2. People in business (not 2.4 (need to add)) Flashcards
What is a motivated worker?
Motivated worker – A hard-working employee who works effectively for a business.
Why do people work (5 reasons)?
- Money – People need money to buy food, water and other items they need to live.
- Social needs – People just like us likes to feel part of a team, socialise and make friends.
- Esteem needs – Feeling important, feeling that they are contributing to a business.
- Job satisfaction – enjoyment from the work and achievements they have accomplished.
- Security – Feeling of having a secure job with a stable income. (not likely to lose job etc…)
What are 3 ways that a business benefits from a well-motivated workforce?
- labour productivity
- reduced absenteeism
- labour turnover
How does the workers being productive help the business and what is labour productivity?
Motivation improves productivity so motivated workers will work harder and produce more output, and the firm will make more profit as a result.
Labour productivity is output per worker measured by output divided by the number of workers. So if 10 workers pick 4000 oranges the labour productivity is 4000 divided by 10, 400 oranges per person.
How does less absenteeism benefit the business?
Motivated workers will arrive on time, are less likely to be absent from work (also known as absenteeism) and are less likely to leave the business. We can calculate the rate at which workers leave the business by dividing the total number of employees by the number of employees who left in the last year.
What is labour turnover and how is it calculated?
Among the causes that contribute to high labour turnover are that the job and the worker do not suit one another, low wages, bad working conditions, bad treatment on the part of the employer or just the roving nature of the worker.
Labour turnover is equal to the number of employees leaving, divided by the average total number of employees (in order to give a percentage value). The number of employees leaving and the total number of employees are measured over one calendar year.
What was Abraham Maslow’s theory?
Abraham Maslow’s theory states that the more levels of needs achieved by the worker = the higher motivated they will become. This also means that each level of motivation must be achieved before an employee can move to the next level of motivation.
What are the 5 different parts of Maslow’s Hierarchy?
Physiological needs:
- Food, rest, recreation and shelter
- wages high enough to meet weekly bills
safety/security needs:
- protection against danger, poverty, fair treatment
- job security
social needs:
- friendship, a sense of belonging to a team
- work colleagues that support you at work
esteem needs:
- having status and recognition, achievement, independence
- being given recognition for a job well done
self-actualisation:
- successding to your full potential feeling that you have done a good job, not just for financial and personal reward
- being promoted and given responsibility
What is one limitation of Maslow’s theory?
One limitation of this theory is that it doesn’t apply to every worker. For some employees, for example, social needs aren’t important but they would be motivated by recognition and appreciation for their work from seniors.
What was F.W. Taylors theory?
F. W. Taylor: Taylor based his ideas on the assumption that workers were motivated by personal gains, mainly money and that increasing pay would increase productivity (amount of output produced). Therefore he proposed the piece-rate system, whereby workers get paid for the number of output they produce. So in order, to gain more money, workers would produce more. He also suggested a scientific management in production organisation, to break down labour (essentially division of labour) to maximise output
What are the limitations of F.W. Taylor’s theory?
- Employees can be motivated by other factors not just money
- There is no guarantee that all employees will work harder if they are paid more
- There are many jobs where output cannot be measured easily (difficult to determine if employee actually works hard)
What is Herzberg’s Two-Factor Theory?
There are 2 factors Hygiene & Motivation factors. Workers expect hygiene factors to be available to them otherwise they will become demotivated. Hygiene factors will not motivate the workers only motivation factors will make the employees work harder.
What are Federick Herzberg’s motivation factors?
- recognition
- achievements
- level of responsibility
- need for personal growth
What are Federick Herzberg’s hygiene factors?
- working conditions
- salary and job status
- company policy and benefits
- working relationships
Why are the hygiene factors important?
According to Herzberg, the hygiene factors need to be satisfied, if not they will act as de-motivators to the workers. However hygiene factors don’t act as motivators as their effect quickly wear off. Motivators will truly motivate workers to work more effectively.
What are the 3 ways to motivate employees?
- Financial rewards
- Non-financial rewards
- Job satisfaction
What are the different kinds of financial motivators?
- wage
- salary
- bonus,
- commission
- profit sharing
What are wages and some cons of this method?
Usually paid weekly – to manual workers e.g. warehouse workers,
cleaners etc
cons:
- Good and bad workers get paid the same
- Calculating wages takes time and money (opportunity cost)
What is wages (time rate) and what are the cons?
Wages (time rate) – Payment for a period of time such as amount per hour e.g. $10 per hour.
Cons:
- Good & bad workers get paid the same
- Recording every employee’s working hours may be complicated
- costs business to hire an employee to calculate each workers’ wage (opportunity cost)
What is wages (piece rate) and what are the cons?
Wages (piece rate) – Workers paid depending on quantity of product produced e.g. $2 for every bicycle assembled.
Cons:
- Workers may rush and produced bad quality products, Workers that make slow high-quality products will get paid less.
- workers may focus on quantity rather than quality, this can damage the reputation of the business
- if any machinery break down the employees will earn less money
What are salaries?
- Workers are paid monthly
- Pay is calculated per year, then divided by 12
- Extra work may not be paid for
- Often used with office staff or management
- It is easy to calculate
- It can be used in combination with other methods
What is commission and what are the cons?
- Used with sales staff
- They are paid a % of the profit or value of the sale
- Can be very motivating!
Sales staff are often paid a small percentage of the selling price of the product they are selling e.g. If a car salesman sells a car, the salesman might get 20% of the selling price of the car which is added to his salary.
cons:
- But also demotivating if staff don’t make many sales
- If sales staff are too pushy it can annoy customers and harm the reputation of the business
What is profit sharing?
- Can be used with all staff
- They are paid a share of the profits, in addition to their basic salary. It is a paid as a ‘dividend’
- Can be motivating as all staff want the business to succeed
- Used when it is difficult to identify individual contributions
What is a bonus?
- A lump sum paid to workers when they have worked well
- Usually paid at the end of the year or at intervals throughout
What does it mean when you get performance related pay?
- Employee’s pay is linked to the effectiveness of their work.
- This is often used with jobs where output cannot be easily measured. E.g. teachers, police officers, managers
Businesses use an appraisal to assess effectiveness:
- The manager will interview the worker and discuss progress
- Training needs and objectives for the year ahead should be identified.
What is share ownership?
- Employees are given the opportunity to buy some shares in the business
- This should encourage them to work hard as they will receive dividends if the company does well
- The share price will also increase if the company is doing well
- May improve employee loyalty as they now feel part of the company
What is another way to motivate employees which isn’t financial?
A worker will be motivated if non-financial rewards given to them, these are also called perks or fringe benefits.
What are some examples of non-financial rewards that can be given to employees?
- Health care paid by company
- Company cars
- Free trips / company holidays
- Employee of the month
- Free meals
- Discount on company’s products
- Free housing
- Children’s education fees paid by company
What is job sataisfaction?
Job satisfaction is the enjoyment obtained from
feeling that you have done a good job.
As stated by Herzberg, factors which dissatisfy or demotivate must be resolved before
workers can be motivated.
What are ways a business can reach job satisfaction?
- Pay
- Promotion
- Working conditions
- The work itself
- Status of the job
What is job rotation and how does it increase job satisfaction (how effective is it)? What is a con?
What: Workers swap roles to do different tasks.
How: This stops the employee from getting bored.
Con: It requires time and money spent to train employees
Effective?: Yes
What is job enlargement and how does it increase job satisfaction (how effective is it)? What is a con?
What: More extra tasks are given to the worker so they have a variety of things to do. However, these tasks should not be more difficult. e.g. supermarket cashier now adds price label on items.
How: It reduces boredom
Con: workers will not get paid any more for doing more tasks so they may feel demotivated
effective?: not very effective
What is job enrichment and how does it increase job satisfaction (how effective is it)? What is a con?
What: Adding tasks that require more skill and responsibility. e.g. receptionist employed to greet clients now deal with telephone enquiries
How: Workers may be given greater autonomy (independence) over their work
-Increased decision making opportunities
Con: additional training is required
effective?: very effective
What is team working/ autonomous work groups and how does it increase job satisfaction (how effective is it)?
What: This involves giving a group of workers responsibility for a particular process or task.
How: They can decide how to complete the task
using their skills, knowledge and experience, this should improve job satisfaction
effective?: effective
What is a organisational structure?
Organisation structure refers to how responsibility and authority is shared in a business organisation.
What is a organisational chart?
a visual representation of the organisational structure, showing who reports to whom.
What are the 2 common types of charts?
- Tall organisational charts – These have a long chain of command and a small span of control
- Flat organisational charts – Short chain of command, wide span of control
What is a line manager?
a manager directly in charge of a worker (above their subordinates on an org. chart)
What is a subordinate?
a worker who reports to their line manager (below their line manager on an org. chart)
What does delegate mean?
giving authority for a task to a subordinate (e.g. when a manager gives responsibility to a worker)
What does span of control mean?
the number of employees (subordinates) working directly under a manager
What does chain of command mean?
the path of authority passed from senior management to workers
What are the advantages of an organisational chart?
- Shows how everybody is linked together in a business
- Lines of communication are clear
- Motivational as employees can see where they belong and can plan their career paths
What are the advantages of a short chain of command?
- Faster communication – Communication is quicker and more accurate since it is passed on by fewer people.
- Stronger relationship between high-level managers and employees – This is because there are fewer levels between managers and employees.
- Each manager is responsible for more employees – This encourages them to delegate (pass down) more work to employees.
What is de-layering and why does it happen?
- removing an entire row of management
- It is primarily done to cut costs but is also used to improve/speed up communication / decision making.
What are the benefits and problems of a flat structure?
Benefits:
- Communication is quicker and more accurate
- Management are more in touch with the people below them
- Spans of control will be wider
- Managers will delegate more (Workers will feel more trusted, they may get to make more decisions which might lead to more job satisfaction)
Problems:
- Fewer management positions – less chance of promotion
- Difficult for manager to monitor performance
