SECTION 2

Chapter 6: Motivating Employees

Why people work

- Money
- Security
- Social needs
- Esteem needs
- Job satisfaction

Motivation is the reason why employees want to work hard and work effectively for the business

Benefits of a well motivated workforce

- increased productivity
- Two-way-communication with management
- Low labour turnover
- Low rates of absenteeism
- Low rates of strike action

Concepts of human needs

 Advantages Disadvantages

employee motivation is improves not everyone has the same needs

better quality products difficult to identify which level employee is on

improve competitiveness money might satisfy esteem need and those

lower down the hierarchy

improve profitability self actualisation is rarely achieved

Motivation Theories

F.W. Taylor
● “All individuals are motivated by personal gain”
● Also known as “theory of an economic man”
● Had a mechanical approach rather than human.
● This means that if the workers are paid more, they will work more effectively
● By breaking down worker’s jobs into simple tasks, you could calculate how much output
they could do in a day
● Taylor’s idea was that if the workers produced more, they would receive a bonus
● But the problem with this approach is that Taylor believed everyone is ONLY motivated
by money, which doesn’t, always stand true

Hezberg

According to Herzberg, humans have two sets of needs; one is for the basic needs, which he
called 'hygiene' factors or needs, and the second is for a human being to be able to grow
psychologically, which he called 'motivational' needs or 'motivators.
Methods of motivation
● Financial Methods
● Non-Financial Methods
Chapter 7: Organization and Management

Organizational Structure

Organizational structure refers to the levels of management and divisions of responsibilities

within an organization. This structure is often represented in the form of an organizational chart
with several level of hierarchy

Advantages of organizational chart:

- employees know which communication channel is used to reach them
- every individual can see their own position in the organization; who they are accountable
to and who they have authority over
- shows the links and relationship between different departments
- everyone is in a department which gives them a sense of belonging

Simple Hierarchical Structure:

1) levels of hierarchy

● A hierarchy refers to the levels of authority within an organization

● Describes the ranking of positions from top to bottom
● The higher the position in the hierarchy, the more authority and power it holds
● Tasks become simpler as you move down the hierarchy

2) chain of command

● The route through which authority is passed down through an organization

 ● Each person in the chain of command is directly responsible to the reps on
immediately above them and directly responsible for the person directly below
them

3) span of control

● the number of subordinates reporting to each supervisor

● A span of control is described as ‘wide’ or ‘narrow’ depending on how man
supervisors a person is responsible for.
○ A narrower span of control means that there are more layers of
management
○ A wider span of control means that there are fewer layers of management

Delayering:

Reducing the size of hierarchy by removing one or more levels - most often middle
management.
Centralised or Decentralised Organization

● Centralized organization is one where all the important decision-making is held at head
office, or the center
● Decentralized organization is one where the decision-making powers are passed down
the organization to lower levels
Tall or Flat Orgnization
Roles, responsibilities and inter-relationships

● Chief Executive Officer (CEO): senior most manager

○ responsibilities
- overall performance and success
- implement decisions of the board of directors

● Directors : appointed or elected members of the board of directors of a company. Some

directors are elected by the shareholders at the Annual General Meeting (AGM)
○ responsibilities
- setting strategy
- making sure the resources are available to achieve objectives
- reviewing the performance of managers
- protecting the interest of shareholder and other stakeholders
- Provide leadership to ensure the success of the business

● Managers : individual who is in charge of a certain group of tasks, or a certain area or

department of a business
○ responsibilities
- making sure that the decisions of the directors are carried out
- delegate tasks to members of their department
- taking the decision needed to achieve department goals
- motivating employees in the department
- solving day to day problems that mat arise within the department

● Supervisors : individual who checks and controls the work of subordinates

○ responsibilities
- complete their tasks efficiently and at the required quality standard
- work towards achieving individual, group or departmental targets

Role of Management

1) Planning: setting goals, determining strategies and outlying in actions

2) Organizing: structuring resources and tasks to execute the plan efficiently

3) Commanding: providing direction and leadership to employees to carry out tasks

4) Coordinating: ensuring that the activities and resources work together towards a
common goal

5) Controlling: monitor the progress, compare it to plan, and make necessary adjustments
to achieve desired outcomes
Delegation

Passing authority down through the organizational hierarchy to a subordinate

Advantages Disadvantages

managers can focus on more complex tasks lose control over decision making
of greater importance

managers are less likely to make mistakes employees may feel overloaded with work

motivate employees subordinates might fail to do the task

employees can develop new skills

Leadership Styles

● Autocratic Leadership Style

● Democratic Leadership Style
● Laissez-faire Leadership Style

Choosing a leadership style

 - skills and experience of the workforce
- time available to make decisions
- personality of the manager
- task to be completed

Trade Unions

An organization of employees aimed at improving pay ad working conditions and providing other
services

Trade union members carry out following tasks:

● negotiating with employers to improve pay and working conditions
● resolving conflict between employers and employees on behalf of its
members
● provide legal support and advice to its members
● providing services for members such as pension schemes, insurance
schemes, holiday schemes etc.
● meet government official to influence policies

Benefits to employees of trade union membership:

● have greater power when dealing with employers
● improved condition of employment
● trade union will provide support and legal above if treated unfairly
● protect employees job security by discussing with employers any major
changes that my cause job losses

Drawbacks to employees of trade union membership:

● must pay a fee
● decision of the majority of the members is binding son all members
● during strike action, employees lose wages which cannot be recovered
● may be required to take industrial action, even if they don’t want to

Benefits to employers of trade union memberships :

● improve communication between worker and management
● wage agreements will be easier to negotiate with a trade union than with
each worker individually

Drawbacks o employers of trade union memberships:

● trade unions can organize strikes if they do not receive what they demand
for
● wages are likely to be higher
Chapter 8: Recruitment, Selection and Training of Employees

Recruitment and Selection

Businesses need to start the process of recruitment and selection when:

- an employee leaves their job and it needs to be replaced
- a new business and starting up and requires employees
- business wants to expand by employing more people

Recruitment Methods

1) Internal Recruitment - filling a vacant post by someone already in the business

Advantages
● vacancy can be filled quickly and cheaply
● applicants already know how the business works
● business already knows the strength and weaknesses of the applicant
● employees can become more motivated when they see that there is a
chance of promotion

Disadvantages
● a better candidate may have been available from outside the business
● cause conflict within the workplace if other internal employees feel that
they should have got the job
● does not bring any new ideas or perspectives
● there will still be a vacancy to fill, until the employees previous job has
become redundant

2) External Recruitment - filling a vacant post with somebody not already employed within
the business

Advantages
● external l candidates can bring new deals and improve the efficiency and
effectiveness of the business
● there will be wider choice of applicants with different skills and expertise
● avoids risk of upsetting existing employees

Disadvantages
● takes longer to fill vacancy
● expensive due to the advertising costs and time spent interviewing
candidates
● External applicants will require training, increasing expenses
● existing employees can feel demotivated when they see that there is no
chance of promotion

Recruitment Stages
Part-time employees vs Full-time employees

advantages disadvantages

part-time employees low labor costs less committed

flexible workforce communication problems

may arise

attract employees seeking less likely to be trained

flexible working hours because they might see it as
temporary and don’t want a
promotion

easier to extend operating take longer to recruit as more

hours workers will be required
 full-time employees less time required in high labor expenses
recruitment

more time to develop skills less flexible working hours

lesser communication they can become overworked

problems

more commitment

Recommending which workers to employ

● age
● qualifications
● experience
● internal or external

Training Employees

Importance of training:
- introduce a new process or equipment
- improve efficiency of the workforce
- decrease the supervision required
- improve opportunities for internal recruitment
- decrease chances of accident

Types of training

1) Induction Training: an introduction given to a new employee, explaining the business’s

activities customers and rpodciedured and introducing them to fellow workers

Advantages
● helps new employee settle into their job quickly
● workers are less likely to make mistakes
● workers perform effectively from start

Disadvantages
● time consuming
● wages are paid but no work is being done
● delays the start of employee commencing their job

2) On-the-Job Training: occurs by watching a more experienced worker doing their job
 Advantages
● individual tuition is given
● costs less than off-the-job training
● trading can be tailored to the specific require of the business
● ensures some production from the worker while they are at training

Disadvantages
● trainer will not be as productive because they are showing the trainee
instead of getting on with their job
● triner can pass bad habits on to trainee
● no training qualification recognised outside business

3) Off-the-Job Training: involves being trained away from the workplace, usually by
steadfast trainer

Advantages
● broad range of skills can be taught
● uses expert trainers who have up-to-date knowledge
● if courses are thought in evening, employee can carry out duties
during day
● employee can be move around the company if required since they
are multi-skilled

Disadvantages
● High costs
● wages aid but no work done by employee
● Additional qualifications make it easier to find job elsewhere

Reducing the size of Workforce

Why downsize the workforce

- introduction of automation
- falling demand for products
- factory/shop/office closure
- relocating abroad
- A business has been merger/ taken over so there is a surplus of jobs

How to downsize the workforce

- redundancy: an employee is no longer needed and so loses their job. It is not due to any
part of their work being unsatisfactory
- dismissal: when employment if ended against the will of the employee, usually for not
working in accordance with the employment contract

Which employees to make redundant:

 - length of time employed by the business
- employment history of the worker
- skills of the workers
- which department needs to lose workers
- Any workers volunteering to be made redundant

Legal Controls over Employment

1) The contract of employment - a legal agreement between an employer and employee,

listing the rights and responsibilities of workers.

Impact of employment contract

● employee and employers know what is expected of them
● provides some security to employee
● if employee does not meet contract condition, dismissal is allowed
● If employer does not meet contract condition, employee can take legal
actions

2) Unfair Dismissal - an employer ends a worker’s contract of employment for a reason

that is not covered by that contract.

Impact of unfair dismissal

● employer must keep accurate records of worker’ perforce if they want to
claim that employee has broken records
● provides some security to employee
● Allows employees to take their employer to an industrial tribunal if they
feel they’ve been treated unfairly
● businesses are less likely to treat employees unfairly

3) Protection against Discrimination - an employer makes decisions that are based on

unfair reasons such as: race, religion, gender, age or a disability

Impact of protection against discrimination

● employees are treated equally
● business should recruit and promote staff on merit alone
● employees have a sense of belonging

4) Health and Safety at work - many laws have been passed that have forced employers to
improve health and safety at work

Impact of health and safety

● increase costs to employer
● time-consuming as employees have to be trained
 ● workers feel safer and more motivated at work
● reduces accidents rate

5) Legal Minimum Wage - it makes it illegal for an employer to pay wages below the
minimum wage set

Impact of legal minimum wage

● prevent employers from employing workers
● encourage more people to seek work
● low-paid workers will earn more increasing living standards
● employees who receive wages above the minimum wage will ask for a pay rise to
maintain that gap

Chapter 9: Internal and External Communication

Types of communication

● internal communication
employee communicate with each other in their own department or with other departments in
the business

● external communication
communicating with people and organizations outside the business

Effective Communication

Why is effective communication important?

- reducing the risk of mistakes
- enabling faster decision making
- enabling quicker response to market chnages
- imporivng corrdingintion between departments
- improving the morale and motivation of workforce
- improving customer relationships

Types of Communication

● oral

● electronic
- e-mail
- text messaging
- video-conferencing
● visual
- presentations
- videos
- photographs
- charts

● written
- letter
- memorandum
- agenda
- minutes of meeting
- job description
- purchase order
- invoice
- company magazine
Which methods of communication to use?

- How urgent the message is

- the length of complexity of the message
- how many people need to reinvent the message
- how far away the receiver is from the sender
- cost of media
- how important it is to have a written record of the communication
- if the message required discussion
- How confidential the message is

Communication Barriers
problems that can occur due to communication barriers:
- tasks are completed incorrectly - increased waste - lower productivity
- damaged business reputation
- employee motivation falls
- higher risks of accidents
- reduced sales - poor advertising

how communication barriers can be reduced:

- ensure that the language used is appropriate to the receiver
- keep the channel of communication as short as possible
- The sender musts insist on receiving feedback
- sender must use the appropriate medium for. The message
- Physical barrier, such as noise, must be removed