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Business Studies Unit 2
Transcript of Business Studies Unit 2
Structure Unit 2: Managing A Business Developing and Retaining an Effective Workforce: Motivating Employees Motivation In Theory Recruitment (and selection) is concerned with filling job vacancies that may arise within a business. Organisational structure is the formal and systematic way the management of a business is organised. Finance & People Measuring the Effectiveness of the Workforce Key Elements of Organisational Structure Workforce Roles - Directors The board of directors who handle the most senior appointments and set out the main aims and objectives of the business. - Managers Flat hierarchy Less than or equals to 3 levels Tall hierarchy More than or equals to 4 levels Delayering Taking out the middle management Functional areas Centralised Decentralised Chain of command Matrix group The different department Decision-making power and control remains in the hands of the top management levels Delegates decision-making power to workers lower down the organisation Shows the reporting system from the top of the hierarchy to the bottom
The route through which information travels throughout the organisation A project team made up of people with different skills to enable them to make integrated decisions for the project. There are two types of director: * Executive directors.
They head up important divisions or departments.
* Non-executive directors.
Part time directors from outside the business; their job is to take an independent view of the shareholders' best interests. A person responsible for organising others to carry out tasks.
A line manager is the person immediately above someone in the organisational chart. - Team Leaders This role will usually arise in firms that organise themselves in a matrix management structure. Span of control The number of people directly under the super vision of a manager. Advantages & disadvantages of a narrow span of control Advantages Disadvantages Allows close management supervision, vital if staff are inexperienced, labour turnover is high or if the task is critical.
Communications may be excellent within the small, immediate team.
Many layers of hierarchy means many rungs on the career ladder, so promotion chances arise regularly. Workers may feel over-supervised and therefore not trusted; this may cause better staff to leave as they are looking for more personal responsibility
Communications may suffer within the business as a whole, as a narrow span means more layers of hierarchy, which makes vertical communications harder.
The narrow span usually leads to restricted scope for initiative and experiment; the boss is always looking over your shoulder and this will alienate enterprising staff. SILO Vertical chimney which acts as barrier to horizontal communication Two main performance indicators used to measure the effectiveness of a personnel department: Labour Productivity
Labour Turnover Labour Productivity Measure of how well a firm's workers are doing output per period number of employees per period __________________________ Higher productivity leads to lower labour costs per unit. Labour Turnover Measure of the rate of change of a firm's workforce number of staff leaving the firm per year average number of staff x 100 _________________________________ Causes of labour turnover If rate of labour turnover is increasing, it may be a sign of dissatisfaction within the workforce. Internal:
Poor recruitment and selection procedure -> Wrong person to wrong post.
Ineffective motivation or leadership -> Lacking commitment to the firm.
Wage level are lower than those earned by similar workers in other local firms.
More local vacancies arising.
Better transport links -> making a wider geographical area accessible for workers. Consequences of high labour turnover New workers can bring new ideas and enthusiasm to the firm
Hire workers with specific skills
New ways of solving problems (different perspective) Cost of recruitment of replacements
Cost of retraining replacements
Time taken for new recruits to settle into the business and adopt the firm's culture
Loss of productivity while the new workers adjust Training is a provision of work-related education, where employees learn new skills or develop the skills they already possess. Recruitment The process by which a job vacancy is identified and potential employees are notified. Job description: Person Specification: A summary of the main duties & responsibilities of a job. A description which identifies the skills and experience that are likely to be held by a successful applicant for a job vacancy. Demonstrated by application form, letter or curriculum vitae (CV). Selection The process of assessing candidates and appointing a post holder. Interview: Aptitude Testing: In-tray Exercise: Some methods used: Part of the recruitment process where a candidate is met face to face. Assessing the skills of applicants. Activity based around what the applicant will be doing. For example, writing a letter to a disgruntled customer. Internal Recruitment External Recruitment Where candidates for a job vacancy come from within the organisation Where candidates for a job vacancy come from outside the organisation Advantages Advantages Disadvantages Disadvantages Quicker and cheaper than external recruitment
Can motivate employees
Avoids the need for induction training
Aware of employees' skills and attitude to work Existing workers may not be skilled enough for new position
Not much input of new ideas
Can create vacancy elsewhere within the business Avoid need for additional training if candidates have expertise in the position
Allows new ideas to be brought into the business The process is expensive and time consuming
Can de-motivate the current workforce
Can result in increased staff turnover if the right employees are not selected Training The provision of work-related education or skills development Usually 4 reasons why training will take place: - Induction
- Upgrading skills
- Multi skilling
- Re-training Induction Training Training aimed at introducing new employees to a business and its procedures. On-The-Job Training Training that takes place at the workplace. For example, Mentoring
Job Rotation Advantages Disadvantages Gain essential skills while doing their job
Does not result in a significant disruption to production
Can be cheaper (Trainees have lower rate pay) All training is ultimately a cost to the business in terms of providing the training itself
May mean that other staff have to be removed from their jobs to supervise the trainee
Risk involved when appointing a novice to do a job they have never done before Off-The-Job Training Training that takes place away from the workplace For example, Seminars
Conferences Advantages Disadvantages Allows employees to gain knowledge and training from outside the business
Allow for new ideas to be brought into the business
Motivate employees by giving them occasional distraction from the day to day routine of their work Cost to the business in terms of loss of production and costs of the external training
Further costs may be incurred by the business through travel and accommodation expenses
Can result in paying two people for one job to be carried out
Can de-motivate some employees if they see the training as a waste of time F W Taylor and scientific management He saw it as management's task to decide exactly how every task should be completed. Then to devise the tools needed to enable the worker to achieve the task as efficiently as possible. [Evident today in McDonald's]
He believed that people work for only one reason - money (Economic Man)
A manager could best motivate a worker by offering an incentive (a 'carrot') or a thread (the 'stick') Advantages Disadvantages There are a lot of people who are motivated by money
Influential in terms of effective management Does not consider other reasons for motivation Elton Mayo and the human relations approach Heavily influenced by Taylor
Experiments at Hawthorne: The Hawthorne Experiments & Relay Assemply Test
The consequences of Mayo's work were huge - this movement became known as the human relations school of management Advantages Disadvantages Unlike Taylor, Mayo considers other factors
Provides a more complex and comprehensive approach, which takes Taylor's theory further A complex subject (Human behaviour is complex as every human is different) Maslow and the hierarchy of needs Maslow believed that everyone has the same needs - all of which can be organised as a hierarchy.
For example, if an individual's primary motivations is physical needs, he/she is motivated by food, shelter and warmth. Advantages Disadvantages It makes sense as it is individualistic and shows that different people has different needs
It is simple Should open out at the top of the pyramid as even if they are the best, they would keep wanting to improve themselves Herzberg 's two factor theory 1. Hygiene Factors These factors do not lead to higher levels of motivation, but without them there is dissatisfaction (de-motivating)
These hygiene factors include: Working conditions
Security 2. Motivation Factors This involves what people actually do in the job and should be engineered into the jobs that employees do in order to develop intrinsic motivation.
These factors result from internal instincts in employees, resulting in increased levels of motivation
The motivators are: Achievement
Interest In The Job Advantages Disadvantages Talks about motivation
More complex & comprehensive Generic Approach (All workers are different, thus might not be appropriate for every worker)