Human Resource Management (Chapter 2)

Characteristics of an Effective Leader (2.3)

- Desire to succeed and natural self-confidence that they will succeed - Ability to think beyond the obvious - to be creative - and to encourage others to do the same - Multi-talented enabling them to understand discussions about a wide range of issues affecting their business - Incisive mind that enables the heart of an issue to be identified rather than unnecessary details

Business Communication - Cultural Overview (2.2)

- Ignoring culture in business communication can lead to problems and communication disruptions - Internal business communication can be disrupted or misinterpreted if workers don't share the same understanding of goals, expectations, and processes as managers - Understanding a culture can help businesses anticipate potential challenges or barriers in the adaptation of new policies or processes before efforts break down - Modern technology increases the chance that a lack of cultural sensitivity during communication can result in an offended client or business partner

Maslow's Hierarchy of Human Needs: Limitations (2.4)

- Not everyone has the same needs as are assumed by the hierarchy - In practice it can be very difficult to identify the degree to which each need has been met and which level a worker is 'on' - Money is necessary to satisfy physical needs, yet it might also play a role in satisfying the other levels of needs - Self-actualization is never permanently achieved

Modern Work Patterns and Practices - Disadvantages (133) (2.1)

---Drawbacks of Part-Time and Flexible Contracts for the Business--- 1. More employees to 'manage' 2. Effective communication will become much more difficult due to more employees and the inability to hold meetings with all workers at any one time 3. Motivation levels may be affected because part-time workers may feel less involved and committed to the business compared to full-time workers, which will make it more difficult to establish a teamwork culture 4. Some managers fear that teleworking will lead to lower productivity as workers cannot be monitored as easily ---Drawbacks for the Workers with Part-Time and Flexible Contracts--- 1. Workers will be earning less than full-time workers 2. Workers may be paid at a lower rate than full-time workers 3. The security of employment and other working conditions are often inferior to those of full-time workers 4. Teleworking and temporary/flexi-time contracts can lead to much less social contact with fellow workers

Training - Evaluation (2.1)

---Drawbacks of Training--- - Expensive to train staff - 'Poaching' of well-trained staff - training can lead to well-qualified staff leaving for a better-paid job once they have gained qualifications from a business with a good training structure ---Benefits of Training--- Trained staff are: • More productive • More flexible to do a variety of tasks • Give more satisfactory customer service • More motivated • Less likely to have accidents

Effectiveness of Leadership Styles (2.3)

---Factors--- - The training and experience of the workforce and the degree of responsibility that they are prepared to take on - The amount of time available for consultation and participation - The management culture and business background of the managers (e.g. whether they have always worked in an autocratically run organization) - Personality of managers - do they have the confidence and strength of character to lead by persuading and motivating people to follow them or must they hide behind the authority of their role to 'dictate' what needs to be done? - The importance of the issue - different styles may be used in the same business in different situations; if there is great risk to the business when a poor or slow decision is taken, then it is more likely that management will choose an autocratic way [Leadership traits result from cultural norms and the needs of the leadership task, national cultures differ regarding the use of power]

Mintzberg's Management Roles (163) (2.3)

---Groups--- 1. Interpersonal Roles - dealing with and motivating staff at all levels of the organization 2. Informational Roles - acting as a source, receiver, and transmitter of information 3. Decisional Roles - taking decisions and allocating resources to meet the organization's objectives ---Roles--- //Interpersonal Roles 1. Figurehead - Description: Symbolic leader of the organization - Examples of Actions: (1) Opening new factories/offices, (2) hosting receptions, (3) giving important presentations 2. Leader - Description: (1) Motivating subordinates, (2) selecting and training other managers/staff - Examples of Actions: Any management tasks involving subordinate staff 3. Liaison - Description: Linking with managers and leaders of other divisions and other organizations - Examples of Actions: (1) Leading and participating in meetings, (2) correspondence with other organizations //Informational Roles 3. Monitor (Receiver) - Description: Collecting data relevant to the business's operations - Examples of Actions: Attending seminars, business conferences, research groups, reading research reports 4. Disseminator - Description: Sending information collected from external and internal sources to the relevant people within the organization - Examples of Actions: Communicating with staff within the organization using appropriate means 5. Spokesperson - Description: Communicating information about the organization - its current position and achievements - to external groups - Examples of Actions: Presenting reports to groups of stakeholders (e.g. annual general meeting) and communicating with the media

Recruitment - Advantages of Internal & External - Step 3 (2.1)

---Internal Recruitment--- - Applicants may already be well known to the selection team - Applicant will already know the organization and its internal methods - no need for induction training - Culture of the organization will be well understood by the applicant - Often quicker than external recruitment - Likely to be cheaper than using external advertising and recruitment agencies - Gives internal staff a career structure and a chance to progress - Staff will not have to get used to the new style of management approach if vacancy is a senior post ---External Recruitment--- - External applicant will bring new ideas and practices to the business - this helps to keep existing staff focused on the future rather than 'the ways things have always been done' - Should be a wide choice of potential applicants - not limited to internal staff - Avoids resentment sometimes felt by existing staff if one of their former colleagues is promoted above them - Standard of applicants could be higher than if limited to internal staff applicants

Offshoring - Benefits & Limitations (2.1)

---Potential Benefits--- - Cost savings as HR salaries and administrations can be a substantial overhead for businesses - Access to HR specialists and experts - Business can now focus its HR resources on strategic HR issues - HR is not generally a department that adds value, thus if many of the HR functions are outsourced then the business can focus on its core activities - If HR functions are undertaken by outsourced businesses that employ workers in low-wage countries, further costs savings can be made ---Potential Limitations--- - Outsourcing is not necessarily cheap - A lack of insight by outside specialists into the culture and attitudes that exist within a business may result in inappropriate advice or decisions - Revenue may be threatened by trusting an outside business to operate HR activities - Outsourcing key HR functions could mean that decisions are taken by an outside business without integration with other departments of the business - Distance and different languages create potential communication problems - The offshoring business may employ workers who are not fully informed of the employee laws, practices, and cultures of the country in which the business contracting out the outsourced functions is based

Cultural Differences and Financial Reward Systems (2.4)

1. Performance Orientation - In the countries where 'performance orientation' is strongest, there exists a greater emphasis on performance-related pay, bonus payments, and share purchase schemes 2. Future Orientation Future Orientation: The degree to which individuals are focused on delaying immediate reward and engaging in future-oriented behavior, such as planning and investing for the future - In the countries where 'future orientation' is strongest, there exists a greater emphasis on individual-incentive schemes 3. Institutional Collectivism Institutional Collectivism: The degree to which organizations reward or encourage the distribution of resources to groups and focus on collective action - In the countries where 'institutional collectivism' is strongest, there exists a greater emphasis on team-based incentives and employee profit-sharing schemes

Human Resource Planning - Stages (2.1)

---Stages--- 1. Forecasting the Number of Employees Required - Forecasting demand for the firm's product - influenced by market conditions, seasonal factors, competitors' actions, and trends in consumer tastes • If consumer demand is falling, then less staff will be needed to meet the produce the supply demanded by consumers - Productivity Levels of Staff • If productivity is forecast to increase, then fewer staff will be needed to produce the same level of output - Business Objectives • If the business plans to expand over the coming years, then staffing numbers will have to rise to accommodate this growth • If the firm intends to increase customer service levels, then more workers might need to be recruited - Changes in the Law Regarding Workers' Rights • If the government of a country decides to pass laws which establish a shorter maximum working week, then more workers might need to be recruited to ensure that all the available work is completed on time • If the government of a country decides to pass laws which introduce a minimum wage level, then firms may want fewer workers and substitute them with machines 2. Forecasting the Skills Required - Pace of Technological Change in the Industry • If more IT applications are installed, traditional typists or clerks will be replaced with skilled computer operators and web designers - Flexible or Multi-Skilled Staff • Businesses need to recruit staff or train them with more than one skill, so that the firm has greater adaptability to changing market conditions

Employment Patterns and Practices (2.1)

---Traditional Work Patterns & Practices--- - Full-time employment contracts - Permanent employment contracts for most workers - Regular working hours each week - Working at the employer's place of work ---Modern Work Patterns & Practices--- - Part-time and temporary employment contracts - Teleworking from home - Flexible hours contracts - Portfolio working ---Reasons for Changes in Work Patterns & Practices--- - Focus on competitiveness, driven by competitive pressures from globalization, by cutting overhead labor costs - Need for greater labor flexibility with the rapid pace of technological change - Greater opportunities for outsourcing, especially in low-wage economies - Changing social and demographic patterns - - - - - - - - - - Teleworking: Staff working from home but keeping contact with the office by means of modern IT communications Portfolio Working: The working pattern of following several simultaneous employments at any one time Outsourcing: Using another business ('third party') to undertake a part of the production process rather than doing it within the business using the firm's own employees

Mintzberg's Management Roles (163) (2.3)

//Decisional Roles 6. Entrepreneur - Description: Looking for new opportunities to develop the business - Examples of Actions: Encouraging new ideas from within the business and holding meetings to put new ideas into effect 7. Disturbance Handler - Description: (1) Responding to changing situations that may put the business at risk, (2) taking responsibility when threatening factors develop - Examples of Actions: Taking decisions on how the business should respond to threats, such as new competitors or changes in the economic environment 8. Resource Allocator - Description: Deciding on the allocation of the organization's financial, human, and other resources - Examples of Actions: (1) Drawing up and approving estimates and budgets, (2) deciding on staffing levels for departments 9. Negotiator - Description: Representing the organization in all important negotiations - Examples of Actions: Conducting negotiations and building up official links between the business and other organizations

Leadership Styles (2.3)

1. Autocratic Leadership Autocratic Leadership: A style of leadership that keeps all decision-making at the center of the organization ---Main Features--- - Leader takes all decisions - Gives little information to staff - Supervises workers closely - Only one-way communication - Workers are only given limited information about the business ---Drawbacks--- - Demotivates staff who want to contribute and accept responsibility - Decisions do not benefit from employee input ---Possible Applications--- - Defense forces and police where quick decisions are needed and the scope for 'discussion' must be limited - In times of crisis when decisive action might be needed to limit damage to the business or danger to others 2. Paternalistic Leaders Paternalistic Leadership: A type of fatherly style typically used by dominant males where their power is used to control and protect subordinate employees who are expected to be loyal and obedient ---Main Features--- - Strong 'father-like' figure takes key decisions but in the interests of employees - Some feedback and consultation are encouraged - but not participative decision-making ---Drawbacks--- - Low staff motivation if a loyal connection to the leader is not established - Increasing dependency of employees on the leader, leading to more supervision required - Employee dissatisfaction if bad decisions are bad ---Possible Applications--- - Family-owned businesses where leaders still want to make decisions themselves but value employee loyalty and low labor turnover - In a business with a formal and hierarchical structure where creative thinking is not required of employees

Human Resource Management - Cultural Differences (2.1)

1. Culture of the Organization - A business that is focused on maximizing profits or returns to shareholders may adopt a hard HRM strategy Hard HRM: An approach to managing staff that focuses on cuttings (e.g. using temporary and part-time employment contracts, offering maximum flexibility but with minimum training costs) - A business that is focused on developing employees as people may adopt a soft HRM strategy ---Limitations of Hard HRM--- - It could increase recruitment and induction training costs in the long term as temporary workers have to be frequently recruited - Demotivated workers with little job security might be unproductive and unwilling to participate in business developments - this could reduce company efficiency and profitability - Bad publicity regarding the treatment of workers might lead to negative consumer and pressure group actions against the company - It is not suitable for professional, qualified employees, as these workers must be retained and developed to allow them to contribute fully to the organization Soft HRM: An approach to managing staff that focuses on developing staff so that they reach self-fulfillment and are motivated to work hard and stay with the business ---Limitations of Soft HRM--- - Increased global competition makes low-cost operations one of the main ways to stay competitive - Flexibility of labor means that fixed costs of employing workers are now replaced with variable costs - If workers compete for jobs and do not have permanent job security then this could encourage them to work harder and be more productive - Workers who are trained and developed fully by an organization can more easily gain employment in other businesses 2. National Cultures - HR management practices may need to be adapted to suit national conditions and culture

Human Resource Management - Innovation (2.1)

1. Innovation in HRM - HRM has been transformed by innovations in managing people, based on the principle that employees have much more to offer than their physical qualities - team-working, regular appraisals, quality circles, information sharing, empowerment, performance-related pay, and job enrichment // Effects of Innovation in HRM - Higher productivity - Higher labor retention - Attraction of high quality employees - Greater contribution from employees to problem-solving at work and the generation of new ideas 2. Innovation through HRM - Human resources management can lead to a culture of innovation // Examples - Matrix organizational structure that allows for project teams to work through major developments - Delegation to junior managers give them the authority to show initiative and take important decisions - Extensive and continuous training programs - Regular appraisals to identify training needs and career plans - An entrepreneurial culture that encourages risk-taking and does not penalize failure, but rewards success well

Leadership Styles (2.3)

5. Situational Leaders Situational Leadership: Effective leadership varies with the task in hand and situational leaders adapt their leadership style to each situation ---Main Features--- - Style of leadership used will depend on the nature of the task and the work group's skills and willingness to accept responsiblity ---Drawbacks--- - Varying the style of leadership may be difficult for some workers to accept and they may become uncertain of how they will be led in different situations ---Possible Applications--- - By allowing flexibility of leadership style, different leadership approaches can be used in different situations and with different groups of people

Leadership Styles (2.3)

3. Democratic Leaders Democratic Leadership: A leadership style that promotes the active participation of workers in making decisions ---Main Features--- - Participation encouraged - Two-way communication used, which allows feedback from staff - Workers given information about the business to allow full staff involvement ---Drawbacks--- - Consultation with staff can be time-consuming - On occasions, quick decision-making will be required - Level of involvement - some issues might be too sensitive (e.g. job losses, development of new products) ---Possible Applications--- - Most likely to be useful in businesses that expect workers to contribute fully to the production and decision-making processes, thereby satisfying their higher-order needs - An experienced and flexible workforce will be likely to benefit most from this style - In situations that demand a new way of thinking or a new solution, then staff input can be very valuable 4. Laissez-Faire Leaders Laissez-Faire Leadership: A leadership style that leaves much of the business decision-making to the workforce ---Main Features--- - Managers delegate virtually all authority and decision-making powers - Very broad criteria or limits might be established for the staff to work within ---Drawbacks--- - Workers may not appreciate the lack of structure and direction in their work - this could lead to a loss of security - Lack of feedback - as managers will not be closely monitoring progress - may be demotivating ---Possible Applications--- - When managers are too busy (or too lazy) to intervene - May be appropriate in research institutions where experts are more likely to arrive at solutions when not constrained by narrow rules or management controls

Adams and Equity Theory (2.4)

Adams and Equity Theory: A theory that employees become motivated when a balance between inputs and outputs is achieved - Employees become demotivated towards their jobs and employer if they feel that their inputs are greater than their outputs - Employees should attempt to achieve a fair balance between what the employee gives an organization and what they receive in return - When a balance is reached, then employees will consider their treatment to be fair and will respond with positive attitudes and high levels of motivation

Bureaucracy (2.2)

Bureaucracy: An organizational system with standardized procedures and rules - Bureaucracies slow down the decision-making process, as a set of procedures and protocols need to first the followed - inefficient

Centralization and Decentralization (2.2)

Centralization: Keeping all of the important decision-making powers within the head office or the center of the organization - Centralized businesses want to maintain exactly the same image and product range in all areas - perhaps because of cost savings or to retain a carefully created business identity in all markets ---Advantages of Centralization--- - A fixed set of rules and procedures in all areas of the firm should lead to rapid decision-making - there is little scope for discussion - The business has consistent policies throughout the organization - prevents any conflict between the divisions and avoids confusion in the minds of consumers - Senior managers take decisions in the interest of the whole business - not just one division of it - Central buying should allow for greater economies of scale - Senior managers at head office will be experienced decision-makers Decentralization: Decision-making powers are passed down the organization to empower subordinates and regional/product managers - Decentralized businesses are those multinationals that allow regional and cultural differences to be reflected in the products and services they provide ---Advantages of Decentralization--- - More local decisions can be made which reflect different conditions - the managers who make the decisions will have local knowledge and are likely to have closer contact with consumers - More junior managers can develop skills and this prepares them for more challenging roles - Delegation and empowerment are made easier and these will have positive effects on motivation - Decision-making in response to changes should be quicker and more flexible as the head office will not have to be involved every time

Motivation - Payment/Financial Reward Systems: Commission (2.4)

Commission: A payment to a salesperson for each sale made ---Advantages--- - It encourages greater effort and faster working - The labor cost for each sale is determined in advance and this helps to set a price for the product ---Disadvantages--- - It requires output to be measurable and standardized - if each product is different, then piece work is inappropriate - It may lead to falling quality and safety levels as workers rush to complete units - Workers may settle for a certain pay level and will therefore not be motivated to produce more than a certain level - It provides little security over pay level - Workers may use high-pressure selling to convince a customer to buy a product or service that creates a bad impression of the company

Dismissal of Employees (2.1)

Contract of Employment: A legal document that sets out the terms and conditions governing a worker's job Dismissal: Being removed from a job due to incompetence or violation of discipline Unfair Dismissal: Ending a worker's employment contract for a reason that the law regards as being unfair - - - - - - - - - - An HR manager may need to dismiss an employee for continued failure to meet the obligations laid down by the contract of employment - Before dismissal can happen, the HR department must be seen to have done all that it can to help the employee reach the required standard or stay within the conditions of employment - to prevent allegations of unfair dismissal ---Severity of Dismissal--- - Removes a worker's immediate means of financial support and social status - If the conditions of the dismissal are not fully in accordance with company policy or with the law, then civil court action might result, which can lead to substantial damages for the firm

Handy's Shamrock Organization (153) (2.2)

Core Workers Core managerial and technical staff who: - Must be offered full-time, permanent contracts with competitive salaries and benefits - Are central to the survival and growth of the organization - Are expected to be loyal and work long hours when needed [Since core workers are expensive, their numbers are being reduced in most organizations] Outsourced Work Outsourced functions by independent providers consist of workers who: - Provide specific services that do not have to be kept withing the core (e.g. payroll services, transport, catering, and IT) Flexible Workers Flexible workers on temporary and part-time contracts are: - Shown little concern or loyalty by the organization - Most likely to lose their jobs in an economic downturn

Delayering (2.2)

Delayering: Removal of one or more of the levels of hierarchy from an organizational structure - to reduce the costs of management salaries - Delayering leads to wider spans of control and increased delegation to subordinates, which has been assisted by improvements in IT and communication technology ---Advantages of Delayering--- - Reduces business costs - Shortens the chain of command and should improve communication through the organization - Increases spans of control and opportunities for delegation - May increase workforce motivation due to less remoteness from top management and greater chance of having more responsible work to perform ---Disadvantages of Delayering--- - Could be one-off costs of making managers redundant (e.g. redundancy payments) - Increased workloads for manager who remain - this could lead to overwork and stress - Fear that redundancies might be used to cut costs could reduce the sense of security of the whole workforce - a Maslow's need

Delegation (2.2)

Delegation: Passing authority down the organizational hierarchy - The wider the span of control, the greater is the degree of delegation Accountability: The obligation of an individual to account for his or her activities and to disclose results in a transparent - When a manager delegates authority to accountable staff, he or she retains ultimate responsibility for the work done in the department whether it was delegated to others or not ---Advantages of Delegation--- - Gives senior managers more time to focus on important, strategic roles - Shows trust in subordinates and this can motivate and challenge them - Develops and trains staff for more senior positions - Helps staff to achieve fulfillment through their work (self-actualization) - Encourages staff to be accountable for their work-based activities ---Limitations of Delegation--- - If the task is not well defined or if inadequate training is given, then delegation will be unlikely to succeed - Delegation will be unsuccessful if insufficient authority (power) is given to the subordinate who is performing the tasks - Managers may only delegate the boring jobs that they do not want to do - this will not be motivating

Motivation - Non-Financial Methods: Delegation and Empowerment (2.4)

Delegation: Passing authority to perform tasks to workers Empowerment: Allowing workers some degree of control over how the task should be undertaken and the resources needed to complete it

Cultural Differences for Non-Financial Rewards (2.4)

Different cultures may prefer to be recognized in different ways - In individualistic cultures, employee-of-the-month schemes are widely adopted and employees are praised as individuals - In relationship-focused cultures, motivators are likely to be based on personal and professional factors, such as how well supported by managers employees feel and how good relationships are with superiors

F.W. Taylor and Scientific Management: Relevance to Today (2.4)

Economic Man ---Relevance to Modern Industry--- - Some managers still believe that money is the only way to motivate staff ---Limitations--- - A more commonly held view is that workers have a wide range of needs, not just needs of money, which can be met from work Select the right people for each job ---Relevance to Modern Industry--- - The importance Taylor gave to staff selection is still relevant in nearly all businesses ---Limitations--- - This requires an appropriate selection procedure Observe and record the performance of staff ---Relevance to Modern Industry--- - 'Time and motion study' is still employed as a technique, but often with the cooperation and involvement of staff ---Limitations--- - Taylor's autocratic use of this technique was regarded with suspicion among workers who saw it as a way of making them work harder Establish the best method of doing a job - method study ---Relevance to Modern Industry--- - This is still accepted as being important as efficiency depends on the best ways of working being adopted ---Limitations--- - The Taylor approach of management, which involved giving instructions to workers with no discussion or feedback, is considered to be undesirable Piece-rate payment systems - to maximize output through motivating workers to produce more ---Relevance to Modern Industry--- - This is often of limited relevance as it has become difficult to identify the output of each worker ---Limitations--- - This is not now a widely used payment system, as quality may be sacrificed in the pursuit of quantity, and it has become very difficult to identify the output of individual workers

Effective Communication (154) (2.2)

Effective Communication: The exchange of information between people or groups, with feedback ---Features of Effective Communication--- - Sender (or transmitter) of the message - Clear message - Appropriate medium (way in which the message is sent) - Receiver - Feedback to confirm receipt and understanding Feedback: The response to a message by the receiver ---Importance of Effective Communication--- - Employee motivation and labor productivity - if employees are encouraged to participate then effective communication will aid in motivation - The number and quality of ideas generated by the workforce - if employees are asked for their ideas, then this can assist with problem-solving - Speed of decision-making - the more people who have to be communicated with, the slower the decision-making system - Speed of response to market changes - if changes in consumer tastes take a long time to be communicated to the main decision-makers, then the business will be slow to respond with appropriate products - Reduces the risk of errors - incorrect understanding of a poorly expressed message will lead to incorrect response, which can lead to many internal problems - Effective coordination between departments [Poor communication will lead to demotivated workers, uncoordinated departments, poor customer service, and a lack of overall direction for the organization]

Innovations in Communication Technology - Electronic Media (2.2)

Electronic Media: Ways of communicating information that is electronic - internet, email, intranets, fax messages, video conferencing, phones, etc. ---Drawbacks of Electronic Media--- - May require staff to be trained, and the young are usually much more proficient in their use than older employees - Reduce social contact and can create a sense of isolation - Security issues with computer technology and hard copies of important messages are often kept in case of a virus - There is increasing evidence that IT can lead to information overload - so much information and so many messages are received that the most important ones cannot be easily identified and quickly acted on - most likely to occur with electronic media

Appraisal of Employees (2.1)

Employee Appraisal: The process of assessing the effectiveness of an employee judged against preset objectives - Used to comment on the worker's ability to meet certain criteria and may suggest areas for action and improvement or recommendations for training or promotion (128) ---Types of Appraisal--- 1. Formative - Goal: To gather feedback that can be used by the instructor/supervisors and the employees to guide improvements in the ongoing work being undertaken by the workers - Based on a range of formal and informal assessment methods employed by supervisors to monitor an employee's progress and support and provide guidance for improvement - qualitative feedback 2. Summative - Goal: To measure the level of an employee's success or proficiency in meeting predetermined benchmarks - discussed and agreed with each employee before the time period of assessment - The outcome of a summative assessment could be used to influence an employee's pay grade, annual bonus, or chances of internal promotion 3. 360-Degree Feedback - Goal: To assess training and development needs and to provide competence-related information for succession planning, not promotion or pay increases - 'All around' appraisal of an employee based on a collection of feedback from people who come into contact the employee - employee colleagues & peers, subordinates, supervisors, internal & external customers 4. Self-Appraisal - Involves asking the employee to self-evaluate his or her job performance to then be discussed with a manager during an annual performance review meeting

Horizontally Linked Structure (2.2)

Employees are grouped by function into three areas - planning, building, and running - Horizontally linked structure is primarily found in the IT and high-tech sectors, as it allows companies to respond quickly to changing market conditions and technological advances ---Example--- - The planning department is responsible for developing new projects and may include employees from research, development, and finance - The building department would then construct or assemble the projects - The running department would include sales, marketing, and maintenance

Ethical Leadership (2.3)

Ethical Leadership: Leading by knowing and doing what is 'right' - Ethical leaders must (1) act and make decisions ethically and (2) lead ethically - in the ways they treat people in everyday interaction, in their attitudes to people and situations, in the ways they motivate, and in the directions in which they lead their organization - Tangible Qualities: The way the leader works with and deals with customers, suppliers, and employees, in his or her statements and actions - Intangible Qualities: The leader's character, in the decision-making process, in the set of values and principles that support the leader's decisions and in their courage to make ethical decisions in challenging situations ---Indicators of Ethical Leadership--- - The ability to ignore personal interests for the sake of the organization, the needs of the employees and the greater good of the community - A willingness to encourage and consider seriously feedback, opinions different from the manager's own, and challenges to the manager's ideas and proposed decisions - The encouragement of leadership in others - Making the consideration and discussion of ethics and ethical questions and issues part of the culture of the organization - Understanding the importance of leadership and sharing it as much as possible and exercising it carefully to the benefit of employees, the business, and society

Modern Work Patterns and Practices - Advantages (2.1)

Flex-Time Contract: Employment contract that allows staff to be called in at times most convenient to employers and employees - at busy times of day Temporary Employment Contract: Employment contract that lasts for a fixed time period Part-time Employment Contract: Employment contract that is for less than the normal full working week - - - - - - - - - - Recent trends in labor recruitment have been towards employing more part-time staff on temporary contracts and using outsourcing and teleworking ---Advantages of Part-Time & Flexible Contracts for the Business--- 1. Employees can be required to work at particularly busy periods of the day but not during the slack times - competitive advantage, as businesses can give good customer service without substantial cost increases 2. More employees are available to be called upon should there be sickness or other causes of absenteeism 3. The efficiency of employees can be measured before they are offered a full-time contract 4. By using teleworking from home for some groups of workers, even further savings in overhead costs can be made - smaller office buildings ---Advantages for the Workers with Part-Time & Flexible Contracts--- 1. Ideal for certain types of workers who do not wish to work a full week or wish to improve their work-life balance - students, parents with young children, elderly people 2. Workers may be able to combine two jobs with different firms, giving greater variety to their working lives 3. Teleworking allows workers to organize their own working day at home while meeting preset targets and deadlines and keeping in contact with the head office via the internet

Motivation - Payment/Financial Reward Systems: Fringe Benefits (Perks) (2.4)

Fringe Benefit: A non-cash form of reward that is given in addition to normal payment systems, such as company cars, free insurance, private health insurance, discounts on company products

Other Cultural Differences for Financial Reward Systems

Fringe Benefits - Fringe benefits need to consider local differences in culture, as what constitutes a recognition award varies in different cultures Program should have a local feel - Although global organizations generally use English as their international business language, more employers now require programs to be language-specific to each country Local distribution of rewards - Once the type of reward and the language used to deliver the scheme in each country has been determined, employers must ensure the rewards can be distributed locally as required

Herzberg's Two-Factor Theory (2.4)

Herzberg's Two-Factor Theory: A theory that employee satisfaction has two dimensions: "hygiene" and motivation. 1. Motivation Motivating Factors (Motivators): Aspects of a worker's job that can lead to positive job satisfaction, such as achievement, recognition, and interesting work and advancement at work 2. Hygiene Hygiene Factors: Aspects of a worker's job that have the potential to cause dissatisfaction, such as pay, working conditions, status, and over-supervision by managers ---Consequences--- 1. Herzberg did not claim that pay did not matter, but that it moves people to do a job and does not motivate them to do it well 2. Herzberg suggested that motivators could be provided by adopting the principles of 'job enrichment:' - Assign workers complete units of work - to involve teams of workers rather than individuals on their own - Provide feedback on performance - could give recognition for work well done and provide incentives to achieve even more - Give workers a range of tasks - to challenge and stretch the individual 3. Herzberg suggested that businesses offer higher pay, improved working conditions, and less heavy-handed supervision of work - to remove dissatisfaction ---Evaluation--- - Team working in now much more widespread as a consequence of Herzberg's findings, with whole units of work being delegated to these groups - Workers tend to be made much more responsible for the quality of their own work rather than being closely supervised by a quality-controlling inspectorate - Most firms are continually looking for ways to improve effective communication, and group meetings allowing two-way communication are often favored

Organizational Structure - Hierarchical Structure (149) (2.2)

Hierarchical Structure By Function ---Advantages--- - Grouping employees by functional skills, which promotes collaboration and the opportunity for the further development of professional expertise - Employees can capitalize on their specialized skills as a means to move up the ladder in a given department - As each department specializes in a specific function, managers train and develop employees within their unit to be proficient in their given role ---Disadvantages--- - Tends to suggest that one-way (top-to-down) communication is the norm - rarely the most efficient form - There are few horizontal links between the departments, which can lead to a lack of coordination between them - Managers are often accused of tunnel vision because they are not encouraged to look at problems in any way other than through the eyes of their own department - too focused on departmental objectives and not overall corporate aims - Very inflexible and often leads to change resistance, as all managers tend to be defending both their own position in the hierarchy and the importance of their own department

Organizational Structure - Hierarchical Structure (2.2)

Hierarchical Structure By Region - Multinational businesses are often structured using regional divisions ---Advantages--- - Communication between representatives can be very direct and personal in a geographical organizational structure - Grouping employees into regional sections can encourage the formation of strong, collaborative teams that work effectively together and engage in planning and decision-making together - The ability to recruit local management offers companies the advantage of having leaders who are completely familiar with the local business environment, culture, and legal climate - Better decisions can result from relying on the knowledge and experience of regional managers who are aware of specific cultural factors - recruiting a mix of local and head-office managers to lead a geographical unit has the advantage of linking local culture with company culture and providing better customer service - Tracking the performance of individual regional markets is simplified under this structure, as measures such as revenues, profit margins, costs, and performance improvements can be tracked to specific regions ---Disadvantages--- - Duplication of personnel between head office and regional offices - Conflict and unhealthy competition between areas - More difficult to be consistent in core company beliefs from area to the next - Inconsistent company strategies might be adopted in different regions as a result of poor coordination between regional offices

Organizational Structure - Hierarchical Structure (147) (2.2)

Hierarchical Structure: A structure in which power and responsibility are clearly specified and allocated to individuals according to their standing or position in the hierarchy - A hierarchical structure is used by organizations based on a 'role culture,' where the importance of the role determines the position in the hierarchy Hierarchical Structure By Product - Generally consists of several parallel teams focusing on a single product or service line (Ex: Different car brands under General Motors) - Gives a larger business the ability to segregate large sections of the company into semi-autonomous groups, which are often mostly self-managed and focus on a narrow aspect of the company's products or services - Product divisions tend to be more autonomous, each with its own top executive, managing their own recruitment, budgeting, and advertising ---Advantages--- - Product divisions can work well because they allow a team to focus on a single product or service, with an appropriate leadership structure - Having a senior executive - often a member of the Board of Directors - makes it more likely the division will receive the resources it needs from the company - A product division's focus allows it to build a common culture and group spirit that contributes both to higher morale and a better knowledge of the division's range of products ---Disadvantages--- - Product divisions may compete with each other for available financial resources and this might reduce cooperation between them - Divisions can result in compartmentalization that results in lack of coordination or even duplication of developments

Motivation - Payment/Financial Reward Systems: Time-Based Wage Rate (2.4)

Hourly Wage Rate: Payment to a worker made for each hour worked ---Advantage--- - More income security ---Disadvantage--- - The opportunity to earn overtime might encourage workers to stretch work out unproductively

Human Resource Management (2.1)

Human Resource Management (HRM): The strategic approach to the effective management of an organization's workers so that they help the business achieve its objectives and gain a competitive advantage

Human Resource Planning (2.1)

Human Resource/Workforce Planning: Analyzing and forecasting the numbers of workers and the skills of those workers that will be required by the organization to achieve its objectives - Human Resource/Workforce Plan: Numbers of workers and skills of those workers required over a future time period - aligns with the overall business plan of a company - Workforce Audit: A check on the skills and qualifications of all existing employees

New Communication Technologies (2.1)

ICT = Information and Communication Technology ---Impacts of ICT--- - Routine jobs have been replaced by computers - demand decreased - Demand for creative jobs has increased - New opportunities have been created for flexible and ICT-trained employees - Workers no longer need to share a location to share information and work together - Firms have found new and more efficient ways of producing goods and services - often with fewer employees - Larger geographical flexibility

Motivation - Non-Financial Methods: Job Enlargement (2.4)

Job Enlargement: Attempting to increase the scope of a job by broadening or deepening the tasks undertaken

Motivation - Non-Financial Methods: Job Enrichment (2.4)

Job Enrichment: Attempting to motivate employees by giving them opportunities to use the full range of their abilities ---Key Features--- 1. Complete units of work so that the contribution of the worker can be identified and more challenging work offered, e.g. cell production - Cell Production: A lean method of producing similar products using cells, or groups of team members to facilitate operations by eliminating setup time between operations 2. Direct feedback on performance to allow each worker to have an awareness of their own progress, e.g. two-way communication 3. Challenging tasks offered as part of a range of activities, some of which are beyond the worker's recent experience - these tasks will require training and the learning of new skills ---Job Redesign--- Job Redesign: Involves the restructuring of a job to make work more interesting, satisfying, and challenging - Job redesign is used to introduce job enrichment into many traditional businesses

Motivation - Non-Financial Methods: Job Rotation (2.4)

Job Rotation: The practice of moving employees between different tasks to promote experience and variety - Job rotation can increase variety and the number of skills workers are required to use, but does not necessarily provide more stimulating or challenging work

Labor Turnover (2.1)

Labor Turnover: Measures the rate at which employees are leaving an organization - High labor turnover indicates employee discontent, low morale, and possibly a recruitment policy that leads to the wrong people being employed - High labor turnover is more likely in areas of low unemployment, as there may be many better-paid and more attractive jobs available in the area - Some industries naturally have higher labor turnover rates, such as fast-food restaurants, where students look for part-time and temporary employment - Some industries naturally have lower labor turnover rates, such as law practices and scientific researches ---Drawbacks of High Labor Turnover--- - Costs of recruiting, selecting, and training new staff - Poor output levels and customer service due to staff vacancies before new recruits are appointed - Difficult to establish loyalty and regular, familiar contract with customers - Difficult to establish team spirit an stable work groups ---Potential Benefits of High Labor Turnover--- - Low-skilled and less-productive staff might be leaving - they could be replaced with more carefully selected workers - New ideas and practices are brought into an organization by new workers - A business that plans to reduce staff number anyway - due to rationalization - will find that high labor turnover will do this, as leaving staff will not be replaced

Human Resource Management - Ethical Considerations (2.1)

Lack of Cultural Awareness - HR managers must prepare employees for appropriate conduct before they are sent to their overseas destination • Training and cultural classes help to educate employees about different customs and practices in other countries Bribery - HR managers must prepare employees travelling to countries with high rates of reported corruption on how to properly interact with clients, suppliers, and authorities, as well as ensure the employees remain safe • If an employee is facing bribery attempts overseas, a HR manager must aid the employee Pay - HR managers may need to decide whether to narrow the gap in compensation by increasing pay of native workers in foreign locations, as an employee from a developed country sent to a developing country is likely to make more than their counterpart doing the same job

Organizational Structure - Levels of Hierarchy (144) (2.2)

Level of Hierarchy: A stage of the organizational structure at which the personnel on it have equal status and authority - represents a grade or rank of staff Span of Control: The number of subordinates reporting directly to a manager - wide (many subordinates) or narrow (few subordinates) Chain of Command: The route through which authority is passed down an organization - from the chief executive and the board of directors - - - - - - - - - - Tall (Vertical) Structure: One with many levels of hierarchy and, usually, narrow spans of control ---Problems--- 1. Slow communication, with messages becoming distorted or 'filtered' in some way 2. Spans of control are likely to be narrow 3. Greater sense of remoteness, among those on lower levels, from the decision-making power at the top Flat (Horizontal) Structure: One with few levels of hierarchy and wide spans of control ---Benefits--- - More control by managers/supervisors - Better communication between the top of the hierarchy and the lower levels

Differences Between Management and Leadership (2.3)

Management: A set of processes that keep an organization functioning - planning, budgeting, staffing, clarifying jobs, measuring performance, and problem-solving ---Management--- - Directing and monitoring others - Problem-solvers - Official position of responsibility in the organization - Skilled and qualified to perform role - Believes in doing things right - Listened to by others because of status - not necessarily because of personality - Accepts and conforms to the 'norms' of the organization Leadership: The art of motivating a group of people towards achieving common objective ---Leadership--- - Motivating and inspiring others - Innovators who encourage others to accept change - Stems from personal qualities or traits - Natural abilities and instincts - Believes in doing the right thing - Respected and trusted by followers - they want to follow because of leader's personality - Creates and develops a culture of change

Functions of Management (2.3)

Manager: Responsible for setting objectives, organizing resources, and motivating staff so that the organization's aims are met ---Functions of Management--- 1. Setting objectives and planning All good managers think ahead: • Senior management will establish overall strategic objectives and these will be translated into tactical objectives for the less senior managerial staff • The creation of objectives requires planning and preparation of sufficient resources 2. Organizing resources to meet the objectives - Senior managers will ensure that the structure of the business allows for a clear division of tasks and that each section or department is organized to allow them to work towards the common objectives 3. Directing and motivating staff - Managers are responsible for guiding, leading, and overseeing employees to ensure that organizational goals are met 4. Coordinating activities - Managers are responsible for ensuring consistency and coordination between different parts of the organization as the business increases in size 5. Controlling and measuring performance against targets - Managers are responsible for appraising performance against targets and to take action if under performance occurs

Maslow's Hierarchy of Human Needs (2.4)

Maslow's Hierarchy of Human Needs: A theory that arranges human needs in order of their priority ---Levels--- 1. Self-Actualization Self-Actualization: A sense of self-fulfillment reached by feeling enric---How it works--- ---Evaluation---hed and developed by what one has learned and achieved - Business: Challenging work that stretches the individual - this will give a sense of achievement 2. Esteem Needs - Business: Recognition for work done well - status, advancement, and responsibility will gain the respect of others 3. Social Needs - Business: Working in teams or groups and ensuring good communication to make workers feel involved 4. Safety Needs - Business: A contract of employment with some job security - a structured organization that gives clear lines of authority to reduce uncertainty, ensuring health and safety conditions are met 5. Physical Needs - Business: Income from employment high enough to meet essential needs ---Interpretation--- - Individuals' needs start on the lowest level - Once one level of need has been satisfied, humans will strive to achieve the next level - Many people do not reach self-actualization, but everyone is capable of reaching their potential - Once a need has been satisfied, it will no longer motivate individuals to action - Reversion is possible, and for individuals to move down a level

Organizational Structure - Matrix Structure (151) (2.2)

Matrix Structure: An organizational structure that creates project teams that cut across traditional functional departments ---Advantages--- - Allows total communication between all members of the team, cutting across traditional boundaries between departments in a hierarchy where only senior managers are designed to link with and talk to each other - Less chance of people focusing on just what is good for their department, instead focusing on what is good for the project and the business as a whole - The crossover of ideas between people with specialist knowledge in different areas tends to create more successful solutions - As new project teams can be created quickly, this system is well-designed to respond to changing markets or technological conditions ---Disadvantages--- - Less direct control from the 'top' as the teams may be empowered to undertake and complete a project - The benefit of faster reaction to new situations is, therefore, at the expense of reduced bureaucratic control, which may be resisted by some senior managers - Team members may have two leaders if the business retains levels of hierarchy for departments but allows cross-departmental teams to be created, which could cause a conflict of interests

Motivation (2.4)

Motivation: The intrinsic and extrinsic factors that stimulate people to take actions that lead to achieving a goal - Extrinsic Motivation: Comes from external rewards associated with working on a task, for example pay and other benefits - Intrinsic Motivation: Comes from the satisfaction derived from working on and completing a task - - - - - - - - - - - High motivation level results in (1) high productivity levels, (2) competitiveness of the business, (3) reduced unit costs, (4) reduced costs of labor turnover, (5) increased response rate from employees ---Indicators of Poor Staff Motivations--- - Absenteeism - Deliberate absence for which there is not a satisfactory explanation; often follows a pattern - Lateness - Often becomes habitual - Poor Performance - Poor-quality work; low levels of work or greater waste of materials - Accidents - Poorly motivated workers are often more careless, concentrate less on their work or distract others, and this increases the likelihood of accidents - Labor Turnover - People leave for reasons that not positive; even if they do not get other jobs, they spend time in trying to do so - Grievances - There are more complaints raised within the workforce and there might be more union disputes - Poor Response Rate - Workers do not respond well to orders or leadership and any response is often slow

Effect of Demographic Change on Labor Supply (2.1)

Natural Population Growth/Decline (birth rate compared to death rate) ---Opportunities--- - May be easier to recruit effective employees as the working population increases ---Constraints--- - Increased birth rates may takes years before they impact on the working population Net Migration (immigration compared to emigration) ---Opportunities--- - May be easier to recruit effective employees from other countries at lower rates of pay - Highly qualified employees might be recruited from other countries ---Constraints--- - 'Brain drain' of qualified and experienced staff to other countries will reduce competitiveness - Immigrants may need more training - language and cultural issues Aging Population (average age of population increases as a result of rising life expectancy) ---Opportunities--- - Older employees may be more loyal and reliable than younger workers - Older employees may have experience and 'people' skills that younger employees may have not yet developed ---Constraints--- - Older employees may be less flexible and adaptable - to the introduction of new workplace technologies

Innovations in Communication Technology (2.2)

New inventions in communication technology have allowed people within a business to: - Keep in contact - Collaborate on reports, programming, and other document production - Use cloud computing to operate globally without sacrificing security or limiting user access - Communicate with customers - Easy access to the intranet Intranet: Internal computer networks built on internet technologies ---Limitation in Communication Technology--- - Initial cost can be significant - Security issues remain - Employees may need training - Reduced interpersonal contact - not necessarily good for communication with employees, customers, or supplies or for satisfying social needs

Mobility of Labor (2.1)

Occupational Mobility of Labor: Extent to which workers are willing and able to move to different jobs requiring different skills - High occupational mobility of labor helps a country achieve economic efficiency and keep structural unemployment low ---Developed Economies - Low Mobility--- - High levels of home ownership means that workers are reluctant to pay the cost in time and money of arranging a house sale and purchase in another region - High-skill levels in one occupation may mean that workers are not equipped to deal with machines, processes, and technologies in other industries and occupations ---Emerging Economies - High Mobility--- - Home ownership is low - Low skill levels mean that workers can undertake low-skilled jobs in many different industries Geographical Mobility of Labor: Extent to which workers are willing and able to move geographical region to take up new jobs - High geographical mobility of labor can lead to overcrowding and very poor living conditions in towns and cities, as people move from rural to urban areas ---Government Policies to Increase Labor Mobility--- - Relocation grants for key public sector workers - Job centers and other government offices to advertise job vacancies nationally - Training and retraining programs for the unemployed

Offshoring - HR Activites (2.1)

Offshoring: The relocation of a business process done in one country to the same or another company in another country Re-shoring (In-Shoring): Reversal of offshoring; the transfer of a business process or operation back to its country of origin ---Common Outsourced HR Activities--- - Payroll administration - Employment recruitment - Training and development - Human resources information systems - Pension administration - Exit interviews when an employee decides to leave - Childcare/eldercare assistance - Equal opportunity compliance/reporting - Legal advice - Legal compliance - Health and safety administration ---Not-Outsourced HR Activities--- Strategic HR activities are those that have a direct impact on organizational performance and can provide it a competitive advantage - Change management - Strategic HR planning - Development and maintenance of HR policies - Remuneration and benefits strategy - Termination of employment/redundancies - Cultural change programs - Recruitment and selection for key jobs (e.g. senior management) - Succession planning - Specialized training

Organizational Structure (143) (2.2)

Organizational Structure: The internal, formal framework of a business that shows the way in which management is organized and linked together and how authority is passed through the organization - As a business expands, with more workers, including supervisory staff, different departments or divisions, the need for a structure becomes crucial ---Organizational Structure Chart--- - Who has overall responsibility for decision-making - The formal relationships between people and departments - workers can identify their position in the business and who is their immediate 'line' manager - How accountability and authority are passed down the organization - the chain of command - The number of subordinates reporting to each more senior manager - the span of control - Formal channels of communication both vertical and horizontal - The identity of the supervisor or manager to whom each worker is answerable and should report

Motivation - Payment/Financial Reward Systems: Performance-Related Pay (2.4)

Performance-Related Pay (PRP): A bonus scheme to reward staff for above-average work performance ---Procedures--- - Regular target setting, establishing specific objectives for the individual - Annual appraisals of the worker's performance against the preset targets - Paying each worker a bonus according to the degree to which the targets have been exceeded ---Advantages--- - Staff are motivated to improve performance if they are seeking increases in financial rewards - Target setting can help to give purpose and direction to the work of an individual - Annual appraisal offers the opportunity for feedback on the performance of an individual, but as it tends to occur only once a year this is not usually sufficient to achieve a key feature of job enrichment ---Disadvantages--- - It can fail to motivate staff if they are not driven by the need to earn additional financial rewards - Team spirit can be damaged by the rivalry generated by the competitive nature of PRP - Claims of manager favoritism can harm manager-subordinate relationships - It may lead to increased control over staff by managers because of the danger that bonuses may not be awarded if workers do not 'conform'

Motivation - Payment/Financial Reward Systems: Piece Rate (2.4)

Piece Rate: A payment to a worker for each unit produced ---Advantages--- - It encourages greater effort and faster working - The labor cost for each unit is determined in advance and this helps to set a price for the product ---Disadvantages--- - It requires output to be measurable and standardized - if each product is different, then piece work is inappropriate - It may lead to falling quality and safety levels as workers rush to complete units - Workers may settle for a certain pay level and will therefore not be motivated to produce more than a certain level - It provides little security over pay level

Pink Theory (2.4)

Pink Theory: A theory that suggests that there are 3 elements of intrinsic motivation: autonomy, mastery, and purpose 1. Autonomy Self-direction is a natural inclination - Workplaces can support autonomy by giving people real control over various aspects of their work 2. Mastery Everyone wants to get better at doing things - Managers should not give tasks fitting a person's exact capabilities, but give them space and support to reach higher to encourage improvement, continual mastery, and growth 3. Purpose People who find purpose in their work unlock the highest level of motivation - Employers should help employees connect to something larger than themselves, shift the focus from mere measurement by numbers and figures, connect work to people and values

Motivation - Payment/Financial Reward Systems: Profit-Related Pay (2.4)

Profit-Related Pay: A bonus for staff based on the profits of the business - usually paid as a proportion of basic salary Employee Share-Ownership Plan: A system in which workers are given shares in the business when the firm makes a profit ---Advantages--- - Potential conflict between owners and workers is reduced as everyone now has an interest in higher profits - They are designed to lead to higher worker effort levels and a greater preparation to accept cost-reduction measures and changes that benefit the business - The business is likely to attract better recruits drawn by the chance of sharing profits or owning shares in the firm - As the bonuses are paid out of profits, the scheme does not add to business costs, unlike a normal increase in pay levels - If successful in increasing motivation, then the schemes could lead to an increase in overall business profitability ---Disadvantages--- - The reward offered is not closely related to individual effort - The schemes can be costly to set up and operate, especially in large firms with many employees - Small profit shares paid at the end of the financial year are unlikely to promote motivation throughout the year - Profit-sharing schemes will reduce profits available to be paid to owners and to be reinvested in the business - Worker share-ownership schemes can increase the total number of shares issued and 'dilute' the value of existing shares

Recruitment - Steps (2.1)

Recruitment: The process of identifying the need for a new employee, defining the job to be filled and the type of person needed to fill it, attracting suitable candidates for the job and selecting the best one ---Steps--- 1. Draw up a Job Description Job Description: A detailed list of the key points about the job to be filled, stating all the key tasks and responsibilities of it 1. job title 2. details of the tasks to be performed 3. responsibilities involved 4. place in the hierarchical structure 5. working conditions 6. how the job will be assessed and performance measured [Advantage of a job description is that it should attract the right type of people to apply for the job] 2. Draw up a Person Specification Person Specification: A detailed list of the qualities, skills, and qualifications that a successful applicant will need to have to perform the job described in the job description 3. Job Advertisement - A job advertisement should be prepared that reflects the requirements of the job and the personal qualities looked for • The job advertisement can be displayed within the business premises (particularly if an internal appointment is looked for), on the firm's website or in government job centers, recruitment agencies and/or newspapers 4. Draw up a Shortlist of Applicants - A few applicants are chosen based on their application forms and personal details, as well as references used to check on the character and previous work performance of the applicants 5. Conduct Interviews - Interviews are designed to question the applicant on their skills, experience, and character to see if they are likely to perform well and fit into the organization

Redundancy (2.1)

Redundancy: When a job is no longer required so the employee doing this job becomes redundant through no fault of his or her own - Redundancy often occurs because of a fall in demand or a change in technology, thus a company may enforce retrenchment to save on costs to remain competitive

Motivation - Payment/Financial Reward Systems: Salary (2.4)

Salary: Annual income that is usually paid on a monthly basis - Salary is not dependent on the number of hours worked or the number of units produced - The annual fixing of the salary level for each job helps determine the status of that post in the whole organization - In most organizations, all jobs will be put into one of a number of salary bands, with precise income earthen within each band depending upon experience and progress ---Advantages--- - Salary gives security of income - It gives status compared to time-rate or piece-rate payment systems - It aids in costing - the salaries will not vary for one year - It is suitable for jobs where output is not measurable - It is suitable for management positions where staff are expected to put in extra time to complete a task or assignment ---Disadvantages--- - Income is not related to effort levels or productivity - It may lead to complacency of the salary earner - Regular appraisal may be needed to assess whether an individual should move up a salary band, although this could be an advantage if this becomes a positive form of worker appraisal

F.W. Taylor and Scientific Management (2.4)

Scientific Management: A method that analyzes work processes to improve economic efficiency ---Steps--- 1. Select workers to perform a task 2. Observe them performing the task and note the key elements of it 3. Record the time taken to do each part of the task 4. Identify the quickest method recorded 5. Train all workers in the quickest method and do not allow them to make any changes to it 6. Supervise workers to ensure that this 'best way' is being carried out and time them to check that the set time is not being exceeded 7. Pay workers based on results - Based on the theory of 'economic man' - Humans were motivated by money alone and the only factor that could stimulate further effort was the chance of earning extra money

Motivation - Non-Financial Methods: Team Working (2.4)

Team Working: Production is organized so that groups of workers undertake complete units of work ---Advantages--- - Workers are likely to be better motivated as social and esteem needs are more likely to be met - Better-motivated staff should increase productivity and reduce labor turnover - both will help to reduce business costs - Team working makes fuller use of all of the talents of the workforce - Team working can reduce management costs as it is often associated with delayering of the organization - fewer middle managers will be required - Complete units of work can be given to teams - a key feature of job enrichment ---Disadvantages--- - Not everyone is a team player - some individuals are more effective working alone - Teams can develop a set of values and attitudes which may contrast or conflict with those of the organization itself, particularly if there is a dominant personality in the group - The introduction of team working will incur training costs and there may be some disruption to production as the teams establish themselves

Training (2.1)

Training: Work-related education to increase workforce skills and efficiency ---Types of Training--- 1. On-the-Job Training On-the-Job Training: Instruction at the place of work on how a job should be carried out - Involves watching or working closely with existing experienced members of staff - cheaper than sending recruits on external training courses - Along with on-the-job training, all new recruits are given induction training - introductory training program to familiarize new recruits with the system used in the business and the layout of the business site 2. Off-the-Job Training Off-the-Job Training: All training undertaken away from business (Ex: work-related college courses) - Involves any course of instruction away from the place of work to introduce new ideas that no-one in the firm currently has knowledge of 3. Cognitive Training Cognitive Training: Exercises designed to improve a person's ability to understand and learn information - Consists of a variety of exercises designed to help improve performance in areas, such as sustaining attention, thinking before acting, visual and auditory processing of information, listening and reading 4. Behavioral Skills Training Behavioral Skills Training: Designed to improve an individual's ability to communicate and interact with others both inside and external to the organization - Includes communication skills, change management skills, assertiveness skills, negotiating and influencing skills, conflict management skills, presentation skills, customer service skills, networking skills, and interview skills

Business Communication - Cultural Differences (2.2)

What impact should different cultures have on communication? - Each national or ethnic culture has set beliefs and practices that its members take for granted, making it challenging to communicate across different cultures - Intercultural communications is becoming more important due to increased globalization and more diverse domestic workforces ---Cultural Differences in Communication--- - High-context cultures (Mediterranean, Slav, Central European, Latin American, African, Arab, Asian, American-Indian) leave much of the message unspecified, to be understood through context, non-verbal cues, and between-the-lines interpretation of what is being said - Low-context cultures (most Germanic and English-speaking countries) expect messages to be explicit and specific - In sequential cultures (North America, the UK, Germany, etc.) business people give full attention to one agenda item after another - In synchronic cultures (South America, southern Europe, and Asia) the flow of time is viewed as a sort of circle, with the past, present, and future all interrelated - In neutral countries (Japan, Indonesia, the UK, Netherlands, etc.) emotional reactions are least acceptable - In cultures with high emotions (Italy, France, the USA, etc.) emotional reactions are most accepted