Unit 6 - Human Resource Management Flashcards
(197 cards)
1
Q
What are the 6 HR objectives?
A
- employee engagement
- talent development
- training
- diversity
- alignment of employee and employer values
- number, skills and location of employees
2
Q
What is employee engaement?
A
- making full use of employees’ potential by ensuring they are fully engaged, involved and motivated
- higher employee engagement = increase productivity = reduces labour turnover and absenteeism, and reduces labour costs
- need good behaviour, attitude = good outcome
3
Q
What is talent development?
A
has 3 main aspects
- training
- what training do employees need to improve them for the future?
- education
- what education may an employee need for the future?
- development
- link to future roles
4
Q
What are training objectives?
A
- development of employee skills in order to improve performance
- depend on type of business and specific challenges
- allow HR to determine training needs
- allow development of programmes for new and current employees
5
Q
Why would a business need to train its staff?
A
- induction training
- training on new technology or practices
- enable employee progression
- enable redeployment and flexibility
- encourage job satisfaction
- job rotation to encourage motivation
- meet organisation objectives
6
Q
What is diversity?
A
- respect and acceptance in terms of race, ethnicity, gender, age, sexual orientation, physical abilities, religion, etc
- business must understand benefits of diverse workforce (wider range of skills and ideas)
7
Q
What are alignment of values?
A
- a business must align its corporate objectives with its HR objectives/employee values
8
Q
What is number, skills and location of employees objectives?
A
- involves workforce planning in order to ensure a business always has the right employees in the right numbers, in the right place with the correct skills
9
Q
What are other HR objectives?
A
- maximising labour productivity
- minimising labour costs
- maintaining good employee/employer relations
10
Q
What are the benefits of setting HR objectives?
A
- lower labour turnover
- higher labour retention rates
- higher productivity
- full compliance with any UK labour legislation
11
Q
What are problems with setting HR objectives?
A
- external changes hard to predict so objectives may be based on incorrect assumptions
- may be conflict of objectives
- business may not have sufficient resources for HR department
- if objectives are imposed not agreed, employees may not feel ‘ownership’ of department
12
Q
What are the external influences on HR objectives?
A
- economy
- economy growing = greater requirement for HR, linked to demographics
- political
- government passing measures affecting HR planning (equality, min wage)
- technology
- new technology = less labour needed, but need new skills
- competition
- change in market and competitor actions likely affect demand, which will in turn impact HR requirement
13
Q
What are the internal influences on HR objectives?
A
- corporate objectives
- HR objectives must be aligned with corporate objectives
- overall objective of growth = HR needs to prepare for this with sufficiently skilled workers
- type of product or service
- skills of workforce appropriate for that particular product or service as well as business image
- style of management
- hard or soft HRM will influence decision making
14
Q
What is the definition of a hard HRM approach?
A
treats employees as a resource to be monitored and used efficiently in order to achieve strategic objectives
15
Q
What are the features of a hard HRM approach?
A
- employees are ‘directed’
- autocratic approach
- centralised organisational structure
- short term approach
- employees can be hired or fired as needed
- pay is minimum
- employees have limited control
- downward communication
- leaders use Theory X
- external recruitment as short term solution
- appraisals are judgements on performance
- motivation is pay
16
Q
What are the implications of having a hard HRM approach?
A
- costs
- high staff turnover/absenteeism which can increase costs in the long term
17
Q
What is the definition of a soft HRM approach?
A
treats employees as valuable assets that need to be developed
18
Q
What are the features of a soft HRM approach?
A
- democratic leadership style
- decentralised organisational structure
- long term approach of developing workforce rather than recruiting
- consultation between managers and employees
- power given to employees
- leaders use Theory Y
- employees promoted from within
- appraisals tend to be developmental rather than judgemental
19
Q
What are the implications of having a soft HRM approach?
A
- costs
- can be more expensive as rely on permanent and long term employees
20
Q
Why might an employee leave a business?
A
- find a better paid job elsewhere
- change of career
- dissatisfied with current pay and conditions
- dislike job
- weak/ineffective leadership of current employer
- change in personal circumstances (home move, partner’s job)
21
Q
What is the definition of labour turnover?
A
the proportion of employees leaving a business over a period of time
22
Q
What is the formula for labour turnover?
A
labour turnover = ( no. of employees leaving over a given period / avergae no. employed over a given period ) x 100
- expressed as a percentage
23
Q
What is the average labour turnover in the UK?
A
- 13%
- private sector = 16%
- public sector = 9%
- non-profit = 15%
24
Q
In 2015, a business employed an average of 80 staff. During 2015, recruited 12 staff to replace 15 who left.
Calculate the labour turnover.
A
labour turnover = ( 15 / 80 ) x 100 = 18.75%
25
What are the problems with high labour turnover?
- cost of recruiting replacements
- cost of training replacements
- time taken for new recruits to settle in
- loss of productivity during recruitment and training
- unsettles remaining employees
- a need to redesign the job to stop employees leaving
26
What are the causes of high labour turnover?
- ineffective leadership and management
- poor communications
- low wages and salaries
- poor selection procedures
- boring/unchallenging jobs that lack career opportunities
- poor working conditions
- low morale and motivation
- bullying
27
How can a business improve high labour turnover?
- monitoring and benchmarking
- exit interviews
- better recruitment and selection processes
- better induction and training for new staff
- reducing turnover of long term staff
- opportunities for career development
- appropriate motivation
- involving employees in making decisions
- setting realistic targets
- provide competitive pay and other incentives
- job enrichment
- rewards staff loyalty
28
What are the positive effects of high labour turnover?
- new workers bring new ideas and share best practice from previous employment
- new workers generally more enthusiastic
- lifting morale and productivity
- workers with specific skills can be employed rather than retraining existing workers
- replacing ineffective or demotivated workers
29
How do you calculate the average number employed over a given period?
(no. employed at start of period + no. employed at end of period) / 2
30
What is labour retention?
the proportion of employees with one or more years of service
31
What is the formula for labour retention?
labour retention = ( no. employees with one or more years of service / overall workforce number ) x 100
32
What does a business want labour turnover and labour retention to be?
- labour turnover should be low
- labour retention should be high
- = lower costs of recruitment and training
33
What is the definition of labour productivity?
- measures output per employee over a given period
- measure of business efficiency
34
What is the formula for labour productivity?
labour productivity = output per period / no. of employees
35
What is labour productivity expressed as?
output per employee
36
A business makes 18,000 units each month, with 40 people employed to produce the units. What is the labour productivity?
labour productivity = 18,000 / 40 = 450 units per employee
37
What is the definition of labour cost per unit?
- a measure of the average labour cost involved in producing one unit of output in a given period of time
38
What is the formula for labour cost per unit?
labour cost per unit = total labour costs / total units of output
39
A business makes 18,000 units each month with 40 people employed to produce the units. Each employee is paid £1000 a month. What is the labour cost per unit?
labour cost per unit = (40 x 1000) / 18,000 = £2.22
40
What does higher labour productivity result in?
lower labour costs per unit
41
How can labour productivity be inreased?
- recruiting suitable skilled and trained employees
- training to improve the skills and attitudes of existing employees
- using appropriate remuneration and non-financial benefits to improve motivation
- improved technology and capital equipment
42
How can labour costs per unit be reduced?
- holding down wages
- replacing workers with machines and technology
- outsourcing production to other firms
- must get employees on side with change in order to increase labour productivity
43
What is the definition of employee costs as a percentage of turnover?
- the percentage of sales turnover needed to cover employee or labour costs
44
What are employee costs to a business?
- their largest cost
45
What are examples of employee costs?
- wages
- salaries
- pension
- payroll taxes
- benefits (such as bonuses)
46
What is the formula for employee costs as a percentage of turnover?
employee costs as a percentage of turnover = ( labour costs / turnover ) x 100
47
What is employee costs as a percentage of turnover expressed as?
- as percentage
48
Why is monitoring employee performance important for a business?
- helps identify business' needs in terms of recruitment, training, redundancy or redeployment
49
What can a business do to see if its employees are efficient?
benchmark their employee costs against the industry standard
50
What are the problems with having high employee costs as a percentage of turnover?
- low profit margins
- prices are too high
- employees paid well above the industry average
51
What are the problems with having low employee costs as a percentage of turnover?
- poor service
- incomplete work
- poor quality
- delays and poor workmanship
- insufficient staff
- staff are paid lower than industry standard
52
What could a business do to overcome high employee costs as a percentage of turnover?
- reduce wages
- make staff redundant
- redesign jobs to ensure each employee is working efficiently
53
What could a business do to overcome low employee costs as a percentage of turnover?
- take on more employees
- better training programmes
- pay better wages
54
What will happen to unit labour costs when each employee produces more (more productive)?
unit labour costs will fall
55
What will happen to unit labour costs when each employee produces less (less productive)?
unit labour costs will rise
56
Over a year, a business has an output of 250,000 units. It employs 200 employees, with labour costs of £5m, and a turnover of £10m.
Calculate labour productivity, labour cost per unit and employee costs as a percentage of turnover.
labour productivity = 250,000 / 200 = 1250 units per employee
labour cost per unit = £5m / 250,000 = £20
employee costs as a percentage of turnover = ( £5m / £10m ) x 100 = 50%
57
What is absenteeism?
an employee's intentional or habitual absence from work
58
What is the formula for absenteeism?
absenteeism = ( number of days taken off for unauthorised absence over period / total days worked by workforce over period ) x 100
59
What is absenteeism expressed as?
a percentage
60
A business employs 20 staff. In 2019 there were 4000 available working days. Unauthorised absence for 2019 was recorded at 560 days. Calculate the absenteeism.
absenteeism = ( 560 / 4000 ) x 100 = 14.0%
61
Why is absenteeism a significant issue for businesses?
- significant cost
- need to work out if it is genuine or not
- often predictable
- Monday/Friday or end of shift pattern
- main holidays
62
What can a business do to reduce absenteeism?
- understand causes
- set targets
- monitor trends
- have clear sickness and absence policy
- provide rewards for good attendance
- consider wider issue of employee motivation
- introduce more flexible working practices
- ensure jobs are interesting and challenging
- improve working conditions
63
What is centralisation?
has a greater degree of control at the centre
64
What is the leadership style of a centralised structure?
autocratic
65
What are the advantages of a centralised structure?
- consistent policies on marketing and production
- decisions can be made quickly
- every branch identical, so customers know what to expect
- enables tight financial control
- corporate view can be clearly emphasised
- strong central leadership good in crisis
- can gain from economies of scale
66
What are the disadvantages of a centralised structure?
- manager at local branch may have better knowledge about customer needs, but has little input in decision making
- lack of decision making power may affect branch managers' motivation
- can lead to inflexibility and inappropriate decisions at local level
67
What are examples of businesses with centralised structures?
- Burger King
- Pizza Hut
- McDonald's
- Apple
68
What is decentralisation?
involves a greater degree of delegated authority to the regions or subordinates
69
What is the leadership style of a decentralised structure?
democratic
70
What are the advantages of having a decentralised structure?
- can empower local managers to make them more innovative
- increases job satisfaction
- local knowledge may increase sales
- reduces volume of day to day communication between head office and local branches
- senior managers have more time to consider long-term strategy
- flexibility should improve
- as the organisation becomes more responsive to changing customer demand
71
What are the disadvantages of having a decentralised structure?
- customers may not like the reduction in branch uniformity
- local managers may not see the bigger picture, as they focus only on the local branch
- opportunities may be missed
72
What are examples of businesses with decentralised structures?
- Google
- Nike
- Coca Cola
73
What are the 4 types of organisational structure?
- functional
- product
- regional
- matrix
74
What is a functional structure?
- chief executive
- marketing
- operations
- finance
- HR
75
What are the advantages of a functional structure?
- expertise can be shared
- help to problem solve
- talk same business language
76
What are the disadvantages of a functional structure?
- identify with the department rather than organisation as a whole
77
Give examples of businesses that use a functional structure.
- Amazon
- Starbucks
78
What is a product structure?
- chief executive
- product A
- marketing
- operations
- HR
- finance
79
What are the advantages of a product structure?
- focus on specific market segments
- meet customer needs more effectively
- extend knowledge within specialised divisions
- respond to market changes quickly and more effectively
- encourage positive competition between departments
- coordinate and measure performance of each division directly
80
What are the disadvantages of a product structure?
- duplicating functions (e.g. different sales team for each division)
- dispersing technical expertise across smaller units
- nurturing negative rivalries between divisions
- over-emphasising divisional over organisational goals
- lose central control over each separate division
81
Give examples of businesses that use a product structure.
- Thomas Cook
- Netflix
82
What is a regional structure?
- chief executive
- region A
- marketing
- operations
- HR
- finance
83
What are the advantages of a regional structure?
- close communication with local customers
- strong collaborative teams at each location
- ability to better serve local needs and tailor approach to local market
- encourage positive competition between different departments
84
What are the disadvantages of a regional structure?
- potential duplication of jobs, resources or functions
- some economies of scale may be lost
85
Give examples of businesses that use a regional structure.
- Jaguar
- Land Rover
86
What is a matrix structure?
region A region B region C
product X
^
product Y < job 1
product Z
individual job holders have more than one boss
job 1 reports to both region B manager and product Y manager
87
What are the advantages of a matrix structure?
- shared knowledge
- more informed decisions
- better morale
- more communication between areas
88
What are the disadvantages of a matrix structure?
- possible lack of clarity
- potential conflict
- slower processes
89
Give examples of businesses that use a matrix structure.
- Coca Cola
- Nike
90
What is organisational design?
the process of shaping the organisational structure so the organisation can achieve its objectives effectively
91
What is organisational structure?
the relationship between the different people and functions of an organisation
92
What is authority?
the power or right to give orders or make decisions
93
What is the chain of command?
the order in which authority and power in an organisation are exercised and delegated from top management down
94
What is a hierarchy?
the way the different levels of authority are ranked in an organisational structure
95
What is the span of control?
the number of subordinated who can be controlled effectively by on manager
96
What factors influence a manager's span of control?
- ability of the manager
- type of work
- the skills of the employees
97
What are the two forms of span of control?
- narrow
- wide
98
What is a narrow span of control?
- where the manager supervises a small number of employees
- lots of layers to the business
99
What are the advantages of having a narrow span of control?
- allows for tight control and close supervision
- communication with subordinates is easier
- more opportunity for promotion
- less pressure on employees
- good for employees that are still learning
100
What are the disadvantages of having a narrow span of control?
- subordinates may feel left out of decision making process and lack motivation
- management and admin costs are high as more layers
- coordinating decisions of numerous managers can be difficult
- too much supervision may stifle initiative and motivation
101
What are examples of businesses with narrow spans of control?
- factories
- supermarkets
- KFC
- Tesco
102
What is a wide span of control?
- when a manager supervises a larger number of subordinates
- fewer layers to the business
103
What are the advantages of having a wide span of control?
- fewer levels of management and decision making
- lower supervision costs
- greater decision making authority for subordinates
- can increase job satisfaction and motivation
104
What are the disadvantages of having a wide span of control?
- direct supervision of subordinates can be difficult
- management could lose control
- subordinates may have more than one boss
- motivation and output may be impaired if orders become confused
- structure may become unworkable if business expands
105
What are examples of businesses with a wide span of control?
- creative businesses
- Google
- Valve (video game company)
106
What are the factors that influence organisational design?
- leadership style of senior management
- size of business
- larger = more complex structure
- level of centralisation or decentralisation
- skills and experience of employees
- nature of business
- corporate objectives
- technology
- external environment
107
What is delegation?
the passing of workload and therefore authority to a subordinate by a manager
108
Who is responsible for the task, the manager who delegated or the subordinate?
the manager who delegated
109
What are the advantages of delegation?
- frees up management time
- empowers and motivates employees
- subordinates may have better local knowledge that managers
- allows flexibility and quicker response to change
- allows staff to develop for higher positions
110
What are the disadvantages of delegation?
- might not have the staff to delegate to
- customers may want to see manager even if the task has been delegated down chain of command
- the leadership style will dictate the amount of delegation
- staff may not have the right skills to complete the delegated task
- in crisis, delegation is less likely
- if there is need for confidentiality, delegation is less likely
111
How can a manager improve the effectiveness of delegation?
- explain all tasks clearly
- communicate delegation to others so no one questions authority of subordinate
- manager should avoid interfering unless something seriously wrong
- set interesting and challenging tasks
- must select suitable subordinate to delegate to
- need trust between manager and subordinate
112
What is human resource planning?
the process that identifies the current and future HR needs of an organisation in order to achieve its objectives
113
What is human resource flow?
the movement of employees through an organisation, including recruitment, promotion and employment termination
114
What are HR inflows?
- recruitment and selection
- induction training
115
What are HR internal flows?
- performance evaluation/appraisal
- career development
- promotion
- demotion
- transfer
- redeployment
- training and development
116
What are HR outflows?
- employees leaving voluntarily
- dismissal
- redundancy
- retirement
117
What is the process of recruitment and selection?
1. vacancy arises
2. construct job description
3. construct person specification
4. decision made to advertise internally or externally
5. adverts placed appropriately
6. applications requested and received
7. shortlisting takes place (matching applications against person specification)
8. select candidates for interview
9. selection takes place and person appointed
118
What does effective recruitment and selection result in?
- lower labour turnover
- lower costs
- improved productivity
- more highly motivated employees
119
What factors affect the method of recruitment and selection?
- level of job
- size of organisation
- resources available
- supply of labour
- culture of organisation
120
What is a job description?
sets out the duties and tasks associated with a particular post
121
What is a job specification
sets out the qualifications and qualities requires of an employee
122
What is training?
the provision of job related skills and knowledge
123
What is development?
helping employees reach their full potential for future jobs
124
What is training often a response to?
- development and introduction of new products/services
- restructuring a firm
- development and introduction of new technology
- changes to procedure, including improvements to customer service
- high labour turnover
- low morale
- changes in legislation
125
How can a business evaluate the effectiveness of their training?
- questionnaires to assess people's view of the course
- mystery shoppers
- monitor quality of output
- reductions in labour turnover
- candidates come forward for internal promotion
- reduction in accidents, wastage and mistakes
126
What is redeployment?
use of employees in any aspect of the business to achieve a particular affect
127
What are the reasons for redeployment?
- one product selling better than another
- medical reasons
- introduction of automated machines
- bullying complaints
128
What are the advantages of redeployment for both employees and employers?
- maintaining job security for employees whose current jobs are at risk
- improve morale of workforce
- employer retained employees whose original jobs disappeared (e.g. replaced by machines)
- retaining valuable skills, knowledge and experience within organisation
- reduce cost and time associated with recruitment and selection
- reduce time needed for induction training
129
What is redundancy?
when a business dismisses an employee because their job no longer exists
130
Why do businesses try and avoid redundancy?
- negative publicity
- costs involved in paying redundancy payments
- business may lose skilled workers
- negatively affects motivation of employees still there
131
How can a business avoid redundancies?
- natural wastage and recruitment freeze
- when individual employees leave, they are not replaced
- stopping or reducing overtime
- ask employees to volunteer for early retirement
- retraining or redeployment
- pay freezes
- short time working
132
What are the benefits of motivated and engaged employees?
- improved productivity
- reduced costs
- improved reputation for the organisation and therefore increased recruitment and retention rates
- improved likelihood of meeting business objectives
- improved work ethic
- competitive advantage
- lower labour turnover
- less absenteeism
- change is easier to implement
- higher profitability likely
133
What is motivation?
the desire and energy to be continually interested and committed to a job, role or subject, or to make an effort to attain a particular goal
134
What is engagement?
feeling positively about doing a good job, thinking about how to do the job better, and actively taking opportunities to improve at work
135
What are the characteristics of a motivated and engaged employee?
- hardworking
- team worker
- trustworthy
- reliable
- punctual
- enthusiastic
- achieves goals
- ambitious
- want to do what is best for the business
136
What are the characteristics of a demotivated and un-engaged employee?
- does the minimum
- late
- complaining
- arguing
- regularly absent
- doesn't take responsibility
- doesn't achieve targets
- can't work in a team
- rude
137
What are the three classic theories of motivation?
- Scientific management (Taylor)
- Hierarchy of needs (Maslow)
- Two-factor theory (Herzberg)
138
What is the scientific management theory of motivation?
- Taylor theorised that workers were motivated by pay
- he also stated that:
- workers aren't naturally interested in work and so need close supervision
- jobs should be broken down into small tasks
- workers need to be trained at those tasks so they can be efficient as possible
- if workers are paid according to the number of items they produce, they would be motivated to increase their productivity
139
What three methods did Taylor believe are the main ways of improving productivity and efficiency?
- extreme division of labour
- job broken down into small, manageable tasks where workers specialise in one particular task
- increased productivity
- payment by piecework
- however, may focus on quantity over quality
- tight management control
140
Give an example of Taylor's theory in the modern world.
Amazon uses piece rate
141
What are the problems with Taylor's theory?
- jobs become boring and repetitive
- led to low morale and lack of motivation
- only work hard whilst being observed
- Taylor's ideas relied too heavily on motivation by money
142
What is Maslow's hierarchy of needs theory?
- there are five levels of human needs that need to be fulfilled a work
- once a lower level need has been fully met, the worker would be motivated by needing to have the next level also fulfilled
- concludes that a business should offer different incentives in order to motivate their employees
143
Draw Maslow's hierarchy of needs.
- self actualisation (achieving targets, fulfilling potential)
- esteem (self respect, level of status)
- social (feeling wanted, part of a team)
- safety (safe working environment, job security)
- psychological (basic needs, such as pay)
144
What are the problems with Maslow's theory?
- not everyone has the same needs
145
Give an example of Maslow's theory in the real world.
Mark Zuckerberg (Facebook) meets with entry level employees = values everyone's ideas = social
146
What is Herzberg's Two-Factor theory?
- through research in 1944, found that the causes of dissatisfaction were markedly different from the causes of satisfaction
- developed the idea of job satisfaction and dissatisfaction
- motivators (factors that motivate employees) and hygiene factors (factors that reduce job dissatisfaction but cannot motivate alone) are both needed
147
What are the 5 motivators?
- achievement (sense of acomplishment)
- recognition (positive feedback and acknowledgement)
- the work itself (interesting and challenging)
- responsibility (authority and decision making)
- advancement (career progression opportunities)
148
What are the 5 hygiene factors?
- salary (adequate compensation)
- working conditions (physical aspects of work environment)
- company policies (rules and regulations)
- interpersonal relations (quality of relationships with supervisors, colleagues and subordinates)
- job security (assurance of employment)
149
What are the problems with Herzberg's theory?
- studied a limited sample of only 200 engineers and accountants
- doesn't take into account the role of groups and teams in the workplace and the motivational influences they have on individuals
150
Give an example of Herzberg's theory in real life.
Amazon has low hygiene factors, but offers opportunities to advance, and recognises good work (high motivators)
151
What are the two types of motivation?
- financial
- non-financial
152
What are the financial methods of motivation?
- piece rate
- commission
- salary schemes
- performance related pay
- profit sharing
- share ownership and share options
153
What is piece rate?
- the employee is paid for every unit they produce
- fixed price for each manufacturing unit
154
What are the advantages of piece rate?
- only requires low levels of manager supervision
- encourages high speed production
- good incentive for workers who are mainly motivated by pay
- punishes lazy workers
155
What are the disadvantages of piece rate?
- workers focused on quantity not quality
- repetitive, which can be de-motivating
- workers only used to one set method of production and may be resistant to change
- can cause low morale as employees may not know how much they will get paid each week
- employees may rush jobs = health and safety issues
- output needs to be sold, therefore may need to restrict it if in crisis such as recession
156
What is commission?
- where the sales person is paid on results
- sometimes they have a lower basic salary plus commission
157
What are the advantages of commission?
- enables high-performing employees to earn large amounts
- encourages employees to work hard
- increases productivity
- payroll costs are directly related to value of sales achieved
158
What are the disadvantages of commission?
- salaries not guaranteed so employees will not feel secure
- can put sales employees under pressure to sell
- can cause problems with sales methods, and employees may cut corners
159
What are salary schemes?
- basic rate systems
- worker is paid according to a given time period (hourly rate, weekly rate or annual salary)
160
What are the advantages of salary schemes?
- simple and cheap to administer
- allow labour costs to be forecast accurately
- easily understood by workforce
- security of a salary scheme may motivate workers more
- fewer disputes and individual grievances
161
What are the disadvantages of salary schemes?
- do not provide direct incentives to improve productivity or performance
- can lead to rigid, hierarchical pay ranges
- payment by time = payment for input not output
162
What is performance related pay (PRP)?
- systems that reward individual employees based on assessment of their individual performance
- could be a bonus or increase in salary
- can also be non-financial such as free day off
163
What are the advantages of PRP?
- direct link between pay and effort
- may lead to reduction in costs as a result of lower levels of supervision, an increase in productivity and improvement in quality
- may see improved motivation and possible reduction in labour turnover and absenteeism
- generally self-funding (performance improved more than pay for reward)
- individual performance can be easily monitored and assessed
- setting targets means employees are more focused
164
What are the disadvantages of PRP?
- discourages team-based approach
- can be difficult to measure performance of some workers, e.g. service sector firms (teachers, etc)
- incentives may not be large enough to motivate employees
165
What is profit sharing?
where employees receive a share of the profits
166
What are the advantages of profit sharing?
- direct link between pay and performance
- creates sense of team spirit
- may improve employee's loyalty to business
- reduce labour turnover and absenteeism
- employees more likely to accept changes in working practices if can see that profits will increase overall
167
What are the disadvantages of profit sharing?
- amount of profit needs to be reasonable to motivate employees
- staff who put in less effort will also get a share, may seem unfair to others
- large pay-outs from profits will affect shareholder dividends and retained profits for future investment
168
What are share options?
common incentive for senior managers who are given shares in a company rather than a straightforward bonus or membership of profit sharing scheme
169
What are fringe benefits?
items an employee receives in addition to their normal wage or salary, e.g. company car, private health insurance, free meals
170
What are methods of non-financial motivation?
- job rotation
- job enrichment
- empowerment
- team working
- flexible working
171
What is job enlargement?
- increasing the scope of a job
- either by job rotation or job enrichment
172
What is job rotation?
- horizontal extension of jobs
- individuals get extra tasks but at the same level
- employees have a systematic programme of switching jobs regularly to provide greater variety
173
What are the advantages of job rotation?
- relieves boredom of work
- more interesting job = less absenteeism
- workers motivated as using wider skill set
- workers participating more in decision making process
174
What are the disadvantages of job rotation?
- workers take on more responsibilities = fall in specialism
- if jobs are enlarged but still repetitive workers may not be satisfied
- retaining costs will increase
- social benefits of working together may be reduced due to constant change of jobs
175
What is job enrichment?
- giving individuals whole units of work
- introducing new tasks and challenges
- providing feedback on performance
- giving individuals more autonomy over their work
176
What are the advantages of job enrichment?
- increased job satisfaction
- reduction in absenteeism and poor morale = lower costs
- develops workers' skills
- greater contribution to decision making
- autonomy gained through setting goals
- enhances workers' promotional aspects
177
What are the disadvantages of job enrichment?
- responsibilities given to more individuals = change in hierarchy of business = supervisors may resent duties being handed down to team
- individuals may be intimidated by process and reluctant to change
- could be seen as de-layering the business
- long term strategy so not necessarily immediate results
178
What is empowerment?
- giving employees the means by which they can exercise power over their working lives
- recognising workers can do more
- making workers feel trusted and confident
- recognising workers' achievements
- creating environment where workers want to contribute and be involved
179
What is team working?
- working in groups
- rather than individuals taking on greater responsibilities, people are encouraged to work in teams
- enables individuals to be more motivated
- more flexible, so absences can be covered easily
- incorporates social need for human interaction
180
What are the methods of flexible working?
- flextime (employees can vary their start and end hours, usually sticking to core hours)
- telecommuting (work from location other than the office)
- compressed work weeks (work weekly hours but in fewer days)
- job sharing (two or more employees share responsibilities and workload, working part time together covering one full time position)
- part time work (employees work fewer hours)
- flexible hours (employees determine their daily work hours, as long as they meet overall weekly or monthly work requirements)
- annualized hours (employees work a fixed number of hours over the year, but choose how they are distributed)
- phased retirement (employees gradually reduce their work hours as they reach retirement)
181
What are the benefits of flexible working?
- improved work life balance, reducing stress and improving overall wellbeing
- increased job satisfaction
- enhanced productivity
- talent attraction and retention
- cost savings
182
What influences the choice of reward systems?
- levels of hierarchy and spans of control
- whether the lines of accountability are clear
- culture of delegation or empowerment?
- nature of job and employees
- clarity and nature of business objectives
- quality of communication
- timescale involved (financial incentives good short term)
- organisational culture
- size of organisation
- state of economy
183
Why is motivation important?
financial methods + non-financial methods = motivated workforce = reduced labour turnover + reduced absenteeism = increased labour productivity
184
What factors influence the amount of involvement in decision making employees have?
- size of organisation
- larger will have more formal procedures
- external environment
- leadership style
- quality of communication
- organisational culture
185
What are the methods of employee representation?
- employee groups
- workers directors
- suggestion schemes
- democratic management style
- trade unions
- work councils
186
What are employee groups?
- such as improvement groups, quality circles and autonomous work groups
187
What are workers directors?
- employees of a company who sit on the board of directors
- involved in decision making at this level
- represent the workforce
188
What are trade unions?
(4 categories)
- according to TUC, there are 4 categories:
- unions with members across a range of jobs, employees and sectors
- unions with members across a range of jobs and employers but in one broad sector of the economy
- unions with members with particular skills, trade or profession
- unions with members who work for a particular employer or closely linked employers
189
What are the functions of trade unions?
- negotiation
- can take form of collective bargaining
- representation
- represent employees at disputes or
industrial tribunals
- provide information, advice and member services
190
How do trade unions benefit employers?
- provide valuable communication link between senior management and workforce
- can avoid very time consuming bargaining and negotiations with each individual employee
- strong union may encourage managers to take workers' needs seriously which may improve morale and productivity
- presence of trade union may ease situations that could cause difficulty for a firm, such as downsizing and redundancy
191
When do industrial disputes occur?
- when there is a disagreement between the management and the trade union representatives
- sometimes serious enough to result in industrial action
192
What is industrial action?
when employees take measures that halt or slow production
193
What are the methods of industrial action?
- strike
- complete withdrawal of labour by employees
- employers lose sales revenue
- employees lose wages and salaries
- work-to-rule
- workforce follows rules to the letter by stopping overtime and many forms of communication and participation that are accepted practice
- go-slow
- working at the absolute minimum pace required to avoid being subject to legitimate disciplinary action
- overtime ban
- disrupting an employer's plans, whilst keeping employees' basic wage unaffected
194
What are works councils?
- forum within a business where workers and management meet to discuss working conditions, pay and training
- employee representatives are elected by the workforce
- common when no trade union exists
- purely consultative, and management do not have to take recommendations
- way of having employee participation without allowing workforce to have proper place at negotiating table
195
What is ACAS and what is its function?
- The Advisory, Conciliation and Arbitration Service
- to improve organisation and working lives through employee relations
- will arbitrate between organisation and trade union to come to a resolution
- arbitration can avoid industrial action taking place
- organisation can still reject the recommendations of ACAS
196
How can a business manage and improve employer-employee relations and communications?
- attitudes
- employees need to trust managers so they are receptive to communication
- intermediaries
- lots of intermediaries (chain of command) message can get lost
- lack of common purpose
- communication problems if business and employee objectives differ
- organisation size
- communication of same message to lots of people
- communication overload
- amount of communication given at once can cause messages to be confused
- appropriate leadership and culture
- employees more likely to have confidence in people they trust and in leadership styles and cultures that encourage their involvement
197
What is the value of having good employer-employee relations?
- improves productivity
- studies suggest organisations grow 5 times faster than those with poor employer-employee relations
- employees feel valued and less likely to leave
- enable business to implement change more effectively
- employees more likely to be motivated
- business more likely to achieve its objectives and improve competitiveness
