Motivation in Theory

Motivation in theory - What is motivation?
What is Motivation?
Buchanan defines motivation as follows:
"Motivation is a decision-making process, through which the individual chooses the
desired outcomes and sets in motion the behaviour appropriate to them".
How does motivation differ from "motives"
Buchanan defines motives as:
"learned influences on human behaviour that lead us to pursue particular goals because
they are valued".
Motivation can therefore be thought of as the degree to which an
individual wants AND chooses to engage in certain behaviours.
For example: are you motivated to study? The answer lies in whether you
(1) Want to study - what are the reasons, if so?
(2) Choose to study? - Why are you reading these revision notes? What factors mean that
you have taken the decision to study? How much effort do you put in?
Individual behaviour is at the heart of human motivation
Why is individual behaviour so important in trying to understand and then influence
motivation?
- Every individual has a set of needs and a different set of goals
- Individuals behave in a way as to satisfy their needs and fulfil their goals
- Therefore, individuals behave differently!
- Businesses, as organisations, are in a position to offer some of the satisfactions that
individuals seek:
E.g. - Relationships; sense of belonging; intellectual stimulation; mental & physical
challenge; self-development
Why is motivation important for businesses?
It is often said that the best businesses have the best motivated workers. Why might this
be important? Because well-motivated employees are usually characterised by:
- Higher productivity (i.e. they produce more for a given level of resources than poorly-
motivated workers)
- Better quality work with less wastage
- A greater sense of urgency (things happen quicker - when they need to)
- More employee feedback and suggestions made for improvements (motivated workers
take more "ownership" of their work")
- More feedback demanded from superiors and management
- Working at 80-95% of their ability
Motivation Theory - Maslow
Author: Jim Riley Last updated: Sunday 23 September, 2012
Maslow's hierarchy of needs
Maslow's Hierarchy of Needs is a "content theory" of motivation" (the other main one is
Herzberg's Two Factor Theory).
Maslow's theory consisted of two parts:
(1) The classification of human needs, and
(2) Consideration of how the classes are related to each other
The classes of needs were summarised by Maslow as follows:

How does the Hierarchy Work?
- A person starts at the bottom of the hierarchy (pyramid) and will initially seek to satisfy
basic needs (e.g. food, shelter)
- Once these physiological needs have been satisfied, they are no longer a motivator. the
individual moves up to the next level
- Safety needs at work could include physical safety (e.g. protective clothing) as well as
protection against unemployment, loss of income through sickness etc)
- Social needs recognise that most people want to belong to a group. These would include
the need for love and belonging (e.g. working with colleague who support you at work,
teamwork, communication)
- Esteem needs are about being given recognition for a job well done. They reflect the fact
that many people seek the esteem and respect of others. A promotion at work might
achieve this
- Self-actualisation is about how people think about themselves - this is often measured
by the extent of success and/or challenge at work
Maslow's model has great potential appeal in the business world. The message is clear - if
management can find out which level each employee has reached, then they can decide on
suitable rewards.
Problems with the Maslow Model
There are several problems with the Maslow model when real-life working practice is
considered:
- Individual behaviour seems to respond to several needs - not just one
- The same need (e.g. the need to interact socially at work) may cause quite different
behaviour in different individuals
- There is a problem in deciding when a level has actually been "satisfied"
- The model ignores the often-observed behaviour of individuals who tolerate low-pay for
the promise of future benefits
- There is little empirical evidence to support the model. Some critics suggest that
Maslow's model is only really relevant to understanding the behaviour of middle-class
workers in the UK and the USA (where Maslow undertook his research).

Motivation Theory - Herzberg
Herzberg two factor theory
Herzberg's Two Factor Theory is a "content theory" of motivation" (the other main one is
Maslow's Hierarchy of Needs).
Herzberg analysed the job attitudes of 200 accountants and engineers who were asked to
recall when they had felt positive or negative at work and the reasons why.
From this research, Herzberg suggested a two-step approach to understanding employee
motivation and satisfaction:

Hygiene Factors
Hygiene factors are based on the need to for a business to avoid unpleasantness at work. If
these factors are considered inadequate by employees, then they can cause dissatisfaction
with work. Hygiene factors include:
- Company policy and administration
- Wages, salaries and other financial remuneration
- Quality of supervision
- Quality of inter-personal relations
- Working conditions
- Feelings of job security
Motivator Factors
Motivator factors are based on an individual's need for personal growth. When they exist,
motivator factors actively create job satisfaction. If they are effective, then they can
motivate an individual to achieve above-average performance and effort. Motivator factors
include:
- Status
- Opportunity for advancement
- Gaining recognition
- Responsibility
- Challenging / stimulating work
- Sense of personal achievement & personal growth in a job
There is some similarity between Herzberg's and Maslow's models. They both suggest that
needs have to be satisfied for the employee to be motivated. However, Herzberg argues
that only the higher levels of the Maslow Hierarchy (e.g. self-actualisation, esteem needs)
act as a motivator. The remaining needs can only cause dissatisfaction if not addressed.
Applying Hertzberg's model to de-motivated workers
What might the evidence of de-motivated employees be in a business?
- Low productivity
- Poor production or service quality
- Strikes / industrial disputes / breakdowns in employee communication and relationships
- Complaints about pay and working conditions
According to Herzberg, management should focus on rearranging work so that motivator
factors can take effect. He suggested three ways in which this could be done:
- Job enlargement
What is Job Enlargement?
Job enlargement (sometimes also referred to as horizontal loading) involves the addition
of extra, similar, tasks to a job.
In job enlargement, the job itself remains essentially unchanged. However, by widening the
range of tasks that need to be performed, hopefully the employee will experience less
repetition and monotony that are common on production lines which rely upon the division
of labour.
With job enlargement, the employee rarely needs to acquire new skills to carry out the
additional task, and the motivational benefits of job enrichment are not usually
experienced.
One important negative aspect is that job enlargement is sometimes viewed by employees
as a requirement to carry out more work for the same amount of pay.

- Job rotation
What is Job Rotation?
Job rotation involves the movement of employees through a range of jobs in order to
increase interest and motivation.
Job rotation can improve multi-skilling but also involves the need for greater training.
In a sense, job rotation is similar to job enlargement. This approach widens the activities of
a worker by switching him or her around a range of work.
For example, an administrative employee might spend part of the week looking after the
reception area of a business, dealing with customers and enquiries. Some time might then
be spent manning the company telephone switchboard and then inputting data onto a
database.
Job rotation may offer the advantage of making it easier to cover for absent colleagues, but
it may also reduce' productivity as workers are initially unfamiliar with a new task.
Why is Job Rotation Important?
Job rotation is seen as a possible solution to two significant challenges faced by business:
(1) Skills shortages and skills gaps, and
(2) Employee motivation
Skills shortages occur when there is a lack of skilled individuals in the workforce.
Skills gaps occur when there is a lack of skills in a companys existing workforce which
may still be found in the labour force as a whole.
According to the Treasury and DfES, both skills shortages and gaps are major problems
acting as major barriers to economic growth and the reduction in long-term
unemployment in the UK.
- Job enrichment
Job enrichment is connected to the concept of job enlargement.
Job enrichment is the process of "improving work processes and environments so they are
more satisfying for employees".
Many jobs are monotonous and unrewarding - particularly in the primary and secondary
production industries. Workers can feel dissatisfied in their position due to a lack of a
challenge, repetitive procedures, or an over-controlled authority structure.
Job enrichment tries to eliminate these problems, and bring better performance to the
workplace.
There are three key parts to the process of job enrichment
1. Turn employees' effort into performance:
Ensuring that objectives are well-defined and understood by everyone. The overall
corporate mission statement should be communicated to all. Individual's goals
should also be clear. Each employee should know exactly how she fits into the
overall process and be aware of how important her contributions are to the
organization and its customers.
Providing adequate resources for each employee to perform well. This includes
support functions like information technology, communication technology, and
personnel training and development.
Creating a supportive corporate culture. This includes peer support networks,
supportive management, and removing elements that foster mistrust and
politicking.
Free flow of information. Eliminate secrecy.
Provide enough freedom to facilitate job excellence. Encourage and reward
employee initiative. Flextime or compressed hours could be offered.
Provide adequate recognition, appreciation, and other motivators.
Provide skill improvement opportunities. This could include paid education at
universities or on the job training.
Provide job variety. This can be done by job sharing or job rotation programmes.
It may be necessary to re-engineer the job process. This could involve redesigning
the physical facility, redesign processes, change technologies, simplification of
procedures, elimination of repetitiveness, redesigning authority structures.
2. Link employees performance directly to reward:
Clear definition of the reward is a must
Explanation of the link between performance and reward is important
Make sure the employee gets the right reward if performs well
If reward is not given, explanation is needed
3. Make sure the employee wants the reward. How to find out?
Ask them
Use surveys( checklist, listing, questions)
Motivation Theory - Taylor
Taylor & Scientific Management
Introduction
Taylor developed his theory of "scientific management" as he worked his way up from a
labourer to a works manager in a US steelworks.
From his observations, Taylor made three key assumptions about human behaviour at
work:
(1) Man is a rational economic animal concerned with maximising his economic gain;
(2) People respond as individuals, not as groups
(3) People can be treated in a standardised fashion, like machines
Taylor had a simple view about what motivated people at work - money. He felt that
workers should get a fair day's pay for a fair day's work, and that pay should be linked to
the amount produced (e.g. piece-rates). Workers who did not deliver a fair day's work
would be paid less (or nothing). Workers who did more than a fair day's work (e.g.
exceeded the target) would be paid more.
The implications of Taylor's theory for managing behaviour at work were:
- The main form of motivation is high wages, linked to output
- A manager's job is to tell employees what to do
- A worker's job is to do what they are told and get paid accordingly
Weaknesses in Taylor's Approach
The most obvious weakness in Taylor's approach is that it ignores the many differences
between people. There is no guarantee that a "best way" will suit everyone.
Secondly, whilst money is an important motivation at work for many people, it isn't for
everyone. Taylor overlooked the fact that people work for reasons other than financial
reward.
Motivation Theory - McGregor
McGregor Theory X & Theory Y
Introduction
McGregor developed two theories of human behaviour at work: Theory and X and Theory Y.
He did not imply that workers would be one type or the other. Rather, he saw the two
theories as two extremes - with a whole spectrum of possible behaviours in between.
Theory X workers could be described as follows:
- Individuals who dislike work and avoid it where possible
- Individuals who lack ambition, dislike responsibility and prefer to be led
- Individuals who desire security
The management implications for Theory X workers were that, to achieve organisational
objectives, a business would need to impose a management system of coercion, control
and punishment.
Theory Y workers were characterised by McGregor as:
- Consider effort at work as just like rest or play
- Ordinary people who do not dislike work. Depending on the working conditions, work
could be considered a source of satisfaction or punishment
- Individuals who seek responsibility (if they are motivated0
The management implications for Theory X workers are that, to achieve organisational
objectives, rewards of varying kinds are likely to be the most popular motivator. The
challenge for management with Theory Y workers is to create a working environment (or
culture) where workers can show and develop their creativity.
Motivation in practice - importance of pay
Motivation in practice - financial incentives
Although some theorists like Herzberg believe that money is not a positive motivator
(although lack of it can de-motivate), pay systems are designed to motivate employees.
The scientific / Theory X approach, in particular, argues that workers respond to financial
rewards.
Getting employee pay right (often referred to as the remuneration package) is a crucial
task for a business.
Why is pay important?
It is an important cost for a business (in some labour-intensive businesses, payroll
costs are over 50% of total costs)
People feel strongly about it. Pay helps to satisfy many needs (e.g. security, esteem
needs, resources to pursue self-actualisation)
Pay is the subject of much important business legislation (e.g. national minimum wage;
equal opportunities legislation)
It helps attract reliable employees with the skills the business needs for success
Pay also helps retain employees rather than them leave and perhaps join a competitor
For most employees, the remuneration package is the most important part of a job and
certainly the most visible part of any job offer.
There are many methods of financial reward (these are covered in separate revision notes)
Time-rate pay
Piece-rate pay
Commission
Performance-related pay
Bonuses
Shares and options
Benefits in kind (fringe benefits)
Pensions
Because pay is a complex issue, there are several ways in which businesses determine how
much to pay, and which methods to use:
Job evaluation / content; this is usually the most important factor. What is involved in the
job being paid? How does it compare with similar jobs?
Fairness pay needs to be perceived and be seen to match the level of work
Negotiated pay rates the rate of pay may have been determined elsewhere and the
business needs to ensure that it complies with these rates.
Market rates another important influence particularly where there is a standard
pattern of supply and demand in the relevant labour market. If a business tries to pay
below the market rate then it will probably have difficulty in recruiting and retaining
suitable staff
Individual performance increasingly, businesses include an element of performance-
related reward in their pay structures.
However, it is important to remember that pay is only one element of motivation and will
work best where management also give attention to:
Developing good management and supervision;
Designing jobs and organising work groups to make them as satisfying as possible;
Providing feedback to staff about their performance and training and development;
Making effective arrangements for communications and consultation.
Financial rewards - structuring the package
Structuring the Pay Package
With so many methods of pay available, how should a business decide to structure the pay
package it offers to employees, and what rate of pay should it use?
Start with the Market Rate
The starting point is usually to find out what the market rate is. Paying the market rate
involves careful job evaluation (it helps to know what is being compared to what!).
Factors that help determine the market rate for a job include:
Whether the skills that are required are widely available
The overall level of unemployment in the employment catchment area
Whether the job requires specialised (or even highly specialised) skills
There are several ways in which a business can obtain data on market rates:
Local employment agencies
Job centres
Job adverts in national newspapers of specialist publications (e.g. professional journals)
Commission (or contribute towards) a specific salary survey in the industry
More or Less?
The next question is should the business pay MORE or LESS than the market rate? Factors
to consider here include:
Does the business need above-average employees (e.g. salesmen with an industry
reputation for being strong performers)
Does the business need trained employees or is it prepared to invest in training
beginners?
Are the skills wanted by the business needed urgently (in which case the business
would probably want to pay more)
Do factors affecting the mobility of labour need to be addressed e.g. are there
transport problems that need to be solved (e.g. pay for a rail season ticket) or relocation
allowances to be offered to encourage new employees to move home?
Structure
The third important question is how to structure the remuneration package.
Should employees be paid on the basis of time spent working (e.g. time-rates) or the
amount they produce (e.g. piece rates) or some other measure of performance?
Should the remuneration package be a combination of approaches (e.g. some basic pay
per month + a commission-related incentive)?
What kind of remuneration package is used by competitors - this may provide a useful
guide as to how to structure the package (and it may also influence what employees
expect)
In deciding the answers to these questions, a business should try to construct a pay
structure that is simple (to help employees understand it), logical and fair.
Time-rate pay
Financial motivation - time-rate pay
Time rates are used when employees are paid for the amount of time they spend at work.
This is the most common method of payment in the UK.
The usual form of time rate is the weekly wage or monthly salary. Usually the time rate is
fixed in relation to a standard working week (e.g. 35 hours per week).
The employment contract for a time-rate employee will also stipulate the amount of paid
leave that the employee can take each year (e.g. 5 weeks paid holiday).
Time worked over this standard is known as overtime. Overtime is generally paid at a
higher rate than the standard time-rate reflecting the element of sacrifice by an
employee. However, many employees who are paid a monthly salary do not get paid
overtime. This is usually the case for managerial positions where it is generally accepted
that the hours worked need to be sufficient to fulfil the role required.
The main advantages of time-rate pay are:
Time rates are simple for a business to calculate and administer
They are suitable for businesses that wish to employ staff to provide general roles (e.g.
financial management, administration, maintenance) where employee productivity is not
easy to measure
It is easy to understand from an employees perspective
The employee can budget personal finance with some certainty
Makes it easier for the employer to plan and budget for employee costs (e.g. payroll
costs will be a function of overall headcount rather than estimated output)
The main disadvantages of time-rate pay are:
Does little to encourage greater productivity there is no incentive to achieve greater
output
Time-rate payroll costs have a tendency to creep upwards (e.g. due to inflation-related
pay rises and employee promotion.
Piece-rate pay (payment by output)
Financial motivation - piece rate pay
Piece-rate pay gives a payment for each item produced it is therefore the easiest way for
a business to ensure that employees are paid for the amount of work they do. Piece-rate
pay is also sometimes referred to as a payment by results system.
Piece-rate pay encourages effort, but, it is argued, often at the expense of quality. From
the employees perspective, there are some problems. What happens if production
machinery breaks down? What happens if there is a problem with the delivery of raw
materials that slows production? These factors are outside of the employees control but
could potentially affect their pay.
The answer to these problems is that piece-rate pay systems tend, in reality, to have two
elements:
A basic pay element this is fixed (time-based)
An output-related element (piece-rate). Often the piece-rate element is only triggered by
the business exceeding a target output in a defined period of time
Case study: Piece-rate pay in practice in the UK Home-based workers
In the UK many thousands of people engage in what is known as home-based work. This
refers to work:
In the home, or near the home in premises that are not those of an employer
For a cash income (i.e. not unpaid household work)
Whilst there are many successful business people and well-paid professionals working
from home, the use of piece-rate pay is focused is on those at the other end of the scale
home-based workers, mainly women, who earn only a subsistence level income.
Subsistence level home-based workers fall into two broad categories:
Those who work for an employer, intermediary or subcontractor for a piece-rate, who are
not responsible for designing or marketing the product, but simply contribute their labour.
These workers are often called subcontracted or dependent home-workers
Workers who design and market their own products, but who cannot be considered to be
running small businesses - known as own-account workers.
The majority of home-based workers are women who do home based work in order to
combine earning cash with other responsibilities, such as child-care and household
management. Many earn well below the local minimum wage or average earnings. Most
dependent workers work informally, without a proper employment contract. They are rarely
organised or supported by formal trade unions.
Home-based work is found in most sectors of the economy, both modern and traditional
industries. Good examples include:
Production of garments and shoes
Assembly of electronic, plastic and metal components
Many kinds of packing work
Weaving and dyeing of textiles in the traditional sectors
Handicraft work
Sewing and knitting garments
Assembling toys
Data-processing
It used to be thought that home-based work was an old-fashioned form of employment
that would die out with the rise of modern industry. However, over the last 20 years much
large-scale industry has reorganised its production, subcontracting work to smaller
companies, often in other countries. At the end of the chain there are often informal
workshops and home-based workers.
Subcontracted homework is a form of production which allows companies to reduce their
costs by:
Outsourcing production to lower-paid workers, usually without formal contracts,
employment and social protection or even a regular supply of work
Passing on some of the costs of heating, lighting and storage to the workers themselves
Avoiding responsibility for health and safety for these workers
Using home-based workers as a source of flexible labour
Some of the problems faced by home-based workers include:
Irregular work and therefore irregular income
Earnings well below average
No economic or social security for sickness, maternity or old age
Long working hours
Potential health problems caused by repetitive processes and inadequate health and
safety
Financial rewards - commission
Commission is a payment made to employees based on the value of sales achieved. It can
form all or part of a pay package. Commission is, therefore, a form of incentive pay (see
also performance-related pay, bonuses).
Commission, like piece-rates, is a reward for the quantity or value of work achieved. In
most cases, the employee is paid a flat percentage of the value of the good or service that
is sold.
The rate of commission depends on the selling price and the amount of effort required in
making the sale.
For example, commission rates could range from 5% where the product sells easily (e.g.
household goods sold door-to-door) to 30% where the effort is substantial.
Advantages of Commission
The main advantage of commission from an employees point-of-view is that it enables
high performing sales people to earn huge amounts.
The main advantage to the employer is that the payroll cost is related to the value of
business achieved rather than just the amount produced. After all, businesses exist to sell
goods and services for profit not just to make things (piece rates simply reward amounts
produced, not sold).
Disadvantages of Commission
There are several drawbacks with using commission payments:
Sales people may cut corners to make sales (e.g. not explain the product or service in
enough detail to potential customers). This was a major problem in the recent pensions
mis-selling scandal in the UK
High commission earnings enjoyed by some of the sales team may be resented elsewhere
in the business particularly if the sales actually depend on a team effort
It is difficult to change what proves to be an over-generous commission structure
without upsetting and demoralising the sales team
Once commission payments have been made, the sales force may lose some motivation
until they begin to focus on the next payment (which might be up to 12 months away)
As a result of the above disadvantages, most businesses that use commission as an
incentive payment method offer a basic pay plus a moderate commission level. In this way,
if sales and profits justify the change, the commission rate can always be increased
slightly.
Recent research suggests that the use of commission is reducing in comparison with the
growth of other incentive payment methods.
Performance related pay
Financial motivation - Performance related pay
Performance-related pay is a financial reward to employees whose work is:
Considered to have reached a required standard, and/or
Is above average
Performance related pay is generally used where employee performance cannot be
appropriately measured in terms of output produced or sales achieved. Like piece-
rates and commission, performance related pay is a form of incentive pay.
Whilst the detail of performance-related schemes varies from business to business, there
are several common features:
Individual performance is reviewed regularly (usually once per year) against agreed
objectives or performance standards. This is the performance appraisal.
At the end of the appraisal, employees are categorised into performance groups which
determine what the reward will be (if any)
The method of reward will vary, but traditionally it involves a cash bonus and/or increase
in wage rate or salary.
Performance-related pay has grown widely in recent years particularly in the public
sector. This is part of a movement towards rewarding individual performance which reflects
individual circumstances.
According the Equal Opportunities Commission, a well-designed performance-related pay
scheme would have the following elements:
Objective setting
Communication and understanding of objectives
Consideration of performance against objectives
Translation of evaluation into performance rating
A link between ratings and the determination of pay
A separate appeals procedure
Disadvantages of Performance Related Pay
There are several problems with performance-related pay:
There may be disputes about how performance is measured and whether an employee
has done enough to be rewarded
Rewarding employees individually does very little to encourage teamwork
It may encourage unhealthy rivalry between managers
There is much doubt about whether performance-related pay actually does anything to
motivate employees. This may be because the performance element is usually only a small
percentage of total pay.
Financial motivation - share options
Offering employees shares in a business is an increasingly popular part of pay packages
particularly for businesses whose shares are traded on a stock exchange.
Offering shares is a more complicated kind of reward than paying employees cash.
However, it can be much more effective in linking the objectives of the business (e.g. profit
maximisation) and the objectives of employees (e.g. make a large gain on the value of
shares held).
This payment method also encourages employees to commit to the business in the longer-
term.
There are various schemes available which companies can use to offer shares as part of the
remuneration package:
Employee Share Ownership Plans (ESOPs)
ESOPs involve setting up a trust into which a company offers shares in the business. In the
UK, a company using an ESOP can give employees shares worth up to 3,000 each year.
The gains made on these shares are free of tax (capital gains tax) as long as they are held
in trust for more than five years.
Share Option Schemes
These are popular ways of incentivising senior management and key employees. Under a
share option scheme, selected employees are given the right to buy shares at their current
price, at a later date. If the shares increase in value in the meantime, employees will make
an immediate profit when the exercise their options.
In the UK, employees may hold options on shares worth up to 30,000. The option can be
exercised after three years but not later than ten years. Again, there is no tax paid on any
gains made by exercising these options.
Sharesave Schemes
Sharesave schemes are made available to all employees who must be able to participate
in the scheme on equal terms. All scheme members get the right but not the obligation
to buy a number of shares (normally at a lower price than their current price) after three,
five or seven years.
In the meantime, employee members save a regular amount to pay for the shares. If the
shares rise in value, employees have a profit when they buy the shares. No income tax is
paid on any gains made on these shares.
Motivation in practice - job rotation
What is Job Rotation?
Job rotation involves the movement of employees through a range of jobs in order to
increase interest and motivation.
Job rotation can improve multi-skilling but also involves the need for greater training.
In a sense, job rotation is similar to job enlargement. This approach widens the activities of
a worker by switching him or her around a range of work.
For example, an administrative employee might spend part of the week looking after the
reception area of a business, dealing with customers and enquiries. Some time might then
be spent manning the company telephone switchboard and then inputting data onto a
database.
Job rotation may offer the advantage of making it easier to cover for absent colleagues, but
it may also reduce' productivity as workers are initially unfamiliar with a new task.
Why is Job Rotation Important?
Job rotation is seen as a possible solution to two significant challenges faced by business:
(1) Skills shortages and skills gaps, and
(2) Employee motivation
Skills shortages occur when there is a lack of skilled individuals in the workforce.
Skills gaps occur when there is a lack of skills in a companys existing workforce which
may still be found in the labour force as a whole.
According to the Treasury and DfES, both skills shortages and gaps are major problems
acting as major barriers to economic growth and the reduction in long-term
unemployment in the UK.
Motivation - delegation & empowerment
Delegation
Delegation involves the assignment to others of the authority for particular functions,
tasks, and decisions.
The main advantages and disadvantages of delegation can be summarised as follows:
Advantages Disadvantages
Reduces management stress and workload
Allows senior management to focus on key
tasks
Subordinates are empowered and motivated
Better decisions or use of resources
(potentially)
Good method of on-the-job training
Cannot / should not delegate responsibility
Depends on quality / experience of
subordinates
Harder in a smaller firm
May increase workload and stress of
subordinates
Empowerment
Empowerment is giving employees the power to do their job. The aim of empowerment is
that
The concept of empowerment is closely linked to motivation and customer service.
Employees need to feel that their actions count and empowerment is about making this
happen.
Empowerment is a catch-all term that covers:
Giving authority to make decisions to front-line staff (e.g. hotel receptionist, call
centre assistant)
Encouraging employee feedback
Showing more trust in employees
The Recruitment Process
For most businesses, large or small, the task of identifying what work needs doing and
who should do it is a continuous challenge!

It is rare that a business of any size operates for long without having to recruit or remove
employees. For example, consider why a business might need to recruit staff:
Business expansion due to
o Increasing sales of existing products
o Developing new products
o Entering new markets
Existing employees leave:
o To work with competitors or other local employers
o Due to factors such as retirement, sick leave, maternity leave
Business needs employees with new skills
Business is relocating and not all of existing workforce want to move to new
location
The world of work is also changing rapidly:
Increase in part-time working
Increased number of single-parent families
More women seeking work
Ageing population
Greater emphasis on flexible working hours
Technology allows employees to communicate more effectively whilst apart
People rarely stay in the same job for life
Businesses need to understand and respond to these changes if they are to recruit staff of
the right standard and keep them!
So what is workforce planning?
Workforce planning is about deciding how many and what types of workers are required
There are several steps involved in workforce planning:
The workforce plan establishes what vacancies exist
Managers produce a job description and job specification for each post
Job description
Detailed explanation of the roles and responsibilities of the post advertised
Most applicants will ask for this before applying for the job
Refers to the post available rather than the person
Job specification
Sets out the kind of qualifications, skills, experience and personal attributes a
successful candidate should possess.
A vital tool in assessing the suitability of job applicants
Refers to the person rather than the post
Recruitment - internal & external
Internal and external recruitment
A manager can recruit in two different ways:
Internal recruitment is when the business looks to fill the vacancy from within its
existing workforce
External recruitment is when the business looks to fill the vacancy from any suitable
applicant outside the business
Of course, the option to use BOTH internal and external recruitment can be used. This is
often the case for senior management appointments.
Internal
Recruitment
Cheaper and quicker to recruit Limits the number of potential applicants
People already familiar with the
business and how it operates
No new ideas can be introduced from
outside
Provides opportunities for
promotion with in the business
can be motivating
May cause resentment amongst
candidates not appointed
Business already knows the
strengths and weaknesses of
candidates
Creates another vacancy which needs to
be filled
External
Recruitment
Outside people bring in new ideas Longer process
Larger pool of workers from which
to find the best candidate
More expensive process due to
advertising and interviews required
People have a wider range of
experience
Selection process may not be effective
enough to reveal the best candidate
The four most popular ways of recruiting externally are:
Job centres Government agencies to help the unemployed find jobs or get training
Job advertisements - the most common form of external recruitment. Where a
business chooses to advertise will depend on the cost of advertising and the
coverage needed (i.e. how far away people will consider applying for the job)
Recruitment agency - Provides employers with details of suitable candidates for a
vacancy and can sometimes be referred to as head-hunters. They work for a fee
and often specialise in particular employment areas e.g. nursing, financial services,
teacher recruitment
Personal recommendation - Often referred to as word of mouth and can be a
recommendation from a colleague at work. A full assessment of the candidate is
still needed however but potentially it saves on advertising cost
When recruiting externally, the business will almost certainly have to produce a job
advertisement. The objectives of the advertisement are to:
Inform audience of potential candidates about opportunity
Provide enough information to both inform and interest possible applicants
Help screen or dissuade unsuitable applicants
Obtain most number of suitably qualified applicants for post advertised
Recruitment - Job Description
What is a job description?
A job description sets out the purpose of a job, where the job fits into the organisation
structure, the main accountabilities and responsibilities of the job and the key tasks to be
performed.
Why is a job description important?
A job description has four main uses:
Organisation - it defines where the job is positioned in the organisation structure. Who
reports to who.
Recruitment - it provides essential information to potential recruits (and the recruiting
team) so that they can determine the right kind of person to do the job (see person
specification)
Legal - the job description forms an important part of the legally-binding contract of
employment
Appraisal of performance - individual objectives can be set based on the job description
Contents of a Job Description
The main contents of a job description are:
- Job Title: this indicates the role/function that the job plays within an organisation, and
the level of job within that function (e.g. Finance Director would be a more senior position
than Financial Accountant - although both jobs are in the "finance department")
- Reporting responsibilities: who is the immediate boss of the job holder?
- Subordinates; who reports directly TO the job holder?
- Main purpose - who is involved in the job overall
- Main tasks and accountabilities: description of the main activities to be undertaken and
what the job holder is expected to achieve (e.g. in the case of the Management Accountant,
this might include "Complete monthly management accounts by 10th working day of each
month and prepare report on all key performance variances")
- Employment conditions
Recruitment - interviews
Recruitment interviews - selecting the candidates
An interview is the most common form of selection and it serves a very useful purpose for
both employer and job candidate:
For the Employer:
Information that cannot be obtained on paper from a CV or application form
Conversational ability- often known as people skills
Natural enthusiasm or manner of applicant
See how applicant reacts under pressure
Queries or extra details missing from CV or application form
For the Candidate
Whether job or business is right for them
What the culture of company is like
Exact details of job
There are though other forms of selection tests that can be used in addition to an interview
to help select the best applicant. The basic interview can be unreliable as applicants can
perform well at interview but not have the qualities or skills needed for the job.
Other selection tests can increase the chances of choosing the best applicant and so
minimise the high costs of recruiting the wrong people. Examples of these tests are
aptitude tests, intelligence tests and psychometric tests (to reveal the personality of a
candidate).
Managers selecting candidates for a high level post in an organisation may even send
applicants to an assessment centre. In such centres candidates undergo a variety of tests,
role-plays and simulations for a number of days.
Once the best candidate has been selected and agreed to take up the post, the new
employee must be given an employment contract. This is an important legal document that
describes the obligations of the employee and employer to each other (terms and
conditions) as well as the initial remuneration package and a number of other important
details.
Recruitment - job analysis
Job analysis
The management of a business need to determine what work needs to be done. Job
analysis is a key part of this need.
Job analysis concentrates on what job holders are expected to do. It provides the basis for
a job description, which in turn influences decisions taken on recruitment, training,
performance appraisal and reward systems.
What is contained in a job analysis?
A job analysis would typically contain:
Job purpose What is the job meant to do - and how does this related to other
parts of the business?
Job content Duties and responsibilities
Accountabilities What results / outputs is the job holder responsible for?
Performance criteria How will the job holder's performance be measured?
Resource
requirements
E.g. equipment, location
How is a job analysis carried out?
Several techniques should be used to complete an effective job analysis:
- Research business documents - e.g. procedures manuals
- Ask relevant managers about the requirements and purpose of the job; what are the key
activities; what relationships does the job have with other posts. Develop a comprehensive
profile through these discussions
- Interview the existing job holder (if the job already exists) -e.g. ask store managers in
retail stores and build a profile from asking those who actually do the job
- Observe the job holders to see what they really do
The key information that needs to be collected includes:
- Job title
- Main duties and tasks
- Targets and performance standards that the job holder is required to achieve
- The amount of supervision that is normally given / freedom of decision-making in the
job
- Skills and/or qualifications needed for the job (including personal skills)
Recruitment - advertising the job
Advertising a job
The Objective of Recruitment Advertising
The objectives of recruitment advertising are to:
(1) Attract suitable candidates, and
(2) Deter unsuitable candidates
What makes a good job advert?
Whilst there are no hard and fast rules about the contents of a job advert, the following
features are likely to be in an effective advertisement:
Accurate - describes the job and its requirements accurately
Short - not too long-winded; covers just the important ground
Honest - does not make claims about the job or the business that will later prove false to
applicants
Positive - gives the potential applicant a positive feel about joining the business
Relevant - provides details that prospective applicants need to know at the application
stage (e.g. is shift-working required; are there any qualifications required)
Content of a job advert
Most job adverts contain:
- Details of the business/organisation (name, brand, location, type of business)
- Outline details of the job (title, main duties)
- Conditions (special factors affecting the job)
- Experience / qualifications required (e.g. minimum qualifications, amount of experience)
- Rewards (financial and non-financial; the financial rewards may be grouped together
under a total valued "package2 - e.g. total package circa 50,000)
- Application process (how should applicants apply, how to; deadlines)
Choice of medium
What kind of advertising medium should be chosen? The following factors are relevant:
Type of job: senior management jobs merit adverts in the national newspapers and/or
specialist management magazines (e.g. the Economist, BusinessWeek). Many semi-skilled
jobs need only be advertised locally to attract sufficient good quality candidates
Cost of advertising: National newspapers and television cost significantly more than local
newspapers etc
Readership and circulation: how many relevant people does the medium reach? How
frequently (e.g. weekly, monthly, annually!. Is the target audience actually only a small
fraction of the total readership or Viewer ship?
Frequency: how often does the business want to advertise the post?
Recruitment - person specification
Person specification
What is a person specification?
A person specification describes the requirements a job holder needs to be able to perform
the job satisfactorily. These are likely to include:
- Education and qualifications
- Training and experience
- Personal attributes / qualities
How does this compare with a job description?
A job description describes the job ; a person specification describes the person needed to
do the job. A person specification can, therefore, form the basis for the selection of the
most suitable person to fill the job.
How should a person specification be created?
The most common approach now used by recruiters is to use what are known as
"competencies" to design the person specification. These are then classified as "essential"
or "desired" to determine which are most important.
Competencies might include some or all of the following:
- Physical attributes (e.g. state of health, aged, speech)
- Attainments (e.g. highest level of education completed, relevant market experience,
ability to supervise/manage)
- Aptitudes (e.g. verbal reasoning; numerical aptitude)
- Interests (social activities; sporting activities)
- Personal circumstances (e.g. ability to work shifts; full or part time)
Person specifications have to be prepared and used with great care. In particular, it is
important to ensure that the list of essential or desired competencies does not lead to
unlawful discrimination against potential employees.
Training - Introduction
Training can be defined as:
The process of increasing the knowledge and skills of the workforce to enable them to
perform their jobs effectively
Training is, therefore, a process whereby an individual acquires job-related skills and
knowledge.
Training costs can be significant in any business. However, many employers are prepared
to incur these costs because they expect their business to benefit from employees'
development and progress.
Training takes place at various points and places in a business. Commonly, training is
required to:
Support new employees (induction training)
Improve productivity
Increase marketing effectiveness
Support higher standards of customer service and production quality
Introduction of new technology, systems or other change
Address changes in legislation
Support employee progression and promotion
Effective training has the potential to provide a range of benefits for a business:
Higher quality
Better productivity
Improved motivation - through greater empowerment
More flexibility through better skills
Less supervision required (cost saving in supervision)
Better recruitment and employee retention
Easier to implement change in the business
Effective training starts with a training strategy. The three stages of a training strategy
are:
Identify the skills and abilities needed by employees
Draw up an action plan to show how investment in training and development will
help meet business goals and objectives
Implement the plan, monitoring progress and training effectiveness
Given the costs involved, you might not be surprised to learn that many businesses do not
invest enough in training.
Some firms dont invest anything in training! Here are the most common reasons for
under-investment in training:
They fear employees will be poached by competitors (who will then benefit from the
training)
A desire to minimise short-term costs
They cannot make a justifiable investment case
Training takes time to have the desired effect management are impatient!
Sometimes the benefits of training are more intangible (e.g. morale) than tangible
so they are harder to measure
Training - Induction Training
Induction training
What is induction training?
Induction training is training given to new employees.
The purpose of the induction period (which may be a few hours or a few days) is to help a
new employee settle down quickly into the job by becoming familiar with the people, the
surroundings, the job and the business.
It is important to give a new employee a good impression on the first day of work.
However, the induction programme should not end there.
It is also important to have a systematic induction programme, spread out over several
days, to cover all the ground in the shortest effective time.
Devising an effective induction training programme
The induction programme should be drawn up in consultation with all those involved.
Depending on the size and complexity of the business this may include:
Senior management (including directors)
Supervisors or line managers
Personnel officers
Health and Safety managers
Employee or trade union representatives
What induction training involves
Usually induction involves the new employee meeting and listening to different people talk
about aspects of the business.
Other methods include written information, audio visual aids and group discussion.
The following items should be covered in an effective induction programme:
Introduction to the business/department and its personnel/management structure
Layout of the buildings (factory / offices)
Terms and conditions of employment (explaining the contract of employment)
Relevant personnel policies, such as training, promotion and health and safety
Business rules and procedures
Arrangements for employee involvement and communication
Welfare and employee benefits or facilities
Training - On the Job
With on the job training, employees receive training whilst remaining in the workplace.
The main methods of one-the-job training include:
Demonstration / instruction - showing the trainee how to do the job
Coaching - a more intensive method of training that involves a close working
relationship between an experienced employee and the trainee
Job rotation - where the trainee is given several jobs in succession, to gain
experience of a wide range of activities (e.g. a graduate management trainee might
spend periods in several different departments)
Projects - employees join a project team - which gives them exposure to other parts
of the business and allow them to take part in new activities. Most successful
project teams are "multi-disciplinary"
The advantages and disadvantages of this form of training can be summarised as follows:
Generally most cost-effective
Employees are actually productive
Opportunity to learn whilst doing
Training alongside real colleagues
Quality depends on ability of trainer and time
available
Bad habits might be passed on
Learning environment may not be conducive
Potential disruption to production
Training - Off the Job
This occurs when employees are taken away from their place of work to be trained.
Common methods of off-the-job training include:
Day release (employee takes time off work to attend a local college or training
centre)
Distance learning / evening classes
Block release courses - which may involve several weeks at a local college
Sandwich courses - where the employee spends a longer period of time at college
(e.g. six months) before returning to work
Sponsored courses in higher education
Self-study, computer-based training
The main advantages and disadvantages of this form of training can be summarised as
follows:
A wider range of skills or qualifications can
be obtained
Can learn from outside specialists or
experts
Employees can be more confident when
starting job
More expensive e.g. transport and
accommodation
Lost working time and potential output from
employee
New employees may still need some
induction training
Employees now have new skills/qualifications
and may leave for better jobs
Workforce planning - introduction
Workforce planning
For most businesses, large or small, the task of identifying what work needs doing and
who should do it is a continuous challenge!
It is rare that a business of any size operates for long without having to recruit or remove
employees. For example, consider why a business might need to recruit staff:
Business expansion due to
o Increasing sales of existing products
o Developing new products
o Entering new markets
Existing employees leave:
o To work with competitors or other local employers
o Due to factors such as retirement, sick leave, maternity leave
Business needs employees with new skills
Business is relocating and not all of existing workforce want to move to new
location
The world of work is also changing rapidly:
Increase in part-time working
Increased number of single-parent families
More women seeking work
Ageing population
Greater emphasis on flexible working hours
Technology allows employees to communicate more effectively whilst apart
People rarely stay in the same job for life
Businesses need to understand and respond to these changes if they are to recruit staff of
the right standard and keep them!
So what is workforce planning?
Workforce planning is about deciding how many and what types of workers are required
There are several steps involved in workforce planning:
The workforce plan establishes what vacancies exist
Managers produce a job description and job specification for each post
Job description
Detailed explanation of the roles and responsibilities of the post advertised
Most applicants will ask for this before applying for the job
Refers to the post available rather than the person
Job specification
Sets out the kind of qualifications, skills, experience and personal attributes a
successful candidate should possess.
A vital tool in assessing the suitability of job applicants
Refers to the person rather than the post
Flexible working - overview & introduction
Flexible working hours - overview
A system of flexible working hours gives employees some choice over the actual times they
work their contracted hours. Such a system can be a good way of recruiting and retaining
staff - since it provides an opportunity for employees to work hours consistent with their
other commitments (e.g. child care).
Most flexible working hours schemes have a period during the day when employees must
be present. This is known as "core time". A typical core time would be 10 00 a.m. to 4.00
p.m.
Other than the core time, employees may choose when they start and finish work within
flexible bands at the beginning and end of each day. These bands are typically 08:00
10:00 and 16:0018:000. However, there is wide scope for variation depending on the core
time, the hours the work place is open and the nature of the business.
Some schemes also have a flexible band during the middle of the day so that employees
have some choice over the time they take their lunch break.
Contracted hours (the total hours an employee must work according to their employment
contract) are achieved by employees working the core time plus hours of their choice
during the flexible bands over an agreed period. This period is known as the accounting
period and is typically four weeks long. Some schemes allow for an excess or deficit (within
set limits) to be carried over to the next accounting period. Hours are credited for absences
such as sickness or holidays.
How to introduce a flexible working hours scheme
The introduction of a flexible working hours scheme requires care and needs to be
carefully planned by all those likely to be affected. Experience suggests that a
joint "working party" comprising representatives of management and employees is usually
the best approach and any recognised trade union should be fully involved. The working
party should consider:
Whether the scheme is to be voluntary or compulsory
What type of recording system should be used (eg manual, clocking or computerised)
How flexibility should be built into the bands
How sickness, absence and late attendance should be treated
Arrangements for managing and monitoring the scheme (e.g. monitoring the effect on
production or customer service levels)
When the details have been agreed there should be a trial period of, perhaps, three months
to help identify and eliminate any problems.
Advantages of flexible working hours
Employees have greater freedom
Can make traveling easier (e.g. avoiding commuting during the normal rush-hour)
Improved morale and reducing absence and lateness
Reduction in overtime and less lost time since long lunch breaks or late arrivals are not
recorded as time worked
Disadvantages of flexible working hours
Costs involved in administering the scheme
If the premises are open longer, there may be increased costs for lighting and heating
Employees will not be in work at certain times and therefore it may not be suitable for
organisations where continuous cover is necessary.
Workforce planning - benefits and potential issues
Workforce planning - Benefits and Issues
Performed effectively, the following are commonly seen as benefits of workforce planning:
Most importantly, an effective workforce plan helps a business achieve its corporate
objectives by ensuring the business has a workforce of the right size, with the right
skills, in the right place. Seen like that, you can argue that good workforce planning
is a source of competitive advantage
Workforce planning encourages managers to prepare and plan for changes rather
than simply react to them it places the HRM managers at the heart of strategic
decision making
Businesses going through periods of significant change (e.g. technological change
in the industry, environmental change) are better able to handle the workforce
implications
Improved communication is a common benefit staff feel that they are closer to the
decision-making process, are working for a business that takes HRM seriously etc
Issues with workforce planning
The main issues that need to be addressed in order for workforce planning to be effective
can be summarised as follows:
Cost
This is perhaps the most important issue. A workforce plan needs to be supported by
sufficient financial resources for it to be effective. However, the HRM department cant be
given a blank cheque. Every decision made as a result of the plan has a cost implication
e.g. new training, extra recruitment, redundancies. The cost needs to be justified and
should be consistent with the corporate objectives.
Employer / employee relations
Businesses perform best when there are strong working relationships between employers,
employees and the business owners (e.g. shareholders). Decisions made as a result of a
workforce plan inevitably both sides of the relationship for example:
A decision to make redundancies and reduce staff costs might be viewed positively
by the shareholders, but negatively by the employees and trade unions
A plan to offer more flexible working options would be welcomed by employees, but
might place additional pressure on the workloads of line managers
The solution to these potential conflicts and issues is usually found through
communication and consultation. Ultimately, decisions need to be taken in the best
interests of the business but it is important to at least attempt to gain the support of
other stakeholders.
Training
Business textbooks wax lyrical on the importance and benefits of training to a business.
However, whilst training undoubtedly does have an important role to play in workforce
planning and HRM, it is easy to underestimate the difficulty of getting the right amount and
type of training done. The issue for most businesses (particularly small ones) is that
training is:
Expensive (particularly off-the-job training)
Disruptive, and
Difficult to measure the benefits
A good workforce plan will recognise these issues and focus on the essential training that
is required to support key decisions from the plan
Business image
A business that has an effective workforce plan that has the support of employees is likely
to enjoy a better brand or corporate image than one which is perceived to be poorly
managed and uncaring towards its employees.
Customers recognise businesses that place HRM as a strategic priority they see it in the
higher quality of customer service and quality that they experience at each interaction with
the business.

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Workforce planning - managing labour supply
Workforce planning - Handling Labour Shortages or Excess Supply
Dealing with labour shortages
When might a business find that the challenge of workforce planning is to deal with a
shortage of labour? That could happen when, for example:
There is a short-term increase in demand which cannot be handled by the existing
production capacity
The business experiences a loss of experienced staff through higher staff turnover
A competitor expands its operations and offers better pay terms, which encourages
staff to change jobs
Changes to the business products or production processes mean that existing staff
do not have the required skills and experience
How could workforce planning address a labour shortage? Amongst the steps that might
be taken are:
Increase production capacity by introducing additional shifts, extending working
hours (overtime), or by employing temporary or seasonal staff
Review whether the existing pay and reward systems are competitive and make
any changes as necessary
Invest in training to address the skills gaps in the workforce
Recruit more aggressively, perhaps by promoting job opportunities in new ways or
by offering incentives to staff to introduce potential recruits
Offer flexible working options to broaden the pool of potential recruits to the
business
Some of the above options are unlikely to work effectively in the short term (e.g.
investment in training takes time to have an effect). The important point to remember is
that workforce planning is not the perfect solution for every business problem.
Dealing with excess labour
A more common scenario for most businesses during the economic downturn of 2008-
2010 has been that they have found themselves with too many staff an excess supply of
labour. The production capacity of many businesses has simply been too much for the
available demand resulting in lower productivity and higher unit costs.
The prime reason for this has been an external factor the effect on market demand of the
decline in consumer spending, business investment and exports brought about by the
credit crunch.
Workforce plans prepared back in 2007 and 2008 would probably not have anticipated the
full effect of the economic slowdown, and so might not have anticipated the need to handle
excess labour. So, what options have businesses taken as part of their short-term
workforce planning as a result? Here are some examples:
The obvious short-term response is to make some employees redundant. This has
happened to many thousands of staff in recent months. A business has to take care
though. For a redundancy to be genuine the job that the employee does must
disappear the business can still take on new staff but not to do the work the
redundant employee was doing.
An alternative to redundancies is to ban or restrict overtime, introduce short-time
working or lay-off employees for a short period. This is likely to result in some
financial hardship for the employees concerned, but for most will be preferably to
losing a job.
Flexible working arrangements also offer an opportunity. For example some full-
time staff might be persuaded to move to a part-time or annualised hours contract
employment; others could consider job-sharing, or taking a career break or
sabbatical during the period of excess labour supply.
Another option is a temporary workplace shutdown (Honda and Toyota did this in
the UK for several months at the start of 2009) which affects nearly all staff and
management.
If the excess labour arises in specific departments or business units, there may be
an option to relocate or retrain employees so that they can work in other parts of
the business where there is still demand for labour.
Workforce planning - roles and workload
Workforce roles and workload
What roles do employees play in a business? How much work should each employee
perform, and who decides?
Here are three key terms that you need to remember:
Workforce roles Managerial and supervisory roles within the hierarchy
Work loads The tasks an individual employee has to complete within a period
Job allocations The way in which tasks are allocated to certain jobs
There are a variety of titles that are given to the roles employees play. Four of the most
common and important are summarised below:
Directors In overall charge of business
Appointed by shareholders
Responsibility for key business functions
Marketing
Finance
Operations
HRM
Close day-to-day involvement in small/medium sized businesses
Managers Report to Directors
Responsible for specific departments / activities
Oversee budgetary control
Have responsibility for their functional areas & budgets
May delegate tasks to subordinates
Managerial styles will vary
Team leaders Tasked with ensuring that teams of employees work well together
Associated with a matrix organisational structure
A`team leader:
Allocates workload & jobs between the team members
Manages team resources
Focuses on quality & team motivation
Supervisors Common role in a tall hierarchy
Responsible for allocating jobs to subordinates (at different levels of
the hierarchy)
Traditional activities of a supervisor:
Checking quality (quality control)
Organising staff
Maintaining discipline
Flexible working - annualised hours
Flexible working - annual hours contracts
What is an annual hours contract?
An annual hours contract is a system whereby the period of time within which full time
employees must work is defined over a whole year.
For example, an average 40-hour week becomes 1,880 annual hours, assuming five weeks
of holiday entitlement (37 weeks x 40 hours per week). This is the total hours an employee
must work each year under the contract.
Once the annual hours of work have been agreed these hours are usually distributed in a
schedule.
Some of the hours may be held in reserve to be used when the employer and employee
agree, or they may all be used within the schedule. It will also be necessary allow for public
holidays and overtime.
Annual hours can be applied to all employees, including day workers and white collar
employees, but in practice the system is often restricted to shift workers.
Why might a business introduce an annual hours system?

An annual hours system can be used:
To help reduce the working week (often an objective of trade unions)
To reduce, abolish or control overtime
To help the business cope with seasonal variations and/or peaks and troughs in demand
To maximise productivity
To help introduce technological change
To harmonise terms and conditions of employment
Advantages of an Annual Hours System
- For employers annual hours can provide greater employee flexibility, reduce overtime
and maximise productivity and efficiency
- Benefits for employees include improved basic pay and progress towards salaried status
Possible Disadvantages
- Most annual hours agreements specify that employees can be asked to work extra hours
at short notice which may be beneficial to employers but can reduce the freedom of
employees to plan their leisure
- Employees who have high overtime earnings may resist the introduction of annual hours.
Flexible working - job sharing
Flexible working - job sharing
Job sharing involves dividing a single full-time job between two people who share the
responsibility, pay and benefits.
Jobs can be shared between two people on a:
- Daily basis, with one sharer working mornings and the other afternoons
- Weekly basis, with sharers working half a week each
Another method is for sharers to work alternate weeks.
When deciding how to split a job, several factors should be considered:
The flexibility of the job sharers
The need for any overlap (e.g. an hour to "hand-over" the current issues of the job)
Travel costs (for example, if these are significant, the use alternate week sharing may
reduce costs through the purchase of weekly tickets)
Advantages of job sharing
Job sharing has several advantages:
Job sharing allows businesses to recruit skilled, experienced workers who may not be
available for or willing to do full-time work
It allows one position to be filled by two people with different but complementary
experience
It provides some continuity if one sharer leaves or is absent
Disadvantages of job sharing
Job sharing involves some additional administrative and training costs and extra time
spent on supervision and communication
Where job sharers have managerial responsibilities staff may find it difficult or confusing
to work for two people
Some job sharers may feel that they are achieving proportionately more than a full-time
employee and that they are being inadequately paid
Flexible working - teleworking
Teleworking
Teleworking is a method of workforce planning that allows employees to spend all or part
of their working week at a location remote from employers workplaces. Home working is a
form of teleworking but there are several different categories:
Traditional mobile workers, like sales representatives and delivery drivers. They receive
instructions and information via telephones, computers or fax machines at home or in their
vehicles;
Managerial and professional staff who spend working days away from their office base and
also communicate via telephones, computers or fax machines from their home car or other
remote location;
Specialists or office support staff who carry out a range of duties from home or other
remote locations and communicate via telephones fax machines and computers;
Other workers who operate from local centres with computer and telecommunications
facilities sometimes known as telecottages
Advantages of Teleworking
- Teleworking can reduce costs by providing savings on office space and other facilities
- It can improve productivity as people are not interrupted by the day to day distractions of
office life and politics
- Employees have more freedom over where they live, how they organise their work and
when they carry it out
- Employers who help people with disabilities or caring responsibilities to work at home
can benefit from the additional skills and expertise of workers who may not be available to
attend the workplace.
- Teleworking also reduces or eliminates time spent on traveling and lowers absence and
turnover rates
Disadvantages of Teleworking
- Remote working is not suitable for all types of job
- Providing suitable technology can be expensive
- Some employees may feel socially isolated; successful teleworkers tend to be self
motivated, self-disciplined, competent and able to work with little supervision
- Despite improvements in communications technology, managers may find it difficult to
communicate with and manage remote workers
- Career development and training may suffer
- Health and safety issues arise - are employees homes or other available premises
suitable for teleworking?
Communication - introduction
Communication can be defined as:
The process by which a message or information is exchanged from a sender to a receiver
Communication can be:
Internal: between people in the same business
External: with people outside the business
Internal communication is particularly important. It links together all the different activities
involved in a business. It also aims to ensure that all employees are working towards the
same goal and know exactly what they should be doing and by when.
Examples of internal communication include:
Formal meetings and briefings
E-mail
Intranets
Wikis, blogs, podcasts, internal social media tools
Informal meetings where employees can meet with senior management
Conference calls & webinars
Internal newsletters, brochures, and other printed materials
Team briefing sessions
Message boards
Training packs (e.g. induction materials)
External communication is where the business communicates with people & organisations
outside of the business.
This is closely linked with the idea of stakeholders i.e. those who have an interest in the
activities and results of the business
Examples of external communication include:
Press releases
Marketing materials (e.g. adverts, brochures, direct mailings)
Published financial information (e.g. accounts)
Letters, emails and telephone conversations with customers and suppliers
Reports to government and other agencies
Communication - barriers
Aiming to achieve effective communication is one thing actually doing it is
another. There are severalbarriers to communication, including:
Barrier Explanation
Language The communication message might not use vocabulary that is
understood by the receiver e.g. too much use of technical or financial
jargon
Noise Various things stop a message from getting through or being heard
e.g. poor connection, background noise, distractions, too many people
speaking
Overload Too much information can cause problems e.g. slow down decision
making
Emotion The relationship between the sender and receiver of communication
might adversely affect the message which could be ignored or
misinterpreted
Gaps Too many intermediaries (e.g. too many layers in hierarchy through
which message has to be passed) might prevent or distort the message
Inconsistency If people receive conflicting or inconsistent messages, then they may
ignore or block them

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Revision Quizzes
Communication - benefits
What would be considered good or effective communication? It would be communication
in which:
The sender and receiver of information are properly matched
The message is communicated clearly i.e. without misunderstanding or
misinterpretation
Communication is made using an appropriate communication channel and/or
method
The receiver of the communication is able to pass on any relevant and appropriate
feedback (i.e. two-way communication)
There are many reasons why it is important for a business to achieve effective
communication:
Motivates employees helps them feel part of business
Easier to control and coordinate business activity prevents different parts of
business going in opposite directions
Makes successful decision making easier decisions are based on more complete
and accurate information
Better communication with customers will increase sales
Improve relationships with suppliers
Improves chances of obtaining finance e.g. keeping bank up-to-date about how
business is doing
The link between communication and motivation is particularly important. Good
communication is an important part of motivating employees and the main motivational
theorists recognised this:
Mayo emphasised importance of communication in meeting employees social needs
Maslow and Herzberg stressed importance of recognising employees achievements
and self-esteem needs
Amongst the other reasons for using communication to boost motivation are:
Ensures that everyone is working towards same company goals
Enables employees to be involved in decision-making
Employees can offer feedback and give suggestions
People are motivated by having clear targets set for them
Recognise employee achievements
Communication - employee representation
Employee Representation
Employee representation or participation arises when employees are part of a formal
structure for involving them in the decision-making process of an organisation.
Of course all businesses communicate with their employees in some way everyday.
However, there are some situations when the law requires this communication to take
place. The law requires a business to consult with employees on things such as:
Redundancy programmes
When employees are transferred from one employer to another (e.g. the sale of the
business)
On changes to pension arrangements
Proposed changes to working time arrangements
In additional to the mandatory requirements for employee representation, there are several
strong reasons why a business should have a formal system of employee
representation. For example, to:
Make employees' views known to management
Help strengthen both management's and employees' understanding of workplace
issues and other matters affecting the business
Help create an atmosphere of mutual trust between employees and management
and therefore improve workplace relations
The main benefits and drawbacks of employee representation to a business include the
follows:
Increased empowerment and motivation of Time-consuming potentially slows
the workforce decision-making
Employees become more committed to the
objectives and strategy of the business
Conflicts between employer and employee
interests may be a block to essential change
Better decision-making because employee
experience and insights taken into account
Managers may feel their authority is being
undermined
Lower risk of industrial disputes

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Motivation in theory - What is motivation?

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