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Business > Unit 8 > Flashcards

Unit 8 Flashcards

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1
Q

Salary

A

Fixed annual income that is usually paid monthly

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2
Q

Wage - Time Rate

A

Employees are paid per period of time worked

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3
Q

Wage - Piece Rate , Pros and Cons?

A

Employees are paid per unit of production

Pros
- Rewards hard workers
- Encourages higher productivity

Cons
- Encourages speed over quality
- Less income stability for employees

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4
Q

Commission, Pros and Cons?

A

An amount of money paid to an employee as a fee or percentage for a task

E.g. A payment to a sales person for each sale made

Pros:
- Encourages employees to sell more
- Rewards hard work and selling skill
- Helps business control expenses

Cons
- Aggressive selling techniques
- Might worsen team spirit - Employees might fight for the customer
- Less income stability for employees

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5
Q

Performance-related pay (PRP), Pros and Cons

A

Employees are rewarded financially according to meeting certain objectives at work
Requires target-setting and appraisal
E.g. Good= %5 bonus, Excellent=10% bonus

Pros:
- Rewards higher performance
- Can identify lower performer

Cons:
- Performance might be difficult to measure
- Might worsen team spirit

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6
Q

Profit-related pay

A

Employees are financially rewarded according to the financial performance of the business
E.g. 10% bonus if company makes a profit over 2m euros per annum

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7
Q

Employee share ownership schemes

A

Employees are financially awarded by being given shares or they have the option to buy a share

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8
Q

Pros and Cons of Profit-related pay and share ownership

A

Pro:
- Employees feel connected to the success of the business
- Encourages employees to stay longer to receive benefits

Con:
- Dilutes ownership of the business
- Doesn’t identify individual high performances

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9
Q

Fringe benefits (perks)

A

Non-cash forms of financial rewards
Financial benefits to employees beyond salaries and wages
- E.g. company car, insurance, pensions, low-interest loans
- E.g. free housing, interest free loan, subsidized canteen, buy 2 weeks more holiday

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10
Q

Financial rewards

A

Methods of motivating employees that involve monetary payments

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11
Q

Non-financial rewards

A

Methods of motivating employees that do not involve monetary payments

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12
Q

Job enrichment, Pro and Con

A

Changing an employees job to include more challenging and demanding tasks
Adding new, more complex tasks

Pro:
Employees can develop new skills
Con:
May require employee training

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13
Q

Job enlargement, Pro and Con

A

Changing an employees job by adding more tasks similar to what they are already doing
Adding new, similar tasks

Pro:
- Variety of tasks

Con:
- Employees may just see it as extra work

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14
Q

Job rotation

A

Moving a employee to different jobs in the business at a similar level of complexity

Adding similar, new tasks in different areas

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15
Q

Empowerment, Pros and Cons

A

Allowing employees some autonomy over their jobs - what they do and how they do it
Ex. choose own work hours, work from home
Laissez-faire leadership

Pros:
- Employees feel trusted - higher motivation
- Development of new skills

Cons:
- Training costs
- Employees might not have the skills to choose best

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16
Q

Purpose/the opportunity to make a difference

A

The opportunity to help lives of others and to make a difference in the world
Ex. doctors, nurses, teachers
Ex. can provide charitable work opportunities

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17
Q

Teamwork

A

The job is organized so that groups of workers can work together
Could be formal
Production teams
Or informal
Ex. encouraging employees to work together on a project

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18
Q

Training

A

Procedure where employees gain knowledge and skills relevant to their role in the business

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19
Q

Induction training

A

The training received when employees start a new job

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20
Q

On-the-job training

A

Training the employees that takes place at the workplace
Ex. training sessions by specialists, online training, job rotation

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21
Q

Off-the-job training

A

Training of employees that takes place away from the workplace
Ex. away days, conferences, part-time MBA

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22
Q

Training pros and cons

A

Pros:
- Employees feel values - higher motivation
- Development of new skills and knowledge
- Employees become more productive

Cons:
- Training costs
- Time not working to attend training
- Might not be beneficial
- Employee may leave

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23
Q

Taylor’s Motivation Theory

A

People are motivated by money. Belief in the ‘’Economic Man’’ -

Based on maximizing productivity by experimenting with different ways to perform a task. Known as ‘’Scientific Management’’

Payment should be linked directly to output through a piece rate system of payment. → the more they produce the more they should get paid

BUT not as relevant today

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24
Q

Maslow’s Hierarchy of Needs

A

Based on the theory that we are motivated by what we need - our actions are dependent on our needs

After a need has been satisfied it will no longer motivate us so we must aim higher

Limitations
- Not everyone moves up the pyramid systemically
- What does Self-Actualization even mean?

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25
Hertzberg’s Two factor theory/Motivation hygiene theory
Based on two factors: Motivators - Motivate when present - Psychological factors that motivate employees - Maslow - Self-Actualization, Esteem Hygiene (Demotivators) - Do not motivate employees but demotivate when absent - Maslow - Physiological, Safety, Belonging Implication: High salaries can lower dissatisfaction but will not lead to to higher levels of motivation - This is because high salaries are quickly taken for granted - Real motivation comes through interesting and challenging work Need to remove dissatisfaction and then create satisfaction
26
McCelland’s Acquired Needs Theory (HL)
Everyone is driven and motivated by 3 types of needs 1) The need for achievement (n-ach) - To successfully complete tasks - Take on tasks of moderate difficulty - Not too easy or difficult 2) The need for power (n-pow) - A need for prestige, status, and being able to influence others or the organization - May involve competition with others for this 3) The need for affiliation (n-aff) - Need to feel accepted and respected by a group - Working as part of a team to collaborate on tasks and goals Implication People tend to favor one of the three Ex. Managers favor Power Show managers how to motivate employees Ex. allow those who need Affiliation to use Team working
27
Deci and Ryan’s motivation theory / Self determination theory
1) Autonomy - Decision making power and control over your own situation (link w/McClelland’s Power) - Give employees more choice and agency rather than being told what to do 2) Competence - The feeling of being accomplished at something - Provides opportunities to learn and training 3) Relatedness - Interacting and feeling connected to others - Provide team work opportunities (link with McClelland’s Affiliation) Implication - The focus in on intrinsic motivation - employees enjoying the work for what it is - Fulfilling autonomy, competence, and relatedness can improve an employee’s self determination and motivation
28
Adam’s Equity theory
To be motivated, employees need to feel that what they get out of the job (output) is equal to what they put in (input) output=input Time, effort, loyalty, skills = pay, bonus, benefits, recognition etc. Ex. not rewarded enough? / rewarded too much?
29
Vroom’s expectancy theory
Employees will only be motivated if they see that their efforts will lead to the desired outcome 1) Expectancy Whether employees feel they have the ability to complete the tasks 2) Instrumentality Whether employees believe they will be rewarded if the task is completed 3) Valence Whether employees value the reward upon completion of the task
30
Labour turnover
The number of people leaving an organization over a period of time as a % of the total workers Labour turnover = number of workers leaving/average number of staff x 100 Reasons for leaving a business Redundancy Fired Quit Retired What is a good labour turnover? Depends on the organization E.g. fast food restaurants vs. schools
31
Pros of Low Labour Turnover and Pros of High Labour Turnover
Pros Low labour turnover: - Indicator of high morale and efficient management - Lower cost of recruiting and induction training - Better relations with customers Pros High labour turnover - Potentially lower salaries/wages - the longer a employee works the higher the salary will get - Bring fresh ideas and thinking into the business - Low performing employees might leave
32
Appraisal
The method of evaluating the performance of an employee according to the job description/contact
33
Formative Appraisal
Continual process whereby the focus is on focusing the strengths and weaknesses of the employees in a view to improving their performance over time
34
Summative Appraisal
- A definitive judgment about their performance of the employees, often accompanied with a rating - Requires goal-setting and benchmarks E.g. IB grades 1-7
35
360 feedback (Appraisal)
- An employee performance is given by collecting opinions from various people with whom they work E.g. managers, co-workers, customers
36
Self-appraisal
- An employee gives their own opinion about their performance in the job - May be a starting point for another type of appraisal
37
Recruitment
The process of hiring new employee into an organization
38
Internal recruitment
Hiring an employee who already works within the organization Ex. promoting a middle manager to become a manager
39
External recruitment
Hiring an employee from outside the organization
40
Internal recruitment - pros
- Employee already knows the culture and rules within the business - Organization already has experience with working with the individual - Higher employee morale - other employees may see promotion opportunities in the future - Might be cheaper if can avoids the need for lengthy recruitment process
41
External recruitment - pros
- Access to a wider pool of candidates - Bring fresh ideas and thinking into the business - Promoting internally might lead to resentment from other employees “left behind” - Potentially lower training costs - if person recruited has already working in a similar role
42
Mission Statement
A statement that outlines the overall purpose of a business and what it is trying to accomplish Tend to be more specific and detailed - Who are we? E.g. - Connect the world’s professionals to make them more productive and successful - Discover and spread ideas that spark conservation, deepen understanding, and drive meaningful change
43
Vision Statement
- A statement that outlined the goals and dreams of the business in the future - Broad and not necessarily realistic - Who do we want to be? E.g. A world without poverty Making the best ice cream in the nicest possible way
44
Pros of Mission/Vision Statement
Pros - Gives direction and guides decision-making and behaviour - Brand image - Motivate employees Cons - Can be too vague and general - Could be seen as just public relations - Time and cost involved in making them
45
Common business objectives
1) Growth - In revenue,profit, market share, assets etc. 2) Profit Maximizing the difference between revenue and costs 3) Protecting Shareholders Value Shareholders generally want high share price and dividend payments 4) Ethical objectives Objective based on moral guidelines E.g. helping the community and environment
46
Strategic Objectives
Aims and goals of the business that are long-term E.g. Become a market leader Buy a competitor Achieve a stock market valuation of 1bn dollars Long term strategies are then put in place to achieve these
47
Tactical objectives
Aims and goals of the business that are short-term and often only include parts of the business E.g. Double sales revenue within 2 years Run a new marketing campaign Tactical objectives (short term goals) lead to the strategic objectives (achieve long term goals) CSR
48
Corporate Social Responsability (CSR)
Operating a business in a way that takes account of all parts of society and multiple stakeholder groups Therefore businesses that focus on CSR do not only focus on profit
49
Examples of CSR
Examples Environmental - Commitement to decrease carbon emissions in production Ethical - Paying above the minimum wage when not required to do so Philantrophic - Donates to non-profit businesses in the local community Economic - Providing tuition, support to employees
50
Triple Bottom Line (TBL)
Bottom Line=Profit TBL Focuses on: - Profit, People and Planet Economic, Social, and Environment - Profit (Economy) - People (Social) - Planet (Environment) A business success is not just measured by profit, but also its impact on society and the environment.
51
Pros of CSR
- Enhance brand image - Enhanced customer loyalty - Differentiation from competitors - Attracting and motivating employees - Less bad publicity - Long-Term Profitability - Alignment with regulations - Attract investors
52
Cons of CSR
- Increased costs, implementation - Lower profits in the short run - Increased publicity for unethical behaviour - Consumers may see through it - Stakeholder Conflict : Shareholders wanting short-term profits may resist CSR spending
53
For-profit vs Non for-profit CSR vs Social Enterprise
54
Corporate Social Responsibility
Corporate Social Responsibility (CSR) refers to the concept that businesses have a responsibility to consider and positively impact society beyond their economic interests
55
Linear Business Models
Take, Make, waste Take resources, make products, consumers use them Waste is created Focus on profit
56
Circular Business Models (BM Toolkit 8)
- Models where products are still created but environmental and social costs are minimized - Models where outputs can be fed back in as inputs 1) Circular supply models 2) Resource recovery models 3) Product life extension models 4) Sharing models 5) Product service system models
57
Circular supply model
Instead of using scarce resources, aim to resource that are - Renewable - Recycle - Biodegradable As well as aiming to reduce the number of new input into the production process E.g. reusable cups, solar power
58
Resource recovery model
Instead of throwing away waste from production, aim to re-use this waste - Recycle the waste - Reprocess the waste E.g. reprocessing old cooking oil into biofuel
59
Product life extension models
Business aim to extend the product life cycle of current products rather than producing new ones Instead of producing a whole new product, aim to upgrade parts of the existing product, through: Repair Remanufacture Resell E.g. apple selling restored versions of older phones, Ikea will buy back our old furniture in exchange for store credit
60
Sharing models
A system whereby consumers of a product share the same product rather than owing it individually Someone has an asset and shares it with another (usually free) E.g. vehicle sharing, property sharing (Airbnb)
61
Product service system models
- Consumers can choose to rent or lease and asset rather than buying it themselves - The business is selling use of the asset rather than selling it outright E.g. short-term vehicle rental, business that offer places to work
62
Pros and Cons of Circular Business Models
Pros - Aligns with socially increased focus on Corporate Social responsibility - Improved brand image - Can lead to lower costs or new revenue streams - Competitive Advantage Cons - May involve high upfront costs and infrastructure needs - May decrease profitability - Customers might not buy in - Circular models rely on consumer participation (e.g., returning products, using repair services) can be inconsistent

Business (16 decks)

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