People in Business

Motivating Workers
● It is very important for a business to have a well-motivated workforce
● The main reasons why people work:
○ Money: to pay for the basic needs for life and some wants
○ Security: to know that you are safe (financially)
○ Affiliation (Social needs): to feel part of a group, meet people, make friends
○ Self-importance (esteem): to feel that you are important and that the job you do
is important
○ Job Satisfaction: to feel pleasure that you have done a good job
● Motivation – the feeling that makes employees want to work hard and effectively in a
business
● Well-motivated workers with high productivity increased output and higher profits
● Unhappy workers do not work effectively, low output, no/ lower profits
Key Motivational 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
● ABRAHAM MASLOW
○ Also known as “Hierarchy of Needs” – a pyramid showing the different types of
needs and how some are more important than others
 ◆
○ Physiological Needs – food, rest, shelter (fulfilled by receiving wages)
○ Safe/security Needs – protection against danger & poverty. Having fair treatment
(fulfilled by having job security)
○ Social Needs – friendship, belonging in a group (fulfilled by having colleagues at
work)
○ Esteem Needs – having status and recognition (fulfilled by being recognised for
good work)
○ Self-actualisation – achieving your full potential, feeling that you have done a
good job (fulfilled by being promoted & being given more responsibility)
○ Maslow’s theory also suggests that each level in the hierarchy (starting from
Physiological needs) needs to be achieved before moving on to the next
● FEDRICK HERZBERG
○ Also known as “the 2-factor theory”
○ Humans have two sets of needs:
 ◆ Basic human needs (called ‘Hygiene’)
◆ To be able to grow physiologically (called ‘Motivator’ needs)

‘Motivator’ Factors ‘Hygiene’ Factors

Achievement Status
Recognition Security
Personal Growth Work Conditions
Advancement/Promotion Relationship with boss &
subordinates
Work itself Salary
● • The presence of hygiene factors doesn’t motivate employees, but their
absence demotivates them.
Methods of Motivation
● There are 3 Factors that motivate employees:
○ Financial Rewards
○ Non-Financial Rewards
○ Job Satisfaction
● Financial Rewards/Motivators include:
○ Wages
◆ Wage is a payment given weekly
◆ Workers are paid quickly, so don’t have to wait too long to receive money
◆ Given overtime for extra hours worked
◆ They must be calculated every week, which is expensive
◆ Wage clerks need to be appointed
○ Time Rate (payment per hour, i.e. 10$/hour)
◆ Paid according to number of hours worked
◆ Easy to calculate
◆ Good and bad workers are paid the same (demotivating)
◆ Supervisors may need to be appointed to keep a check on workers
◆ Clocking-in system may be required
○ Piece Rate
◆ Workers are paid depending on the quantity of products made
◆ Given above basic pay
◆ Encourages workers to work faster
◆ May only focus on quantity and ignore quality
◆ Workers focusing on quality may earn less (demotivating)
○ Salaries
 ◆ Paid monthly
◆ No overtime
◆ Salary = annual income/12
◆ Payment needs to be calculated only once a month
○ Commission
◆ Given to sales staff
◆ Higher sales, higher money
◆ Encourages people to sell more
◆ If too persuasive may have negative effects on customers
○ Profit sharing
◆ It involves giving employees a share of profit, above basic pay
◆ Increases motivation
◆ Other profits may be given to shareholders
○ Bonus
◆ A lump sum amount of money is given to workers who have done a good
job
◆ Paid yearly
◆ Performance related pay
◆ Employee pay is related to the effectiveness of the employee
◆ Mostly used in service sector, when output can’t be easily measured
◆ Often used as a method of appraisal
◆ Appraisal is when an employee’s immediate supervisor observes their
work and discusses their training needs
○ Share ownership
◆ Shares of a company are given out to employees
◆ Encourages them to work harder
◆ Share price and value may increase
◆ Improves loyalty as there’s a greater sense of belonging
● Non-Financial Rewards (fringe benefits) -
○ Company Car
○ Discounts of products
○ Health Care
○ Children’s school paid for
○ House is paid for
○ Free trips abroad (holidays)
● Job Satisfaction
○ Enjoyment derived from feeling that you have done a good job
○ Pay
○ Promotion
○ Status
 ○ Training
○ If these things are kept in mind employees will be well-motivated
● Job Rotation
○ Working, swapping around and doing a specific job for a limited time period
○ Increases variety of work
○ Easier for managers to cover up if 1 employee is absent
○ Makes the job more interesting
● Job Enlargement
○ Where extra tasks of similar level of work are added to a person’s job description
○ Extra tasks shouldn’t add extra work
○ Increases variety
○ Higher job satisfaction
● Job Enrichment
○ It involves adding tasks that require more skills
○ Higher responsibility
○ Higher job satisfaction
○ Higher productivity
Organisation and Management
● Organisational structure – the levels of management and division of responsibilities
within a company
● Organisational Charts show a clear structure of the business and make it easy to see
which part of the company does what
● Features –
○ It is a hierarchy
○ Organised into departments
○ Shows the chain of command and span of control
● Benefits –
○ The chart shows how everybody is linked in the organization
○ Gives a sense of belonging
○ Employees know their position
○ It shows how departments are linked
○ All employees are aware from which communication channel will they receive
messages
● Example of Organisational Chart:
● Chain of command - The structure in an organization which allows instructions to be
passed down from senior management levels to lower levels of management
● Span of control - The no of employees working directly under a manager
● There are two types of organizational structures of a business:
○ You can have a ‘tall’ structure, with a long chain of command:

● You can have a ‘wide’ structure, with a short chain of command:

● The advantages to have a short (and wide) structure is that:

 ○ Communication is faster and more accurate
○ Top managers are more in touch with subordinates because there are less levels
○ Wider span of control means employees feel trusted and take more decisions by
themselves
○ Higher job satisfaction
● Disadvantages:
○ Difficult to control
○ Inefficient supervisors
○ Communication problems
○ Difficult to motivate workers
○ Sometimes there may be a conflict between departments (i.e. marketing wants
to buy something but finance does not think it is necessary)
● The supervisors working in these departments are Line managers – they have direct
responsibility over people below them in the organisational chart
● You also have Staff Managers – which are specialists in certain areas to provide
support and information to line managers

Role of Management
● All organisations have managers. Leaders, director, executive are all different names,
but they are all managers
● The functions of managers include:
○ Planning – setting aims or targets
○ Organising – delegating tasks. organising people and resources effectively
○ Co-ordinating – making sure departments work well with each other and have
good communication
○ Commanding – making sure the workers are keeping to targets and deadlines. By
guiding and delegating tasks
○ Controlling – measuring and evaluating work of employees and verify they are on
target
● Without clear and effective management, a business will lack:
○ A sense of control and direction
○ Control of employees
 ○ Organization of resources
○ Coordination between departments
Delegation
● Delegation involves giving a subordinate the authority to perform particular task.
● However, if the employee does a bad job, the manager must accept the responsibility
for it
● Delegation is important because:
○ Managers cannot do every job by themselves
○ Managers can then measure the success of the employees
○ Work becomes more interesting for subordinate, increases their motivation
○ Makes employees feel trusted and important
○ Gives workers greater career opportunities and chances of promotion
● However, some managers do not delegate tasks because:
○ They might be afraid the subordinates will fail and manager wants to control
everything
○ Manager might also feel threatened that subordinate will do a better job than
them
● Delegation means that once the task is completed, the manager will have less direct
control
● This means the trust for the workers is increased by the manager
● Therefore, there needs to be more trust in workers in order to reduce control over them
Leadership Styles
● Leadership styles are the different approaches to deal with people when with authority
● There are THREE TYPES OF leadership styles:
○ Autocratic Leader: where the manager expects to be in charge of the business
and expects to have their orders followed with no questions asked
○ Democratic Leader: where the manager allows the subordinates to be involved in
the decision-making process
○ Laissez-Faire Leader: Where the manager makes broad/general objectives for
the employees and leaves them to make their own decisions.
Trade Unions
● Trade union – a group of workers that join together to protect their interests
● A trade union is a pressure group
● Employees usually have the same interests (i.e. good wages, pleasant work
environment, etc)
● If an employee wants to join a trade union, they must pay a yearly subscription for the
benefits
● Benefits from a trade union usually include:
○ Improved conditions of employment (such as wages, holidays, hours of work)
 ○ Improved work environment (health & safety, heating, noise)
○ Advice/support if member thinks they have been unfairly fired, mistreated, etc
● Disadvantages:
○ Costs money
○ May be required to take industrial action
Recruitment
● Recruitment – the process from identifying that a business needs to employ someone,
to the point where applications have arrived at the business
● Recruitment is one of the roles of the Human Resources department
● Recruiting usually happens when an employee leaves a job, a business is starting up, or
it wants to expand
● Recruitment process (for external recruitment):
○ A job analysis is done to identify the tasks and responsibilities to be carried out
by the new employee
○ Once the details of the job are gathered, a job description will be made, outlining
these duties.
○ From the job description, a job specification is created, which outlines the
requirements, qualifications and expertise for the job
○ Then the job is advertised
◆ Internal - when the vacancy is filled by someone who is an existing
employee of the business
◇ It is cheaper, motivates other employees, potential of the employee
is already known. The employee is aware of the working conditions
and other workers, lesser time taken for induction training
◇ But no new ideas come into the business and there may be jealousy
and rivalry amongst employees
◆ External - when the vacancy is filled by someone who isn’t an existing
employee and will be new to the business
◇ New ideas come into the business. There’s wider choice of workers
◇ But it is expensive and time-taking and may demotivate existing
employees
◇ Ads can be place in:
■ Local newspapers- usually for unskilled and semi-skilled
workers.
■ National newspaper- usually for senior positions which
requires high skills.
■ Specialist magazines- used for particular technical people.
■ Government job centers- usually for unskilled and semi-skilled
workers.
■ Recruitment agencies- they keep details about qualified
 ■
people and are approached by companies
● Selection process:
○ Candidates start by sending their application forms. They send in their CV’s and
resumes outlines why the applicant wants the job
○ Short-listed applicants are called for interviews. These may be done one-on-
one, two-on-one talks, skill tests, aptitude tests, etc.
Types of Workers
● Part-time workers
○ Workers working for less than 35 hours a week
○ Advantages:
◆ Work hours are flexible.
◆ Business can extend the opening/closing hours
◆ Employees can just work at busy times
◆ Cheaper for the employer than employing a full-time worker
◆ May agree for a low salary as good work-life balance
○ Disadvantages:
◆ Employees are less likely to be trained because they might see it as
temporary and don’t want a promotion
◆ Takes longer to recruit many part-time workers than a couple full-time
workers
◆ Communication problems may arise
◆ Might be less committed to the company
● Full-time workers
○ Workers working for more than 35 hours a week
○ Advantages:
◆ Higher training and chances of promotion
◆ Lesser time taken in recruitment
◆ Highly committed to the business
◆ Lesser communication problems
○ Disadvantages:
◆ No flexible working hours
◆ Expensive
◆ May demand higher pay as poor work-life balance
Training
● Training is needed when:
○ New technology is employed
○ Less supervision is required
○ Need to increase efficiency
○ Need to increase chances of internal promotion
○ New skills needed
 ○ Need to lower accidents
● There are three types of training:
● Induction Training – where the employee is given an introduction on the company’s
procedures and customs, and is introduced to their co-workers

Advantages Disadvantages
Employees settle into their job Time consuming
quickly
Workers make fewer mistakes Worker is being paid while not
doing work
May be a legal requirement Delays the start of work for the
employee
● • On-the-job Training – where the employee does the job while being
supervised by a more experienced worker, giving tips, suggestions and help

Advantages Disadvantages
Employee does not need to be Trainer won’t be as productive
sent away because they are teaching
employee
So cheaper than off-the-job Trainer might have bad habits
training and pass on to employee
There is still production from Not recognized training
worker while training qualifications outside the
business
● • Off-the-job training – where the employee is trained away from the
workplace, normally by specialized trainers.

Advantages Disadvantages
Lots of skills are taught Expensive to send employees off
to expert trainings
trainings are sometimes off- Workers are being paid but not
work hours, worker will still work doing any work
Employees become versatile Professional training gives
(can be moved around company employees additional
and know what to do) qualifications, makes it easier for
employee to find another job
● • Sometimes, a company might need to reduce the size of the workforce,
possibly because of:
○ Automation (robots replacing human jobs)
○ Less demand for products or services
○ Business might have relocated abroad
○ Business being taken over/merged and now there are too many workers doing
same job
● Companies need to think ahead on the future and establish how many employees they
will need and their skills, this is called workforce planning
● When a business needs to reduce the number of employees, they can either dismiss
the employee or make them redundant
● Dismissal – when the worker is told to leave the job due to poor work or poor behavior
(i.e. if employee is always late for work after being given warnings, when employee is
caught stealing, etc)It is more commonly known as being ‘fired’
● Redundancy – when a business no longer needs an employee. Even though the
employee did nothing wrong. Usually happens during period of falling sales or due to
an economic recession (when no one is buying anything)
Legal Controls over employment issues
● There are many laws in countries, that ensure that everyone has equal employment
opportunities regardless of race, gender, religion, age etc.
● This means that businesses need to be careful when advertising a job. They cannot
advertise for just a single type of person.
● Companies must treat all applicants for the job equally, if not, they will be fined and
prosecuted
● Employees of a business have legal right that must be protected, which includes:
○ Unfair discrimination at work/when applying: i.e. when employers discriminate
unfairly against employees or applicants due to their race, gender, religion or
colour.
○ Health and safety: there are laws that make sure that employees are protected
from dangerous machinery, that they are provided safety equipment & clothing,
hygiene conditions, suitable temperatures, provide breaks.
○ Unfair dismissal: when the worker is dismissed unfairly (i.e. from joining a trade
union, being pregnant, or when given no warnings before being dismissed), the
worker can take their case to an industrial tribunal to see both sides of
 argument.
○ Wage protection: an employee in a business should have a contract of
employment, where it should contain the wage rate, frequency of wages and
what deductions are made from the wages (from tax). In some countries
businesses pay whatever they want because unemployment is high, so they offer
very low wages.
Governments take action by creating a legal minimum wage.
Internal & External Communication
● Effective communication is important so that the information sent in the message is
received, understood and acted upon as it should
● It is important to businesses because if it is not understood, it can lead to serious
consequences
● There are two types of communication in businesses:
● Internal Communication – communication between employees of the same business
● External Communication – communication between the business and other businesses
and individuals
● External communication has to be especially efficient because it establishes the image
and the efficiency of a business
● i.e. if a company communicates inefficiently with their suppliers, they might receive
the incorrect materials
● Effective communication involves:
1. The transmitter/sender sending a message to pass on information
2. A medium of communication – the method for sending message (i.e. e-mail,
phone, etc)
3. The message being sent to the receiver
4. The receiver confirming that the message has been received and responds to it
(feedback)
● There are two types of communication:
○ One-way communication – where the receiver cannot reply to the message (i.e.
posters)
○ Two-way communication – where the receiver can respond to the message,
could be just confirmation that message was received (e-mail)
● The methods of communication include:
● Verbal methods – sender speaks to the receiver (i.e. meetings, telephone, video
conference)

Advantages Disadvantages
Information given out quickly & If talking to many people, it’s
Efficient way to communicate hard to tell whether everyone got
with many people
 hard to tell whether everyone got
with many people the message
Opportunity for immediate Not good for accurate messages
feedback and if a permanent record of the
message is needed
Message is reinforced by the
speaker’s body language
● • Written methods – sender creates e-mails, memos or letters, including the
use of Information Technology

Advantages Disadvantages
Message can be referred to in Might lead to too many e-mails
the future “hard evidence” and ‘information overload’
Easy to explain complicated Two-way communication is
messages difficult
Can be copied and re-sent to Hard to check if message has
many people been received
● • Visual methods – sender uses diagrams, charts, videos, PowerPoints

Advantages Disadvantages
Information presented in more No feedback and needs other
appealing way, people will be methods of communication to go
more interested to look at it with it
Can be used to make written Graphs and charts may be
messages clearer, to illustrate difficult for people to
the point understand, message may be
misunderstood
Communication Barriers
● Communication Barriers – things that prevent efficient communication
● Problems with the sender: when language is too difficult, speaks too quickly/not
clearly, communicates wrong message
● Overcome by: using understandable language, making sure message is a clear as
●
possible by asking questions to make sure message was understood
● Problems with the medium: message may be lost/not seen by receiver, wrong medium
used (i.e. important message on noticeboard), if message is being passed along – it
might get distorted
● Overcome by: sender asking for feedback/receiver always sending feedback that
message is received, selecting the appropriate channel to send message
● Problems with the receiver: not listening/paying attention, receiver doesn’t trust the
sender/doesn’t want to do it
● Overcome by: emphasizing importance of message, ask for feedback to ensure it was
understood, using direct communication