Flashcards in Unit 2: Human resource management Deck (113)
Work force planning
is the method used by a business to forecast how many and what type of employees are needed now and then.
Internal source of labor
is when are available within the organization.
External source of labor
is when the employees have to be recruited from outside the organization.
Labor turnover definition and calculation
the proportion of employees leaving within a given period. The labor turnover of an organization is measured by the number of employees leaving the business divided by the entire workforce.
Labour turnover: (Number of employees leaving/ number of employees in the business) x 100
Avoidable causes of employees leaving
- Dissatisfaction with payment
- Poor working environment
- Job dissatisfaction
- Human resources policies
- Lack of facilities
- Dissatisfaction with working time
How can an organization predict its future employee needs?
- Past data
- Productivity of workers
- Management knowledge
- Calculating staff turnover
The costs for the business of a high labour turnover are:
• Recruitment: the business will need to find new employees and the recruitment process has associated costs.
• Loss of productivity: the organisation will lose some of its productive potential while it recruits new employees and brings their skills and efficiency up to the level of the employees who have left.
• Inefficiency, machine breakdown, waste, defective products: while new employees are settling in, it will take time for them to master the job to a high standard.
• Training: the newly recruited employees will need to be trained, which takes time and distracts the current experienced employees from their tasks.
• Reputation of the company: a high labour turnover tarnishes the company's image and may make it difficult to attract talented employees.
External factors that affect work force planning
- Technology advancements
- Population and demographics
- Economic situation
- Availability of skills
- Government training and subsidies
Internal factors that affect work force planning
- Structure of the organization
- Working practices
1. Job analysis
2. Job description
3. Person specification
4. Job evaluation
5. Job advertisement
is the study of what the job entails. It provides details of the skills, training and tasks needed to carry out the job.
• Used to select employees and determine their payment, promotion and performance review.
• Company looks at the aspects with others associated with the job and includes: the current post-holder, the employees line manager, the employees subordinates and anyone else whose role interacts with the job in question.
• The information collected is analyzed tasks and skills needed to carry out the job are determined.
• Identifies the duties and appropriate standards and behaviors required.
Is the simple “word picture” of the job
• A way to communicate with potential candidates of what is expected by them.
• It helps HR decided the qualities and qualifications the successful candidate must have.
• Used to judge whether the appointed employee manages the job well
Some of the elements included are:
- Job title
- Context of the job within the business
- Main tasks, other duties (e.g. part of a team)
- Working environment (e.g. physical, social, length of working day)
- Performance information (e.g. criteria for measuring performance).
Is derived from the job analysis and te job description and defines the quantities of the individual needed to fill the vacancy. E.g. qualification, experience, personality, skills.
• Used alongside the job description during the recruitment process.
• Sets out the quality’s, qualification, experience and skills need to do the job.
• Helpful to identify what skills are an essential
is an assessment of the value of the job in relation in other jobs so that the rewards and remuneration can reflect its value.
• Allows managers to decide the value of the job compared to others. ( not about the performance of the employee in the job)
• Allows organization to differentiate the payments for jobs.
• Factors such as skills, experience, problem solving are given weights according to the importance for the job.
A job can be advertised internally if company policy is to promote existing employees. If an internal candidate is promoted, a vacancy lower in the hierarchy will appear. If there are no candidates internally, the company may advertise the job externally.
External advertising may be in a variety of places. These include employment agencies, job centers and professional recruitment centers, newspapers and other media, including the internet.
The process of selecting the most suitable candidate for the job is important and can be broken into several steps.
Why is it so important to select the 'right' employee for the job? If the candidate is unsuitable, the organization will have to deal with the employee's poor performance. There also will be extra costs for additional training and replacement when the employee leaves or is dismissed.
factors that influence the selection process are:
- Size of the business
- The resources available
- The location
- The situation in the labor market
- The organization’s style of management and its culture.
- Junior or senior position
means that a job vacancy is filled from within the business by promoting and retraining an existing employee rather than employing externally.
• Shorter induction training will be needed as the employee is familiar with the company.
• Existing resources can be used, building on the expertise of existing staff.
• The employer/manager is familiar with the candidate's abilities and experience.
• It is likely to be less expensive than external recruitment.
• It can be used to motivate other employees who will see possibilities for development.
It retains valuable employees and avoids recruitment costs.
• The number of applicants is limited to employees in the company.
• There is no opportunity to select from external candidates who may be of better quality.
• Another vacancy is created and will have to be filled.
• Fewer new ideas and innovative solutions are brought into the organization.
• There may be support by internal groups in the organization that causes conflict.
It may cause discontent among employees who have been overlooked for promotion.
Is when the company fills a job vacancy by recruiting an employee from outside the organization, usually because the company needs certain skills that it lacks current employees.
• It avoids the risk of creating internal conflicts by promoting existing employees.
• New people will bring new ideas, skills and knowledge.
• It encourages existing staff to complete and update their skills and education.
• It promotes change as part of the organizational culture.
• It offers greater choice and a range of experience in candidates
• The new employee may not fit well in the organizational culture.
• Existing staff may become demotivated because they feel overlooked.
• It is time consuming and costly.
• Longer periods of induction and training will be required.
• The risk of employing someone unsuitable is greater.
The action of teaching someone
Types of training
Off the job training
is conducted while the employee is preforming work activities, without leaving the work place.
Types of on the job training
Types of on the job training:
1) Induction training:
They start their work in the organization introducing the business and the job role.
The new employee is presented with information about the company, its personnel policies, facilities, the nature of the work, health and safety regulations, and so on. Employees also meet their fellow workers.
- Easier for new employees to adapt to their new environment and mangers can answer their questions.
- Helps employee become familiar with a company’s mission, vision and goals
- Employee becomes more efficient in their work more quickly
⎫ Employee feels valued and respected from the start.
⎫ Know their surroundings and people
⎫ Understand expectations of the organization
- Information overload
- Time consuming
- Use of management line
- Bad habits picked up
- Mistakes made
- Unqualified trainers
A supervisor guides the employee through the use of equipment or a process.
Often the trainee will perform the process and receive feedback from the supervisor.
Weakness: it does not give the employee a chance to express their own ideas.
Employee is paired with a more experienced worker.
The trainee carries out the job, but discusses problems and how to solve them with the mentor
4) Job rotation:
Employee works at different positions in the company for short periods.
Aim: To give the employee a range of experiences in different departments.
⎫ Job rotation also allows employees to replace each other if an employee falls sick.
⎫ It prevents boredom and improves motivation.
o Can disrupt workflow if the employee is new to the job.
Trainees work under the supervision of an expert for a long period, and may also attend college or university regularly
Common in industry’s where it takes a long time to acquire the skills to perform the work.
There will also be classroom training that covers the principles and theory involved.
6) In-house courses or professional development opportunities:
The company may organize its own training courses staffed by its own workers.
For example, in a school that implements a programme for integrating technology into teaching and learning, the school may use some of its own teachers to train others in classroom practice.
The company may use multimedia resources to help employees learn new skills.
Employees learn from online materials at their own pace and from any place where there is internet access.
Types of off the job training
1) Lectures and conferences
Involve verbal presentations for a large audience.
It must be interesting enough to motivate the audience and the speaker must be expert in the subject.
2) Vestibule training:
Employees are trained in a prototype environment near the work place.
This might be a specific part of a factory dedicated to training, which replicates working conditions as closely as possible. This method was commonly used in the past when large numbers of workers had to be trained in the skills needed for factory work.
Involves specialized equipment that simulates the working environment as closely as possible. The trainee is asked to make decisions after which feedback is provided. It is widely used to train pilots in the aviation industry.
4) Case studies:
Trainees are presented with a case study and related questions that they have to think about. The follow-up is a discussion with the group and the instructor. This type of training is good for promoting decision-making abilities and motivating trainees to participate fully in training.
5) Role playing
Some of the trainees in a group are given roles to play. There are no lines to remember and no rehearsals, but trainees have to react to different situations as they would in real life. Role-playing usually focuses on topics such as employer-employee relations, hiring and firing, appraisal and customer service.
Cognitive training methods
These methods involve theoretical learning.
- describing how to do the task
- discussions around a specific context provided by the trainer
- computer-based training.
Behavioral training methods
The behavioral methods of training are more about giving employees practical experience.
- business games
- computer-based simulations
- case studies
- role plays.
Appraisal / performance review
An act of assessing something or someone.The performance review may be completed quarterly or annually.
Performance review or performance appraisal is carried out in order to:
♣ help improve the employee's performance
♣ provide feedback on performance
♣ identify training needs
♣ improve motivation and job satisfaction
♣ identify potential for promotion
♣ decide on any salary increase.
Types of performance appraisal
1) Formative appraisal: the employee receives this type of appraisal on an ongoing basis, even while undergoing training. It is a type of feedback from the line manager on the skills the employee is mastering and the progress being made on a project, especially if modifications are needed.
2) Summative appraisal: when the employee finishes a project or period of training, a summative appraisal may be conducted. It consists of evaluating the attitudes and information learned from the training programme and determining how the information learned is to be used back on the job.
3) 360-degree appraisal: this method of appraisal uses surveys to gather information about an employee’s performance from different people involved in their work. The employee is rated by supervisors, subordinates and peers. Customer ratings and self-ratings can also be used. The 360-degree appraisal gathers the feedback of many different stakeholders and is usually used when a decision needs to be made about promotion.
4) Self-appraisal: the employee uses the preset criteria to assess their own performance. This helps the employee prepare for the discussion and identify their own needs for professional training. However, the self-appraisal method does not usually replace appraisal by the immediate manager.
Reasons for dismissal
when the employer decides to terminate an employee’s contract.
Common steps in the dismissal process
STEP 1 - Full investigation:
after the misconduct has been established, the situation needs to be investigated and witnesses’ statements gathered. Witness statements relating to a specific incident should provide details of the date and time and a description of the employee's behaviour.
STEP 2 - Complete check:
the manager should check the company policies and the employment agreement to determine what is considered misconduct that warrants dismissal.
STEP 3 - Provide written evidence: a letter is sent to the employee with details of the allegations, details of any previous misconduct and warnings issued, and the relevant clauses in the employment agreement or company policies that have been breached. The letter should also include the date when there will be a meeting with the employee to discuss the matter and what the consequences might be.
STEP 4 - Meeting with the employee: the meeting gives the employee the chance to present their side of the story. The allegations are discussed as well as the possible consequences if they are upheld.
STEP 5 - Written notice: after a decision has been made, a written notice is sent to the employee. The decision might be that the employee receives a final warning, a first warning (if this is the first incident) or dismissal (if there has been a final warning about an incident in the past). The written notice should contain details about the policies and clauses that have been breached, the decision made and the last day of employment with the organisation in the case of dismissal.
is a lawful reason to dismiss employees when there is insufficient work in the company.
The company simply needs to lose some roles as a result of a recession or reduced demand
Common steps in Redundancy
STEP 1 – Planning the redundancy
The HR department should plan the redundancy carefully and consider whether it is necessary. The reasons should be clearly identified
There are three main types of redundancy:
1. Job redundancy
when the employer’s business, or the part of the business where the employee works, cease to exist.
2. Work place redundancy
When the business has moved to a different location.
3. Employee redundancy:
• because of a reduction in the volume of a particular type of work;
• as a result of reduced demand for the employee, e.g. the work has been outsourced to an independent contractor or other employees can absorb the work duties;
• because of a reorganisation and the installation of new equipment so that fewer employees are needed.
STEP 2 – Identifying alternatives to redundancy
It is important for the employer to identify whether such alternatives exist to avoid future employment discrimination claims in front of the employment tribunal.
Alternatives might include:
- Exploring the availability of volunteers for redundancy
- Looking at employees who meet the retirement requirements
- A recruitment freeze
- A ban on overtime work
- The possibility of job shares and the termination of work for part-time employees
STEP 3 – Prepare a schedule
Once it has been decided that redundancies are necessary, the HR department prepares a redundancy schedule…
- Covers the timescales
- Advance notice that must be given to employees, which ranges from 30 to 90 days depending on the relevant country's labor law
- It also has to say when employees will first be informed about the need for redundancies.
STEP 4 – inform employees
The employee representative or trade union representative must be informed about the redundancy plan, usually in an informal discussion. The employer must give the reasons for the redundancy
The informal consultation above only applies if a big group of employees is to be made redundant. If only a few employees are affected, the employer should inform the employees directly about the reasons and the payment they will receive. News such as this can have a huge impact on employee morale for those remaining as well as those being made redundant. The employer should communicate the news sensitively.
STEP 5 – redundancy’s
The employer should select those who are to be made redundant using criteria that are transparent and fair.
Things to consider:
-Experience and qualifications
-Disciplinary record and available skills for future business tasks.
The employer should ensure that the selection will not result in unlawful discrimination leading to a possible employment discrimination suit. Consideration of absences cannot relate to pregnancy, maternity or other contractual leave.
The employer should also consider the possibility of offering alternative similar employment. If such an offer is made to the employee and is refused, the employee usually loses the right to redundancy payment.
STEP 6 – Individual consultations
The employee must be told about the situation and that they have been selected to be made redundant.
The final decision is confirmed by letter with details of the meetings and discussions. The employee must be told how the redundancy payment has been calculated.
Reasons for changing work patterns and practices
Emerging economies in Asia (with their cheap and abundant labour force) have made businesses in developed countries less competitive. In order to stay competitive, they have had to cut their costs and this has been done by introducing more flexible work practices, down sizing and outsourcing business functions.
• Flexible work-
Allow the organisation to ensure more flexible labour is available at all times (often 24 hours a day and 7 days a week), which may also increase employee commitment and loyalty to the organisation.
• Improve loyalty and increase productivity
Flexible work patterns allow business organisations to improve customer service, retain their valuable employees, reduce absenteeism and increase productivity
• Attractiveness increases
With flexible work practices, businesses are able to attract more part-time and temporary employees.
• Decreased absenteeism
Various groups of people may be unable to work at certain times. These include: employees with young children, or taking care of the sick or elderly; people with disabilities; people with special interests such as religious observances; students at university; and people who have retired but are available for work on a part-time or temporary basis.
Part time work
Is when employees are contracted to work fewer hours than are required of full-time employees
is an employment situation where an employee is expected to remain in a position only for a certain period of time.
is when employees can choose their hours within the core time that the business is open.
There are several types of flexitime employment:
• Flexible working hours: employees can choose their working hours within the times that the business is open. For example, if the business is open from 7 a.m. to 7 p.m. the employee may choose to work from 7 a.m. to 3 p.m. This arrangement tends to suit people with young children, and students who attend lectures at university.
• Job sharing: two or more employees divide a full-time role between them, for example in a bar or at an office. This can be done daily, weekly or monthly and the job sharers share the payment and the benefits of the job.
• Annual working hours: the employee’s working hours are calculated on an annual basis. This system is usually used for shift workers to reduce and control workload and overtime
is when the employee spends all or part of their work time at a location other than the work place.
There are several types of teleworking:
• Mobile workers such as drivers of delivery trucks and sales representatives: they receive instructions by phone or computer at home or in their vehicles.
• Professionals or managers: they spend working days out of the office on building sites or machine installation sites. They use the phone or computer to communicate with their workplace.
• Specialists or office support staff: they work from home or other remote locations and communicate by phone and computer, e.g. advertising firms in India or teachers of online courses.
is a type of employment where the employee is not dependent on a company or a client and can offer high professional skills to several companies at the same time.
A person who is engaged or has been engaged in a remunerated in a State of which he or she is not a national.
Advantages and Disadvantages
when a company transfers or contracts part of its work to outside suppliers or companies instead of completing it internally.
• It saves overhead costs and HR costs.
• It allows the business to focus on its core activities and competences, which are important for its future growth and success.
• It allows for specialisation and economies of scale.
• It reduces the requirement for training of new employees.
The business can hire the best experts for a project.
• It may take time and effort to find and sign a contract with a suitable company to which to outsource a task or a business function.
• If the outside company has access to confidential information, this can pose a security threat.
There might be difficulties in communication between the business and the outsourced provider, which can delay the completion of projects.
Advantages and Disadvantages
Occurs when a company relocates a manufacturing operation to a foreign country without giving up control or ownership of the operation.
• attract professional talent that is rare in the home country;
• make an entry into emerging markets in order to maintain global presence;
• offer consumers a lower price for products and services;
• gain understanding of the local market and be able to see to the local consumers in the foreign country;
• focus on core business functions and competitors;
• benefit from lower corporate taxes in the country where the company chose to offshore.
• Communication and language issues
• Cultural and social differences
• Displacement of US jobs
• Time zone differences
The reverse of outsourcing. Operations moved internally to gain more control.
is the process of bringing back manufacturing facilities that were offered to another country.
This means relocating manufacturing to locations abroad that are closer to the home country
⎫ Here wages are still lower, creating a cost advantage for the business and helping it to be competitive.
Influence of innovation on the work force practices
Recruitment: Technology has made recruiting more efficient and effective.
Training: . Employees now can be trained more efficiently.
Storage of files: HR staff process considerable amounts of paperwork and the use of electronic imaging has made it possible to store files in an electronic format
Performance review or appraisal: performance reviews of employees have become easier with computer technology. A variety of software programs can be used for examining employees’ performance.
Administrative tasks: information technology has reduced administrative costs by automating routine administrative and compliance functions
and the two types
determines how tasks are divided and coordinated who employees report to, who has the authority to define tasks to employees and what the role of each employee is in the organization.
is the assignment of responsibility or authority to another person to carry out specific activities.
- Empowers employees to make decisions
- Builds skills and motivates employees
- The manager will have free time for higher-priority tasks
- Employees may feel frustrated if they are unwilling to take more responsibility
- Employees may feel that they are doing the tasks of the manager for much less pay than the manager
- Tasks may be repetitive and tedious
Span of control
Features of the two types of span of control
describes the number of subordinates that a manger or supervisor can directly control. This number varies with the type of work: complex, variable work reduces it, whereas routine, fixed work increases it.
Narrow span of control
- Close supervision
- Direct control of the supervisor over the employees
- Many levels of management
- Less independence and decision authority for subordinates
- A large distance between top management and bottom staff.
Broad span of control
- Less control from the supervisor
- Low management cost
- empowerments through delegation of authority
- less distance between top management and employees
- leading to better communication
a pyramid like structure where each level (exept the top and bottom) has a high and lower one.The higher the level is in the hierarchy the greater the authority or importance.
Chain of command
in an organization is the line of authority and responsibility along which orders are passed from one person to another.
An organisation with many levels of hierarchy will have a 'long chain of command'.
Communication takes a long time to reach the bottom layer of employees. This slows down the process of reacting to issues, causing customer dissatisfaction and other production issues.
Organisations with fewer levels of hierarchy have a 'short chain of command' and communication flow is faster. This allows faster reaction to issues with products and makes the organisation more efficient in dealing with problems.
rules and procedures that must be followed- “red tape”
is the HR strategy of reducing the number of levels in the organizational hierarchy.
- Fewer managers are needed, which allows cost reduction.
- The organisation becomes less bureaucratic
- Decisions can be made faster.
- Encourages innovation.
- Increased span of control, which can increase the workload of managers.
- Can have negative impact on motivation if there were job cuts in the process.
- Not all companies are suited for organisational structures with few levels of hierarchy
- People will have to take new responsibilities and time will be needed for adjustment.
All decisions are made by a small group of managers close to the head of a business
means a transfer a decision making power. It is usually achieved by delegation of authority to individual or groups at all levels of an organization.
An organizational chart
is a graphical illustration of relationships between an organizations departments functions and people
The types of organizational structures and their features
1. A flat / horizontal structure – is one with few levels or hierarchy, typical for small businesses.
- Few layers of hierarchy
- Short chain of command
- Wide span of control
- Common for small companies and start ups
- Not suitable for large companies
- Middle management is eliminated and the employees are empowered to make decisions independently
- Employees have supervisors but the sharing of decision making improves motivation and accountability
- No job titles
A tall organization structure –Is a structure with multiple levels of management. Typical for large and complex organizations
- Many layers of hierarchy
- Long chain of command
- No / little delegation
- Narrow span of control
- Formal and bureaucratic
- Division of labor is more specialized
Hierarchical organizational structure
is a tall organizational structure with many levels of hierarchy, organizational chart is similar to a pyramid
Product organizational structure
the business is organized into departments focused on different products.
Functional organizational structure
Is a common type of organizational structure in which the organization is divided into smaller groups based on specialized functional areas, such as marketing, production, finance, IT and others.
Organizational structure by region
Is a type of organizations structure used by organizations with operations in different geographical locations. It is also called a “geographical organizational structure”
Project- based (or matrix) organizational structure
is a temporary structure which is created to facilitate the execution of a specific project. It can exist within all types of organizations.
All the types of organizational charts
• by product
• by function
• by region
Explain the Shamrock organization
The shamrock model is intended to plan for these complicated issues while practising labour flexibility. According to Handy, a business should have a relatively small number of core employees and supplement them with others as needed. The shamrock helped to show his vision: an organization with core staff only, which outsources activities and functions to external contractors and temporary workers
Core workers: core managers, technicians and employees who are necessary for the business to fulfill its core mission and deliver on its Unique Selling Point (USP).
Contract employees: activities that are not at the core of the business but which are nevertheless necessary. These activities should be sub-contracted out to specialist businesses (for example, many businesses subcontract payroll services out to special contractors).
Temporary workers: They constitute a flexible workforce composed of part-time, temporary and seasonal workers.
Types of communication:
1) Verbal communication:
- Face to face
- Phone calls
2) Written communication:
- Press releases
1) Visual communication:
- Body language
1) Electronic communication:
The key functions of management
Summaries the work a manager does within a business organization, such as planning, coordinating, commanding, controlling and organizing activities.
Five functions of management:
Planning: a manager sets out how to achieve short and long-term goals or objectives. Objectives were discussed in section 1.3 – strategic (long-term), tactical (short-term) and operational (day-to-day) objectives.
Coordinating: like a juggler with five balls in the air at once, a manager must coordinate the activities of different departments within an organization. That might mean ensuring suppliers know which goods to produce and when, that stores receive the product at the right time to sell it, that financing is in place to purchase the goods and that marketing is ready with its ad campaign. All these activities must be coordinated so that, when a company rolls out its product, the roll-out is a success.
Commanding: this aspect of a manager's job involves giving instructions to employees and ensuring work performance is of a high standard. Sometimes managers need to intervene if an employee's job performance is not satisfactory.
Controlling: this requires a manager to understand the business' processes and policies and make changes to ensure objectives are met. It entails effective communication between the manager and employees.
Organising: this function requires the manager to use the available resources efficiently. These resources can be capital, human or natural. Think back to 1.1 when the concept of resources was introduced.
Management – is the work of business organization’s resources (physical and non-physical) to achieve business objectives.
Managers are generally tasked with these responsibilities:
• Ensure that everyone is performing their assigned duties and coordinate efforts among employees.
• Make decisions that impact a business’ day-to-day operations.
• Resolve problems.
• Work to coordinate and achieve
is the use of strategic and creative thinking that inspires people to meet challenges and accomplish defined goals.
The 'ingredients' that are necessary to be a successful leader:
• a guiding vision
• integrity (this consists of self-knowing, candour and maturity)
• curiosity and daring.
Situational leadership – Is the ability of a leader or manager to adjust their style of leadership to fit the task or situation that they find themselves in.
Paternalistic leadership – is when a leader or manager treats employees as if they were family. This is characterized by a strong leader who tries to make decisions in the interest of their “family’. Employees in return give their loyalty.
Laissez-faire leadership – is the ability of a leader or manager to give employees minimal direction and large amounts of freedom to make decisions and find their own methods of accomplishing objectives.
Autocratic leadership – Is the ability of a leader or manager to make decisions with little or no outside input. Instead autocratic leaders rely on their own ideas and instincts when making decisions.
Democratic leadership- is characterized by inclusiveness. Employees feel validated and are encouraged to share their ideas, participating in the decision making. – slowest
is a reason or set of reasons why we do something. These motivations can be intrinsic or extrinsic or a combination of both.
Extrinsic motivation – Is the behavior that s driven by satisfaction external to one’s self, such as salary, celebrity or approval.
Intrinsic motivation – Is the behavior that is driven by satisfaction internal to one’s self. It comes from inside you. An employee works a job for the satisfaction it brings, for the joy of it.
Types of motivation:
1) Financial motivation:
• Profit-related pay
• Performance related pay
• Shore ownership scheme
2) Non-Financial motivation:
¥ Job enrichment – more challenge
¥ Job enlargement – more variety
¥ Job rotation
¥ Team working
¥ Continuous professional development
Fringe benefits (health insurance, tuition assistance, childcare reimbursement)
is a fixed annual sum that is usually paid over 12 monthly instalments
Fringe benefits (perks)
are rewards paid to the employee in addition to their salary, such as a company car, housing allowance or free meals.
Employee share-ownership schemes
means that employees are given shares in the company as a reward or in some instances they have the opportunity to buy shares at discounted prices.
Performance related pay
means that the worker can receive additional money (bonuses) for reaching pre-agreed objectives)
Profit related pay
means that the employee receives a percentage of profit that the company makes that year.
a type of reward system, which is most frequently seen in sales work. A salesperson who works on commission gets paid a percentage of their total sales.
means that a worker’s pay is based on the number of units or “pieces” they make or complete
Wage (time rate)
is a payment made in the weekly sums based on the number of hours one works
is when employees are given added tasks that require more skill or training.
entails giving employees greater responsibility in deciding how to perform their job.
is when tasks are added to an employee’s job description. These tasks are mostly of a similar level.
is when employees change job for a period of time to learn a new task within a work process e.g. the different tasks in assembly line production work.
Non-financial motivation tools
- Job rotation
- Job enlargement
- Job enrichment
is the collaboration effort of a group working together to achieve completion of a task or goal.
is when the employee seeks to make a positive contribution with their work for the greater good.
Name the Motivation theories
1. Taylor’s Scientific Management
2. Maslow’s Hierarchy of needs
3. Fredrick Herzberg’s two factor theory
4. Adams’ Equity theory
5. Pink’s Drive theory of motivation:
Taylor’s Scientific Management
Is a systematic study of workflows that break down into smaller components. It helps to improve efficiency and productivity. It is most common application is in assembly line work.
Maslow’s Hierarchy of needs
Stresses the importance of having basic needs met so the other higher orders needs – psychological and self –fulfilment needs – can then be satisfied.
Self-actualization – realizing one's potential, creative and moral self-fulfillment, a sense of euphoria about the world as it is.
Esteem needs – being independent minded, possessing mastery, achievement in one's chosen field of work.
Love and belongingness needs – feeling loved and trusted, giving and receiving love, being intimate, feeling part of a group, a sense of belonging, family, friends.
Safety needs – having stability and safety in your environment, protection.
Physiological needs – basic necessities: shelter, food, clothing.
Fredrick Herzberg’s two factor theory
Suggests “hygiene” needs (demotivating factors) are basic needs that must be met and “motivator” needs, if met, give an employee satisfaction in their work.
- peer relationships
- physical work space
- personal satisfaction
- Work itself
- personal growth
Adams’ Equity theory
Suggests that employees are satisfied when they are perceiving that there is equity between the work they put in (inputs) and they receive (outputs).
Therefore, business organizations need to ensure that:
• their employees perceive that they are treated with equity (called 'equity norm');
• employees see that people are compensated fairly based on comparing responsibilities and rewards (called 'social comparison').
One obvious problem with Equity theory is the subjective nature of what an employee deems is fair. Not all people will agree what is fair in a given work context.
Pink’s Drive theory of motivation:
Is derived from his book. His theory rests on the notion that the ultimate motivators are intrinsic and they are autonomy, mastery and purpose.
According to Pink, the modern work place has changed and employees no longer respond to extrinsic rewards alone. Instead, the modern employee responds to challenges, opportunities for creativity and increased responsibilities.
Let's look more closely at the three salient factors Pink cites as being instrumental in motivating people.
Autonomy – a business must give employees the freedom to create a work environment that makes them thrive. This may include when they work, with whom they work, how they complete the task and choosing tasks that they find rewarding. You can find elements of this at Google where employees have this kind of autonomy.
Mastery – the opportunity to master a skill is powerful. Employees who feel challenged and can innovate and learn about things they are interested in are more productive employees. This is achieved when they can set goals that are manageable and practical. It leads to greater confidence, the development of skill sets and an evolving mindset to further develop new goals and mastery of new skills.
Purpose – though it may sound obvious, employees who see their work as being of benefit to others, helping to make the world a better place, are motivated by this. People want to work in an environment that values ethical practices and where there are opportunities to become happier and healthier and feel a part of the process of making a better world.
Organizational culture / corporate culture
the sum of values, attitudes, beliefs, expectations and assumptions of an organization. It could be defined as hat is expected of, or is considered “normal” in an organization.
Some of the key elements of ORGANIZATIONAL cultures are:
Some of the key elements of CORPORATE cultures are:
- Vision of the organization
- dress code
- layout of the office
- communication (formal or informal)
Advantages of having a strong organizational structure:
Weak organizational structures can lead to:
Having a strong organisational culture has some definite advantages:
• Creates a sense of harmony; staff enjoys their time during the work. This leads to more staff retention.
• Encourages more teamwork; according to Mayo, this leads to more productivity.
• Reduces misunderstanding and ‘blame game’ culture in an organisation.
• Works as a guiding star in achieving the company’s goals and objectives.
• Reduces possible conflicts that might arise from having a cultural gap within an organisation.
At the same time, weak organisational culture could lead to:
• Confusion amongst the employees.
• Lack of harmony and tacit understanding between workers.
• Sense of suspicion and negative talk at the workplace.
• A visible sign of unproductivity and fatigue.
• Potential fall of profit.
• Lack of confidence.
refers to an organization that is complex with multilayered systems and processes. These systems and procedures are designed to maintain uniformity and control within an organization. Describes the established methods in large organizations or governments
Types of organizational culture
• An individual or a selected group pf people make decisions for the organization.
• Procedure and formal rules are not dominated so communication is highly centralized.
• Leaders tend to be highly autocratic and rules are seen to be the most crucial factor is assessing the merit of an employee.
A private parking lot and private meeting rooms assigned for top brass are some definitive signs of power culture.
• Structured procedure, well communicated rules and hierarchies for the smooth operation of an organization.
• Companies focus on the “rule book” in dealing with everyday situations.
• They tend to be old, stable and firmly grounded business’.
• Hiring and promotion are done is a traditional way.
• Long chains of command
• Multiple hierarchies
• Task culture promotes problem-solving and teamwork.
• Supports dynamic, innovative and flexible companies by giving power to groups.
• Managers allocate different employees to specific projects based on their skill sets and experience.
• The roles are often flexible and employees are expected to take various positions according to the requirements of the company.
• Teamwork, group dynamics and relationships between peers are seen to be a decisive factor in getting the work done.
• When employees with a similar knowledge base, skills and training come together to contribute to individual businesses, person culture emerges out of it.
• This culture values every person as an expert and relies on their experiences and expertise.
• They also offer very generous financial and non-financial rewards to recruit and retain the best employees.
• A person culture encourages a free, clutter less two-way communication between employees and managers.
• Most of the leaders adopt an open-door policy to discuss any suggestions and grievances from the staff.
A cultural clash
within a business occurs when more than one culture becomes dominant, and there is a conflict as a result.
Circumstances that lead to cultural clashes
- Change in leadership
- Mergers and acquisitions
Trade unions / Employer representatives
Are a group of individuals or people that represent the interests on the management team in a collective bargaining process.
Are groups of people who share common goals by virtue of their work, their job or their industry. Typically, unions negotiate on behalf of their members.
Industrial relation methods used by employees
• Collective bargaining
• Overtime ban
refers to the process in which work conditions and salary or wages are negotiated between employers and employees, usually through their respective agents (a union and a management team, for example)
⎫ Trade unions are more powerful than single employees
Means employees refuse to work. This is usually a result of a major disagreements within a large origination over pay, benefits and working conditions.
employees are instructed by their Union to refuse to work beyond their contracted hours
Employees work at minimum level required by their contract
Means that employees are instructed by their representatives or union to work at the minimum level required by their contract. Similar to a go-slow, a work-to-rule differs in that the employee is performing, but at the lowest possible standard.
A go- slow
is an action where employees are instructed to work at reduced rate
Involves an instruction from the union to its members to work at a slower pace. A slow-down reduces productivity and can be an effective strategy if, for example, there are sales orders that will fail their delivery time frame as a result.
Industrial/ employee relation methods used by employers
• collective bargaining
• threat of redundancies
• changes of contract
mean that a business organisation cuts back on personnel where their roles are no longer necessary or there is no longer any work available. Similarly, funding may be cut and government organisations are forced to lay off personnel.
may result when an employee ends their contract and a new contract needs to be negotiated. At this point, terms can be altered. This may include changes in pay structures, benefit packages and fringe benefits. However, the changes cannot be so drastic as to be coercive where the employee who does not agree to the new terms is denied employment outright.
occurs when management shuts down the business in response to employee strikes. This is extreme and is not often used because it creates animosity between managers and employees. This management action is intended to be severe in order to force employees back to work rather than lose wages or be made redundant.