2.

1 Motivating workers
2.1.1 – The importance of a well-motivated workforce
Motivated worker – A hard working employee who works effectively for a
business.

Why do people work?

 Money – People need money to buy food, water and other items they need to
live.
 Social needs – People just like us likes to feel part of a team, socialise and
make friends.
 Esteem needs – Feeling important, feeling that they are contributing to a
business.
 Job satisfaction – enjoyment from the work and achievements they
have accomplished.
 Security – Feeling of having a secure job with a stable income. (not likely to
lose job etc…)

Abraham Maslow’s hierarchy of needs

Abraham Maslow’s theory states that the more levels of needs achieved by
the worker = the higher motivated they will become. This also means that
each level of motivation must be achieved before an employee can move to
the next level of motivation.

Criticisms

 These needs to not apply to all employees (all humans are different)
 Difficult for managers to determine which needs their employees need
 

F.W. Taylor’s theory

Employees are motivated by money.

More money = employees become more motivated

Criticisms

 Employees can be motivated by other factors not just money

 There is no guarantee that all employees will work harder if they are paid more
 There are many jobs where output cannot be measured easily (difficult to
determine if employee actually works hard)

Federick Herzberg’s theory

There are 2 factors Hygiene & Motivation factors. Workers expect hygiene
factors to be available to them otherwise they will become demotivated. Hygiene
factors will not motivate the workers only motivation factors will make the
employees work harder.

2.1.2 – Methods of motivation

3 Ways to motivate employees

 Financial rewards
 Non-financial rewards
 Job satisfaction

Financial Rewards
 Wages (time rate) – Payment for a period of time such as amount per hour
e.g. $10 per hour.
Cons –  Good & bad workers get paid the same, Recording every employee’s
working hours may be complicated, costs business to hire an employee to
calculate each workers’ wage.

 Wages (piece rate) – Workers paid depending on quantity of product

produced e.g. $2 for every bicycle assembled.

Cons – Workers may rush and produced bad quality products, Workers that
make slow high-quality products will get paid less.

 Salaries – Employees paid monthly, often used to pay office workers.

Managers only need to calculate salaries once a month which uses less time.

Additional Payments (Money added to salaries)

 Commission – Sales staff are often paid a small percentage of the selling
price of the product they are selling e.g. If a car salesman sells a car, the
salesman might get 20% of the selling price of the car which is added to his
salary.
 Profit sharing – Employees receive share of the company’s profit. This
benefits the company because employees will want the company to have a
higher profit.
 Bonus – Money paid to workers when they work well usually at the end of the
year.
 Performance related pay – Employee’s pay is linked to the effectiveness of
their work. This is often used with jobs where output cannot be easily
measured.
 Share ownership – Employees are given some of the company’s shares. This
makes them work hard as prices of shares may increase if the business is
doing well. + This also makes the employee feel that they are part of the
company.

Non-Financial Rewards
Non-financial rewards given to employees are also called perks or fringe
benefits.

Some examples include

 Health care paid by company

 Company cars
 Free trips / company holidays
 Employee of the month
 Free meals
 Discount on company’s products
 Free housing
 Children’s education fees paid by company

Job Satisfaction
 Pay
 Promotion
 Working conditions
 The work itself
 Status of the job

Ways to improve job satisfaction

 Job Rotation – Workers swap roles to do different tasks. This stops the
employee from getting bored.
 Job Enlargement – More extra tasks are given to the worker so they have a
variety of things to do. However, these tasks should not be more difficult. e.g.
supermarket cashier now adds price label on items.
 Job Enrichment – Adding tasks that require more skill and responsibility. e.g.
receptionist employed to greet clients now deal with telephone enquiries.
 Autonomous work groups & team working – Working in teams make
employees more interested in the tasks since they can organise themselves.

2.2 Organisation  and management

2.2.1 – Draw, interpret and understand simple organisational charts
Definition of Organisation Structure

Organisation structure refers to how responsibility and authority is shared

in a business organisation. 

This is often displayed in the form of an organisational chart. The 2

common type of charts are

 Tall organisational charts – These have a long chain of command and a

small span of control
 Flat organisational charts – Short chain of command, wide span of control

Advantages of an organisational chart 

 Shows how everybody is linked together in a business
 Lines of communication are clear
 Motivational as employees can see where they belong and can plan their
career paths

Chain of Command – is how the power and authority is passed down from the
top of the organisation (managers) to lower employees

Span of Control – The number of employees working directly under a manager.

Levels of Hierarchy – Number of layers in an organisation structure

Advantages of short chain of command

 Faster communication – Communication is quicker and more accurate since

it is passed on by fewer people.
 Stronger relationship between high-level managers and employees – This
is because there are fewer levels between managers and employees.
 Each manager is responsible for more employees – This encourages them
to delegate (pass down) more work to employees.

De-layering – removing an entire row of management

2.2.2 – The role of management

Roles of managers in a business.

1. Planning
 Set goals for the future of the organisation.
 Give the business a sense of direction and purpose (e.g. we will aim to
increase sales by 10% by next year.)

2. Organising

 Organising of people and resources so that the business operates

efficiently (Managers can’t do everything, they must delegate tasks to other
employees)

3. Coordinating

 Making sure all departments are working together to achieve the overall
objectives and plans of the organisation. (e.g. Manager makes sure
marketing and operations department work together to plan for a new product
launch)

4. Commanding

 Guiding, leading and supervising of employees in the

organisation. (Managers need to make sure that employees are doing their
work!)

5. Controlling

 This involves monitoring performance to ensure that objectives will be

met.

Delegation – Passing down authority and responsibility to a subordinate

(employee)

Advantages of delegation

 More time for manager to do other tasks

 More interesting and rewarding work for employee (motivational)
 Employee feels trusted (motivational)
 Trains employee to do important tasks.

2.2.3 – Leadership styles

There are 3 main leadership styles – Autocratic, democratic and laissez-faire

Autocratic – Leader is in charge and gives orders to employees

 Makes decision alone

 Everything depends on the leader
 May de-motivate employees
 May be an advantage for some businesses where decision needs to be made
quickly

Democratic – Other employees involved in decision making

 Communication between managers and employees

 Future plans are discusssed with other employees
 Motivates employees because they are involved in making decisions.
 Sharing of ideas within the business.
 Can delay decision making

Laissez-Faire – “let it be” Leader sets objectives and employees makes decision
and organise their own work.

 Can be useful when creative ideas are needed

 Highly motivational for employees as they control their own working life
 Poor coordination and decision making
 Relies on good team work

Leadership style may be dependent on various factors. e.g.

 Type of business (creative or supply driven)

 Nature of task (requires cooperation?)

2.2.4 – Trade unions

What is a trade union?

Trade union – Group of workers who have joined together to ensure their
interest are protected.

Why join a trade union?

 Improved conditions of employment

 Improved work environment
 Improved benefits
 Improved job satisfaction
 Advice/financial support
 Strenght in number (many employees will join)

Disadvantages

 Cost money to be a member

 May be forced to take action e.g. strike even if you don’t agree

2.3 Recruitment, selection and training of workers

2.3.1 – The methods of recruiting and selecting workers
Why do businesses recruit?

 To replace staff who have left or been promoted

 Bring in staff with new skills
 Recruit more staff as business expands

Job Analysis – A study of the tasks and activities to be carried out by the new
employee

Job Description – This describes the main duties and responsibilities of the job

Job Specifications – The qualifications and qualities necessary to perform the

job (e.g. educational requirements, experience needed)

Advertising the vacancy 

Internal Recruitment – Promoting staff or moving workers from one job to

another within the company.

Advantages

 Saves time and money – Don’t need to spend money on advertising the job
vacancy
 Applicants ‘know’ the firm
 Motivates other workers (chance for them to get promoted)

Disadvantages
 Applicants may not bring in new ideas
 Promoting an employee may make other employees jealous and demotivated

External Recruitment – Recruiting someone who is not an existing employee

and will be new to the business.

Advantages

 New ideas from new workers

 More likely to hire someone who matches job specification

Disadvantages

 Expensive – need to advertise job

 Demotivating for internal candidates

Recruiting channels 

Internal 

 Noticeboards
 Company Newsletters
 Email

External

 Local newspaper
 National newspaper
 Recruitment agencies
 Job centres

Selection of staff

Application forms and CVs – To see if applicant matches the job specification

Interviews – Find out information about candidate’s abilities and personal

qualities

Purpose of interview
1. Find out if applicant has the ability to do the job
2. Personal qualities about the applicant
3. To see if the candidate will ‘fit in’ with the culture of the business

Testing – Applicants may be required to undertake tests to check their ability to

do the job.

Type of tests

1. Skill test – to observe the candidate’s skills

2. Aptitude test – to see how quickly candidate can learn new skills
3. Personality test – to see if their personality has the characteristic that the job
may require
4. Group situation test – to see how candidate(s) works as a team

Part-time worker – employee that works fewer hours than a full-time worker.

Advantages

 Have more employees during busy periods

 Flexible working hours
 Less expensive than hiring full-time employees

Disadvantages

 Workers are less trained than full-time employees (because their job is
temporary)
 Less committed to the business (temporary job)
 More difficult to communicate with part-time workers when they are not at work

2.3.2 – The importance of training and the methods of training

Why train employees?

 Trained workers are more productive

 decrease the amount supervision required
 may lead to job satisfaction
 reduce accidents and injuries
 improve chances for internal promotion
Induction training – Introduction given to a new employee explaining the
company’s activities and procedures and introducing them to other employees.

Advantages

 Helps new employee settle in

 Health and safety training may be required

Disadvantages

 Time consuming (delays the start of employee’s work)

 Wages are paid but no work has been done by the employee

On the job training – Experienced worker teaches new worker how to do the
job.

Advantages

 Training is cheap
 Training is specific for their job
 Work can be done while training

Disadvantages

 The trainer will not be getting work done.

 Training won’t be effective if the trainer is bad

Off the job training – Training taking place off the job (not being trained while
doing job)

Advantages

 Trainers are experts (Skills can be taught)

 Training can be done outside of working hours (in employee’s own time)

Disadvantages

 Off the job training is expensive

 Worker may receive training paid by business and leave
 Training may not be specific for the job

2.3.3 – Why reducing the size of the workforce might be necessary

Why might a business need to reduce the number of employees?

 automation (machines replace humans)

 factory/shop closure
 business relocating
 demand for goods/services falling
 business merging

Dismissal – Employee is told to leave because of bad behavior

Redundancy – Employee told to leave because the business doesn’t need a

worker for that job anymore (not employees fault)

How to decide who is made redundant?

 Some workers may volunteer because they might have planned to leave
anyways.
 Lenght of time worked (employees who have worked there for a long time can
stay)
 Workers with good skills remain
 Worker’s employment history (e.g. behavior / performance of employee

2.3.4 – Legal controls over employment issues and their impact on

employers and employees
Most countries have laws to ensure that employees are treated equally

 Business must be careful when advertising job and while selecting applicants
to make sure they are all treated fairly/equally (e.g. Gender / race)

Employees need to be protected from

 Unfair discrimination at work and when applying for job

 Wage protection (e.g. minimum wage)
 Health and safety standards
 Unfair dismissal
2.4 Internal and external communication

2.4.1 – Why effective communication is important and the methods

used to achieve it
Communication – Process by which information or instruction is exchanged
between one group or person to another.

Internal communication (Communication from and to people within the

business)

e.g. Employees talking to each other. Director sending an email to employees,

Noticeboard in office,

Poor internal communication leads to –

 Workers don’t understand what they have to do

 Poor motivation
 Wastage (e.g. 2 employees do the wrong task because of wrong instructions)

External communication (Communication from people inside the business to

people outside the business)

e.g. Employees talking to customers, Ordering materials from suppliers,

Advertisements

Poor external communication leads to –

 Unhappy customers (leads to fewer sales)

 Bad business reputation (lower sales)
 Problems with suppliers/customers due to incorrect information (e.g. wrong
supplies being delivered)

Formal communication – Recognised and approved by business (e.g. formal

emails, official meetings, reports)

Informal communication – Information is sent and received casually (e.g.

employee talking during lunch break)
One way communication – Communication that does not allow for a response

Two-way communication – Communication where the receiver sends feedback

to the sender about the topic.

Advantages of two way communications

 Receiver can tell the sender that they have understood the
information/instruction
 Chance to ask for more information
 Allows the receiver to contribute ideas

Methods of communication

 Verbal
 Visual
 Written

Verbal (oral) communication

 Discussions
 Telephone calls
 Meetings

Advantages of verbal comm

 Fast
 Opportunity for receiver to reply (2 way comm)
 Body language

Disadvantages of verbal comm

 Feedback from receiver slows process down

 No permanent record of the discussion

Written communication 
 Emails
 Reports
 Newsletters
 Notices

Advantages of written communication

 permanent record of message

 May be required by law (e.g. legal information or safety notices)
 Can be easily sent to many people (e.g. emails to all employees)

Disadvantages of written communication

 Readers may find long letters boring and hard to read

 No feedback from receiver unless they reply
 No body language

Visual communication 

 Posters
 Images
 Videos
 Graphs / Charts / Diagrams

Advantages of visual communication 

 Interesting (Readers may pay more attention to posters / videos than boring
letters)
 Information can be clearer than other methods (e.g. Video instructions can be
clearer than letter instructions)

Disadvantages of visual communication

 No feedback
 Some people may find charts / graphs difficult to read

2.4.2 – Demonstrate an awareness of communication barriers

Some examples of communication barriers are
Problems with the sender 

 Difficult/technical language is used – The sender needs to use language that

could be understandable by the sender
 The sender speaks too quickly or not clear enough – The sender should
ensure that the message is clear
 The sender sends the wrong message or sends it to the wrong receiver – The
sender must make sure that the right person is being sent the correct
message

Problems with the communication channel

 The wrong communication channel was used (e.g. important letter placed on
board that does not get seen) – The appropriate communication method must
be selected