2. People in business
- Syllabus
- 0264–2027–2028
- Section
- 2
- Level
- —
Exam analysis
2.1. Human resource management (HRM)
- Syllabus
- 0264–2027–2028
- Topic
- 2.1
- Level
- —
Recruit and select the best-fit employee
Recruitment starts by analysing the vacancy. A job description states duties, responsibilities and reporting relationships; a person specification states the qualifications, skills, experience and qualities required. The business then advertises—directly, online or through an agency—and selects using evidence such as a CV/resumé, application form, references, tests or assessment centres and interviews.
| Source | Advantages | Disadvantages |
|---|---|---|
| internal recruitment | known performance, cheaper and faster, motivates promotion | fewer candidates, no new ideas, creates another vacancy |
| external recruitment | wider choice, new skills and perspectives | slower, costlier and greater risk of poor fit |
Recommend a candidate by matching evidence to the person specification and the business situation. Give priority to essential criteria and explain how the candidate's evidence improves likely performance; do not choose only on one impressive attribute.
A job description describes the role; a person specification describes the suitable person. Interviews give useful evidence but may be biased, so combine methods where the decision is important.
Use contracts and employment law clearly
| Contract term | What it clarifies |
|---|---|
| duties and responsibilities | the work expected and accountability |
| working hours | when and how long the employee works |
| holiday entitlement | paid leave available |
| sick pay | payment conditions during eligible sickness absence |
Employees gain certainty about obligations, pay-related rights and how disputes can be judged. Employers gain a clear performance standard, consistent expectations, evidence for managing conduct and fewer misunderstandings. Both sides know what was agreed.
| Legal control | Employee protection | Employer effect |
|---|---|---|
| unfair dismissal | requires a fair reason and process | documentation, procedure and possible legal cost |
| discrimination | supports equal treatment | unbiased recruitment and management duties |
| health and safety | reduces workplace harm | training, equipment and compliance costs |
| minimum wage | sets a pay floor | raises pay for some workers and labour cost for some firms |
A written contract does not remove legal rights or every dispute. Its value is clarity and evidence; legal controls can raise employer costs while also improving safety, fairness, retention and reputation.
Choose the right type of training
Training develops the knowledge and skills needed for safe, productive and adaptable work. It can improve quality, productivity, motivation and promotion prospects, but costs money and employee time and may benefit another employer if trained staff leave.
| Type | Best use | Advantages | Disadvantages |
|---|---|---|---|
| induction | introducing a new employee to the organisation, role and safety | faster settling-in, fewer early errors | takes time and may overload the starter |
| on-the-job | learning while doing real work | relevant, practical and usually cheaper | trainer time, possible errors and inconsistent teaching |
| off-the-job | courses away from normal work | specialist expertise, focus and qualifications | fees, travel and lost working time; may be less specific |
Choose by the skill's complexity and risk, trainer availability, cost, urgency and need for recognised qualifications. A blended approach can combine practical relevance with specialist instruction.
Induction is not a complete substitute for job-skill training. The cheapest method is not necessarily best if poor training causes defects, accidents or lost customers.
2.2. Organisation and management
- Syllabus
- 0264–2027–2028
- Topic
- 2.2
- Level
- —
Read an organisational structure
| Function | Main job |
|---|---|
| operations | produce and deliver goods or services |
| marketing | research markets and manage product, price, promotion and place |
| finance | manage budgets, cash, records and funding |
| human resources | recruit, train and support employees |
An organisational chart shows authority and reporting. Read from a role upward to find its line manager; roles on the same level have similar authority. A tall structure has more hierarchy levels, a longer chain of command and usually narrower spans of control; a flat structure has fewer levels, shorter chains and wider spans.
| Arrangement | Possible advantage | Possible disadvantage |
|---|---|---|
| home working | lower travel or premises cost and wider recruitment | isolation, supervision and communication difficulties |
| flexible hours | matches employee and demand needs | scheduling and coordination become harder |
| part-time staff | flexible capacity and lower total pay | less continuity and more training per hour worked |
| full-time staff | continuity, availability and commitment | higher fixed labour cost and less flexibility |
Span of control is the number of direct reports, not total employees. A flat structure is not automatically informal or better; suitability depends on work complexity and manager capability.
Use the five management functions
| Function | Management question |
|---|---|
| planning | What objectives and actions are needed? |
| organising | Which resources, roles and structure will deliver them? |
| coordinating | How will activities and departments work together? |
| commanding | What direction and decisions must be communicated? |
| controlling | Are results on target, and what correction is needed? |
Delegation gives a subordinate authority to perform a task while the manager remains accountable. It can speed decisions, develop and motivate employees, and free managers for other work; it can also create mistakes, inconsistency or loss of control when ability, instructions or monitoring are weak.
Delegation transfers authority for the task, not the manager's final accountability. It is not simply giving unwanted work away.
Match leadership style to the situation
| Style | Decision pattern | Strength | Risk |
|---|---|---|---|
| autocratic | leader decides | fast, clear control | low input and motivation |
| democratic | employees contribute before decisions | ideas, commitment and information | slower and possible disagreement |
| laissez-faire | employees receive high autonomy | creativity and expert ownership | weak coordination or unclear direction |
Justify a style using urgency, risk, employee skill and experience, need for creativity, decision importance and workforce expectations. A safety crisis may favour autocratic direction; a skilled design team may benefit from democratic or carefully bounded laissez-faire leadership.
No style is always best. Laissez-faire still needs objectives and accountability, while democratic leadership does not mean every decision is decided by vote.
Make a justified downsizing decision
Downsizing reduces the workforce, often because automation lowers labour need, demand has fallen or costs must be reduced. Redundancy occurs when a job is no longer required; it is not the same as dismissal for misconduct.
A fair recommendation uses job needs and objective criteria such as relevant skills, performance, versatility, attendance and cost, while following contracts and law. Assess redundancy payments, lost knowledge, morale, workload, service quality and whether the saving is sustainable.
Choosing only the highest-paid or newest employee may be unlawful, unfair or strategically harmful. The role must be evaluated against future business needs, not personal preference.
Explain how trade unions support employees
A trade union is an organisation that represents employees' interests. By acting collectively, members may gain more bargaining power than an individual employee.
A union can negotiate pay, hours and conditions; represent members in grievances or disciplinary cases; advise on employment rights; press for safer work; provide legal or other member support; and communicate employee concerns to management.
Union membership does not guarantee every demand or remove the employer's right to manage. Outcomes depend on membership, negotiation, law, employer finances and the cost of industrial action.
2.3. Methods of communication
- Syllabus
- 0264–2027–2028
- Topic
- 2.3
- Level
- —
Choose the right communication method
Effective communication gives the intended receiver a clear message through a suitable method, with enough opportunity to confirm understanding. It helps a business coordinate work, make decisions, reduce errors and waste, serve customers accurately and maintain motivation. Internal communication stays within the business; external communication links the business with customers, suppliers, government or other outside groups.
| Method | Main strength | Main limitation | Often suitable when... |
|---|---|---|---|
| face-to-face or virtual meeting | discussion, body language and immediate feedback; several people can hear the same detail | arranging attendance takes time and removes people from work | ideas, sensitive issues or complex instructions must be discussed |
| fast, low-cost, detailed, attachable and stored as a record; reaches many people | may be ignored, misdirected, filtered or inaccessible | detailed internal or external information is not dependent on an instant reply | |
| text message | quick, concise and readable later on a mobile phone | little detail, no guarantee it is read, and replies may be delayed | a short urgent update must reach dispersed employees |
| social media | rapid, low-cost reach to many people | limited privacy and control; not every audience sees or trusts it | a broad public or workforce update is appropriate |
| phone or mobile call | fast two-way discussion and immediate questions | no automatic written record; the receiver may be unavailable or the signal may fail | urgency and immediate feedback matter |
| letter | formal, detailed and retained as a hard copy | slower and often more expensive; receipt or understanding is uncertain | formality or a durable external record matters more than speed |
| poster or noticeboard | one visible message can reach many people cheaply | passive, easily missed and offers little feedback | stable information must remain visible in one workplace |
| Decision factor | Question to ask |
|---|---|
| receiver | Is the audience internal or external, one person or many, local or dispersed? |
| message | How detailed, confidential, formal or urgent is it? |
| feedback | Is immediate confirmation or discussion necessary? |
| access and record | Can everyone use the method, and is a permanent record required? |
| cost and disruption | What does the method cost, and how much working time will it interrupt? |
A justified recommendation links the decisive factor to the method's consequence and compares it with the strongest alternative. For an urgent late delivery, a phone call may win because immediate feedback protects production; for detailed specifications that must be retained, email may be stronger. The method changes when the situation changes.
A message being sent does not prove effective communication. The receiver must receive and understand it well enough to act correctly; speed alone is therefore not a complete reason for choosing a method.
Remove barriers to communication
A communication barrier is anything that prevents a message from being received or understood as intended. Follow the whole chain: identify where the barrier arises, explain the misunderstanding or delay it causes, connect that problem to a business consequence, then choose a remedy that targets the cause.
| Where the barrier arises | Examples and cause | Likely problem | Targeted reduction or removal |
|---|---|---|---|
| sender or message | jargon, unfamiliar language, excessive detail, unclear or wrong message | receiver misunderstands the priority or instruction; errors and slow decisions follow | use short, plain, audience-appropriate language; check the recipient and highlight key action |
| method or technology | wrong channel, lost message, failed device, poor connection, junk filtering | message arrives late, distorted or not at all; work or delivery is delayed | test the method, use a suitable alternative channel and request receipt confirmation |
| receiver | not listening, not checking, distrust, distraction or unfamiliar language | message is ignored or misread; wrong action, waste or poor service may result | create time to listen, translate or clarify, invite questions and confirm understanding |
| feedback | no opportunity or failure to respond | sender cannot know whether the message arrived or was understood; mistakes remain hidden | require acknowledgement, questions or a concise repeat-back |
| organisation and setting | long chain of command, too many intermediaries, noise, time-zone or cultural differences | details change, response slows or meaning differs across locations | shorten the route, choose a quieter or suitable time, and adapt language and channel to the audience |
To analyse a barrier: (1) name the exact cause, not just 'poor communication'; (2) state what happens to this message or receiver; (3) explain the operational effect, such as mistakes, delay, waste, lower efficiency or damaged service; (4) propose a remedy aimed at that exact cause. Asking for feedback fixes uncertainty about receipt or understanding, but it does not repair a broken connection until another working channel is used.
Do not confuse a communication method with a barrier. Email is a method; an inaccessible account, unclear email or missing feedback can be barriers. Likewise, 'employees do not know what to do' is a consequence, not the underlying cause.
2.4. Motivating employees
- Syllabus
- 0264–2027–2028
- Topic
- 2.4
- Level
- —
Why motivation changes business performance
People work for income and security, but also for belonging, recognition, satisfaction, achievement, growth and the chance to help others. Motivation is the willingness to direct effort towards work goals; it changes what employees do, not merely how positive they say they feel.
| Well-motivated behaviour | Business effect |
|---|---|
| employees work with sustained effort and care | labour productivity and output can rise; errors, waste and unit cost may fall |
| employees attend reliably | lower absenteeism reduces disruption and makes staffing and customer service more dependable |
| employees are more willing to stay | lower labour turnover reduces recruitment, selection and training costs and preserves experience |
| employees trust the purpose of a change | greater willingness to accept new technology or working methods can speed implementation |
| Theory | Core idea | Management implication | Important boundary |
|---|---|---|---|
| Taylor | money is a central motivator, especially where measurable output can link effort to reward | use clear targets and financial rewards such as piece rate or performance pay | higher pay raises cost and may give only a short-term effect; not everyone is motivated mainly by money |
| Maslow | people seek physiological, safety, social, esteem and self-actualisation needs; unmet lower needs normally demand attention before higher ones | combine adequate income and security with teamwork, recognition, responsibility and growth | employees may value needs differently; a reward does not automatically satisfy the intended need |
| Herzberg | hygiene factors such as pay, security, conditions and relationships prevent dissatisfaction; motivators such as achievement, recognition, responsibility, advancement and the work itself create positive motivation | secure acceptable hygiene, then enrich work and create recognition, responsibility and growth | removing dissatisfaction is not the same as creating motivation |
Use a theory as a lens, not a label. First diagnose what matters to these employees and what the business can change. Then trace the proposed action to employee behaviour and to a business outcome. Manual, measurable work may make Taylor useful; limited promotion or repetitive jobs may constrain Herzberg; Maslow helps explain why the same reward can affect employees differently.
Motivation does not guarantee higher profit. A reward can increase cost, targets can distort behaviour, and productivity gains matter only if quality, demand and other operations support them.
Choose an appropriate method of motivation
An appropriate motivation method fits the employees' needs, the work being done and the business's resources. Compare how the method changes behaviour, what it costs, who can receive it and whether the effect is likely to last.
| Financial method | How it works and may motivate | Main limitation |
|---|---|---|
| time-based wage | pay depends on hours worked; gives predictable income | weak direct link to output and raises cost for every paid hour |
| piece rate | pay depends on units produced; creates a direct output incentive | employees may rush, reduce quality or dislike jobs where output is hard to control |
| salary | fixed regular payment, often for managerial or professional work | little short-term link between extra effort and reward |
| bonus | extra payment for reaching a target; business can make payment conditional | unrealistic or unequal targets can create conflict; effect may be temporary |
| commission | payment depends on number or value of sales | can encourage selling but may pressure customers or neglect non-sales tasks |
| profit sharing | employees receive part of profit, supporting a shared goal | no or low profit means little reward; many profit drivers are outside one employee's control |
| fringe benefits | non-cash financial rewards such as discounts or private benefits add value to the package | costly and not equally valuable to every employee |
| Non-financial method | How it may motivate | Main limitation |
|---|---|---|
| job enrichment | adds responsibility, skill and decision-making to make work more meaningful | redesign and training cost time; some employees may not want or be ready for added responsibility |
| job rotation | moves employees between tasks, adding variety and flexibility | tasks may remain repetitive and training can increase cost or mistakes |
| training | builds skill, confidence and prospects while signalling investment in employees | costs money and working time; trained employees may leave |
| promotion opportunity | offers advancement, status, responsibility and often higher pay | few roles are available and unsuccessful applicants may feel demotivated |
| praise | gives immediate recognition at little financial cost | vague, unfair or insincere praise loses credibility |
| employee of the month | public recognition can meet esteem needs and reward visible performance | limited winners and unclear criteria can create resentment |
| Decision factor | Ask... |
|---|---|
| cause of low motivation | Is the issue inadequate pay, boredom, weak recognition, limited skill or poor prospects? |
| job and measurement | Can individual output or sales be measured without harming quality or teamwork? |
| employee differences | Do employees value income, flexibility, recognition, responsibility or advancement differently? |
| business constraint | Can the business afford the direct cost, training time and administrative complexity? |
| fairness and duration | Can everyone understand the criteria, and will the effect last? |
A recommendation compares the strongest alternatives in context. Piece rate may fit repetitive measurable output, but job rotation may be safer when quality matters and boredom is the problem. A cash-poor small business may use specific praise or enrichment, while a profitable team-based business may use profit sharing. Explain why the chosen method solves the diagnosed problem better than the rejected option.
Financial and non-financial methods can work together. Calling a reward 'financial' describes what the employee receives; it does not prove that it will motivate every employee or improve performance.