Section 4 - Managing People

• Employees


  • They are an asset to a business
  • The skills and abilities of staff mean that they can add value to a product
  • Businesses should treat their staff as a valued asset and invest in them by training them and looking after their wellbeing
• Employees


  • They are also a cost to a business
  • Employees get remuneration (payment) for the work they do
  • Remuneration is usually in the form of wages or a salary
  • Wages are paid to workers based on the amount of work they have done
  • Salaries are a fixed amount usually paid monthly
• To protect workers from being underpaid, the UK government sets National Minimum Wage (NMW) as the legal minimum that businesses must pay their employees per hour
• NMW rates can lead to better motivated staff, which could increase productivity. However, it can also lead to increasing costs for businesses as the rates usually increase each year
• Dismissal


  When an employee's contract of employment is ended by the employer
• Redundancy


  When an employee's job role is no longer required, for example due to the business reducing staff or changes in technology
• Redundancies cost a business money as they need to pay a minimum redundancy payment to employees that have been with the firm for at least two years
• Flexible workforce


  • It's beneficial to a business as it makes it easier to match the workforce to the varying needs of the business
  • Flexible working can be offered in different ways such as full-time, part-time, zero-hours contracts, permanent or temporary contracts, and shift work
• Zero-hours contract


  A firm employs a worker but does not offer them guaranteed hours. Staff only work when they're needed, so employers don't waste money paying for hours when there is no work
• Permanent contract


  A contract with no end date
• Temporary contract


  A contract with an end date, for example one year
• Shift work


  The working day is divided into shifts (e.g. morning, day, and night) and staff work different shifts to ensure 24-hour cover
• Home working

  Employees can work from home some or all days of the week
• Flexitime


  Workers complete a set number of daily/weekly/monthly hours at times that suit them
• Outsourcing


  Businesses can get other businesses to do some tasks for them, such as assembling a product or producing marketing materials
• Multi-skilled workforce


  • It can lower a firm's recruitment costs
  • Workers can be moved between jobs when necessary
  • It can increase motivation and productivity
• Individual bargaining


  When individual employees negotiate with their employer about their own pay and working conditions
• Collective bargaining


  When a group of employees is represented by workforce representatives (e.g. trade unions) who negotiate with employers on issues such as pay and working conditions
• Trade unions can take action in the workplace to protect or improve conditions, and can also put pressure on the government to bring in legislation that will serve the interests of their members
• Unions


  Can take action in the workplace to protect or improve conditions
• Actions unions can take


  • Negotiate pay and productivity bonus
  • Negotiate reasonable hours of work
  • Negotiate paid holiday entitlement
  • Negotiate safe and healthy working conditions
  • Protect against mistreatment, discrimination and unfair dismissal
• Trade unions


  Can also take action at a national level to put pressure on the government to bring in legislation that will serve the interests of the trade union members
• Legislation introduced due to trade union efforts

  • Minimum wage
  • Redundancy payments
  • Pension Protection Fund
• Recruitment


  Finding the best person for a job
• Recruitment process


  1. Identify what new roles are needed/ vacancy

  2. Write a job description and specification

  3. Advertise job 4. Process applications 5. Shortlist most suitable applicants 6. Assess most suitable candidates 7. Appoint most suitable candidate
• Job description


  Includes the job title, the main roles and responsibilities of the job, the salary, etc.
• Job specification


  Includes the qualities and qualifications required for the job
• Example job description and specification


  • Job Description: Head Chef, Restaurant Delaiasa, Central London, Salary: £36,500, Full-time, 40 hours weekly, Duties and responsibilities: Controlling food preparation, conducting menu planning, approving dishes before they reach the customer

  Job Specification: We are recruiting an experienced chef with at least 3 years experience. You must be an inspirational leader and be able to work under pressure. You will need strong people management and communication skills.
• Internal recruitment


  Recruiting someone who already works for the business
• External recruitment


  Recruiting someone from outside the business
• Pros of internal recruitment


  • Candidates already know the business and the business knows the candidates
  • Short and cheap process
  • Motivates workers to go for a promotion
• Cons of internal recruitment


  • Leaves a vacancy in another department
  • Can cause resentment among colleagues who are not selected
• Pros of external recruitment


  • Brings in fresh new ideas
  • Brings in experience from other organisations
  • Larger number of applicants
• Cons of external recruitment


  • Long and expensive process
  • Candidates will need a longer induction process
  • Business will have only seen a candidate at recruitment - might not be representative of what they're like at work
• Costs of recruitment


  • Cost of advertising the vacant post
  • Cost of using a recruitment agency
  • Cost of time spent by existing staff on shortlisting and assessing candidates
• Training costs


  • Cost of people delivering the training
  • Cost of handover period where new employee shadows the role of a person who is leaving the firm
• Labour turnover


  The percentage of employees who leave a business over a period of time (usually a year)
• High labour turnover is costly for a business as it means it has to spend more on recruiting and training new employees
• Induction training


  Training given to new recruits to help them understand the business, their job role, and any relevant policies and procedures
• Purposes of induction training


  • Help the new employee understand the business and their job role
  • Provide training on health and safety and other relevant policies
  • Help the new employee feel welcomed and supported