Unit-2 People In Buiness

Unit 2.1

MOTIVATING EMPLOYEES

MOTIVATION (Mar-2018. Q. No-1a)

Motivation may be Internal and external factors that force the people to work better than before to achieve the goals. 

The importance of motivation. (Mar-2021 Q.No-3a P-2) (Oct/Nov 2021 Q.No-4c)

1. Increases employee’s commitment

When employees are motivated to work, they will generally put their best effort in the tasks that are assigned to them, so it would enhance the overall production capacity of business.

2. Improves employee’s productivity

An employee’s efficiency level is not only based on their abilities or qualifications. For the company to get the very best results, he must be supported in every aspect in the form of motivation.

3. Reduces absenteeism

            If employees are motivated it would ensure the continuous presence of employees in all the fields of activities in an organization so it ensures the smooth running of organization.

4. Reduces employee turnover

            If employees are motivated, they would like to stick with the organization in different situations.  It would help to bring a loyalty towards the organization among the employees. 

5. Improves relationship

             Motivation helps to bring harmonious atmosphere in the organization so it ensures a strong relationship between the employer and employees.

6. Ensures high quality output

            If the employees are motivated, they would show their sincerity towards the work what they are assigned with, so it results the better outputs from the business.

THEORIES OF MOTIVATION (March 2022 Q.No-4b)

A. Maslow’s Hierarchy -The concept of human needs (Oct/Nov 2021 Q.No-4b)

According to Maslow, all humans start at the lowest level of need called physical needs. Once they have satisfied their physical needs, then they are motivated to try to reach the next level -safety needs -and so on, until they reach the top level of need -self-actualization. 

Maslow’s Hierarchy of Needs

Maslow believed that humans have levels of need:

1. Physiological needs – these are the basic needs we must have to survive. They include water, food, shelter and clothing.

2. Safety needs – we need to be safe from physical danger and individuals need to know that they have job security.

3. Social needs – most people want to be accepted by others and feel that they are loved and trusted. It is important to have friends and belong to a group where social activities can be shared and enjoyed together. Eg:- Team building, group task ,etc.

4. Esteem needs – individuals want to be respected and to have their achievements recognized by others. Eg: Employee of the month. Best business entrepreneur, etc.

5. Self-actualization – not everyone will reach their full potential, but for some individuals it is a very important need. Even the most successful people rarely achieve self-actualization because they will always set themselves another challenge.

Limitations of Maslow’s theory of motivation.

1. It is often difficult to identify how much of each need has been met and level each worker is on.

2. Money might also satisfy esteem needs as well as those lower down the hierarchy.

3. Not everyone has the same needs as those in Maslow’s Hierarchy.

4. Self-actualization is rarely, if ever achieved.

B.  F.W. TAYLOR – SCIENTIFIC MANAGEMENT THEORY

Taylor’s scientific management theory refers money is the basis of motivation. This is sometimes known as the theory of economic man. Piece rate methods of paying production workers developed from Taylor’s research. If workers are motivated by money, they will work harder because the more units they produce result more payments 

 

C. FREDRICK HERZBERG – TWO-FACTOR THEORY

            Herzberg identified two groups of factors which he called hygiene factors and motivators.

Hygiene factors	Motivators
§  Working conditions	§  The work itself
§  Relationship with others	§  Responsibility
§  Salary or wage	§  Advancement
§  Supervision	§  Achievement
§  Company policy and administration	§  Recognition of achievement

Hygiene factors

1. Working condition – includes things such as how clean and safe the work place is and what facilities are provided for workers, for example, washrooms, drinks machines and canteen for meals

2. Relationships with others – this factor considers the importance to a worker of having good working relationships with co-workers and managers, to be treated fairly and with respect.

3. Salary and wage – Herzberg argue that people had to be paid enough to encourage them to do a job, but money was not enough for them to want to do the job well.

4. Supervision – this factor considers the importance of leadership style and how closely workers are supervised and guided.

5. Company policy and administration – these are the rules and procedures which control and affect the way that workers work and their relationship with others in the workplace.

Motivators

1. Work itself – the tasks that workers do are an important influence on the motivation of workers. The work needs to be varied and challenging and Herzberg suggests that this could be achieved by introducing job enrichment.

2. Responsibility – giving workers more responsibility for the tasks they perform, for example allowing them to make decision about their tasks. The manager is showing that they trust workers and value their contribution.

3. Advancement – workers have the opportunity for promotion

4. Achievement – workers need to feel that they have reached challenging goals

5. Recognition of achievement – workers need to have their achievements recognized by management and other people they work with.

 

METHODS OF MOTIVATION (May/June 2020 Q.No-3b P-2) (Mar 2019 Q.No-1b. P-2) (Oct/Nov 2017 Q.No.3e.) (Mar-2021 Q.No-3e) (May/Jun 2015, Q.No.4e)

A. Financial rewards

1. Hourly wage rate

2. Salary

3. Piece rate

4. Bonus schemes

5. Commission

6. Profit sharing

B. Non-financial rewards

1. Job rotation

2. Job enlargement

3. Job enrichment

4. Quality circles

5. Team working

6. Delegation

 

A. Financial rewards and methods of Motivation (Mar-2018. Q.No-1e) (May/June 2022 Q.No-2c.)

1. Hourly wage rate (Time rate)

An hourly wage rate means that workers are paid a fixed amount per hour worked. The longer a worker is at work the more they get paid. For example, if an employee is paid $10 per hour and he works for 40 hours, then he will be paid $400 (40x$10).

2. Piece-rate

Piece-rate means that pay is based on the number of units of output workers produce. Piece rate can be used where it is possible to measure the performance shown by an individual in a team. The main advantage of this method is that workers are only paid for number of items they produce.

3. Salary

With salary, workers are paid a fixed amount per year, which is usually paid monthly. This method is best use for workers whose work effort is not directly linked to production, for example supervisors, managers, and professional staff.

4. Commission

Commission is the payment based on the value of sales made by staff. This method is only used to reward sales staff. The main advantage of this method is that pay is linked to the value of goods sold. The main disadvantage of this payment method to worker is that they are never certain about how much they will earn.

5. Bonus scheme

Bonus is an additional reward paid to workers for achieving targets set by managers. A bonus scheme is a method of performance-relate pay. Workers receive an additional payment for achieving a target set by managers.

6. Profit-sharing (Mar 2016, Q.No.1c)

It is an additional payment to workers based on the overall profits of the business. It is usually paid once a year. It may be in the form of cash payment, calculated as a percentage of worker’s wage or salary, or workers may be given shares in the company.

B. Non-financial methods of Motivation (Mar-2018. Q.No-1d) (May/June 2017 Q.No-4e) (Mar 2016, Q.No.1b) (Feb/Mar 2023 Q.No-4e)

1. Job rotation, enlargement and enrichment

a. Job rotation (May/June 2021 Q.No-3d)– Instead of doing the same task, workers switch form one job to another. This makes the work more interesting and helps prevent boredom. Workers become multi-skilled, which helps create a more flexible workforce.

b. Job enlargement – Workers are given a greater variety of similar level tasks to do. Their jobs become more interesting and reduces boredom.

c. Job enrichment (May/June 2019 Q.No.2b)– Work is organized so that workers are able to use more of their skills and abilities and making work more challenging. They often become more involved in decisions affecting their job. Workers feel more valued by their employer and this increases their job satisfaction, efficiency and motivation.

2. Quality circles

            Quality circles are groups of workers who meet regularly to discuss work-related issues. Workers come up with solutions to problems or suggest how improvements can be made. The results of quality circles are presented to manage and good ideas and solutions are introduced into workplace.

3. Team working and delegation

a. Team working – production workers are organized into groups or teams and are given responsibility for the completion of the whole task.

b. Delegation – this involves managers passing authority for the performance of tasks to lower-level workers.

Unit-2.2

ORGANISATION AND MANAGEMENT

Organization chart/ structure (Oct/Nov 2022 Q.No-3b)

An organizational chart simply shows the internal structure of a company and how authority and management roles are shared out.

Advantages of an organization chart (Mar 2017 Q.No-3a P-2)

1. It shows the working relationship between different sections and who is in charge.

2. It helps to know the different departments within an organization.

3. It provides guidance on formal lines of communication as who to speak to whom if there is a problem.

4. It shows each employee’s position in an organization

The concept of hierarchy, chain of command and span of control.

a. Hierarchy

            Hierarchy shows the different levels of staffs in an organization. It shows the top-level authorities and the subordinates.

b. Chain of command (Mar 2019 Q.No-4b) (May/June 2018 Q.No-1a.P-2) (May/June 2021 Q.No-3c)

Chain of command is the structure in an organisation, which allows communications to be passed down from top management to lower levels of management.

c. Span of control (May/June 2018 Q.No-1a.P-2)

Span of control shows the number of subordinates that a manager or superior can directly control.

d. Delegation (Mar 2019 Q.No-3e) (Oct/Nov 2018 Q.No 3a P-2) (March 2022 Q.No-4a) (March 2022 Q.No.2a P-2) (May/June 2022 Q.No-1d.)

Delegation refers to giving authority to carry out tasks and make decisions to subordinates. It is a managerial task.

Advantages of delegation

1. It allows superiors to focus on main tasks such as administrative activities.

2. It helps to reduce the burden of superiors if employees are more independent

3. Superiors can measure the success of their staffs more easily

4. The work becomes more interesting and motivate the subordinates if they get freedom to complete the task.

5. It reduces the pressure on staffs and increases the productivity of staffs

Disadvantages of delegation

1. Superiors are still responsible if there are errors by subordinates.

2. Superiors may lose some control over the employees.

3. Employees may misuse the freedom so it may affect the productivity and output.

 

Two types of Hierarchies

a. Tall hierarchy.

            This hierarchy will have many layers of management. Here chain of command is long.

 b. Flat hierarchy

             This hierarchy will have few levels of management. Communication and decision making are quicker here.

Delayering- Changing the organizational structure

            In tall hierarchy, the business may reduce the level of management to save cost is known as delayering.

Benefits of changing the organizational structure. (Oct/Nov 2017 Q.No-4d)

1. Improved communication so it could reduce complaints from employees or faults.

2. Lower labour costs as staffs are eliminated in higher post.

3. Managing Director are always close to the subordinates so more aware of issues.

4. Increased delegation so it can improve employee motivation.

5. Quicker decision making because less layers in organization structure.

METHODS OF DECISION MAKING

There are two forms of decision making based on levels of management.

Centralization

It refers to a structure where most of the decision making takes place at higher levels of management. There is little delegation.

Decentralization.

It refers to a structure where the majority of the decision making is delegated to lower levels of management.

 

TEAM OF MANAGEMENT

Directors.

            Directors are the most senior level of management in any limited companies, they are elected by the shareholders.

CEO (Chief Executive Officer)

            The most senior manager responsible for overall performance and success of a company. He is responsible for implementing the decisions of board of directors.

Manager

            An employee who is in-charge of a certain group of tasks or certain area of department.

Supervisor (Feb/Mar 2023 Q.No-3a)

            Supervisors check and control the work of subordinates. They help to share the communication from the top level to bottom level.

Role of Management

Every team of management should take the following role in their organization.

1. Setting business objectives

2. Motivating employees

3. Procuring resource. 

Define management.

Management is the art of things getting done through other people. Management does planning, organizing, coordinating, commanding and controlling.

FUNCTIONS OF MANAGEMENT) (Mar 2016 Q.No-2a P-2) (Oct/Nov 2021 Q.No-4a. P-2)

a. Planning.

Planning refers to the looking at where the business is now and where it wants to be in future. The decisions give the business a sense of direction and purpose.

b. Organizing.

A manager cannot do everything by himself, therefore, jobs must be delegated to employees. Employees need sufficient resources to complete their job, so managers need to organize people and resources effectively.

c. Coordinating.

Managers need to bring the people together in a business to achieve the pre-set goals. Here the managers evaluate the status of the task of various departments by holding regular meetings or setting up a project team with different members from different departments.

d. Commanding.

Commanding refers to the leading and guiding subordinates to make sure that all subordinates are following targets and deadlines. It is the responsibility of the manager to ensure that all tasks are completed and therefore instruction and guidance must be provided to employees.

e. Controlling.

Controlling means evaluating the performance of subordinates, so that corrective action can be carried out if the subordinates are not sticking to goals.

 

LEADERSHIP- STYLES (Mar-2020 Q.No-3b P-2). (Oct/Nov 2019 Q.No-2b P-2) (Mar-2021 Q.No-4e) (May/June 2023 Q.No4a P-2)

            It is one of the qualities of a manager to lead the team of subordinates

1. Autocratic Leadership (May/June 2019 Q.No-4a) (Feb/Mar 2023 Q.No-3d)

Managers make all the decisions related business without considering the opinion of subordinates. It is a manager centered decision making and one-way communication method, from the top to downwards.

Advantages

1. Managers can control of all activities and situations

2. Mangers are able to take quick decision making

3. Workers will have clear direction from the top level and they know what to do and expect

4. It is effective if employees are fresh or unskilled.

Disadvantage

1. Lower motivation as employees don’t have freedom to express suggestions

2. Too dependent on the manager

3. No scope for individuals to develop skills

4. No delegation

2. Democratic leadership (May/June 2017 Q.No-4d) (Oct/Nov 2022 Q.No-3d)

It is just opposite of autocratic leadership. Here managers make decisions considering the opinions or suggestions from workers. It is an employee centered decision making style.

Advantages

1. Managers get support of workers in precise decision making

2. Workers are likely to be motivated as they take part in decision making

3. Useful when workers are skilled and experienced.

Disadvantage

1. Decision making can be slow

2. It is no effective if workers do not have enough skills or qualification.

3. Manager might not agree with decision but have to accept it

4. Can lead to conflict among the staffs

3. Laissez faire leadership (Let them do it) (Mar 2017 Q.No-4d)

Manager delegate the powers to the workers to make day to day decisions and carry out the tasks. Here managers have little influence in the actions of the workers and they are free to take own decisions.

Advantages

1. Employees can be more motivated as free to do that as they think best

2. Encourages the workers and increase productivity

3. Workers can apply all their skills for benefit of business

Disadvantage

1. It is suitable only if workers are highly experienced or skilled

2. Poor coordination can lead to inefficiency

3. Can lead to conflicts between team members

Factors to consider when deciding on the right management style.

1. Manager’s own characteristics – is the manager naturally autocratic or democratic?

2. The skills and experience of the workforce.

3. The task to be completed – is it straightforward or complex?

4. Type of business – a design business is likely to have a different approach to a large factory making standard products.

5. The time limit- to take decisions and produce goods.

Qualities of a leader or Manager (Oct/Nov 2018 Q.No-1b)

1. Good communicator- Leader must be able to communicate and pass the decisions to the subordinates or team members quickly.

2. Friendly - Leader should be approachable to all subordinates or team members to share their opinion openly.

3. Good motivator- Leader must motivate the members by all means and must be mentor to all.

4. Ability to take quick decision- leader must be able to take quick decisions in unforeseen situations.

TRADE UNIONS (May/June 2020 Q.No-2a) (May/June 2016 Q.No-1a) (Oct/Nov 2022 Q.No-4a. P-2)

A trade union is a group of workers who have joined together to ensure their interests are protected.

Why do workers join a trade union? (How trade unions help the employees?)

1. Collective bargaining or negotiation with employers for better payment or working conditions.

2. Providing services for members-pension scheme, health insurance, etc.

3. Reducing conflicts between employees and employers.

4. Providing legal support and advice if any of the rights of the employees are rejected.

5. Improved environment where people work, for example, health and safety, noise, heating

6. Improved benefits for members who are not working because they are sick, retired or have been made redundant

7. Improved job satisfaction by encouraging training

8. Advice and financial support if a member think they have been unfairly dismissed or make redundant or have been asked to do something that is not part of their job.

Unit 2.3

RECRUITMENT, SELECTION AND TRAINING OF EMPLOYEES

 

Recruitment -meaning

            Recruitment is the process of inviting the candidates for the post of vacant jobs in an organization.

METHODS OF RECRUITMENTS

1. Internal recruitment (Mar 2020 Q.No-1e) (Oct/Nov 2016 Q.No-3b P-2)

           If a job post is vacant, instead of employing someone from outside, the business chooses someone who already works for the business. Eg:- Transfer, promotion, etc.

The main advantages of internal recruitment are:

1. The vacancy can be filled more quickly and more cheaply.

2. Applicants already know how the business works.

3. The business already knows the strengths and weaknesses of applicants.

4. Workers can become more motivated when they see that there is a chance of promotion.

The limitations to internal recruitment including:

1. A better candidate may have been available from outside the business.

2. It could cause conflicts within the workplace if other internal candidates feel they should have got the job.

3. It does not bring any new ideas.

4. There will still be a vacancy to fill, unless the worker’s previous has become redundant.

2. External recruitment.

If a job post is vacant, the business chooses employees from outside sources instead of internal sources.

The main benefits to a business of external recruitment are:

1. External applicants might bring new ideas and this can improve the effectiveness and efficiency of the business.

2. There will be a wider choice of applicants with different skills and experience.

3. It avoids the risk of upsetting workers when someone who is internal is promoted.

The limitations of external recruitment include:

1. It takes longer to fill the vacancy

2. It is more expensive than internal recruitment because of advertising costs and the time spent interviewing candidates.

3. External applicants will need induction training, which increases their expenses

MAIN STAGES IN RECRUITMENT AND SELECTION OF STAFF (Oct/Nov 2020, Qno-1b) (Oct/Nov 2020, Qno-2b, P-2) (Oct/Nov 2018 Q.No-1c) (Mar 2017 Q.No-4a) (May/June 2021 Q.No.3b P-2)

1. Job analysis

This is a process that identifies the content of a job in terms of the activities involved and the skills, experience and other qualities needed to perform the work. - This is top- level managerial activity.

2. Job description (May/Jun 2015, Q.No.4c)

A job description is a written document that provides all the details about what a job involves. It is a list of the key points about a job, job title, key duties, responsibility and accountability.

A job description needs to include:

§  Job title – for example, Sales and marketing executive

§  The main duties of the post – for example, plan and carry out marketing activities to agreed budget and timescales

§  Responsibilities – who the job holder is responsible for supervising/managing.

§  Accountability – who the job holder reports to

An example of simple job description is shown below:

3. Person (Job) specification. (Oct/Nov 2017 Q.No-3a.P-2)

It is an analysis of the type of qualifications, skills, experience and personal qualities the business is looking for in applicants.

Examples such as personality, specific job skills, computer skills, qualifications, experiences, Physical fitness, Politeness, Communicator, etc.

4. Advertising a job

Once the job description and person specification have been produced the business needs to advertise the vacancy to the public using various media such as TV, newspapers, Internet, email, recruiting agencies, etc.

5. Sending out application forms and job details

            Once the job has been advertised then the business will need to send out further details and application forms to people who have shown an interest in applying for the job.

Eg:- CV (Curriculum Vitae), Resume, etc.

6. Receiving applications and shortlisting applicants

The Human Resource department should look through all the applications. They will compare the information on the application forms or CV with the job description and person specification to produce a shortlist of applicants for interview.

7. Aptitude test.

            It is the method of finding candidates according to the skills required for the job. A set of questions related with the job is given to the candidates and check the score for final selection. It helps to show whether the worker can do the job effectively and prevent an unsuitable person being employed.

8. Group discussions or individual presentation.

            Here a group of candidates will be given a topic related with the job situation to discuss and debate and finally select the best suggestions. In individual presentation, each candidate will be given a topic to share their findings and suggestions.

9. Interviewing shortlisted candidates

Shortlisted candidates will be invited to attend for interview. The interview is the face to face communication about the job related aspects. Mostly senior management representatives conduct the interviews and it may be through online screening using social media.

10. Selecting the right candidate

Following the interviews and results of any test, the interview panel will select who they think is the best applicant for the job. Such candidate will receive a written formal job offer from the employer. Once he starts work, he will be given induction and training programme.

 

PART-TIME EMPLOYMENT

Benefits and limitations of part-time and full-time workers (Mar 2020 Q.No-1b P-2) (May/June 2019 Q.No-4d) (Oct/Nov 2019 Q.No-2a P-2) (Oct/Nov 2018 Q.No 4c) (Mar-2018. Q.No-1c) (Oct/Nov 2016 Q.No-4e) (May/June 2021 Q.No-2e) (March 2022 Q.No-4c) (May/June 2015 Q.No-1b P-2) (May/June 2023 Q.No1d) 

There are a number of benefits to a business of employing part-time workers, such as:

1. It offering flexible working hours. Eg:- Work after study sessions.

2. Part-time work helps the business to finish the work in time. Eg:- if a worker is off sick, part-time workers can often cover their duties at short notice.

3. According to the busy time business can increase or decrease the number of staffs.

4. Part time workers may provide better than permanent staffs due to lower working hours.

5. Business can save the cost of remuneration such as pension, bonus, etc, to be payable to the permanent staffs.

There are also limitations to employing part-time workers: (Mar 2019 Q.No-1b)

1. There will be an increase in induction and training costs as the workers are new.

2. There could be communication problems. Eg:- Engaged with other work.

3. Business cannot get the service of part time workers when it needs. Eg:- During peak time.

4. Extra staffs may be required to guide the part time employees.

IMPORTANCE OF TRAINING (May/June 2018 Q.No-2d) (March 2022 Q.No-4d) (May/June 2023 Q.No1a)

1. Training increases productivity and improves quality of employees.

2. Training improves the ability and skills of employees so it speeds up the work.

3. Training always motivate the employees to do better than before.

4. Training improves the confidence of the staffs to overcome the challenges if any.

5. It is easier to recruit new workers and to keep existing workers.

6. Health and safety training help to reduce accidents during working hours.

7. Training reduces the risk of top-level management such as conflicts, damage, injury, etc.

8. It helps to reduce customer complaints as trained employees produce quality outputs.

9. It saves the cost of supervision as employees become independent to perform the task 

METHODS OF TRAINING (Oct/Nov 2017 Q.No-4b) (Mar-2021 Q.No-4b) (Mar 2023. Q.No3b.P2)

There are three main methods of training:

1. Induction

2. On-the-job

3. Off-the-job

1. Induction training (Oct/Nov-2019 Q.No.3a) (Oct/Nov-2015 Q.No3c).

This is a welcome training to help new recruits become familiar with their workplace when the newcomers enter into a strange atmosphere. The main benefit of induction training for the worker is that they quickly feel part of the business and make them adaptive to the new work.

2. On-the-job training (May/June 2020 Q.No-2e) (Mar 2018. Q no 4.b) (Mar 2016 Q.No-3a P-2)

            On-the-job training involves the worker learning the skills they need to complete tasks in the workplace. They will often sit with an experienced worker and watch how they perform the task. They will then complete the task under the guidance of the experienced worker.

Types of On-the-job training

1. Job rotation:

2. Coaching:

3. Job instructions:

4. Committee assignments:

5. Internship training:

Advantages of on-the-job training (Mar 2018. Q no 4.c) (May/June 2017.Q.No-2a P-2)

1. It is relatively cheap as no training cost required to send the employees off.

2. Workers learn the way that the business wants the job done- lean the style of business

3. Workers are producing output while training so no vacancy arises.

Disadvantages of on-the-job training

1. Workers might pick up any of the experienced worker’s bad habits.

2. Workers make more mistakes when learning and this increases waste.

3. It slows down the production of the experienced workers too.

3. Off-the-job training (May/June 2020 Q.No-2e) (May/June 2022 Q.No-2a.)

              Off-the-job training takes place away from the workplace. This might be at the company’s own training facility, or attending courses offered by specialist training companies, or at local colleges and universities.

Types of Off-the-job training

1. Case study method:

2. Role play:

3. Business games:

4. Lectures:

5. Management education:

6. Conferences:

The advantages of Off-the-job training

1. Workers learn the latest methods and techniques.

2. It does not disrupt the production of other workers

The disadvantages of Off-the-job training

1. It can be expensive, especially when the training is provided by a private training provider

2. The worker does not produce any output during training.

 

METHODS OF REDUCING THE SIZE OF THE WORKFORCE

1. Resignation

            Termination of employment by the workers due to their own reasons, perhaps because they have found a job with a different employer.

2. Retirement

            In some countries, workers must leave their job when they reach retirement age. Eg:- 65 years. Other countries do not have a compulsory retirement age. In these countries workers can work to any age.

3. Redundancy (Mar 2019 Q.No-2b)

            It is situation when an employee is no longer needed in an organization because the job no longer exists or the job role has gone due to unpredictable reasons.  Sometimes a business may reduce the number of staffs due to adverse effects such as heavy loss, technologies changes, covid-19 pandemic situation, etc.

4. Dismissal (Mar 2020 Q.No-1a)

When the employment is ended against the will of the employee, usually for not working in accordance with the employment contract is known as dismissal.

An employer may dismiss a worker from their job for one of two reasons:

a. Incompetence – the worker does not perform their task to the required standard.

b. Poor conduct – the worker breaks the rules

Redundancy and dismissal are both decisions that are made by employer. They both result in a worker no longer having a job. However, with redundancy the job is lost not due to the worker’s fault, but if they are dismissed then it is due to worker’s fault.

Reasons for downsizing the workforce (May/June 2020 Q.No-3b) (May/June 2016 Q.No-1b)

1. There may be fall in demand for the product the worker produces.

2. The business may introduce new technology which automates tasks that workers currently do.

3. The business may relocate some distance from its current site, perhaps to another country.

4. The business faces economic crisis and try to cut cost due to other reasons such as out of fashion, pandemic situation, etc.

5. If the management decide to close the business due to other reasons such as natural calamities.

6. If the business decides to merge or takeover with other business

7. If business faces redundancy or excess workforce

Problems to the business due to high employee turnover (Mar 2020 Q.No-1c) (May/June 2017 Q.No-4c) (Mar-2021 Q.No-4c)

1. High cost of recruiting for new workers or replacing workers.

2. High cost of training for new employees.

3. Disruption to production would result lower productivity and lower output.

4. It would affect the business reputation due to increased labour turnover.

5. It would take more time to recruit new workers so during the period production may be delayed.

Factors to be considered before reducing the workforce (Oct/Nov 2022 Q.No-3c)

a. Skills or quality or qualifications of employees.

b. Cost of labour- salary, wages, etc.

c. Behaviour of employees- absenteeism, attitude, co-operation, etc.

d. Economic situation of the country- like recession, slump, etc.

Legal controls over employment issues (May-2020 Q.No-4e).

The governments of most countries have passed laws aimed at protecting workers from being exploited by employers and dismissed unfairly. The main areas covered by these legal controls are shown below:

1. Contract of employment

            This is a legally binding agreement between the employer and the employee and will include details such as

a. Name of employer

b. Name of employee

c. Date of commencement

d. Salary details

e. Number of hours to be worked

f. Job title and responsibilities

g. Number days of holidays

h. Period of notice

i. Grievance and disciplinary procedures

2. Unfair dismissal

            Employees are protected by law against the unfair dismissal from the employers. Trade unions may involve to protect the right of employees and the court may seek the reasons for the dismissal. Employees may be compensated or selected back if the dismissal is unfair.

3. Discrimination

           Employees are protected by treating discrimination based on colour, gender, religion, age or disability, in-side the business by the employer. Any employee feels that they have been discriminated against for any of those reasons has the legal right to take their employer to court.

4. Health and safety

           The workplace should be safe for the workers without any dangerous or unhealthy situations such as too hot, too cold, injury, pollution, etc. The employers have to take responsibility for such unhealthy issues related with the employees. The health and safety laws aim to protect employees from such risks.

5. Legal minimum wage

            Minimum wage laws protect the employees from the exploitation from the employers by paying lower wages or salaries. This law state that an employee cannot be paid less than a certain rate per hour.

 

 

Unit 2.4

INTERNAL AND EXTERNAL COMMUNICATION

Define communication

                 Communication is the process of exchanging information or messages between two or more parties.

Effective communication and its importance to business

Communication between two or more people or groups of people will only be effective if:

1. The message is sent using the correct communication media

2. The message is sent to and received by the right person

3. The receiver understands the message

4. The receiver provides feedback to the sender to confirm they have received and understood the message.

TYPES OF BUSINESS COMMUNICATION

1. Internal communication.

Internal communication represents the communication within the business organization. When employees communicate with each other this may be with colleagues, managers or subordinates in their own department or with other departments, these all are examples of internal communication.

2. External communication.

            External communication involves when business communicating with the people outside the business or external stakeholders. This may include selling goods and services to customers, dealing with complaints, dealing with trade unions, documentation with government agencies, etc. 

ADVANTAGES OF EFFECTIVE COMMUNICATION TO BUSINESS (Oct/Nov 2016 Q.No-3d) (May/Jun 2015, Q.No.2c) (Oct/Nov 2022 Q.No-3a)

1. Reducing the risk of mistakes – the receiver of a message must understand what it is they are being asked to do by the sender. If the message is not understood, then the instructions or task will not be completed correctly.

2. Helps to take faster decision-making – if the number of people who need to receive the communication is kept to a minimum, then this will speed up the decision-making process

3. Enabling quicker response to market changes - the longer it takes to communicate changes in markets, the slower the business will be to respond and may miss marketing opportunities as a result.

4. Improving coordination between departments – decisions taken by one department often have an impact on other departments. There need to be effective communication between departments so that each knows what the others are doing and can respond appropriately.

5. Improving morale and motivation of the workforce – if the workforce knows what is going in the workplace and is able to take part in discussions, this will bring better discipline and motivation to the employees.

6. Improving customer relationships – keeping customers informed about the progress of their orders or any new products that the business has added to its range will make customers feel valued and they will want to continue to buy from the business in the future.

TYPES OF COMMUNICATION (Oct/Nov 2017 Q.No-4e) (March 2022 Q.No.1a P-2)

1. Oral communication

2. Written communication

3. Visual communication

4. Electronic communication

1. Oral communication

Communication using the spoken words is known as oral communication. It is an example of two-way communication. Here the sender and receiver have the opportunity for feedback so that the sender can check that the message has been understood.

Eg:- Meeting, face-to-face conversation, speech, etc.

Benefits of oral communication

1. Personal contact between sender and receiver

2. Allows for immediate feedback

3. Language used can be altered to the needs of the receiver

Limitations of oral communication

1. No permanent record or proof

2. Receiver might not listen the message

3. Receiver might not hear the message correctly because of noise

2. Written communication (Feb/Mar 2023 Q.No-3b)

Written forms of communication provide a permanent record of a message and can be looked at more than once to check understanding. The main froms of written communication used by businesses include:

a. Letter – this is used for formal communication between the business and its stakeholders, such as employees and customers, for example informing employees about a pay rise or replying to a customer complaints

b. Memorandum – this is only used for communication within the business, for example a message from the Human Resource Manager to the Operations Manager about the date and time for job interviews

c. Agenda – this is the order for the conduct of a meeting.

d. Minutes of meeting – this is a written record of what was discussed at a meeting, the views expressed by those in attendance and the decision taken.

e. Job description – this is a written statement of what every worker’s job involves.

f. Purchase order – an official document which is sent to suppliers to request the supply and delivery of raw materials, components and other items needed by the business

g. Invoice – an official form sent to customers requesting payments for goods which the business has supplied.

h. Company magazines- many business issue magazine for their stakeholders highlightinh their products, future plans, employee achievements or awards, etc.

Benefits of written communication

1. Provides a permanent record

2. Can be used by the receiver more than once, to check understanding

3. Can be sent to many receivers

4. The message cannot be changed

Limitations of written communication

1. No personal contact

2. Feedback is slower

3. Might not be understood because language is too complex, or message is too long

4. Time-consuming for both sender and receiver

3. Electronic communication

These are modern forms of communication using electronic devices. These methods have the advantage of being much faster than traditional methods and the message is received instantly. Communication such as teleconferencing, video conferencing, fax, email, TV, radio, etc. are the examples of electronic communication.

Benefits of electronic communication

1. Fastest method

2. Some methods, for example email, provide a permanent record and can be looked at more than once, to check understanding

3. Can be sent to many receivers at the same time

4. Can be used to create a more interesting message – a company website for example

Limitations of electronic communication

1. Not everyone has access to the equipment needed

2. Equipment and software can be expensive

3. No personal contact – except for video-conferencing

4. Risk of the message being received by wrong people.

4. Visual communication.

            In this communication, the message is converted into the visual forms to convey the meaning quickly. It may be used when trying to explain difficult concepts. Pictures and charts are often easier for some people to understand than words or complex tables of numbers or detail contained in financial statements.

Eg:- Chart, Diagrams, graph, photographs, bar chart, poster, etc.

Benefits of visual communication

1. Can simplify complex data so more easily understood

2. Creates interests and grabs the attention of receivers

3. Receivers often remember visual messages, especially if moving images are used

Limitations of visual communication

1. Not good for detailed message

2. Different receivers might interpret the information differently

Factors to be considered when choosing the best method of communication

a. How urgent the message is – for example, a telephone call or face-to-face conversation would be better than a letter if the message is urgent

b. The length and complexity of the message – written communication is best for long or complex messages, so that the receiver can read it over again to check they have understood.

c. How many people need to receive the message – letters might be expensive, but it is a good way of contacting many people. Emails might be another method to use depending on the purpose of the message.

d. How far away the receiver is from the sender – several methods could be used to communicate over long distances, such as email, text, phone call or letter. It will depend on other factors, such as how urgent the message is and if the receiver has access to the internet or mobile phone network.

e. How important it is for all those who receive the message at the same time – a meeting is the best way of getting the same message to everyone at the same time. If this is not possible then letters or emails could be used. Everyone will receive the same message, but not necessarily at exactly the same time.

f. The cost of media – letters are more expensive than other methods because of the postage charge. However, email, text messaging and telephone calls all require investment in equipment and regular payments to the phone service or internet provider.

g. How important it is to have a written record of the communication – if this is important, then the method must be a written one (such as letters, memorandums or reports) or electronic (such as email or text messaging).

h. If the message requires discussion – meetings, telephone calls and video-conferencing are all ways for people to discuss and debate a message.

i. How confidential the message is – a letter addressed to the person concerned is the best method for communicating a confidential message.

 

COMMUNICATION MEDIA

Advantages and disadvantages of the most common communication media used in business (Oct/Nov 2020. Q.No-4e) (Oct/Nov 2019 Q.No-3a P-2) (Oct/Nov 2018 Q.No-1e) (May/June 2018 Q.No-1b.P-2) (Mar 2017 Q.No-2a.P-2)

1. Internet. (March 2022 Q.No.1b P-2)

Advantages

1. Can advertise online through website.

2. Canvas customers and sell online

3. Email and messaging using social media

4. Internet banking

5. Reduces travel cost- Video conferencing

6. Less time consuming as no need to travel

Disadvantages

1. High costs of equipment

2. Might not be confidential

3. Need technical knowledge

4. Problem with different world time zones- video conferencing

2. Television

Advantages

1. Mass media of communication

2. Audio and videos can be shared

Disadvantages

1. Expensive for device installation

2. One-way communication

3. Newspaper (Mar 2016 Q.No-4d)

Advantages

1. Written record so can be referred later.

2. Suitable for remote rural areas

Disadvantages

1. Delay to receive the information.

2. Expensive while comparing with digital media.

4. Telephone. (May/June 2023 Q.No2c)

Advantages

1. Convenient to carry while moving

2. Immediate and direct delivery

Disadvantages

1. High cost for devices

2. Not a face-to-face method

5. Meetings

Advantages

1. Everyone gets the same message

2. Allows for the possibility of discussion and feedback

Disadvantages

1. Time-consuming

2. Costly if people have to travel from different locations

3. No written record unless minute are taken

6. Letters

Advantages

1. Written record and proof for future reference

2. Confidential or privacy

Disadvantages

1. Postage costs

2. Delay in feedback

COMMUNICATION BARRIERS (DIFFICULTIES IN EFFECTIVE COMMUNICATION) (Mar 2020 Q.No-1d) (Oct/Nov 2021 Q.No-1d)

How communication barriers arise? (Problems related with effective communication) (May/June 2018 Q.No.4.d) (Oct/Nov 2016 Q.No-3c)

The main causes of barriers to effective communication can be divided into three main areas:

1. Problems with the channel of communication.

Using wrong medium- Example -Using letter for urgent message and feedback

Complex language- Example- difficult to understand English words

Too much information- Example- making a single poster with detailed texts.

Too long channel- Example- many middlemen to send and receive message

2. Problems related with the attitudes of senders and receivers

Lack of trust- Example- prank call or annoying calls

Deliberate ignorance- Example- not replying to calls or mails

Lack of respect- Example- misuse of media.

Demotivated employees- Example- doing same job may lead them bored and may ignore the messages

3. Problems with the physical environment

Too much noisy atmosphere- Example- working in a crowded or factory areas

Too much distance between sender and receiver- Example- international trade

Lack of network coverage or other facilities- Example- located in rural remote areas

Delay in feedback- Example- no postal service or lack of devices.

Impacts of lack of good communication in business

1. Delay in completion of task or completed incorrectly.

2. The reputation of the business may be damaged.

3. The level of worker’s morale and motivation falls.

4. Higher risk of accidents in the workplace.

5. Poor sales and production

6. Wrong recruitment and selection.

Measures to reduce communication barriers (Mar 2018. Q no 3.d) (Mar 2017 Q.No-4e)

1. Make sure the language used is appropriate to the receiver.

2. Keep the channel of communication as short as possible.

3. The sender must always insist or receiving feedback as this shows that the message has been received and understood.

4. The sender must use the most appropriate media for the message.

5. Physical barriers, such as noise, should be removed.

6. Management must build a culture of trust and respect between all employees.