Business Unit 2 People

Key Elements of Organisational Structures

• levels of hierarchy
• span of control
• delegation
• communication flow / chain of command

How Organistational Structures Affect Business Performance

• poor or good communication
• high or low span of control for managers
• costs
• efficiency
• speed of decision making
• delegation
• co-ordination

Methods of Measuring Workforce Performance

• labour productivity = output (units)
• number of employees
• labour turnover = number of staff leaving x 100
• number of employees

Interpreting Measures

• if labour turnover is increasing it is a negative as it may increase costs for training new staff and may create problems towards other staff
• increase in productivity is a positive as it means motivation is high and there is scope for more sales; however it can be a negative because if it increases too much, quality may decrease

Recruitment Process

• job description --> employment specification --> advertise --> accept applicants --> short list --> interview --> select

Internal and External Recruitment

• internal: someone already working for the company, could be a promotion or redeployment. this type of recruitment can be a problem as it creates gaps in the business
• external: someone outside the business, trained up for the job. this type of recruitment can be a positive as they may bring new ideas to the business.

Methods of Selection

• interview
• test centres
• practical tests

How Recruitment and Selection can Improve a Workforce

• short term motivation by giving the workforce a boost
• new employee bringing new ideas to the workforce

Methods of Training

• on the job training - where an employee learns by watching an experienced employee carry out the job. can be cheaper as existing employees and equipment can be used. also represents a real working environment. however, working environment may not be suitable due to distractions, also they may be more motivated when being trained by an expert
• off the job training - takes place away from normal work situations. it has the advantage that employees can escape from the working environment and distractions and concentrate on the training. however, employees don't have the advantage of using the actual working tools and equipment
• induction training - when a newly appointed candidate needs training for a new post in a business

Finacial Methods

• piece rate - a system were employees are paid according to the units of output they produce. this encourages high levels of output, and reduces need for supervision as employees are self motivated. however, employees may sacrifice quality for quantity, employees may produce according to their needs ie. when they need more money
• bonuses - employees are rewarded bonuses on top of their original pay when they have worked well
• fringe benefits - health insurance, pension schemes, transport or discount
• performance related pay - a bonus awarded to employees who show above average performance.

Methods of Improving Job Design

• job enrichment - introducing more challenging tasks
• job enlargement - introducing a wider variety of tasks, can lead to job rotation
• empowering employees - more responsibility and control over their tasks

Working in Teams

• motivational benefits, may lead to better quality work, wider range of ideas, and wider range of skills within the team

Theories of Motivation

• taylor - people are driven by money so to motivate employees financial techniques should be used ie. piece rate schemes
• hertzberg - two factor theory; hygiene, if environment was unpleasant or inadequate employees will feel dissatisfied. motivator factors, based on indivdual needs, if they are met employees will feel satisfied, will increase in performance
• mcgregor - theory x; individuals who dislike work and avoid it, lack ambition and responsibilty and prefer to be led, management systems and control and punishment were needed. theory y; ordinary people who don't dislike work, who seek responsibility and depend on motivation
• mayo - workers are not just concerned with money but could be better motivated if they have their social needs met whilst at work.