Managing People in Business

Managing People

• Businesses employ staff members in addition to owners.
• Business size is measured by the number of employees:
  • Small Businesses: 1-49 employees
  • Medium-sized Businesses: 50-249 employees
  • Large Businesses: 250+ employees
• Different businesses view staff differently, impacting staff productivity.
  • Some businesses see staff as an asset.
  • Other businesses see staff as a cost.

Staff as an Asset

• Asset-oriented businesses value employees.
• Staff welfare is prioritized with attempts at retention via:
  • Competitive wages exceeding industry average
  • Acceptable compensation, including pensions, and paid time off (holidays, sick leave, maternity leave)
  • Safe and comfortable work environment
  • Training and development opportunities
  • Job security and social opportunities
  • Clear, effective leadership, and promotion opportunities
• Opportunities for problem-solving and creative contributions.

Staff as a Cost

• Businesses view staff as a cost when they try to minimize time and expenditures on them.
• Aiming for minimal cost entails:
  • Paying the legal minimum wage
  • Using low-hours contracts
  • Reducing training investment
  • Providing only minimum legal leave.

Flexible Workforce

• A flexible workforce adapts to fluctuating market demands in quantity and type.
• Multi-skilling: developing employee skills to handle various roles.
• Part-time and temporary staff: hired to meet fluctuating demand or temporary needs.
• Zero-hours contracts: workers are called upon as needed without guaranteed hours.

Outsourcing, Penalties

• Outsourcing is the use of external contractors or businesses to handle certain tasks previously performed internally.
• Penalties are imposed on workers who are not meeting expectations (e.g., tardiness).
• Utilizing cheaper recruitment methods has downsides with reduced staff motivation and higher chances of conflicts.

Dismissal vs. Redundancy

• Employee dismissal is due to legal infractions or poor performance.
• Employee redundancy is due to insufficient work.

Employer-Employee Relationships

• These relationships start when a person is hired.
• Conflicts of interest are possible between employers and employees.

Individual vs. Collective Bargaining

• Individual approach: direct employee-employer communication (salary negotiations, leaves etc.)
• Collective bargaining: representatives (such as trade unions) negotiate on behalf of employees.

Recruitment, Selection, and Training

• Recruitment and selection: choosing suitable employees for the business.
• Stages of recruitment: identifying requirements, describing a role, advertising, evaluating/shortlisting applicants, conducting interviews, and providing feedback.
• Job description: outlines tasks, duties, and responsibilities.
• Person specification: describes desired qualifications, skills, and experience.
• Types of recruitment: internal and external.
• Costs of recruitment and selection: recruiting, advertising, and handling recruitment applications.
• Training: increasing employee knowledge and skills.
• Types of training: on-the-job and off-the-job.
• Costs of training: cost of courses, materials, staff time.

Organizational Design

• Structure: internal arrangement of positions and responsibilities within a business.
• Organisational chart: visual representation of roles, responsibilities, and reporting lines.
• Hierarchy: ordering of responsibility levels from lowest to highest.

Motivation Theories

• Taylor's (scientific management) theory: efficient work methods.
• Mayo (human relations) theory: workers as social beings.
• Herzberg (two-factor) theory: hygiene factors and motivators.
• Maslow (hierarchy of needs) theory: fulfil lower needs to become motivated.

Financial Methods

• Piecework: payment related to items produced.
• Commission, Bonus: employee incentives for meeting sales goals.
• Profit-sharing: worker's share in company profits.
• Performance-related pay (PRP): incentives for meeting targets.

Non-financial Methods

• Delegation: giving subordinates responsibility to carry out tasks.
• Consultation: seeking input before decisions.
• Empowerment: enabling employees to decide.
• Teamwork: collaborating to attain goals.

Leadership Styles

• Autocratic: Leader makes decisions alone.
• Paternalistic: Leader considers employee well-being.
• Democratic: Leader seeks input from employees.
• Laissez-faire: Leader delegates decisions to employees.

Adaptation to Business Growth

• The need for shared ownership, greater accountability, and motivation.
• Coping with increasing stress and conflicting demands, and maintaining trust.

Overcoming Leadership Difficulties

• Delegation and trust
• Maturity and experience
• Education