CAIE A-Level Business A2 7 Human Resource Management Questions

Note:

- If more than two leadership qualities are referred to, reward the best two.

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Indicative content

Responses may include:

AO1 Knowledge and understanding

Definition of relevant terms (max K1 mark):

- Leadership is the art of motivating people towards achieving a common goal.

- Theories of leadership include trait, behavioural and contingency theory.

Knowledge of leadership qualities (max K2 marks):

- Leadership qualities include:

- Desire to succeed

- Risk taker

- Confidence, self-belief

- Innovative, creative

- Decisive - decision making skills

- Being inspirational

- Honesty and integrity

- Being a good communicator

- Empathy and emotional intelligence

- Leadership styles, such as democratic

- Ability to delegate

AO2 Application

Max one ${ }^{\text {APP }}$ for application for the first element and max one ${ }^{\text {APP }}$ for application for the second element.

- Qualities illustrated in the case:

- Drive and determination, self-belief - Frederico mortgaged his house to start the business and gave up his role as an executive.

- He communicates effectively and shows charisma - persuaded a venture capital company to invest in his idea and persuaded unions to accepts changes in the factory including the loss of jobs.

- Innovative/creative. - it was Frederico's idea to produce sustainable shoes from bamboo. He spotted a gap in the market.

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AO3 Analysis

Limited analysis AN - candidate shows one link in the chain of analysis.

Developed analysis L2AN - candidate shows two or more links in the chain of analysis.

- Frederico demonstrates self-belief, being willing to give up his executive role and mortgage his house to set up the business. This has enabled the business to finance the investment in product development to bring Frederico's idea to market. AN

- Creativity and innovation have given the business a competitive edge AN by developing a product that is unique and meets customer demands for a shoe that is lightweight and comfortable to wear in a hot climate. This increases sales. L2 AN

- Frederico spotted a gap in the market which enables CQ to face less direct competition AN and gain control over price to charge a premium price and make more profit. L2 AN

- Frederico's communication skills have encouraged the unions and workers to accept change which will result in job losses. His vision for the business may inspire loyalty. This negotiation will help CQ solve its operational problems and reduce costs AN resulting in a higher profit margin. L2 AN

Accept all valid responses.

Evaluate KF's approach to human resource management (HRM) between 2018-2023.

Please refer to the marking grid at the start of the mark scheme.

Indicative content

Responses may include:

AO1 Knowledge and understanding

Knowledge (max 1 mark) can be awarded for any relevant business knowledge about human resources, including:

- Purpose and roles of HRM

- Workforce planning

- Recruitment and selection

- Redundancy and dismissal

- Morale and welfare

- Training and development

- Management and workforce relations

- Motivation as a tool of management and leadership

- Motivation theories

- Motivation in practice

- Management and managers

- Organisational structure

- Business communication

- Leadership

- The difference between hard and soft HRM

- Flexible working contracts: advantages and disadvantages of temporary contracts or flexible contracts including zero hours contracts, part-time, full-time, annualised hours, flexi-time, home working, shift working, job sharing, compressed working hours, the gig economy

- The measurement, causes and consequences of poor employee performance

- Strategies for improving employee performance

- Management by objectives

- The changing role of IT and AI in HRM.

Knowledge and understanding (max 2 marks) ${ }^{[\mathrm{DEV}}$ can be awarded for any relevant business knowledge and understanding about marketing strategy.

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AO2 Application

Application ${ }^{[m<i]}$ (max 1 mark) can be awarded for any relevant use of context linked to KF's Human Resources.

Application $\stackrel{\square}{\square=1}$ (2 marks) can be awarded for applying knowledge of HR strategy, to KF between 2018 and 2023:

- Small staff - one office manager, 15 kitchen support workers

- Use of full-time contracts and flexi-time contracts

- Objectives of growth and profit maximisation

- New delivery service - 45 riders hired, increasing to 75

- Use zero-hours contracts

- Use of tracking software for staff performance

- Tracks speed, efficiency of deliveries

- Unreasonable time targets

- Bad timing within the app

- Bonuses and performance judged unfairly

- Compliance with new legislation banning zero-hours contracts

- Staff moved to self employed and will operate as part of the gig economy

- Use of performance data to judge staff for restructure.

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AO3 Analysis

Analysis is likely to be based on KF's objectives in 2018 to exploit rapid growth in the sector and maximise profits.

Analysis of the impact of KFs HR strategy ( 41 and and 42 ) including:

- KF operates a simple organisation structure that supports the restaurants renting the space - keeping their costs low to aid profit maximisation and growth.

- Kitchen support workers are supplied on zero-hours contracts - keeping costs low on wages.

- The launch of their own delivery service is easy through the use of zero-hours contracts meaning they do not have to pay full-time wages - keeping staff costs low.

- Expansion (and contraction) of the business has been easy due to the flexible working practices KF uses - it is easy to reduce or increase hours/contracts.

- By using zero-hours contracts KF doesn't have to provide paid holiday or benefits - again saving KF costs and helping keep profits high.

- Office manager will spend a lot of time planning the staff on zero-hours contracts - matching the demand from restaurants to the staff available.

- The use of the zero-hours contracts means that calculating the pay for these workers takes longer - this needs to be accurate.

- The delivery app provides key performance indicators that Liam and Samir can use to evaluate the performance of their riders - this can then be used to help decide who continues to be used for work.

- The new technology in the app may not be working properly or staff may not be using it properly - This may need further investigation - leading to costs of redevelopment and/or training for staff.

- The problems with the app may be causing issues with business reputation - leading to further costs.

- KF are complying with the law change on zero-hours contracts - which has implications on the current staff.

- Once the new legislation starts, KF will have much less responsibility for the staff - decreasing the cost of running the business.

- Once riders are self-employed, albeit with an insecure income, what will the impact be on customer service and efficiency of deliveries - will this increase or will the riders not care as much?

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AO4 Evaluation
Evaluation $\left({ }^{\mathrm{N} 1}\right.$ and ${ }^{\mathrm{N} 2}$ and ${ }^{\mathrm{N} 3}$ ) including:
Evaluation will largely depend on the points raised in the analysis.
- The use of zero-hours contracts has helped KF keep costs down but it may cause motivation issues with staff if there
are not enough hours for people to earn 'full-time' money.
- Aiming for profit maximisation has kept Liam and Samir focused on lower costs - decisions about ZHC, the tracking
app, the business model have all been designed to keep costs low and make this objective achievable. But has the
pursuance of this meant HR has been very 'hard'?
- The use of the gig economy means that expansion is much easier for KF but they have little control over who and how
many riders are available at any one time, this might upset the restaurants who may not have a delivery rider available
to deliver food.
- The issues with the app are causing problems with staff - how useful is the technology if it is inaccurate? Will this mean
less riders log on - they are not employees, so they don't have to. This could lead to KF not having enough riders and
having to use a third party (Deliveroo for example).
- KF are responding to the change in law but this is going to increase their costs - affecting the prices for its clients -
and will require a new training structure and recruitment process this will also influence its profit maximisation objective.
- KF approach to HR has been successful in keeping the costs low. How they approach the HR from 2023 onwards may
need to change given the potential growth strategies.
Accept all valid responses.

Analyse two advantages to CD of changing to a geographical organisational structure.

Note:

- Only reward advantages.

- If more than two advantages are referred to, reward the best two.

2

Indicative content

Responses may include:

AO1 Knowledge and understanding

Definition of organisational structure / geographical organisational structure (max K1 mark)

- The internal, formal framework of a business that shows the way in which management is linked together, and how authority is passed through the organisation.

- Structure based on geographical area in which each division is self-contained with its own functional areas.

Benefits of a geographical structure:

- Better customer service.

- More responsive to changing local needs.

- Measure the performance and profitability of each division separately.

- Greater focus on specific market segments.

- Improved customer communication.

- Quicker decisions.

- Reduce costs of production

- Competition between geographic units

- Preparation of managers in geographic units for promotion

AO2 Application

Max one ${ }^{\text {APP }}$ for application for the first element and max one ${ }^{\text {APP }}$ for application for the second element.

- CD's expansion to country C in 2022 is not yet profitable.

- Plans to open factories in two new countries.

- Current plans to export to three new countries.

- Ambitious plans for further international expansion.

- Comment on current hierarchical functional structure.

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AO3 Analysis
Limited analysis AN - candidate shows one link in the chain of analysis.
Developed analysis L2AN - candidate shows two or more links in the chain of analysis.
- Different international markets may have differing needs in terms of the product, pricing and promotion. A geographical
structure can respond more effectively to those needs AN and thus increase sales L2AN.
- Facilitates the establishment of companies' business units at different local as well as regional levels. This enables
regional managers to better understand local needs, preferences, and tastes AN. As such, they can make relevant
products and better satisfy customers and thus increase sales L2AN.
- A geographical structure can promote improved communication between the local customers and local divisions of the
business. Such local divisions can better interact with local customers and create value for the business AN resulting in
an increase in profitability L2AN.
- Enables local managers to make prompt decisions without the consent of the central management. Quick decision-
making enables CD to serve the right customers at the right time AN resulting in increased sales L2AN.
- May enable CD to better estimate the demand of the local customers and as such it helps to reduce the cost of
overproduction and wastage of raw materials AN leading to an increase in profits L2AN.
Accept all valid responses.

Analyse two benefits to OV of the methods it uses to communicate with employees.

Note:

- Only reward benefits.

- If more than two benefits are referred to, reward the best two.

- L2AN (3 marks) is possible for just one point made.

2

Responses may include:

AO1 Knowledge and understanding

Definition of internal communication and/or possible methods (max K 1 mark)

- Definition or explanation of internal communication - communication between different people or groups within the organisation - and possible methods including meetings, reports, notice boards, memos and email.

- Definition of one and/or two-way communication.

- Communication with employees could also be through external methods such as press reports and social media.

Benefits of internal communication used by OV (max K 2 marks)

- Avoid misunderstanding of what is required.

- To allow coordination of activities within a business.

- To enable employees, have some input into business decision-making.

- To give managers feedback from other employees.

- To motivate employees or avoid demotivation.

- To avoid the spread of rumours and fake information.

- Cut costs.

- Low labour turnover.

AO2 Application

Limited application, ${ }^{\mathrm{APP}}$ applies knowledge to OV once.

Developed application, ${ }^{\mathrm{APP}}+{ }^{\mathrm{APP}}$ applies knowledge to OV twice.

Max one ${ }^{\mathrm{APP}}$ for application for the first benefit and max one ${ }^{\mathrm{APP}}$ for application for the second benefit.

Application is making use of relevant case information not just repeating it.

- Aluna meets with factory workers each week. Two-way communication encouraged in meetings - discussion of operational problems.

- Open-plan office giving team members access to directors.

- Intranet to provide company information and plans to employees.

- Monthly bulletin with contributions from employees.

- Inclusive culture that OV has developed.

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AO3 Analysis

Limited analysis AN - candidate shows one link in the chain of analysis.

Developed analysis $\mathrm{L2}^{\mathrm{L2N}}$ - candidate shows two or more links in the chain of analysis.

- Greater commitment from workforce if they feel that their concerns are heard. This could result in lower labour turnover and higher productivity ${ }^{\mathrm{AN}}$ and therefore reduce costs and lead to an increase in profit. L2 AN

- Employees more likely to provide ideas for improving operations resulting in more efficient production and lower costs AN. This can result in higher profit. L2 AN

- Less chance of misunderstanding leading to industrial action and disruption to production ${ }^{\mathrm{AN}}$ and therefore dissatisfied customers leading to a reduction in sales.

L2AN

- Development of a positive organisational culture resulting in greater efficiency in use of resources.

- Communication methods used will motivate employees (Herzberg, Mayo) and therefore increase productivity AN which will reduce unit costs and increase profit.

L2AN

Accept all valid responses.