Notesale: Turn your study into money

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Topic 1
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EMPLOYEES AS ASSETS
EMPLOYEES AS A COST
Provide
good
remuneration Pay workers the minimum
packages
Give reasonable holiday and sick Provide the minimum legal sick
pay
and holiday pay
Invest in the working conditions
Provide basic working conditions
Provide workers with job security Maximise output while minimising
staff costs
See training as an investment
See training as unnecessary
Delegate responsibility
Centralise decision-making
Take care in developing policies Give thought to employee
that motivate staff
motivation
 Employees may be dismissed from work for failing to meet the
required standard or through misconduct
...

 Redundancy applies where there is no work, not enough work or the
position no longer applies
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Flexible Working
In order to adapt to the changing demands of the business
environment, a firm may want to adopt a flexible approach to its
workforce
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 Approaches to flexible working
 Part-time and temporary contracts
...
g
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 Multi-skilling employees so that they can carry out multiple roles
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committed to the company if they
do not have a permanent contract
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experts who do not have to be
permanently employed
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Outsources work may be of a
lower quality
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 Focus on negotiations through collective bargaining
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 Represent members at industrial tribunals and give workers advice on
employment issues
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 Decline of trade unions membership over past 20 years
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 Members elected from the workforce by the workforce
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 Allows the workforce to be heard without trades union representation
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 Informal groups set up by workers to focus on a aspect of work
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 Employee committees influence decisions made at works councils
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The Managing Director may have
ultimate authority but there will be a group of directors known as the board
of directors who will take responsibility for various functions of the firm
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They may be responsible for a
department and report to the directors
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They may
have delegated responsibility from a manager
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Categories:
 PROFESSIONALS – staff with high levels of qualifications and experience
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g
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 OPERATIVES – skilled workers who are involved in the production of a
product or the delivery of a service
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 GENERAL STAFF – roles carried out by workers with non-specific skills
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g
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Organisational Design

Recruitment







The process of finding and hiring a person for a specific job role that
needs filling within a firm
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 Cheaper than external recruitment
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 May require less training
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EXTERNAL RECRUITMENT – involves bringing new employees in from
outside the organisation
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 May attract a wider number of applicants
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 Helps increase the capacity within the firm
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 Output may continue as learning is through actually doing the job
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 However, it can be disruptive for others and mistakes are possible
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 Mistakes reduced as training is not on site
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 However, it might be costly and may not always be relevant
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Another danger is that the
employees may leave the organisation and the investment is then lost
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CHAIN OF COMMAND – refers to the levels in the hierarchy
...
Organisations
naturally increase the levels of the hierarchy as they grow
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An organisation with a wide span of control will
encourage delegation and is referred to as having ‘flat’ hierarchy
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It can be used to
lighten the workload of key personnel as the organisation grows and can be
a key aspect of job design as it leads to job enrichment for junior members
of staff
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CENTRALISATION – refers to a decision-making process whereby the
majority of decisions are led by senior managers
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 Appropriate for situations where managers have the knowledge and
workers are low skilled
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 More suitable in times of crisis
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DECENTRALISATION – refers to a decision-making process whereby the
majority of decisions are delegated to managers in charge of regions,
functions, and product categories
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 Appropriate where firms are spread over a wide geographic area and
local trends and needs are important
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 Allows for flexible working conditions and supports job enrichment
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Organisations tend to add levels to their hierarchy as they grow
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 More control of employees
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 Less delegation and empowerment
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There will be few middle managers but the span of
control for managers at the top of the structure could be wide
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 More flexible
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 Less control and fewer opportunities for promotion
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Teams are formed to carry out a specific project such
as the development of a new product or opening of a new branch
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Motivational Theory – Frederick Taylor
The theory is based on work study and improving productivity and efficiency
of the workforce
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 People are motivated solely by money
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 Improve efficiency through standardisation and the division of labour
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 The application of Taylor’s principles reduces the need for as many
workers as productivity is raised
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 Informal working groups are recognised as having a positive influence on
productivity
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 Social interaction outside of working hours are important
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 Focuses on the needs of the employees
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 People are driven to achieve personal needs
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 Basic needs (physiological and security) refer to those linked to survival
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 A person cannot move up the hierarchy without fulfilling the needs below
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Financial Methods of Motivation
METHOD
COMMISSION – a bonus paid based on achieving 
a sales target
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BENEFITS
Appropriate for sales jobs
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

PIECEWORK – payment based on the number of
units of output produced
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Targets and performance may be reviewed every six
months or annually
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
Incentive to increase output (units)
Links pay to measurable targets specific to the 
nature of the job
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






PROFIT SHARING/BONUS SCHEMES – issuing a 
percentage of net profit across the workforce
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LIMITATIONS
Focus taken away from other areas of the job
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Employees may ignore factors such as quality
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Difficult to ensure PRP is fair across the
organisation
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Non-Financial Methods of Motivation
METHOD
DELEGATION,
CONSULTATION
&
EMPOWERMENT – giving employees authority, and
the power to influence key business decisions
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FLEXIBLE WORKING – adopting flexible contracts
and approaches that do not require employees to
work in an office every day
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BENEFITS
Employees feel involved, have the ability to make
their own decisions and are able to influence the
firm
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Help employees develop a
connection to the firm through their colleagues
Employees fit their work around their personal life
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Helps the firm cut back on employments costs
Employees are motivated through increased variety
and personal development
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Some employees may not have the
skills/experience to make decisions/contribute ideas
Individual performance is harder to identify in a team
situation
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Difficult to keep control of employees and ensure
they are being productive
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Can be disruptive and reduce productivity in the
short-term as employees develop their skills and
learn new roles
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High levels of control suitable for unskilled workforce
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Allows a manager to collect ideas and opinions from employees
Allows employees autonomy to make their own decisions
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Employees feel as though they are being looked after
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No opportunity for employees to be involved in decision-making
No opportunity to collect opinions of the workforce
Decision-making can take a long time when done by committee
Employees may not see the ‘bigger picture’ and vote for
decisions that benefit them
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Employees given no powers to make decisions
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Motivational Theory – Frederick Herzberg: Two-Factor Theory
The theory identified that hygiene factors are important in so far as the satisfactory presence of them will
not lead to the dissatisfaction of employees
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FACTORS LEADING TO DISSATISFACTION
FACTORS LEADING TO SATISFACTION
 Poor pay
 Good leadership practices
 Lack of promotions
 Good manager relationship
 Poor compensation
 Clear direction and support
 Poor benefits offering
 Personal growth
 Poor work conditions
 Advancement and recognition
 Lack of job security

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