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Unit 4: Human Resources
infoWhy this? Students need to understand the interdependent nature of business operations, human resources, marketing and finance. This section of the GCSE course shows the importance of employees within any business and how this links back to previous learning regarding the influences on business areas.
scheduleWhy now? Students have already covered objectives within unit 1; this enables them to see the importance of staff motivation and training in reaching the objectives set. They will also be able to see the link between stakeholder conflict, which directly links to the cost of training and motivation. We will begin the process of understanding the link between motivation, productivity and profit, which will be expanded upon in unit 6.
neurologyYou need to know
- An organisational structure defines job roles, responsibilities, reporting lines and levels of authority within a business.
- Businesses use organisational structures to co-ordinate work, control performance and achieve objectives.
- A well-designed organisational structure can improve clarity, efficiency and accountability within a business.
- An organisation chart is a diagram that shows the hierarchy, chain of command and spans of control in a business.
- A hierarchy is the ranking of jobs in a business from the most senior roles to the most junior roles.
- In a hierarchy, employees are accountable to the manager or supervisor with authority over their role.
- A chain of command is the formal line of authority that shows who reports to whom and how decisions are passed through the business.
- A clear chain of command can improve accountability and reduce confusion about responsibility for decisions.
- Span of control is the number of subordinates directly supervised by one manager.
- A narrow span of control usually creates more management layers because each manager oversees fewer employees.
- A wide span of control usually creates fewer management layers because each manager oversees more employees.
- A tall organisational structure has many management levels, a long chain of command and usually a narrow span of control.
- Tall organisational structures are more common in large businesses with complex operations and specialist departments.
- Tall organisational structures can provide close supervision, specialist roles and clearly defined responsibilities.
- Tall organisational structures can slow decision-making and increase bureaucracy because information passes through many layers.
- A flat organisational structure has few management levels, a short chain of command and usually a wide span of control.
- Flat organisational structures are more common in smaller businesses and start-ups.
- Flat organisational structures can speed up communication, reduce bureaucracy and give employees more autonomy.
- Flat organisational structures can overload managers and leave job boundaries less clearly defined.
- The most appropriate organisational structure depends on the size of the business, the complexity of its operations and the degree of control and flexibility needed.
- Small businesses with few employees often benefit from flatter structures because quick decisions and low management costs are important.
- Larger businesses often need taller or more formal structures to control complex operations and clarify responsibility.
- Delayering is the removal of one or more management levels to make a business structure flatter.
- Delayering can cut costs and speed up communication by reducing the number of management layers.
- Delayering can increase managers' workloads and make supervision harder because spans of control become wider.
- Centralisation means that important decisions are made mainly by senior managers at the centre of the business.
- Decentralisation means that decision-making authority is passed to managers and employees lower down the hierarchy.
- Many businesses use a mixture of centralisation and decentralisation, with strategic decisions kept centralised and routine operational decisions delegated.
- Centralisation can improve consistency, control and co-ordination across a business.
- Centralisation can reduce local flexibility and may demotivate managers who have little authority.
- Decentralisation can improve responsiveness to local conditions and make better use of employees' knowledge.
- Decentralisation can make co-ordination harder and can lead to inconsistent decisions between departments or branches.
- Large businesses are often organised by function, with departments such as finance, marketing, operations and human resources.
- Directors and senior managers are responsible for strategic decisions such as setting overall objectives, policies and long-term plans.
- Middle or functional managers are responsible for the performance of a department and for turning strategy into day-to-day plans.
- Supervisors and team leaders allocate work, monitor performance and pass information between managers and operational staff.
- Operational staff carry out the core activities that produce or deliver the business's goods or services.
- Support staff perform specialist activities such as administration, finance or human resources that help the business operate effectively.
- Delegation is the transfer of authority for a task from a manager to a subordinate while the manager remains ultimately accountable.
- Delegation allows managers to focus on higher-level tasks and can speed up decision-making.
- Effective delegation can motivate employees and develop their skills by giving them more responsibility.
- Delegation is especially important in flat structures because managers with wide spans of control cannot supervise every task closely.
- Some managers resist delegation because they fear losing control or do not trust subordinates to do the task well.
- Organisational structure affects how closely employees are supervised, how decisions are made and how information flows through the business.
- In tall organisational structures, managers usually supervise fewer employees closely because spans of control are narrow.
- In flat organisational structures, managers supervise more employees and therefore rely more on delegation and employee initiative.
- Decision-making is often more centralised in tall organisational structures and more decentralised in flat organisational structures.
- Tall organisational structures often use more specialised job roles, whereas flat organisational structures often require broader and more flexible job roles.
- Tall organisational structures can reduce flexibility because approval and communication must pass through several layers of management.
- Flat organisational structures can be more adaptable because fewer layers allow decisions and changes to be implemented more quickly.
- Communication in business is the exchange of information between individuals or groups to co-ordinate work and make decisions.
- Downward communication is information sent from managers to subordinates, such as instructions, targets or policies.
- Upward communication is information sent from employees to more senior managers, such as feedback, results or problems.
- Horizontal communication is communication between people or departments at the same level of the hierarchy.
- Tall organisational structures often make downward communication clear but can slow both upward and downward communication because messages pass through several layers.
- Flat organisational structures can make communication faster because there are fewer layers between decision-makers and employees.
- Communication in tall organisational structures can become distorted as messages are passed through many managers.
- Flat organisational structures often depend on employees communicating clearly and taking responsibility for decisions because there is less direct supervision.
- Wide spans of control can increase the use of written and electronic communication because managers cannot speak individually to every employee as often.
- Poor communication in any organisational structure can lead to mistakes, duplication of work and slow responses to problems.
- Recruitment is the process of attracting applicants for a vacancy, and selection is the process of choosing the most suitable applicant.
- Businesses recruit staff when they start up, expand, replace employees who have left, or reorganise work.
- The recruitment method a business chooses depends on the cost, speed, skills required and seniority of the job.
- Internal recruitment means filling a vacancy with an existing employee.
- Internal recruitment is usually quicker and cheaper than external recruitment because the business already knows the candidate and the candidate needs less induction.
- Internal recruitment can improve motivation and staff retention because employees can see opportunities for promotion.
- Internal recruitment can create another vacancy, cause resentment between unsuccessful employees and limit the number of applicants.
- Internal recruitment may prevent a business from bringing in new ideas, skills and experience from outside the organisation.
- External recruitment means filling a vacancy with someone from outside the business.
- External recruitment gives a business access to a wider pool of applicants and can bring in new ideas, skills and experience.
- External recruitment is often slower, more expensive and riskier than internal recruitment because outside applicants are less well known to the business.
- An effective recruitment and selection process helps a business appoint employees with the right skills, experience and personal qualities.
- Effective recruitment and selection can raise productivity, improve quality and customer service, and increase staff retention.
- Higher staff retention reduces the costs of recruiting and training replacement employees.
- Staff turnover is the proportion of a workforce that leaves a business during a given period.
- Staff retention is the proportion of employees who stay with a business during a given period.
- The recruitment process begins with job analysis, which identifies the tasks in the job and the skills and qualities needed to do it well.
- A job description states the main duties, responsibilities, hours, pay and conditions of a job.
- A person specification states the qualifications, experience, skills and personal qualities a candidate should have.
- Businesses use job descriptions and person specifications to attract suitable applicants and judge applications consistently.
- Vacancies can be advertised internally through company systems such as noticeboards or intranets.
- External vacancies can be advertised through company websites, recruitment websites, newspapers, social media, job centres, recruitment agencies and careers fairs.
- Recruitment agencies charge a fee to find applicants and can save management time by screening candidates.
- Headhunting is a recruitment method in which a business approaches a specific highly qualified candidate directly.
- Applicants usually apply by completing an application form or by sending a curriculum vitae and a letter of application.
- An application form uses standardised questions, which makes candidates easier to compare.
- A curriculum vitae summarises an applicant's education, qualifications, experience and skills.
- A curriculum vitae can be tailored to a specific role, but different formats can make applicants harder to compare.
- Selection is the stage at which a business decides which applicant should be appointed.
- Shortlisting means selecting the applicants whose qualifications, experience and personal qualities best match the job description and person specification.
- Businesses often use several selection methods because one method alone may not show whether a candidate is suitable.
- An interview allows an employer to ask questions, judge communication skills and assess whether a candidate is suitable for the role.
- Aptitude and skills tests are used to measure whether a candidate has the abilities needed for the job.
- A portfolio allows a candidate to show examples of previous work and is especially useful for creative roles.
- References provide information from previous employers or other suitable referees about a candidate's reliability, behaviour and work performance.
- Assessment centres use exercises such as group tasks, presentations and role plays to assess how candidates perform in work-related situations.
- Effective selection improves the chance of appointing an employee who will perform well, fit the business and stay with the business.
- A contract of employment is a legal agreement that sets out an employee's pay, hours, duties and other terms and conditions.
- Full-time employment means working the number of hours that the employer defines as a full working week.
- Part-time employment means working fewer hours each week than a full-time employee for the same business.
- Job sharing means two part-time employees divide the duties and hours of one full-time job.
- Zero-hours contracts do not guarantee a minimum number of paid hours, so pay depends on the hours actually worked.
- Full-time employment can benefit a business because staffing levels are more predictable and employees can provide greater continuity.
- Full-time employment can benefit employees because pay is usually more regular and employment benefits may be easier to access.
- Part-time employment can benefit a business because staffing can be matched more closely to busy periods.
- Part-time employment can benefit employees because it offers flexibility around study, childcare or other commitments.
- Zero-hours contracts can benefit employers by giving them flexibility when demand is uncertain, but they can create income insecurity for workers.
- Motivation is an employee's willingness to work hard and contribute effectively to business goals.
- A motivated workforce is valuable because motivated employees usually work more productively and produce better-quality output.
- High employee motivation can improve customer service because motivated employees are more likely to take care over their work and respond positively to customers.
- High employee motivation can reduce labour turnover because satisfied employees are less likely to leave the business.
- Lower labour turnover reduces recruitment and training costs because fewer replacement workers need to be hired and prepared for the job.
- High employee motivation can reduce absenteeism because motivated employees are more likely to attend work reliably.
- Financial methods of motivation increase employee reward through pay or other monetary benefits.
- Remuneration is the payment an employee receives for doing a job.
- A wage is payment based on the time worked, so weekly pay can change if the number of hours worked changes.
- A salary is a fixed annual amount paid in regular instalments, so pay does not usually vary with the exact number of hours worked.
- Piece-rate pay rewards employees according to the number of units they produce, so it can encourage faster output.
- Commission is payment linked to sales, usually as a percentage of the value sold.
- Commission is commonly used in sales roles because it gives employees a direct financial incentive to sell more.
- A bonus is an extra payment for meeting or exceeding a target, so it can reward strong performance.
- Profit sharing gives employees a share of company profit, so it can link employee reward to the overall success of the business.
- Non-financial methods of motivation improve motivation without directly increasing basic pay.
- Fringe benefits are non-cash rewards provided by an employer, such as staff discounts, private healthcare or a company car.
- Fringe benefits can motivate employees because they increase the total value of the job and can improve staff retention.
- Training can motivate employees because it improves competence, increases confidence and shows that the employer is willing to invest in them.
- Giving employees greater responsibility can motivate them because it shows trust and can make work feel more meaningful.
- Giving employees greater responsibility can demotivate them if they do not receive the training or support needed to succeed in the role.
- Recognition and praise can motivate employees because employees often value being appreciated for good performance.
- Management style affects motivation because it changes how much control, support and involvement employees have at work.
- An autocratic manager makes decisions without consulting employees, which can create clear direction and quick decisions.
- Autocratic management can demotivate employees if they feel ignored or have little control over their work.
- A democratic manager consults employees before making decisions, which can increase engagement and commitment.
- Democratic management can slow decision making because consulting employees takes time.
- A laissez-faire manager gives employees substantial freedom over their work, which can motivate experienced and self-directed staff.
- Businesses often use a mix of financial and non-financial methods of motivation because different employees value different rewards.
- Training gives employees the knowledge and skills needed for their current job, whereas development is broader and prepares employees for future roles and responsibilities.
- Training is needed by both new and existing employees because jobs, technology and working methods change over time.
- Effective training can increase productivity because employees learn how to complete tasks efficiently and with less supervision.
- Effective training can improve the quality of goods and services because employees are more likely to work accurately and follow the correct procedures.
- Training can help a business adapt to new technology and new ways of working by giving employees the skills needed to use them confidently.
- Training can improve customer service because employees understand products, procedures and how to deal with customers appropriately.
- Training can increase employee motivation and job satisfaction because employees often feel valued when a business invests in their development.
- Training can improve labour retention because employees are more likely to stay with a business that helps them progress.
- Some training is essential for legal compliance, especially where employees must follow health and safety rules or industry regulations.
- Training is usually an ongoing process throughout employment rather than a one-off activity completed only when an employee starts work.
- The most appropriate training method depends on the skills required, the employee's existing experience, the time available and the cost to the business.
- Businesses often deliver job-specific training in-house because it can be tailored closely to their own systems, procedures and standards.
- Internal training can spread poor working practices if trainers are ineffective or use incorrect methods.
- Induction training is the initial training given to new employees when they join a business.
- Induction training introduces new employees to their job role, the workplace, key colleagues, business procedures and essential policies such as health and safety.
- Effective induction training helps new employees settle in quickly, become productive sooner and feel more confident in their role.
- Effective induction training can reduce accidents, errors and confusion by making sure new employees understand rules and expectations from the start.
- Induction training takes time and money to organise, and it is less effective if important information is missing or delivered poorly.
- On-the-job training takes place in the normal workplace while the employee is doing their job.
- Common forms of on-the-job training include observation, work shadowing, coaching and being shown tasks by experienced employees.
- On-the-job training is usually practical and directly relevant because employees learn by using the equipment, systems and procedures of the business.
- On-the-job training is often cheaper than off-the-job training because it usually avoids external course fees, travel costs and time away from work.
- On-the-job training can disrupt normal operations and reduce short-term productivity because experienced employees must spend time training others.
- On-the-job training can be less effective if trainees copy bad habits or receive inconsistent instruction from different employees.
- Off-the-job training takes place away from the employee's normal working environment.
- Off-the-job training can include courses at colleges or training centres, seminars, conferences and online lessons.
- Off-the-job training can give employees specialist knowledge, recognised qualifications and new ideas that may not be available inside the business.
- Off-the-job training can be more expensive than on-the-job training because businesses may have to pay course fees and cover time away from work.
- Off-the-job training can reduce short-term productivity because employees are not available to carry out their normal duties while training.
- Off-the-job training is most effective when the content closely matches the employee's role and the business's needs.
rocket_launchYou must be able to
- Interpret an organisation chart to identify hierarchy, chain of command and lines of accountability.
- Distinguish between tall and flat organisational structures using management layers, chain of command and spans of control.
- Explain how changing span of control affects supervision, communication and management layers.
- Assess whether a business would benefit from delayering by weighing faster communication and lower costs against reduced supervision.
- Judge whether centralisation or decentralisation is more appropriate for a business in a given context.
- Classify business roles into directors, middle managers, supervisors, operational staff and support staff.
- Recommend when delegation should be used and assess its likely effects on motivation, speed and managerial workload.
- Analyse how a given organisational structure affects communication, supervision and decision-making.
- Differentiate between downward, upward and horizontal communication in workplace examples.
- Select an appropriate recruitment method by considering cost, speed, seniority and skills required.
- Compare internal and external recruitment for a specific vacancy and justify the better option.
- Draft a job description and person specification that match a stated vacancy.
- Shortlist applicants against a job description and person specification.
- Choose suitable selection methods for a role and justify the choice.
- Compare full-time, part-time, job-sharing and zero-hours employment for employer and employee needs.
- Recommend financial and non-financial methods of motivation for different employees or business situations.
- Evaluate how autocratic, democratic and laissez-faire management styles are likely to affect motivation and decision-making.
- Distinguish between training and development in workforce planning decisions.
- Recommend induction, on-the-job or off-the-job training for a specific employee need and justify the choice.
- Assess how effective training could affect productivity, quality, customer service and labour retention.