N5 BUSINESS MANAGEMENT

Unit 4Management of People

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List of TopicsRetaining and motivating

•methods used to motivate staff — financial and non-financial •how businesses minimise staff turnover •importance of stable staffing

Legislation •Freedom of Information •Data Protection •Health and Safety

Recruitment and selection •methods of recruitment (online advertisement, national press, local press, recruitment agencies) •methods of selection (application forms, CVs, assessment centres, testing, interviews)

Training •methods of training (in-house, college, peer, training centres, ‘off-the-job’) •costs and benefits of training methods 2

The Role of the Human Resource Department• The Human Resource Management (HRM) function in an

organisation deals with any issue relating to staff (employees). Their activities include:

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Recruitment Process

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Methods of Advertising JobsInternally (inside the organisation)•E-mail•On the company intranet•Posters on company noticeboards

Externally (outside the organisation)•Recruitment agencies which do the work of finding the right staff on behalf of an organisation•On- line advertisements eg S1 jobs•National press eg jobs pages in the Glasgow Herald•Local press eg jobs section in the Oban Times

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Selection Process

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EMPLOYEE TRAINING• All employers must give training to new employees, otherwise

they couldn’t do their jobs• Each company has a set way of doing things• Some skills are company specific• Some training is mandatory (esp health and safety, hazardous

materials and emergency issues)

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Three main types of Training

• Induction Training – training for new employees• On-the-Job Training – carried out in the

workplace• Off-the-Job Training – carried out away

from the workplace

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Induction Training

• INDUCTION TRAINING – is for new employees. • It is mandatory in most companies and in all larger companies• ADVANTAGES• New staff become familiar with surroundings• more aware of what is expected of them• they settle in more quickly

• DISADVANTAGES• other staff members have to carry out induction• new workers can not start working right away

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On-The-Job Training• On the job training takes place within the business that the

employee works for. Often carried out by experienced members of staff.

• ADVANTAGES• Training specific to the job• No time is lost away from work• Less expensive than paying for courses away from the workplace

• DISADVANTAGES• Quality of training may not be very good• Employees may feel awkward being trained by each other• Employees are still expected to carry out their normal duties 10

Off the job training• This training may be provided by a local college or training

company. May last for a few hours or could be much longer.

• ADVANTAGES• allows workers to learn in peace without distraction• Employees may gain formal qualifications• Training is provided by qualified trainer

• DISADVANTAGES- can be costly; need staff to cover• No work distractions while training• Can be expensive• Can take a long time eg if studying for a degree 11

MOTIVATING AND RETAINING STAFF

• Motivated Staff will result in:• Increased productivity• Decreased employee turnover• Fewer labour issues for employers• Improved customer service• Employee input for new ideas• Fewer staff absences

Employees are very important to organisations. Motivation encourages employees to work harder. This can be done using

Financial Incentives – using money to motivate people

Non-financial Incentives – using methods other than money to motivate people

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Financial IncentivesIncentive Detail

Salary A salary is a fixed amount paid in 12 equal monthly instalments.

Time rates Employees are paid per hours worked. This would encourage them to work longer hours

Overtime Working over the minimum number of hours per week will give overtime payments. Often paid at “time and a half” or “double” time . Overtime is not always available.

Piece rate Employees are paid according to the number of items produced. Encourages people to work hard and produce more however quality of the products may suffer if employees rush.

Bonus This is an additional payment on top of salary or time rate – may be received for very good work or meeting a target. Encourages harder work to reach sales target for example.

Commission Employees are paid a percentage of the value of their sales figure so employees are encouraged to try to sell more, eg cars. Can cause employee stress if they feel pressured to sell lots.

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Non-Financial IncentivesCompany Car The business provides the car the employee uses for work

Pension/Insurance Employer will contribute to the employee pension scheme for their retirement. Some also pay for medical insurance for employees

Subsidised canteen/staff discount

Some employeers pay for lunches or provide canteen facilities at reduced prices. Many large companies also allow employees to buy their products at a discount

Childcare vouchers/creche

This can be an incentive for working parents to stay working for an organisation – childcare is very expensive and employees would be keen to work for an organisation which provided free or subsidised care or help with paying nursery costs.

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Other Non-Financial Incentives• Giving people extra responsibilities to

encourage them and providing promotion opportunities• Praising people for doing a good job• Allow people to work in teams or take

part in team-building exercises• Providing training opportunities• Offering flexible working practices (see

next slide) 15

Flexible Working Practices

Part-time working

Allowing people to work less than a full-time contract (normally aroung 35 hours weekly)

Temporary contract

Employees are taken on for a short period of time, perhaps to cover absences or busy periods (eg Christmas)

Home-working

Allowing people to work from home using technology to keep in touch. Employees don’t have the same distractions at work and don’t have to travel every day. However they don’t have the same social contact with colleagues.

Teleworking Allows people to work away from the office using technology to communicate with the business. This allows employees to work on the move, eg on the train but relies on technology working

Flexitime Employees have the flexibility to choose their own start and finish times at work. They would have to be in the office for “core time” specified by the employer. Difficult for employer to know who will be in the office at particular times

Job Share Two people share a full-time job. Encourages skilled staff to stay with the organisation eg after having a family. Relies on employees passing important information to each other

Condensed hours

Allows employees to work their weekly hours over 3 or 4 days

Many people don’t want to work the traditional 9-5 day, Monday to Friday.

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Importance of Stable Staffing• Staff Turnover is the term used to describe staff leaving and

new staff joining the organisation.• Organisations find it beneficial if they have a low staff

turnover ie a stable staffing situation.• Finding and training new staff can be time consuming and

expensive• Customers like to build up a relationship with staff and a

stable staff can get to know particular customers, their needs and wants.

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TRADE UNIONS AND INDUSTRIAL ACTIONThis is an organisation which represents employees. The main aid is to improve the working terms and conditions of its members eg•Wages•Annual leave•Sickness benefits•Dismissal

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WHAT IS INDUSTRIAL ACTION?

• If relations break down, sometimes employees and unions decide to take industrial action

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Picketing

• This is when Union members who are on “strike” stand outside their place of work and try to persuade other employees not to cross the picket line.

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Go-slow• This is when employees

deliberately slow down their work rate, ie produce less.

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Work-to-rule

• This is when employees follow exactly what they are supposed to do in their contract of employment – this can slow down production.

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Overtime ban

• This is when employees only work the hours stated in their contract of employment

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Sit-in

• This is when employees occupy the work premises and normal work cannot take place.

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Strike

• Official Strike• When employees do not

come into work, ie withdraw their labour as directed by their Union.

• Unofficial Strike• As above, but without the

approval of their Union.

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Advantages And Disadvantages Of Industrial ActionDifficulties With Industrial Action • Industrial action creates several difficulties for businesses: • Production is lost sales are lost and business might fail• The businesses reputation is damaged• Employer, employees relationships become strained

Benefits Of Industrial Action • Industrial action can be useful in the long run:• Grievances are 'out in the open' so the employer, employee relationship

has an opportunity to improve• New procedures can be introduce that avoids conflict in the future• Management objectives can be altered to include consultation and

participation by the work force

LEGISLATION

• You must be aware of Legislation regarding

• Freedom of Information • Data Protection • Health and Safety • Equalities•Wages 27

The Freedom of Information Act 200• This act allows the general public access to information held

by public bodies such as the government and local authorities.

• It is designed to build trust in the government as the public know they can request information about spending by local authorities, for example.

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Data Protection Act 1998• This act allows individuals to ask any organisation for access to

the information they hold about them (the organisation may make a charge for this)

• Any organisation holding data about living individuals must apply to the Data Registrar for permission

• The data must be held according to certain principles, eg it must be• Up-to-date and accurate• Protected against misuse• Only held as long as necessary

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Health and Safety at Work Act 1974This lists the duties of employers and employees to ensure a safe working environment for everyone interacting with the business – including staff and the public. Employers must:• Provide and maintain safety equipment and work systems• Ensure materials used are properly stored, handled, transported• Provide health and safety information and training (induction)• Have a health and safety representative• Provide a safe place of employment

Employees must:• Take care for themselves and others• Co-operate with employer on health and safety matters 30

The Equality Act• The Equality Act ensures that no employee is discriminated

against because of • gender• age• disability• race• religion• sexual orientation• marital status.

• This means an employer or manager can’t refuse to hire a person, promote a person or give an employee a difficult time at work because of any of the above reasons, nor can they pay them at a different rate from staff doing a similar job.

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National Minimum Wage 1998• This sets the minimum wage per hour that an employee can

be paid. • The minimum wage will depend on the age of the employee.

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The Employment Act• This act states the conditions and rights employees must have

including maximum working hours, breaks required and maternity and paternity leave that people are entitled to.

• This includes number of hours worked in a row• This includes minimum breaks• This includes allowing new parents to take leave after the

birth of a child

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