yr11 business chapter 9 people

Slide 1:

Unit 2 Chapter 9 People in Businesses

Slide 2:

Learning Objectives This chapter is about how growing businesses can benefit from managing and motivating people well At the end of this section you will Understand why businesses need internal structure Understand how this structure can affect how a business is managed Understand the benefits and challenges of centralisation and decentralisation

Slide 3:

Organisational Structure – Why do businesses need one? It makes it clear who is responsible for which department and which workers The workers know who to communicate with and take instructions from We can see how many departments there are and how many layers of management there are Organisational structure : the internal links between managers and workers showing lines of authority Layers of management : the number of different levels of management and responsibility Insert P131

Slide 4:

Organisational Structure – Why do businesses need one? This organisational structure has four layers of management; also known as levels of hierarchy Each manager is responsible for 3 people – this is called a ‘span of control of three’ Layers of management : the number of different levels of management and responsibility Span of control : the number of junior employees each manager is directly responsible for Insert P131

Slide 5:

Organisational Structure – Why do businesses need one? This organisational structure has less layers of management; it is a fairly flat structure A tall structure would have lots of layers Each manager has eight people working to him/her – this is a wide span of control The opposite is a narrow span of control The way the business is managed will have a big effect on the type of organisational structure If a senior manager wants to control people closely spans of control will narrow Tall organisational structure : many layers of management Flat organisational structure : few layers of management Narrow span of control : each manager has only a few people working to him Wide span of control : each manager has a lot of people working to him What kind of structure does this school have?

Slide 6:

There are benefits to both types of structure and every business will need to decide what is the most appropriate structure

Slide 8:

The coffee shop chain Martin Fisher’s business has grown steadily. He started by running one coffee shop in London and has now opened ten more around the city. When he only had two or three coffee shops he managed them all himself. He took the major decisions and his employees followed his instructions. However, the business is now so large that he has had to appoint branch managers for each of the coffee shops and a senior manager to be responsible for half of the branch managers. Martin is the line manager for the other branches. Martin finds that he is less involved in day-to-day issues in his coffee shops. Do you think that the span of control in Martin’s business has become wider or narrower as it has grown? Why? Answers might include: ● initially the span of control (for Martin at least) would have become wider as the business grew ● since appointing branch managers the span of control for Martin should have lessened considerably

Slide 9:

Organisational Structure – Centralisation or Decentralisation Some business managers think that all the important decisions should be taken from the head office (the centre of the organisation) Others think that the decisions should be made by those that are close to the ground that have a good understanding of their customers (away from the head office) There are benefits and challenges to both Centralisation : senior managers make all the important decisions Decentralisation : decision making is spread to managers in branches and divisions of the business

Slide 12:

The coffee shop chain Martin Fisher’s business has continued to grow. It now operates 15 coffee shops in London. Martin has found it increasingly difficult to manage the business despite having a senior manager to help him. He is considering decentralising the business. This would mean that employees in each of the coffee shops could take decisions on opening hours, the menu of food and drink to be sold, the organisation of employees to staff the coffee shop and managing the finances of each branch. Do you think that Martin should decentralise his business? Answers might include: ● yes, as the coffee shops’ managers (and other employees) might be motivated by this change ● yes, as it will allow the business’s staff to take decisions to sell products that are popular locally ● no, as Martin might want to retain control over the major decisions made in the business that he established

Slide 13:

Organisational Structure – Centralisation or Decentralisation In one year Tesco opening over 100 Fresh and Easy convenience stores in California This was the first time the UK based company had opened shops in the US Do you think the following decisions should be taken centrally in London or decentralised to Tesco managers in California Which goods should they sell? What prices should they charge? The total amount to be spent on the US expansion?

Slide 14:

La Redoute This company sells fashion clothing online and through catalogues. Why might La Redoute decide to decentralise if it opened high-street shops to sell its clothing? Answers might include: ● it may want its employees to be able to take decisions locally on what to sell to increase sales ● decentralisation might help to increase motivation of the company’s staff ● the company might become too large to manage centrally

Slide 15:

Assessment of Organisational Structure Complete short questions Complete long questions (print answers from book)

Slide 16:

Recruitment of Staff Learning Objectives This section looks at how a business can recruit the best workers At the end of this section you will Understand the recruitment process that businesses use to recruit and select new staff

Recruitment of staff:

Recruitment of staff Complete worksheet 11 Do activity on P133

Slide 18:

How to recruit the best workers A business wants to recruit the best workers because It will get better productivity – good workers will be more efficient It will get better quality output or customer service – the best workers will be keen to make sure that high quality is maintained It will make more profit (as a result of the two points above) Workers will be less likely to leave because they will be doing a job that they are good at Recruitment : attracting people to apply for a job vacancy

Slide 19:

How to recruit the best workers There are four important stages in the recruitment process The first is job analysis This is about finding out exactly what the job involves If this is done properly there will be more chance of recruiting the best people This stage of the process must find out The exact tasks and duties of the job Examples of duties of a hotel receptionist would be to welcome guests and work out their bill when they leave The skills E.g. the receptionist might need IT skills and customer facing skills The training required E.g. how to calculate bills and how to deal with difficult customers How a person’s work will be analysed and appraised (to measure their performance) E.g. hotel guest feedback or mystery guest visits Job analysis : identifying the tasks and skills needed to perform a job well

Slide 20:

How to recruit the best workers The second stage is to write the job description This document will detail the nature of the job and the tasks involved The document will be produced by the manager of the team who are recruiting and given to HR so that they know exactly who to recruit It may also be given to the person who gets the job so that that they know what they need to do Job description : a document that describes the nature of the job and the tasks involved

Slide 21:

How to recruit the best workers The second stage is for HR to create a person specification This document is a profile of the type of person that would be the best for this job It will detail what qualities are required Other sections will be Qualifications skills Useful personal qualities Relevant interests This document can now be used by HR to create an advert for either internal or external recruitment It can also be used during the interview process to check that that person has all that is required Person specification : a document contains a profile of the type of person that would make a good applicant

Slide 23:

Internal vs External Recruitment Now HR can either advertise the position inside or outside the firm

Slide 24:

Selection of new workers Once people have applied for the vacancy, selection can take place This can be done in several ways: Application form and personal details – these will be used to decide who to call for the next selection stage Interview – this will allow managers to see, in person, whether they are likely to fit in the organisation and how they respond to some challenging questions Testing – many firms now use testing during the selection process to get a more accurate view on the person This could be a personality test or an aptitude test You could ask for some kind of demonstration for example if you were recruiting a teacher or a chef

Slide 25:

Insert activity from page 133

Slide 26:

A job advert for a mechanic in a small business. If you were thinking about applying for this job, what extra information would you require? Answers might include: ● actual pay rates ● holiday entitlement ● actual training to be offered ● details on pension arrangements

Slide 28:

Training and appraisal of workers Learning objectives To understand the advantages and disadvantages of different types of training To understand how and why businesses use a staff appraisal system

Slide 29:

Staff Training There are many benefits to training staff but there are also costs that need to be taken into consideration Benefits Workers are more able to cope with changes such as advances in technology (new IT equipment) Staff will become more productive and efficient – they may be more flexible and able to do a range of different jobs There is less chance of getting poor quality products/services Staff will feel more motivated because the business has invested in them Costs The financial cost can be greater than the benefits Workers are not producing while they are training Workers will be more employable and might leave to go to better paid jobs

Slide 30:

Types of training Induction training Learning what the business does Who does what within the business Health and safety procedures The role and tasks of supervisors This helps new workers feel part of the team and helps reduce the risk of accidents On the job training This is often done through watching or helping other workers The new worker will learn relevant information from already skilled workers There is no cost because the worker is not being taken away from the place of work This requires a tutor with the correct skills and knowledge There is the danger that the tutor teaches the new work poor skills and bad habits Induction training : initial training to familiarise new recruits with the systems of a business On the job training : when an employee receives training as they are working at the place of work

Slide 31:

Types of training Off the job training this can be run by the business itself or they might use a specialist training company if they lack trainers The problem with this is that the staff are not working when they are training The benefit is that they get proper training and they are not disturbed by their work Case study 135 as a class Off the job training: training that takes place away from the place of work e.g. in a business training centre or a college

Slide 32:

Businesses ‘not training employees’ About £15 million of government funding for work-related training has not been used. A government spokesman has claimed that as many as one in three firms do not train their staff, and that those that did not train were running ‘real risks with their businesses’. The spokesman said that although the government was making a record amount of money available for employer-led training ‘some employers are failing not only to spend their own money on staff training — but also failing to spend ours. This represents a missed opportunity for businesses and a missed opportunity for those who work for them. That’s not fair.’ Source: Adapted from BBC News , 18 June 2008 Why do you think employers are not investing in training their staff, even when the government is paying part of the cost? Answers might include: ● Employers may be unaware of the financial support that is available from the government. ● Employers may be afraid that highly trained employees will leave for better jobs. ● Employers may not believe that the benefits of training staff will outweigh the costs.

Slide 33:

Staff appraisal Through appraisal managers will know whether their workers are doing well or not and whether they are contributing as much as they could The employees must know their targets before the appraisal and know what they are being measured against The supervisor will go through the targets and see if the employee has met them They will then offer praise for targets met and support for those that are being found difficult A good manager will be flexible with targets/objectives and change them if necessary Self appraisal is another method Individuals carry out an assessment on their own work which is then checked by the superior Peer appraisal is another method but some workers don’t like to appraise fellow workers appraisal: assessing how effectively an employee is working

Slide 34:

Staff appraisal - benefits Enables feedback to be given to the worker Make suggestions for improvement Increase motivation because workers will see that an interest is being taken in them Set worker’s objectives for the future that will be agreed with the worker Identify training needs and potential for promotion Provide a basis for pay increases, or not if the appraisal is negative Case study 4,5,6 P135 appraisal: assessing how effectively an employee is working

Slide 35:

Assessment of Recruitment Complete short questions (print answers from book) Complete long questions (print answers from book)

Slide 36:

Motivating and retaining staff Learning objective Understand the methods a business could use to motivate and retain employees Why does a business want to retain staff? Because the recruitment, selection and training process is costly When workers are keen to work they are said to be motivated Businesses will benefit from motivated staff because? Increased productivity and efficiency and supervisors will not have to use close control methods Quality should improve because workers will be keen to keep customers happy All of this should reduce costs and increase profitability Retaining staff: keeping existing staff in the business which cuts down the cost of recruitment, selection and training

Slide 37:

Motivating methods There are three main methods of motivation that managers can use Staff training When a business offers well-run and appropriate training opportunities there will be a significant increase in motivation Untrained staff often feel they have low value and low status Styles of Management The way that people are managed has a great impact on their motivation levels There are two extreme management styles (most people are somewhere in between) Autocratic – workers are not trusted and not involved in the decision making. They should respond to orders without question Democratic – workers are well trained and able to contribute to decisions Autocratic management: managers who believe in taking all decisions and just passing instructions to workers Democratic management: managers who involve workers and less senior managers in decision making

Slide 39:

Motivating methods - Remuneration The best type of remuneration will depend on the worker. The table below shows some general advantages and disadvantages of the different methods

Slide 41:

Profit sharing at the John Lewis Partnership The John Lewis Partnership operates 26 department stores in the UK and 197 of its Waitrose supermarket branches. For the past 10 years, the John Lewis Partnership has paid each of its employees a bonus of between 9% and 22% of their annual pay. The bonus is based on profits for the trading year beginning each February. Some of the profits are reinvested in the business but the remaining profit is shared among its 64,000 employees. Sam Hinton-Smith, a spokesman for John Lewis Partnership, says that employees value the scheme because the organisation also pays attractive wage rates. He believes that profit sharing has advantages over other types of fringe benefits. ‘Obviously, it’s something we think is a fairly important part of the [pay] package, he explains.’ What other methods might the John Lewis Partnership use to motivate its employees? Answers might include: ● The company might design its jobs carefully to make them as interesting as possible. ● The company may allow its employees at all levels to have authority to make decisions. ● The company may offer its employees ongoing training. ● Giving employees the chance to work as part of a team can be motivating.

Slide 42:

Worksheet from teacher guide to be completed at end of people section

Slide 43:

Assessment of People Section Print answers from book