subordinate. Here are the advantages of delegation formanagers and employees, as well as why some managers choose not to delegate.

Pros for the manager:By letting subordinate do smaller tasks; managers have more time to domore important tasks.Managers are less likely to make mistakes if tasks are done byspecialist employees.Managers can measure the success of their task more easily.Pros for the subordinates:Work becomes more interesting and rewarding.Employees feel important and trusted.Helps train workers, giving them better career opportunities.Why some managers don't want to delegate:Managers are afraid that their employees will fail.Managers want total control.Managers are scared that the subordinate will do tasks better than them,making them feel insecure.Delegation must mean:A reduction in direct control by managers or supervisors.An increase in trust of workers by managers or supervisors.

Organisational chartsEventually, when a business grows larger and employs many people, they willhave to create an organisational chart to work out a clear structure for theircompany. Here is another example of an organisational chart from the book:Here are the most important features of the chart:It is a hierarchy. There are different levels in the business which hasdifferent degrees of authority. People on the same level have the same degree ofauthority.It is organised into departments, which has their own function.It shows the chain of command, which is how power and authority ispassed down from the top of the hierarchy, and span of control, meaning howmany subordinates one person controls, of the business.

Advantages of an organisational chart:The charts show how everybody is linked together. Makes employeesaware of the communication channel that will be used for messages to reachthem.Employees can see their position and power, and who they take ordersfrom.It shows the relationship between departments.Gives people a sense of belonging since they are always in one particulardepartment.Chain of command and span of control:Here are two organisations, one having a long chain of command and the other awide span of control. Therefore, the longer the chain of command, the taller thebusiness hierarchy and the narrower the span of control. When it is short, thebusiness will have a wider span of control.

In recent years, people have begun to prefer to have their business have a widerspan of control and shorter chain of command. In some cases, whole levels ofmanagement were removed. This is called de-layering. This is because shortchains of commands have these advantages:Communication is faster and more accurate. The message has to passthrough less people.Managers are closer to all employees so that they can understand thebusiness better.Spans of control will be wider, meaning that the manager would have totake care of more subordinates, this makes:oThe manager delegates more and we already know the advantages ofdelegation.oWorkers gain more job satisfaction and feel trusted because ofdelegation.However, if the span of control is too wide, managers could lose control. If thesubordinates are poorly trained, many mistakes would be made.

The Role of Management:Planning:Set aims and targets for future.Planning gives sense of direction and purpose.Organising:Tasks are delegatedManagers gather required people and resources.Authorities and responsibilities are assignedCarefulness needed.Coordinating:“Bringing the people in organisation together”Make all departments work with coordination.Meetings can be arranged between different department’s people toknow about situations, problems, solutions.Controlling:Measure and evaluate the performance to know how near theyhave reached to targets.Corrective measures are taken if needed.LeadershipGood managers have leadership skills that inspire their workers to work better,as well as directing them with a common goal. Managers use many styles ofleadership, and they can be summarized into 3 main styles:

Autocratic leadership:The manager controls all aspects of their subordinates' work.They keep themselves separate from employees.Employees are expected to obey every command and cannot contribute todecisions.Communication is only top-down.Laissez-faire leadership:Objectives are shown to employees, but the task is completely delegated tothem.Communication can be difficult since clear instructions are not given.The manager has a limited role in this type of leadership.Democratic leadership:The manager discusses tasks with his employees before making decisions.Communication will be two-way, both top-down and bottom-up.Here is a diagram to summarise the leadership styles:The style of leadership used can vary depending on situations where they are themost effective.

Trade UnionsEmployees with similar interests (higher pay) form a trade union. Trade unions area form of pressure group with has the ability to influence business activity. Thereare four main types of trade unions:Craft union: For workers skilled at a particular job.General union: For unskilled and semi-skilled workers from differentindustries.Industrial union: For all types of workers in an industry.White-collar union: For non-manual or office workers.Why do workers join a trade union?Unions have a shop steward, who is an unpaid representative of the union. Whensomeone is new to a job they may ask if they may want to join. If the person joins,they will have to pay an annual subscription. This money will be use foremploying union officials who will represent the views of the employees. Closed shopA closedshop is when all employees must join one union in order to be employed.It is because its members feel that the union is doing nothing when non-membersreceive the same pay rises as them. They think it is unfair. Trade unions also gaingreater strength if all the employees are members of the union. However, many

people think that it is unfair since they are forced to join – they should be able tomake their own decisions.Advantages of a unionStrength in numbers.Improved conditions of employment.Improved working conditions.Improved sickness benefits, pensions, and retrenchment benefits.Improved job satisfaction and encourage training.Advice/Financialsupport if a worker is dismissed unfairly/made redundant or is asked todo something not part of their job.Improved fringe benefits.Employment where there is a closed shop, which is when allemployees in a business must belong to the same union.Trade unions need to:Put forward their views in the media to influence government decisions onpay, employment, etc…Improve communications between workers and managers.Advantages to the employee:

Discussions are clearer if there is only one union to deal with.The union has greater power.No disagreements between different unions.A better working relationship should develop between the union and themanagement.Disputes are solved more quickly.Advantages to the employer:Discussions are clearer.A better working relationship should develop, meaning that there would beless industrial disputes, benefiting both employees and employers.Disputes are solved more quickly.It is easier to agree to changes.Past paper questions:1.What is meant by organizational structure?

(a). What is meant by term ‘span of control’?------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------(b). What is the span of control of production director?

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------(c).What could be disadvantage and advantages to the production director for evenwider span of control?Advantages:-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Disadvantages:------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------5.What do you understand by the term ‘delegation’.------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------6.Why might it be important for a busy manager to delegate to other members ofstaff?

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------7.Identify five qualities of an effective manager.--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------8.(a)List THREE leadership styles.------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------(b).Give five benefits for joining a trade union.--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Chapter 8: Recruitment, Training, and human resourcesThe work of the Human Resources department We all know that recruitment and selection is one of the tasks that the HRdepartment fulfills. The other tasks will be discussed below:Recruitment and selection: Involves selecting and attracting the bestworkers.Wages and salaries: Must be enough to motivate or attract workers.Industrial relations: There must be effective communication betweendepartments.Training programmes: Must meet the training needs of employees andaccomplish business objectives.Health and safety: Must do things according to the law.Redundancy and dismissal: Must obey all laws when firing workers.Recruitment and selectionWorkers are needed when a business starts up, expands or an existing employeeleaves. Businesses use the recruitment process to successfully employ the rightpeople. This process is usually undertaken by the HR department, but in smallbusiness, HR departments do not exist since the businesses employ too littleworkers for it to be of much use. Here is a summary of the recruitment process:1.Vacancy arises.2.A job analysis is done, which identifies the responsibilities and tasks of thejob.3.A job description lists that responsibilities and tasks to the candidates whoapply for the position.

4.A jobspecification outlinestherequired qualifications, expertise andexperience a candidate needs so that they can be accepted.5.The job is advertised in the appropriate media. (e.g. newspapers)6.Candidates fill out application forms, which are short-listed so that onlythe best candidates remain.7.Interviews are held with remaining candidates, and the ones suitable for thejob are selected.8.Vacancy filled.The recruitment processJob analysis and description:When a new employee is needed, a job analysis needs to be taken to identify thetasks and responsibilities of the position. This should be easy for a job that needsreplacement, but not so much for a job that has just been created.Once all the details of the job have been gathered, a job description needs to bedrawn up. This job description has several functions:Given to candidates so they will know what the job will involve.Allows a job specification to be drawn up which will state therequirements for the job.Shows whether an employee carries out the job effectively or not. Ithelps solve disputes between employees and employers about wages,working hours, etc.The job description for any business will usually contain:The title of the job.The department one will work in.Who will be in charge of the job-holder.Who the job-holder will be in charge for. The purpose of the job (job summary).The main duties of the job.Job description sometimes contains information about:

The conditions of employment – working hours, wages, pension schemes.Training that will be offered.Opportunities of promotion.Job specificationAfter the job description has been drawn up, the qualifications for the job can beidentified. They usually include:The level of educational qualifications.The amount and type of experience.Special skills, talents or knowledge.Personal characteristics. (e.g. type of personality)Advertising the vacancyThe next stage is on how to get people to know that you have a job to be filled.Internal recruitmentThe vacancy can be filled by an employee already in the business. It might besuitable for employees seeking promotion.Pros of internal recruitment:Saves time and money.The candidates' reliability, ability and potential are already known.The candidates know the expectations and rules of the company.Motivates other employees to work harder to get promoted too.Cons of internal recruitmentNo new ideas or experience come into the business.

May create jealousy and rivalry between existing employees.External recruitmentMost vacancies are filled with external recruitment, which always involvesadvertising the vacancy. Here are some suitable media of advertising:Local newspaper: Usually for office and manual workers. These people areplenty since the job does not require too much skill.National newspaper: Used to find workers for senior positions that requirea lot of skills. It can be read by people anywhere in the country or overseas.Specialist magazines: Used for particular technical specialists such asphysicists. Can be used to hire people in the home country or abroad.Recruitment agencies: Keeps details of qualified people, and will send thesuitable applicants to interviews when a business asks for a worker. Manybusinesses prefer to use recruitment agencies to find them workers because itis easier. However, it is expensive since their fee is based ona percentage of the workers pay.Government job centres: Place where businesses can advertise theirvacancies. These vacancies are usually for unskilled or semi-skilledworkers.Possible effects of government legislation on the recruitment processManygovernmentspasslawstocreateequal employeeopportunities. They state that all employees should be treated equally in the workplace and receive the same salary for doing the same job. People of any sex andpeople with disabilities are treated equally. Therefore, businesses need to becareful when advertising and treating their employees because they could beprosecuted and fined.Job advertisement

This is what a business needs to decide when drawing up an advertisement:What should be included.Job descriptionJob specificationWhere the ad will be placed.(depends on job)Advertising budget.(depends on job)Applications forms and CVs/résumésWhen a person applies for a job, he will have to fill out an application form, orwrite an application letter with a CV enclosed. CVs are descriptions about one'squalifications and skills in a set format.Businesses will use application forms and CVs to see whether an applicant matchthe job specifications or not. The closest matching applicants are invited tointerviews in the selection stage. A short-list is drawn up. These are what CVs should contain:NameAddressTelephone NumberDate of BirthNationalityEducation and qualificationsWork experiencePositions of responsibilityInterestsNames and addresses of references.The letter of application should contain briefly:Why the applicant wants the job.Why the applicant feels he/she would be suitable.

Applicant forms ask for the same information as the application letter and CV, butmay ask for other types of information.InterviewsApplicants who are invited to interviews will have provided the names andaddresses of their references. These people can give their opinions on thereliability, honesty and skills of the applicants and they will be likely to tell thetruth because the applicants will not know what they have said. Interviews are the most popular form of selection. However, interviews are notalways the most reliable process of selection. They aim to find out these things:The applicant's ability to do the job.Personal qualities those are advantageous and disadvantageous.General characteristics – whether they can "fit in"?These are the likely questions in an interview:Why have you applied for the job?What do you know about this company?What qualities do you have to offer the company?What ambitions do you have?What are your hobbies and interests?Do you have any questions to ask us?Interviews can be one-to-one, two-to-one, or a panel of people to interview peoplewhich is used to select people for important jobs. Some businesses include tests intheir selection.Skilltests: Totesttheskillsofthecandidates.Aptitude tests: To test how easily candidates can be trained/learn newthings.Personality tests: To test for people who have specific personal qualitieswhich will fit into jobs – e.g. that has a lot of stress; requires you to workwith a team.Group situation tests: To test how well applicants work with other people.

Rejecting unsuccessful applicantsWhen applicants fail to get the job, they should be informed and thanked forapplying.The contract of employmentIt includes the following:name of employer and name of the employeejob titledate when employment is to beginhours to be workedrate of pay and any other benefits such as bonus, sick pay, pension, etc.Part-time and full-time workersAdvantages to the business of employing part-time workers are:more flexible in the hours of workeasier to ask employees just to work at busy timesfits in with looking after children The disadvantages to the employer are:takes longer to recruit two part time workers than one full time workercan be less committed to the businessless likely to be promotedmore difficult to communicateTrainingTraining is often needed to do achieve the needs listed below. These needs can belong-term or short-term.Introduce a new process or equipment.Improve efficiency.Decrease supervision needed.Improve the opportunity for internal promotion.Decrease the chance of accidentsEmployees should know the benefits of training for them to take it seriously. Hereare some objectives of training:Increase skills.Increase knowledge.

Change attitude, raise awareness.There are three main types of training:Induction training:Introducinga newemployee totheirbusiness/management/co-workers/facilities.Lasts one to several days.On-the-job training:Employees are trained by watchingprofessionals do a job.Only suitable for unskilled and semi-skilled jobs.Cuts travelcosts.The trainee may dosomework.The trainer's productiveness is decreased because he has to show things tothe trainee.The trainer's bad habits can be passed to the trainee.Off-the-job training: Workers go to another place for training (e.g. school).Methods are varied and usually more complex.Usually classroom training.Employees still work during the day.Employees can learn many skills.Workforce planningA business will need to forecast the type and number of employees needed in thefuture. This depends on the firm's growth and objectives. The forecast can be doneby:

oFindingoutthe skills ofallcurrentemployees.oCounting out people who are leaving soon (e.g. retirement).oTalk to staff about who would want to retrain for new jobs.oProvide a recruitment plan. (how many new staff are needed, andhow they should be recruited, internal or external)Dismissal and RedundancyThere are some situations when businesses need to reduce the number ofemployeestheyhave.Thiscanbedoneintwoways:Dismissal:A worker is fired for unsatisfactory work or behaviour.Fault of the employee.Redundancy:Employees are no longer needed. Not the fault of the employee.Some reasons are:A business is closing down a factory.A business wants to cut costs by reducing the number of employees.A business has merged/taken over another and there is too many staff incertain departments.New machinery replaces workers.Employees are given some money to compensate for their lost job.The money is often negotiated with trade unions.Some government has laws that make businesses pay for their workers thisway.If only some employees are to be made redundant, trade unions will agree withthe fairest way to see who goes. These terms are negotiated with the HRdepartment.Sometimes there will be voluntary redundancy by members.Older workers.There may be some who wants to leave because they have other ideas.Government controls over business activity

Government also influences major areas of business activity:what goods can be producedresponsibilities to employees and working conditionsresponsibilities to consumersresponsibilities to the natural environmentlocation decisionsProtection against unfair discrimination:Often workers are discriminated in a job because of various reasons. There arelaws that protect the employee from such reasons to be discriminated against:Sex Discrimination Act: people of different genders must have equalopportunities.Race Relations Act: people of all races and religions mush have equalopportunities.Disability Discrimination Act: it must be made suitable for disabled peopleto work in businesses.Equal Opportunities Policy: That is what everything is all about.The UK is currently working on an age discrimination act.Health and Safety at work:Laws protect workers from:protect workers from dangerous machinery.provide safety equipment and clothing.maintain reasonable workplace temperatures.provide hygienic conditions and washing facilities.do not insist on excessively long shifts and provide breaks in the worktimetable.Managers not only provide safety for their employees only because laws say so.Some believe that keeping employees safe and happy improves their motivationand keeps them in the business. Others do it because it is present in their moralcode. They are then considered making an ethical decision. However, in manycountries, workers are still exploited by employers.Protection against unfair dismissal

Employees need protection from being dismissed unfairly. The following reasonsfor the employee to be dismissed is unreasonable:for joining a trade union.for being pregnant.when no warnings were given beforehand.Workers who thing they have been dismissed unfairly can take their case to theIndustrial Tribunal to be judged and he/she might receive compensation if thecase is in his/her favour.Wage ProtectionEmployers must pay employees the same amount that has been stated on thecontract of employment, which states:Hours of work.Nature of the job.The wage rate to be paid.How frequently wages will be paid.What deduction will be made from wages, e.g. income tax.A minimum wage rate is present in many Western countries and the USA. Thereare pros and cons of the minimum wage:Pros:Prevents strong employees to exploit unskilled workers who could not easilyfind work.Encourages employers to train unskilled employees to increase efficiency.Encourages more people to seek work.Low-paid workers can now spend more.Cons:Increases costs, increases prices.Owners who cannot afford these wages might make employeesredundant instead.Higher paid workers want higher wages to keep on the same leveldifference as the lower paid workers. Costs will rise.

Chapter 8: Past paper questions1. Explain two differences between redundancy [retrenchment] and dismissal.………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………2. Company C is finding it difficult to recruit new employees. It pays higher wagesthan other companies in the area. Explain two possible reasons why it is findingrecruitment difficult.………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………3. The management of company D believes that they should increase theirspending on staff training.a. State and explain two different types of training that could be used by thecompany.………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………b. Describe the benefits for company D of having a more highly trained staff.………………………………………………………………………………………………………………………………………………………………………………

………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………4. A personnel department has decided to write a job description for each positionin the business.a. Explain what is included in a job description.………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………b. How might a job description help in the recruitment of new employees?………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………c. The personnel manager also decided to introduce induction training for all newstaff. What benefits might the business gain from such training?………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………5. EE provides training to its staff. Analyse the benefits of this training tocustomers and employees of EE.Benefits to customers:………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………Benefits to employees:………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………6. Do you think that a company would benefit from recruiting their seniormanagers from outside the business?………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………7. Outline the recruitment and selection process a company will need to follow tofill in a vacancy.………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

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Chapter: 9Internal and external communicationWhat is effective communication and why is it necessary?Communication is when a message transferred from one person to anotherand is understood by the later.We communicate everyday (by talking, by chatting, by texting, etc.) but weneed to learn how to communicate effectively.Effective communication means that:"The information or message being sent is received, understoodand acted upon inthe way intended."In business, ineffective communication or communication failure could result inserious problems. Why do people within business need to communicate with each other?In business, if we do not communicate, we would be working as individuals withno co-ordination with anybody else in the business. The management, whose tasksare guiding, instructing and commanding subordinates, could not be done because

they cannot communicate with them. Here are some common messages found inthe workplace:No Smoking (sign)You are fired because you are always late (letter)Do not touch (sign)There will be a fire drill 11:00 today (notice board)There are many more things that are communicated. Consequences would besevere if these matters are not communicated effectively. The process of effective communication:Effective communication involves four features:The transmitter/sender who sends the message. He has to choose thenext two features carefully for effective communication.The medium of communication. It is the method of communication, e.g.notice-board, letter, etc...The receiver who receives the message. Feedback means that the receiver has received the message and responds to it. This confirms that the message has been understoodand acted upon if necessary.One-way and two-way communicationThere are two types of communication.One-way communication.

No feedback required for the message, orthe receiver is not allowed to reply. Used by autocratic leaders.This might be the sign that says "Nosmoking", or your boss saying: "give me abiscuit". Two-way communication.Feedback is required. Therefore, both (sender and receiver) arenow involved in the communicationprocess.This could lead to better and clearerinformation.Pros of two-way communication:The sender can now know whetherthe receiver has understood andactedupon the message or not. If they have not,the message might have to be sentagain or madeclearer.Effectivecommunication takes place only if themessage is understood by the receiver.Both peopleare involved inthecommunication process.This makes the receiver feelmore important.

Might motivate them to make bettercontributions to the topic discussed.Internal and external communicationInternal communication is messages sent between people inside a business. Forexample:The boss talking to his subordinates.A report sent to the CEO.External communication refers to messages sent to people or organisations outsidethe business. For example:Orders for goods from suppliers.Talking to customers.Advertising to the public.Both types of communication is almost the same, the only difference is who isbeing communicated with.Why external communication has to work wellExternal communication can greatly affect the efficiency and image of a business.Imagine if the wrong information is sent to a supplier and a customer. The supplierwould send wrong materials while the customer might buy products from another

company. Here are some cases which ineffective external communication mightturn out to be very dangerous:The Finance Manager writes to the tax office inquiring about the amount oftax that must be paid this year.The Sales Manager receives an order of 330 goods to be delivered onWednesday.The business must contact thousands of customers because a product turnedout to be dangerous. An add must be put into the newspaper so that customers canreturn the product for a refund.Different ways of communicating: the communication mediaInformation can be transmitted in several ways:Verbal: Involves the sender speaking to the receiver.Written: The message is written to the receiver.Visual: Using charts, videos, images or diagrams to communicate amessage.There is no best method of communication, so the appropriate medium ofcommunication must be selected depending on the situation. First the sender alsohas to analyse the advantages and disadvantages of each type of communication.Verbal communicationVerbal/Oral communication might be:One-to-one talks.Telephone conversations.

Video conferencing.Meetings.Pros:Information is transferred quickly. This is an efficient way to communicatein meeting to lots of people.There is opportunity for immediate feedback which results in two-way communication.The message might be enforced by seeing the speaker. Here the bodylanguage and facial expression could make the message easily understood.Cons:In big meetings, we do not know if everybody is listening or hasunderstood the message.It can take longer for verbal feedback to occur than written feedback.Verbalcommunicationis inappropriate forstoring accurate andpermanent information if a message. (e.g. warning to a worker)Written communication including Information TechnologyHere are some written forms of communication. Most of them use IT.Letters: Used for both external and internal communication. Follows a setstructure.Memos: Used only for internal communication.Reports: Detailed documents about any problem. They are done byspecialists who send them to managers to analyse before meetings. These reportsare often so detailed that they cannot be understood by all employees.

Notices: Pinned to notice boards that offer information to everyone.However, there is no certainty on whether they are read or not.Faxes: Written messages sent to other offices via telephone lines.E-mails: Messages sent between people with the same computing facilities.The message is printed if a hard copy is needed.oIntranet: A network inside a business which lets all employees with acomputer message each other.oInternet: The global network for messaging anyone. (e.g. customers,suppliers)Pros:There is hard evidence of the message which can be referred to and helpsolve disputes in the future over the content of the message.It is needed when detailed information is transferred: it could be easilymisunderstood. Some countries the law states that businesses need to putsafety notices up because people could forget them.The written message can be copied and sent to many people.Electronic communication is a quick and cheap way to get to manypeople.Cons: Direct feedback is not always possible, unless electronic communication isused. However, this could result in too many emails sent (informationoverload). Direct feedback via other means of written communication ishard.

It is not as easy to check whether the message has been understoodor actedupon.The language used might be difficult to understand. The message mightbe too long and disinterest the reader.There is no opportunity for body language to be used to enforce themessage.Visual communicationHere are some forms of visual communication:Films, videos, and PowerPoint displays: often to help train new staff orinform sales people about new products.Posters: can be used to explain a simple but important message. (e.g.propaganda poster)Charts and diagrams: Can be used in letters or reports to simplifyand classify complicated data. Computer technology could help in the design ofthese charts or diagrams. A printed copy might be needed forward data to add toreports and documents.Pros:Presentinformationinan appealing and attractive waythatencourages people to look at it.They can be used to make a written message clearer by adding a picture or achart to illustrate the point being made.Cons:

No feedback is possible. People need to checked via verbal or writtencommunication to check that they have understood the message.Charts and graphs might be difficult for some people to understand. Themessage might be misunderstood if the receiver does not knowhow to interpret a technical diagram.Formal and informal communicationFormal communication is the channel of communication that is recognisedby thebusiness, such as notices on boards, emails and memos. Formal means ofcommunication is important. It shows that the information given is true.Informal communication might be communication between friends and co-workers. There is no set structure and the information transferred is notrecognised by the business. This channel of communication could be used by themanager to try out new ideas, before publicly announcing it to the rest of acompany. However, informal communication can result in gossip can rumorsor‘grape-vine ‘and managers have no way to remove these informal links frompeople.

The direction of communicationsHere is an organisation chart from the book explaining the direction ofcommunications within the business. The arrows are labeled A, B and C whichshows the direction of communication:Arrow A (downwards communication): oUsed by managers to send important messages tosubordinates.oDoes not allow feedback.oThe message might be altered after passing different levels.Arrow B (upwards communication):oUsed by subordinate send feedback to managers.

oFeedback from subordinates ensures that there is effectivecommunication.oFeedback results in higher morale and new ideascontributed to thebusiness.Arrow C (horizontal/lateral communication):oPeople at the same level of management communicate with eachother.oInformation and ideas can be exchanged both formally andinformally.oCan cause conflict between departments. (e.g. Production departmentasks the Finance department for a budget to hire new staff but is rejected)Barriers to effective communicationAs we already know, the four parts of effective communication includes thesender, medium, receiver and feedback. However, communication may fail ifthere are problems with one of these four features. If one part fails, it becomes abarrier to effective communication which might cause a breakdown incommunication resulting in serious consequences to the business. Here are somecommon barriers to effective communication and how to overcome them.Problems with sender:Problem: Language is too difficult to understand. Technical jargonmay notbe understood.Solution: The sender should ensure that the receiver can understandthemessage.

Problem: There are problems with verbal means of communication. (e.gspeaking too quickly)Solution: The sender should make the message as clear as possible and askfor feedback.Problem: The sender sends the wrong message to the wrong receiver.Solution: The sender must ensure that the right person is receiving the rightmessage.Problem: The message is too long with too much detail which preventsthe main points from being understood.Solution: The message should be brief so that the main points areunderstood.Problems with the medium:Problem: The message may be lost.Solution: Check for feedback. Send the message again!Problem: The wrong channel has been used.Solution: Ensure the appropriate channel is selected.Problem: Message could be distorted after moving down a long chain ofcommand.Solution: The shortest channel should be used to avoid this problem.Problem: No feedback is received.Solution: Ask for it! Use different methods of communication (e.g.meeting)Problem: Breakdown of the medium.Solution: Use other forms of communication.

Problems with the receiver:Problem: They might not be listening or paying attention.Solution: The importance ofthemessageshouldbe emphasized.Request feedback.Problem: The receiver might not like or trust the sender, and may beunwilling to act upon the message.Solution: Trust is needed for effective communication. Use another sender tocommunicate the message.Problems with the feedback:Problem: There is no feedback.Solution: Ask for feedback. Use a different method of communicationwhich allows feedback.Problem: The feedback is received too slowly and may be distorted.Solution: Direct lines of communication should be available between thesubordinate and the manager.Note: The forms of communication are: verbal, written and visual. The methods of communication can be: telephone, e-mail, meeting, etc...

Past paper questions:1.Outline the Four features that make the communication ‘effective’.--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------2.Explain the difference between one way and two way communication.----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------3.Identify and explain one situation where two-way communication would beparticularly effective.

--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------4.Explain the difference between internal and external communication.--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------5.Identify and explain few ways in which communication has been made easy withthe help of new technology.----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------6.(a)Explain two barriers to effective internal business communication.------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------