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Unit 2, Buss 2, Finance and People
Transcript of Unit 2, Buss 2, Finance and People
- The calculation and interpretation of favorable and adverse variances.
-Using variance analysis to inform decision making. Using Budgets - Causes of cash flow problems.
- Methods of improving cash flow Improving Cash Flow Measuring and Increasing Profit - The calculation and understanding of net profit margins.
- The calculation and understanding of return on capital.
- Methods of improving profits/profitability.
- The distinction between cash and profit. Measuring the Effectiveness of a Workplace - Methods of measuring workforce
performance - The recruitment process.
- Internal and External recruitment.
- Selecting the best employees.
- How recruitment and selection can improve a workforce.
- Methods of training. BUSS 2 Unit 2 Finance and People Improving Organisational Structures - Key Elements of organisational structure.
- Workforce roles.
- How organisational structure affects business performance Developing and Retaining an Effective Workforce: Motivating Employees - Using financial methods to motivate employees.
- Improving job design.
- Empowering Employees
- Working in teams
- Theories of motivation Specification Specification Specification Specification Specification Specification Specification RECRUITMENT Recruitment is the process in which a job vacancy is identified and potential employees are notified. KEY TERMS
Job Description: outline the role of the job holder.
Person Specification: outline of the skills and qualities required of the post holder. SELECTION Selection is the process in which candidates are assessed and a post holder is appointed. Selection Methods:
Short Listing - Reducing Number of potential candidates.
Interview - Face to Face Q and A with potential employee.
Presentations - Looking at different skills as well as ideas in a candidate.
In-Tray Exercises - Activity based around what the applicant will be doing.
Psychometric Testing - Assessing personality of the applicants.
Aplitude Testing - Assessing Skills of Applicant. Internal Recruitment Internal Recruitment is when a business employs from with in the business. Advantages:
-Quicker and cheaper than external recruitment
-Greater Variety and can motivate employees.
-Avoids the need for new workers to be inducted into the business .
-Business is already aware of the skills and attitude to work. Disadvantages:
-Exisiting workers may not be skilled enough for the new position.
-May not allow for as nuch inpit of new ideas as external recruitment can bring.
-Can create a vacancy elsewhere within the business, which only delays the need for external recruitment. EXTERNAL RECRUITMENT Where a business employs a new member of staff from out side the business. Advantages:
Allows for much wider range of candidate than internal recruitment
May avoid the need for additional training if candidates have expertise/ experience in the position.
Allows new ideas to be brought into the business, particularly if the candidates already have experience. Disadvantages
The process is expensive and time consuming.
Can demotivate the current work force, particularly those who have ambitions of internal promotions.
Can result in increased staff turnover if the right employees are not selected. TRAINING Training is used to introduce recruited employees into the working environment, as well as developing their skills which are required for the job. There are 4 reason why training takes place:
- Induction - introducing employee to a job
- Upgrading Skills - improving the employees skills
- Multi Skilling - Expanding the employees range of skills
- Re-Training - Re-teaching already accquired skills On-the-job Training On-the-job training is where a worker remains in their place of work and learns how to do their job This can include:
Job Rotation On-the-job Training Advantages
-Gain essential skills whilst doing their job.
-Reduces disruption to production.
-Can be cheaper than Off-the-job training.
-Increases level and range of skills of the workforce.
-Can lead to a more motivated workforce. Disadvantages
-All training ultimately is at a cost to the business in terms of providing it.
-May mean other staff have to be moved from therre workforce in order to supervise/ manage the trainnees.
- Some degree of risk involved in employing a novice to do a job that they have never done before. Off-the-job Training This is when employees are trained away from the usual place of work. These include:
Conferences Off-the-job Training Advantages:
-Allows employees to gain knowledge and training from outside the business.
-Can allow new ideas to be brought into the business.
-Can lead to a more motivated workforce by creating new opportunities.
-Can also motivate employees from giving them a distraction from the day to day work. Disadvantages:
-Cost to business in terms of loss of production and the cost of external training.
-Further costs may incur by the business through expenses such as travel and accomidation.
-Can result in two people getting paid for the same job.
-Can demotivate employees if they see it as a waste of time. Roles and Relationships Directors: They are members of the board. They are the most senior people and deal with important decisions and meetings.
Managers: A manager is a person who is responsible for organising others to carry out tasks.
Team Leader: This role will usually arise in firms themselves in a matrix management. Key Terms Level of Hierarchy: These show the number of different supervisory and management levels.
Span of Control: This describes the number of people directly under the supervision of a manager.
Chain of command: This shows the reporting system from the top of the hierarchy to the bottom.
Centralisation and Decentralisation: This describes the extent to which decision-making power and authority are delegated with in an organisation. Centralised is where the main decision making is made by the management where as decentralised is when it is delegated to different levels of the business. How Organisational Structure Affects Business Performance There is no ideal structure for a business but this does not mean it will not affect them. For example by organising the structure a business can run more smoothly, as communications will improve and with that efficiency. Labour Productivity Output per period / Number of employees per a period Labour productivity is one of the main ways in which business measure the effectiveness of a workforce. It compares the number of workers with the output that they are making and is expressed through the formula. Labour Turnover f (Number of staff leaving the firm per a year / Average number of staff ) x 100 This equation measures the rate of change in a workforce. By having a high labour turnover this can have some disadvantages for a business. For example, be costly, waste precious time and the loss of productivity. FW Taylor Taylor was the first theorist who really looked at what motivates an employee. - Fundamentally Taylor believed that money motivated staff.
-He believed that if staff were motivated then the business will run more efficently.
-Taylor devised a pay scheme which rewarded his staff due to how they worked, and saw an increase in productivity. Elton Mayo Elton Mayo was then able to expand on Taylors theory, looking at more ways which he found motivated employees. -Mayo believed it wasnt just money which motivated staff but also social factors.
-He believed people also came to work to socialise, meet new people than just to earn a living.
-Mayo did many experiments which proved this, although both his and Taylors theory are generalisations as all people are different.
Abraham Maslow Maslow was a psycologist who came up with the idea of a hieracrchy of needs, that were what motivated employees
Physical Needs Herzberg Herzberg further expanded the theory of motivation by not only lookin at what motivated staff, but also what demotivated them. He looked at these as motivators and hygiene factors. (Image p175)