2.1.

1
Importance of good communication and the problems
of ine ective communications

Why is good communication important in business?

E ective communication is important in business with:
A.Customers
B.Managers
C.Employees
Poor communication can upset sta , drive away customers, cause managers
to leave and result in loss of sales, damaged reputation and reduced pro ts

Di erent forms of communication

Written :
it is the transmission of messages, ideas, thoughts and
information either printed or handwritten, includes;
A. Quotations
B. Filling out forms
C. Taking minutes of meetings
D. Writing letters
E. Drafting proposals

Advantages
• Permanent records of future reference and convoIdeal for legal documents.
• Clear and organised
• Can be shared with multiple people
• Easy to distribute
• Suitable for long messages

Disadvantages
• hard to convey emotions In written form.
• time consuming to prepare And read
• risk of misinterpretation w/o Tone or body language
• delayed feedback compared to Verbal communication
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Verbal communication:
Verbal communication is the transmission of messages, ideas and information from
one person to another or a group
This could be through;
A. Phone calls
B. Interviews
C. 1-2-1 conversations
D. Discussions and debates
E. Giving a speech

Advantages
• Fast and immediate feedback
• More personal and engaging.
• Cheaper
• Helps to clarify doubts instantly,Useful in di cult situations
• Powerful means of persuasion and control

Disadvantages
• no permanent record unless Recorded
• legally ambiguous
• language barrier
• Unsuitable for lengthy texts
• easily forgotten

Non-verbal communications:
Non-verbal communication is the transmission of messages or signals in a silent way,
without the use of paper
This could be:
A. A handshake
B. Eye contact in a meeting
C. Facial expressions
D. Gestures E. Posture

Advantages
• Enhances verbal com through body language and Tone
• Can have an instant e ect. (silence hand on lips).
• Can convey emotions and attitude e ectively
• Useful for face-to-face interactions for better understanding

Disadvantages
• short
• varies culture to culture
• can be misinterpreted (eg gestures Vary by culture)
• limited in remote or text-based Communications
• Can twist the meaning
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using IT to facilitate communication:
Information technology can be used to communicate in business usually through:
A. Text on phones
B. Smartphone apps
C. Email
D. Conference calls
E. Vlogs and blogs
F. Podcasts
G. Wearable technology

Advantages
• Enables instant
• global communications (emails, chats, vdos calls)
• Quick and cheap (think email)
• Support collab through tools like zoom, google meet,
• Provides storage and recovery of com records

Disadvantages
• Possibility of technical faults
• security risks like data breaches Or hacking or viruses
• can reduce personal Interactions, leading to Misunderstanding
• Poor Wi-Fi spoiling the connectivity
• Message may get lost In junk and spam

Internal Communication in Business :

This refers to the exchange of information within the organisation—
between managers, team members, and di erent departments.
it includes :
> emails between team members
›meetings among employees or departments
>memos, company newsletters
> chat tools like slack or Microsoft teams

The purpose of internal communication is to :

> to coordinate work and improve productivity
> to share company goals and update
> to build teams

there can be di erent types of communication, like:

Vertical (between di erent levels: manager to employee)
Horizontal (between same-level employees or departments)
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Importance :
1. Increases e ciency and productivity- clear communications help employees
understand their roles and tasks , reducing confusion and mistakes , saving time and
resources
2. Improve employee morals and engagement- open communications makes
employees feel valued and heard encouraging positive work culture and boosts
motivation
3. Supports Better Teamwork and Collaboration- teams can coordinate easily and
work together e ectively helping in sharing ideas , feedbacks and problem solving
4. Helps in managing change- during time of restructuring or new polices clear internal
communications reduces resistance and confusion
5. Strengthens leadership and trust- transparent communications from leaders builds
trust , employees are more likely to support decisions anf follow guidance
6. Enhances decisions making- Good communication ensures the right information
reaches the right people at the right time, Leading to faster and more informed
decisions

External communication of business

External communication occurs between a business and outside parties
it includes :
1. Advertising and marketing
2. Customer service communication
3. Business proposals or contracts
4. Press releases, public statements
5. Emails or calls with suppliers, clients, or investors
The purpose of external communication of a business are :
1. To build and maintain brand image
2. To attract and retain customers
3. To manage public relations
4. To maintain supplier and stakeholder relationship

Importance:
1. Builds strong brand image- clear and constant messaging helps shape how the public sees
business , protects outer image of the brand , building trust and credibility with customers and
stakeholders.
2. Public attractions , attracts and retains customers- e ective communications (eg- ads ,
social media , customer service ) helps promote products and services , reaching the right
base of customer. Building loyalty and customer satisfaction with good communication skills
3. Improves relation with stakeholders- communicating well with investors , suppliers and
partners strengthens business relationship and supports long term success
4. Manages public relations and reputation- in a crisis, a clear and honest communication can
protect a company’s reputation. It helps maintain public con dence and handle negative
publicity
5. Supports business growth and expansion- good communication helps reach new market ,
attract new investors and create partnerships
6. Encourages feedback and improvement- external communication channels like surveys
and reviews allow businesses to understand customer needs and improve their o erings
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 2.1.2
Barriers to communications
Communication barriers : A communication barrier is any factor that causes
a message to be lost or mis understood
This can include:
A. Language barrier
B. Information overload
C. Lack of trust
D. Use of jargon
E. Lack of clarity
F. Too many layers in the hierarchy
(takes a long time for messages
to get through and then they
may e wrong)
G. Technological break down
Internet down
Website crash
Phone signal weak
H. Poor communication skills
Lack of vocab
Di erent accent
Some people are poor listeners
Written messages ( poor spellings , weak grammar , message too long )
Sending messages in anger
I. Distractions : noise , stress
J. Business culture- the way things are done in a business , Culture of poor
communication - rumours , gossip , suspicions and anger sta feel isolated
K. Long chain of command- in tall structures
L. Di erent country , languages and culture- eg di erent time zone

Jargon: jargon is a special word or expression used by a profession or group

that are di cult to understand
Eg- medical jargon : “The patient is experiencing myocardial infarction.”
(Meaning in simple English: “The patient is having a heart attack ”)
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 E ects of poor communication:
1. Mistakes occurs
2. Costs rise
3. Decision making is slowed down
4. Loss of moral and motivation among workers

Problems of ine ective communications;

1. High sta turnover
2. More sta s absent
3. Poor customer service
4. Work related injuries
5. Higher legal costs
6. Di culties making changes and decisions
7. working relationships break down and employees become less productive and
demotivated
8. Poor communications -> misunderstandings -> poor quality of service->
misinformation.
9. Customers switch to alternative sellers-> lost revenues -> lower pro ts
10. Poor communications with suppliers-> components fail to arrive on time ->
production halted
11. Ine ective internal communication-> low motivations -> disengaged workers ->
con icts , mistakes , injuries

How can communication barriers be removed?

1. One way to improve communication is to reduce the layers in the hierarchy
or change the organisational structure so that a message gets through to the
right person in time
2. Recruitments- interviews , formal tests
3. Training- written skills , presentation skills
4. Written communications- use standard formate , forms
5. Technology- training employees in using IT
6. Chain of command- delayering-> move from tall structure to at
7. Social events- creates stronger bonds ,better working relation
8. Culture change- remove physical barriers-> create more open work space ,
open door policy , climate of openness and trust

What is information overload?

> Information overload reduces our capacity to function e ectively, which can lead
to poor decision making in both work and life which is
sometimes referred to as ‘’analysis paralysis’’
This can mean employees in a business are ine ective and
ine ectiveness increasing costs , reducing pro t.
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 2.2.1
Types of employment
Full-time employment :
• Most full-time workers occupy positions which require skills or
quali cations, examples are:
A. Human resources
B. Software engineer
C. Financial analyst
• They work 35-40hrs per week; maximum 48hrs per week in eu
• receive more bene ts
• more committed
• more stability and consistency
• greater job security
• may receive extra professional perks and fringe bene ts such as company
cars , employee discounts , health insurance
• Provides consistency , commitment and loyalty

Part-time employment :
• usually less than 30hrs per week , paid on hourly basis
• at busy periods , a business can employ more part time workers
• it provides more exibility to business
• a business can stay open for longer hrs with more part-time
employees
• useful for students as they can gain work experience

Job share : multiple people sharing one job

job sharing happens when two or more people share one job , this may be
cuz the job is of 24hrs , like working in factories
Two part time workers share the work load and pay of a single full time
worker this way the worker will be able to have more free time ,be more
motivated and less stress. Working as a team increasing productivity
Creating More ideas , expertise and enthusiasm from two people
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Casual employment : no set hours or regular pay
• No guarantee of work (zero-hours contract) , employees are asked to
work whenever there is extra demand and they’re needed
• On-call; employers ask them to work on a very short notice
• Provides more exibility to businesses.
• Less commitment in comparison to full-time or even part-time
workers.
• Often seen in hospitality industries.
Example- a marketing agency may employ a graphic designer
whenever they have a client that needs some graphics work for their ad
campaign

The marketing agency does not need to pay a salary to these designers and only
call on them when they are needed to run the campaign rather than employing them
on full time basis increasing business costs , this gives the business more exibility
to employ di erent designers to meet di erent demands of work needed to be done.

Seasonal employment : hired at particular time of year

• Needed when demand increases , could be during holiday periods
when full-time employees cannot meet the demand
• Works at certain speci c time of the year only.
• The work nature is temporary or part-time.
• Farm manager - extra workers during the harvest season
• When the season ends, workers are laid o
• It is suitable for some workers as it suits their lifestyle.
Example-
• To pick fruit in the summer
• To rake leaves in the autumn
• To work as a lifeguard at a beach in the summer
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Temporary employment ( gigs) : a working agreement
which has a time limit.
• Used to cover for absent employees; those who may have taken maternity
or paternity leave or long term sick leave
• Work is full time but the length varies
• Job seekers may take up temporary work whilst searching for permanent
job.
• The worker could show high levels of commitment and determination as it
can be a doorway to a permanent position.
Example-
• An accountant hired for six weeks to prepare annual accounts
• A lawyer hired for 3 months to work on a court case
• Sound engineers hired for 6 months to work on a music tour
• Substitute teacher
 2.2.2
Recruitment documents

Recruitment documents introduction

Recruitment is the process of actively seeking out, Finding and hiring
candidates for a speci c position or job During this process the
business will use a variety of important documents to help choose the right
candidate for the vacancy

What is a job description?

A job description is a written explanation that outlines the essential
responsibilities and requirements for a vacant position
It may include:
• Key responsibilities of the job
• Working conditions
• Location
• Type of employment (e.g. Full-time)

What is a person speci cation?

person speci cation is an outline of the essential and desirable qualities that
the successful candidate would have
This might include:
• Attainments e.g. quali cations
• Personality traits e.g. patient, motivated, eye for detail, organised
• Job speci c capabilities e.g. able to use software

What is a person speci cation used for?

Candidates for vacancies are able to see before they apply if they will
be suitable for the job It helps the business to test all candidates against the
same list of priorities, which removes bias, rasism and personal interest.
Helps with ‘onboarding’ as the business is already aware of what
the candidate can do e.g. chefs
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What is an application form?
A job application is a formal document created by employers for job
candidates to ll out in response to a vacancy
This might be:
• Online
• On paper
• In person
• Via email

What is a CV / Resume?
A CV is another word for resume, It shows the professional history and
academic background of candidates. the term used will depend on the
country , CV is short for the Latin phrase curriculum vitae which means
‘course of life’
Resume is a term that is used internationally but it means the same as a CV.

What information is on a CV / resume?

A good CV might include:
• Contact information
• Detailed academic history
• Professional experience
• Relevant skills and quali cation
• Achievements and awards
• Hobbies and interests
• References from previous employers
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 2.2.3
Internal and external recruitments
Internal recruitment :
When the business looks to ll a job vacancy from within the company. This
is where the job vacancy is lled with a candidate from inside the business,
or who already works for the company in another role

Advantages
• Do not need to advertise the job vacancy thus reducing costs and
price
• The business already knows the capabilities of the candidate ,
knowing better idea of the performance of the worker.
• Promotion leads to worker loyalty and motivation , the worker will put
more e orts into the business increasing productivity and reducing
costs. Their better quality and service of the job will also increase
customer satisfaction. Overall pro tability of the business rises
• Internal candidate is likely to t in and get along better with the
culture of the business as they already have experience in the work
eld , increasing better teamwork and engagement in the work space.
Also reducing the extra cost of training a new employee
• Reduced relocation expenses

Disadvantages
• May not bring new and fresh ideas
• It will create further vacancies for the position the employee has left ,
eventually requiring external recruitments
• Feeling of egoistic resentment and jealousy those who are not
promoted
• Might create hierarchy
• Limits number of applicants
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 External recruitment :
This is where the job vacancy is lled with a candidate who is appointed
from outside of the business, and who does not already work for the
company

Advantages
• New ideas and energy , leading to more creative and diversity in the
business
• Wider pool of potential talent to choice from

Disadvantages
• More training time required , will take longer for the worker to adapt
• Expensive- advertising the job
• Time consuming- long process
• Existing workers might resits ( might not accept outsiders )n
• Possibility of mismatch of culture

Job advertisement :
A job advertisement is an announcement by the company that informs
prospective candidates that there is a vacancy They should be designed to
attract potential candidates to apply A good advert is important
because it needs to give the right impression and brand image of the
business

Bene ts :
An honest description can attract the talent with the right
skills and experience to ful l the duties of the role
It should include:
• Who to apply to
• What the application process is
• Location
• Closing date
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 shortlisting:
Shortlisting is where the recruitment team from the business looks
through all of the applications and decide who they would like to
interview
Sometimes this is done by reading all the recruitment documents,
sometimes the candidates will also have to pass an online screening
test

Bene ts :
• Shortlisting is a good way to reduce the number of candidates to
interview saving time and money for the business
• The business can use shortlisting as an opportunity to match the
candidate to their job description and person speci cation, making
sure they get the right person for the job

job interview:
A job interview is a conversation between a candidate for a job vacancy
and a representative for the company
Some job interviews are 1-2-1 but others may have more than one
person and are called a ‘panel’ interview Candidates are asked
structured Questions about the job

Bene ts :
The business will be able to ask the candidates questions to
ensure:
• That they will meet the needs of the company
• That they will get the employee , that will give the best service
• That they only employ the sta with the skills that they want and need
• That the applicant matches the details on their CV
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 2.2.4
Legal controls over employment and their e ect
Exploitation- Situation where u treat someone unfairly by asking them to do
things for you and giving them very less in return
Discrimination- Favouring one person over another
Eg- discrimination on grounds of race, religion , gender , roles , sexual
orientation and disabilities

Legal controls over employment : governments pass legislations to

protect people at work , without such legislations workers could be
exploited and discriminated against

Equal opportunities :

• Gender- ( sex discrimination act 1975 , equal pay act 1970 ) Gender
equality requires equal enjoyment by women and men of socially-valued
goods, opportunities, resources and rewards. Where gender inequality
exists, it is generally women who are excluded or disadvantaged in relation
to job sectors , decision-making and access to economic and social
resources

• Race- ( race relations act 1976) Equal opportunity laws ensure that
companies do not hire candidates based on their race Race means a
person’s skin colour, their nationality, or their ethnic or national origin

• Disability- ( equality act 2010 ) The Equality Act also protects people from
discrimination arising from disability This protects you from being treated
badly because of something connected to your disability, such as having an
assistance dog or needing time o for medical appointments

• Religion- ( religion act 1976) Companies must not discriminate against an

employee because they have a particular religious faith Those who have a
faith and those that don’t are all protected under equal opportunity laws,
they are not allowed to be treated di erently. e.g. forced to comply with a
dress code that goes against their religion
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 • Sexual preference- Equality laws prevent discrimination against individuals
due to their sexual preference This includes victimisation, harassment and
bullying in the workplace Employees are not required to disclose their
sexual preference

• Age- Equality laws ensure that workers are not treated unfairly because
they are a certain age Employees must not be denied training or promotion
simply because of their age
• The exception: There may be a minimum age requirement for the job (18)
but this is not discrimination

If businesses fails to comply with the laws-

• Expensive legal battles , if employee sues
• Fails to recruit or promote sta for the post
• Demotivate certain sections of the workforce
• Certain unnecessary tension or con ict between employees
• Brand reputation decreases

Minimum Wage
is the wage rate set by the government above the equilibrium wage rate. No
employer would be legally allowed to pay below this wage rate to their
employees.
The minimum wage includes:
A. Part-time workers
B. Casual workers
C. Apprentices( a person who is learning a trade from a skilled employer,
having agreed at lower wages , to work for a xed period. )
D. O shore workers ( who works far from land )
E. Trainees

Reasons for setting minimum wage:

• To bene t disadvantaged workers - Women, ethnic minorities and low
income families bene t more.
• To reduce poverty - Low income workers could now earn more.
• To help businesses - It promotes greater equality and fairness amongst
workers. This can boost motivation. They will stay with the business longer
and be more productive thus sta turnover rate and absenteeism rate
would fall.
• Reduces cost to the taxpayer
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 E ect of Minimum Wage Laws on Businesses:
• The cost of production may go up.

• To maintain pro t and keep costs low, some workers may be laid o . As
such, their incomes may fall and they might be able to a ord less goods
and services. This means demand and potential sales for businesses may
fall.

• The higher paid workers may also demand even more wages to maintain
the wage di erentials. This could add to further costs to the business.

• The business may also save costs to invest upon labour-saving

technologies (become capital intensive) - less suitable for service sector
businesses.

• The business may decide to outsource production to another country where

labour cost is lower.

Bene ts to a business of Minimum Wage:

• Motivation and morale may increase leading to more e orts - productivity
may increase average cost goes down especially if the rise in productivity is
larger than the rise in minimum wage.
• Motivated employees are likely to stay with the company because of the
payment they receive

• Improved customer service due to more motivated workers customer

satisfaction and loyalty increases.

• Sta absences and sta turnover rate falls

• Due to the minimum wage, as lower paid workers now earn more, their
a ordability for goods and services which previously they could not a ord
increases. This means, businesses may sell more and generate higher
revenues and pro t.
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 2.3.1
Importances of training to a business
and workers
Training- the process involving , increasing the knowledge and skills of a
worker enabling them to be more productive and e cient at their job.
e.g. employees working at a store can be trained to use the system

Purpose of training-
• To increase the skills, knowledge and capabilities of a worker.
• Assist workers in acquiring new skills, improve existing ones
increase productivity and be better leaders.
• To work safely and ensure that they can operate machineries
properly.
However,
Training is expensive
Note: Lack of training could result in less productive workforce.

Induction training
Training given to new employees when they rst start a job , to learn key
information about a business:
• Learn about procedures
• Involves meeting colleagues
• Learn systems / health and safety
This might include : a tour, a company video, or issuing of uniform and id
cards

Bene ts-
• Helps new recruits to settle in and become familiar with the surroundings.
• Without a proper training, sta may feel anxious - leads to fall in
productivity - sta turnover rate may increase.
•
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 Features of induction training
• A complete tour of the workplace.
• Company policies such as dress codes, disciplinary procedures, holidays
• Company history, aims and objectives
• Introduction to key colleagues and senior sta .
• Introduction to the work and what is expected.
• Health and safety training
• Give key information eg- re evacuation
• Reduces stress on employees ( reduce labour turnover )

Disadvantages of induction training

• Cost of having an employee not working
• Employee may not watch the video or understand the training
materials (barriers to communication)
• Takes time , so reduces output
• Does not cover all contents of information

On-the-job training - Training that takes place whilst doing the job.
Involves :
• Working at home
• Training centres and local colleges
• Employees learn through demonstrations talks, and lectures
• O -the-job may also be practical courses to learn ICT or how to operate
machinery e.g. Forklift driving licence

Approaches of On-the-job training:

• Watching another worker - A new recruit copies and shadows the actions of an
experienced and competent worker; workers well if the existing sta is a good
and committed teacher, if not, quality of the training could be compromised.

• Mentoring - Where people with a lot of experience and knowledge advise and help
other people at work or young people preparing work. The trainee is put to work
on their own without direct supervision where employees alternate between
di erent jobs during the course of their employment. The trainee can call on the
mentor for advice and guidance.

• Job rotation- where employees switch between di erent jobs during the course
of their employment. It involves a new recruit spending a period of time in several
di erent departments at a business. This would make the worker multi-skilled and
gain a broader knowledge of how the business works. It also improves the
business's exibility.
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 Advantages :
• More focused environment with less distractions

• The trainee is aware of all the recent developments

• It allows workers to get early experience of the job at hand to tell if the job
suits them

• Output is not a ected , if mistakes are made

• Increases a workers motivation as they feel valued by the company to have

money spent on their improvement

• Customers and others are not at risk

• Less stressful compared with on the job (don't have to learn skills and do
tasks as going along)

• Some job roles, such as astronauts or soldiers, might be trained exclusively

o -the-job, but it is more likely that a trainee has an o -the-job component
to complement the on-the-job training being done.

• Individuals teaching the courses are trained to train

• More chance to gather specialist skills

• It is a cheaper way for businesses to train workers as there is no need for

expensive trainers or workshop leaders and they are not paying the new
employee to be absent from the workplace.

• Employees will often enjoy on-the-job training as they may feel comfortable
being supervised and coached by someone they know already in a less
formal way than if an outsider were to do it.

• This enables workers to access the required skills more quickly, and to
become more productive within a shorter timeframe.
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Disadvantages :
• If the trainer is unpaid , sta get frustrated
• If trainee makes a mistake , it could prove to be costly for the
business
• Teaching and training is a specialist skill in itself and though an
employee may be pro cient themselves, that is no guarantee they will
be able to teach others.
• A trainer's own productivity will decline during the time taken to train
others.
• In some cases, the trainer may pass on bad habits or encourage the
trainee to cut corners.
• Employees may fail to see link between training and workplace
• Employees are taken away from production so the business loses
their productivity for that day
• The employee may not value the training and lack of focus and
motivation required to learn
• The training o ered can be a huge cost and if the employee leaves ,
the bene ts will be realised by a competitor
• The trainee might be shy to ask questions
• Extra costs will have an impact on pro t margins and pro tability of a
business.
• Employee takes time to get work productively

Training in Health and safety & laws :

There could be potential danger in the workplace, to protect
workers, the government passes legislation to provide a safe and
healthy workplace.
It places general duties on employers to ensure the health, safety
and welfare of all persons while at work

Key duties for employers include:

• Creating a safe working environment for all, including safe
access and exit. Establishing and maintaining safe work systems
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 Training Employees need to learn about :
• Using and maintaining safety equipment and protective clothing, such as
re extinguishers, hard hats, ear plugs, safety goggles.
• The importance of a hygienic environment
• The dangers of hazardous substances such as acids and glues.
• The protection needed from violence, bullying, threats and stress in the
workplace.

The main responsibilities for all food businesses covered by the food hygiene
laws are to ensure that :
• businesses do not include anything in food, remove anything from food or
treat food in any way which means it would be damaging to the health of
people eating it , These vary from country to country.

Note: Businesses need to prepare a written statement of their policy on

health and safety and ensure that all employees are aware of its existence.
Businesses will have to provide training, information, instruction and
supervision to ensure health and safety workers.
Many businesses follow code of practice to meet health and safety.

Note: Health and safety inspectors can enter the workplace/premise to

ensure that the health and safety measures are in place and is followed by
the business and its employees.
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 2.4.1
The importance of motivation in the workplace
Motivation- the reasons why humans act or behave in a certain way

Attracting and retaining employees:

• importance of motivation-
It is di cult to attract the right quality of employees to a business If employees see
a good workplace, with happy and motivated sta they will also want to work there
Businesses, therefore, need to provide a positive working environment to increase
productivity

• Employee retention-
Employee retention means that people hired by a business, continue to work for
that business and don’t leave to go and work somewhere else
Unmotivated employees will leave a business This could a ect the businesses
reputation as an employer and in the industry in which it trades
If employees leave a business it will raise costs, this is because:
A. The business will have to hire a new employee
B. The business will have to train a new employee

• Productivity- Productivity means the output of one worker over a speci c

period of time e.g. hour Sometimes this is easy to calculate, in other
businesses it’s hard to work out Well motivated employees are more
productive and will also motivate others Productivity is a critical
measurement of a business’s e ciency If a business hires great employees
and gets them to stay , it then needs to motivate these employees to work
well – to be productive. Productive employees work harder, do a better job
and could be more creative Productivity is about how e cient an employee
is
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Motivational theories :
1. Taylor (scienti c management)
Taylor and scienti c management (1909)
Taylorism
• He believed “ fair days’s pay for fair day’s work”
• He also believed employee would do the minimum amount of work if not
supervised.
• The main form of motivation is high wages, higher wages equalled higher output
• A managers job is to tell employees what to do
• A workers job is to do what they are told and get paid accordingly

2. Maslow (hierarchy of needs)

Maslow's theory was that we all have a pyramid of needs:

A. Employees start by meeting their needs at the bottom of the pyramid for example; they
need food, water, shelter , warmth and everything else we need for basic life

B. Employees then look for a secure job to meet our safety needs
At this point in the hierarchy we have the need for safety and security and health.
Safety in terms of having a roof over our head, but it can also mean
security of employment If employees think they may be
Fired they are unlikely to be productive or self actualising (the complete realization
of one's potential, and the full development of one's abilities) because their safety
needs are not being met. Equally an ill employee will not be working at their best
either
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C. Employees then look for teamwork and a social job
At this point in the hierarchy we seek love and friendship
We crave a ection and intimacy
We look to belong to social groups, clubs, community groups
We wish to be trusted and accepted in society
This is also sometimes known as social needs
If these needs are not being met we are unlikely to be productive

D. Employees then look for responsibility and promotion

Esteem needs
At this level we have the psychological need for the respect of others
We seek independence, recognition, honour, status and responsibility
We want to feel important at work and feel that we are vital to a business
We seek a feeling of accomplishment and we are focussed on building a solid work
image. We might be buying cars, furniture, gym membership and credit cards

E. Then when all these needs are met employees start to self actualise, which is
where they reach their potential
This is the top of the pyramid
We only rise to this level of needs once we have ful lled all the others
At this level we are; creative spontaneous, problem solving, accepting of our
circumstances, in a challenging job, inspiring others, and highly engaged with our work
environment
We are interested in; travelling, hobbies, educating ourselves, enriching activities and
realising our potential
At this level we are playful, mindful and self- su cient

3. Herzberg (two factor theory)

Frederick Herzberg worked in the 1960s, his theories are still studied today
He interviewed accountants and engineers to nd out what motivated them
His theory was that employees have motivating factors; interesting work,
recognition and personal achievement, responsibility and scope to develop
He also found that there were hygiene factors which if not met would dissatisfy the
employees, but if they were met did not motivate them any more than they were
already. These were; good working conditions, pay, relationships with other
employees
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 2.4.1
How businesses motivate employees
Financial methods to motivate employees :

• Remuneration- A salary is a wage usually paid to a full-time employee. They

are likely to be on a rate for the year e.g. £35,00 Wages are usually paid to
part-time employees. They are likely to be on an hourly rate. E.g. £9.50 an
hour To motivate some employees a business may decide to pay them
more, to give them a pay rise, this applies to salaried sta and those on
hourly wages

• Bonus- Given out when certain performance targets have been met By
motivating employees to work harder in order to meet a realistic yet
challenging target and therefore achieve a bonus payment Employees feel
motivated and more valued by getting a bonus, and will work harder Paying
bonuses will attract the best workers and will make the business more
productive and mean lower unit costs

• Commission- With a commission job the employee will receive commission

(money) for every sale made The idea is that employees will work hard to
get the sale, to earn the commission Some jobs are advertised with ‘OTE’
which means on target earnings and gives the employee an idea of how
much commission they can earn

• Promotion- It is important for a business to promote their sta This means

giving them more pay and more responsibility e.g. making an employee into
a supervisor This keeps employees motivated as their earnings will go up
with the new job If a business promotes from within sta will remain more
loyal to the business

• Fringe bene ts- Fringe bene ts include sta discount which is given as a
nancial motivation method in the retail and supermarket industries For
example:
1. H&m gives 25% o clothes to employees
2. Starbucks employees can have 30% o food and Drinks
3. Superdrug gives employees 30% o own brand products
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 Non-Financial methods to motivate employees :

• Job Rotation- Employees are rotated between di erent jobs to avoid

repetition and boredom. It enhances employee careers and trains
employees in a range of skills. It relieves boredom from doing one job
again and again , this way it is easier to nd employee to cover for an
absent colleague and they stay more motivated due to wider ranger of
skills.
On the other hand , it reduces productivity as less specialisation
occurs , it rises training costs and it could be greater number of
boring task with less social bene ts due to the constant changing in
group

• Job enrichment- Job enrichment means adding extra tasks to make

the job more motivating. Employees are given extra responsibilities
The job is redesigned to make it more interesting This can also
uncover potential in an employee. Develops unused skills and
challenges employees , allows them to contribute to decision-making
process and increases feelings of achievement
On the other hand , some employees may feel under pressure and
challenged which would be costly as productivity decreases , it only
bene ts when thinking long-term employees have to be trained and
not all jobs will be enriched eg- warehouse

• Autonomy- Autonomy means allowing employees to make Their own

decisions Employees feel more ownership of their own work and so
are more motivated Employees are able to use their own thinking
skills to complete their work at their pace Some employees may
become unhappy as they need more direction in their work and want
recognition from their boss . Some may want to make more decisions
than they are entitled to
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2.5.1
Organisational charts for di erent types of business
Organisational chart- Organisational chart refers to a diagram which shows
the lines of authority and layers in the hierarchy of the business
All businesses have to organise what they do A clear chart makes it easier to
see which part of the business does what, and who has which job role Makes
communication easier across the company Employees should nd it easier to
be aware of their roles and responsibilities

Hierarchy- A hierarchy is a system in which employees in a business are

ranked according to their status or authority. Authority is the power or right
to give orders, to make decisions and to have control

Organisational diagram-

hierarchical organisational chart :

Many organisations like the police and the military have many layers in their
hierarchy The information takes a long time to get from the bottom to
the top making decisions making time consuming. Everyone knows where
they are in the hierarchy, so they are very orderly and organised.

communication in a hierarchical organisational chart :

Communication in a hierarchical chart may be slow because of the number of
people that the message has to travel through , making decisions time
consuming.This means the business may miss opportunities as they cannot
react fast enough to trends or dynamic markets
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 Advantages
• Lots of layers in the hierarchy means lots of opportunities for promotion
• Supervisors normally have a small span of control so they can get to know
their subordinates really well
• Knowing subordinates means they can delegate the right tasks and make
sure their team is well trained
• Responsibilities are clearly de ned
• More layers mean managers can specialise
Disadvantages
• Lots of layers means along the chain of command which can make the
business very in exible
• It can also mean that communications within the organisation are slow
• This is expensive as there are more managers and supervisors
• Chances of micro-management which can demotivate worker

at organisational chart
Many restaurants and web design companies have a at chart for example
Managers in a at chart have a wide span of control and a short chain of
command so information ows quickly throughout the organisation

Communication in a at organisational chart:

Communication in a at chart is a lot faster as there are fewer layers in the
hierarchy Messages can be passed from management to junior sta quite quickly as
there are fewer employees to pass through Easier for the business to change and
adapt to consumer trends and dynamic markets

Advantages
• Fewer layers of hierarchy between the bottom and the top of the
organisation may mean that communication is fast
• Lots of delegation means that sta are given greater responsibility, which
might mean more opportunities to use their abilities

Disadvantages
• Sta can be overstretched or overworked in a at chart as there is less
supervision, this can cause stress and demotivation
• Can create a power struggle if the manager is rarely around as
subordinates jostle for roles and responsibilities
• Wide span of control means managers have too many sta to manage and
may lose touch with them
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 Centralisation
In a centralised business, the power to make decisions is at headquarters This
keeps decision making at the top of the organisational
chart Usually found in businesses where standardisation and consistency are
important e.g. fashion retail chains, fast food

Advantages
• Decisions are made faster
• Skill and potential of leaders can clearly be seen by top management
• Tighter control on budgets than decentralised organisations
• Economies of scale because headquarters is doing all the buying
• Helps to maintain an overall strategic direction; makes achieving business
objective easier.
• Standardising everything increases e ciency.

Disadvantages
• Managers in branches have little power to make decisions and may become
demotivated
• Decisions not made by those closest to the customers "I will have to check with
head o ce for you on that"
• It can be rather bureaucratic and lack exibility.
• Slow to respond to local problems
• Local opportunities could be missed as the branch managers are not consulted
with.
• Local managers may feel powerless and thus demotivated.

Decentralisation
Decentralisation is the opposite of centralisation Decision making power is given to the
regional or branch managers Some decisions may still be
taken at HQ but sta ng issues can be resolved at branch level

Advantages
• Managers are better able to respond to customer issues and resolve complaints quickly
• Reduction in costs through a atter organisational chart
• Motivating for managers to have more control over decision making (less labour turnover)
• Greater authority to those lower down the hierarchy
• Increases chances of internal promotion

Disadvantages
• Harder to ensure standardisation and consistency within the business e.g. customers
noticing that one Hilton Hotel is not as good as the rest of the chain
• Decision making is tactical (short-term) not strategic (long-term)
• Di cult to co-ordinate overall strategy
• Lesser scope of exploiting economies of scale, AC may be high
• Communications can be di cult without a clear chain of command
• The extra responsibility may demotivate the branch managers.
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 2.5.2
Roles and responsibilities of employees in terms of compliance
and accountability

Span of control
The span of control is a number , This is the number of subordinates
that an employee has the authority to delegate tasks to. It may help to
think of span of control like the wing span of a bird

Chain of command
The chain of command is the ow of information, power and authority
through the business. Those at the top have more power and authority to
make decisions. They can delegate tasks to those subordinate to them in the
hierarchy (below them)

Delegation
Delegation is where a task is given from a superior to a subordinate employee
in the hierarchy Good managers are good at delegating tasks to the right
employees. A task that has been delegated may carry a deadline so
managers can see if the task has been completed on time
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 2.5.3
The di erent functional areas within a business
Human resources function
Human resources is the department in a business that deals with
hiring, administration, payroll, ring and training of sta and any
other sta ng needs.

1. Workforce planning- Workforce planning is the process of analysing

the current workforce and making sure that the business has the
right employees in the right jobs. It will look for current vacancies
and ones that may arise in the future due to : A. Retirement.
B. Promotion.
C. Maternity leave

2. Recruitment and selection- This is the process of hiring new

employees for the business and might include: A. Writing adverts
B. Writing job descriptions C. Writing person speci cations
D. Shortlisting candidates
E. Interviewing candidates

3. Training- The human resources function is responsible for

organising training for employees:
A.Induction training for new employees. B.On-the-job training such
as work, shadowing or demonstrations. C.O -the-job training online
or in classrooms away from the workplace

4. Health and Safety- This function is responsible for enforcing the

health and safety laws of the country in the work place This may
mean issuing health and safety equipment , Putting up o cial
posters and Keep an accident book in the event of a problem

5. Sta welfare- Employee welfare is a term that covers a broad range

of services but can include:
A. Vision insurance (for glasses)
B. Life insurance
C. Onsite day-care
D. Fitness centres
E. Subsidised meals
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6. Employment issues- This department will deal with any employment
issues that come up in the business:
A. It could be bullying in the workplace
B. Dealing with absences
C. Organising a round of surplus
D. Dealing with dismissals

7. Industrial relations- Human Resources may be involved in

negotiations with any trade unions that operate within the business.
A trade union represents the interests of the employees and may call
industrial action:
A. To get better working conditions
B. To get a pay rise for all the trade union members

8. Disciplinary and grievance procedure- This department may have to

deal with sta whose conduct is not appropriate in the workplace,
but is not serious enough to be dismissed. They may also have to
deal with a problem or complaint that an employee raises (known as
a grievance)

9. Dismissal- This department may also have to deal with ending the
contract of an employee:
A. When a lorry driver is banned from driving
B. When an employee is no longer capable of doing the job
C. When the employee has done something that is not acceptable at
work

10. Unfair dismissal- Human resources department may also have to

deal with claims from an employee of unfair dismissal. This means
that the employee considered that there was not good reason to
dismiss them from the business For example:
A. For being a member of a trade union
B. For going on maternity or paternity leave

11. Redundancy- Human resources may have to deal with some

redundancies in the business. This is where the role no longer exists,
for example:
A. Part of the business has closed down
B. The business is changing location
C. The business has more machinery so needs less sta
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 Finance function
1. Wages / Salaries- The nance department may be responsible for making
sure all the wages and salaries are paid on time to sta . This is called
payroll and it is an important part of the job

2. Cash- ow forecasting- A cash- ow forecast is an estimate of the cash

coming into and going out of a business over a period of time. The nance
department would be responsible for making sure that the business has
enough cash to pay for:
• Short term debts
• Pay suppliers

3. Budgets- The nance department may also be responsible for creating

and monitoring budgets of a business. These could be expenditure
budgets for the year e.g. how much will be spent on expenses These
could also be income budgets e.g. how much the business will make in
revenue in the year

4. Accounting- The nance department in a larger business would be part of

preparing the annual accounts of the business
This would include:
A. Statement of nancial position or a balance sheet
B. Statement of comprehensive income or pro t and loss

Marketing function
1. Market research- The marketing department may carry out some market research
before developing new products or services to gauge demand
These could be:
A. Primary or rst hand research
B. Secondary or desk research

2. Product planning-The marketing department may also be involved in product planning

This involves all the steps, decisions and tasks necessary to develop a successful
product
This might include:
A. Initial ideas
B. Market research
C. Prototype testing
D. Launch

3. Pricing-The marketing department may also be responsible for setting prices for the
products. There are lots of pricing strategies but this might include:
A. Skimming to charge a high price at the launch
B. Competitive pricing to charge around the same price as the competition does
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 4. Packaging- The marketing department may also be responsible for organising
the packaging of the products.The wrapper or container needs to aid its
transport, handling and delivery.The packaging also needs to stand out on the
shelf amongst its rivals and appeal to customers

5. Sales promotion- responsible for designing sales promotions to increase

sales revenue and pro t in the business, This could include:
A. Loyalty cards
B. Product samples
C. Coupons
D. Sponsorship

6. Advertising- responsible for creating advertising that will increase sales and
pro t in the business This might be:
A. On TV (expensive)
B. In magazines or newspapers
C. On social media
D. On billboards

7. Customer service- Customer service is support o ered to customers before they

buy, during the sale and afterwards. This needs to be on a channel of their
choice:
A. By phone
B. Via email
C. SMS text
D. Chat bot

8. Public relations- The marketing function may also manage the public relations
for the business. Public relations (PR) is managing the way that information
about the business is presented to the public. This is to make sure the brand
image is put in a positive light
Includes; interviews, press releases

9. Distribution- Distribution means getting the product to the marketplace so that

customers are able to buy it. A good distribution system will take the product
into di erent geographic areas where there is maximum opportunity to buy it
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Production function
1. Manufacturing the product- The production function would be responsible for the
organisation and monitoring of the manufacture of the products. Manufacturing means
making the products on a large scale including the use of machinery. It is the process of
turning raw materials or components into nished goods

2. Designing new products- Once marketing have planned and researched the new
products to be sold, the job of production is to design new products and how they will
be made in the factory

3. Quality control- The production department would be responsible for ensuring the
quality of all the products that are made. Quality control involves testing the products to
make sure they are up to standards

4. Stock control- The production function is also responsible for making sure the stock of
parts and raw materials in the business is carefully managed. This may involve a
warehouse system where lots of parts are kept (called just-in-case) or a system where
parts are delivered daily from the suppliers (called just-in-time)
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