Professional Documents
Culture Documents
Managing the processes that transform and add value to inputs to create
outputs of goods and services.
Productivity
Efficiency
Quality of outputs.
Influences on operations
Globalisation, technology, quality expectations, cost-based
competition, government policies, legal regulation,
environmental sustainability
Globalisation:
Can also act as a threat to a business as other businesses who apply cost
leadership can dominate the market
Able to reach new markets and provide franchises
Gives consumers the opportunity to purchase products from the business that
provides the most value for money
Access to a global market for businesses to sell their outputs
Technology:
Durability (how long the product lasts given a reasonable amount of use)
Reliability (how long the product functions without needing repairs or
maintenance)
Fit for purpose (how well the product does what it is supposed to)
Government policies:
Government policies are methods used by the government that encourage the
operations function of a business to be more innovative and competitive.
A common way to support these innovative businesses is to provide monetary
benefits such as a financial grant or tax concessions.
There has been a gradual reduction in protection of Australian businesses
forcing them to be more efficient in their operations and reduce costs.
Free trades, taxation, interest rates, government spending and environmental
incentives.
Legal regulations:
Environmental sustainability:
Ethical behaviour involves making decisions that are not only legally correct but
also morally correct.
For operations, a code of conduct will be concerned with:
o minimising harm to the environment
o reducing waste, recycling and reusing
o producing value-for-money, quality products
o improving customer service
Environmental sustainability is about the present use not affecting the future use,
looking after the environment for future generations. Social responsibility refers to
the positive effect on the community- protecting interests of customers and wider
society, e.g. initiatives/charity to community.
Operations processes
Inputs
-transformed resources (materials, information, customers)
-transforming resources (human resources, facilities)
Common direct inputs= labour, energy, raw materials, skills/knowledge, machinery
and technology.
Transformed resources: inputs that are changed or converted in the operations
process to a finished good or service.
Materials- raw materials and intermediate goods (e.g. supplies, parts) used up in
the operations
Information-influence and inform how inputs are used, where and which supplier
to use and to keep control over material inputs.
Customers-their choices shape inputs. Customers can be changed in different
ways, e.g. feel that value has been added to their lives after seeing a film or
going on holidays.
Transforming resources: resources that remain in the business and carry out the
transformation process to add value to inputs.
Transformation processes
-the influence of volume, variety, variation in demand and
visibility (customer contact)
-sequencing and scheduling Gantt charts, critical path analysis
-technology, task design and process layout
-monitoring, control and improvement
The transformation processes are those activities that determine how value will be
added. These processes can add value in four ways:
Physical altering of the physical inputs or the changes that happen to people
Transportation of goods or services, e.g. having them delivered to a more
convenient location
Protection and safety from the environment; for example, protecting assets
Variety refers to the range of products made, number of different models and
variations offered in the products or services.
A business producing a high volume product with low variety will be capital
intensive.
Low variety= car factory with small variations. High variety= financial advice.
Operations will also be influenced by the degree to which customers can see the
operations in action.
Service-based businesses will have a high level of visibility. Speed of operations
will also be important as customers usually have a much lower tolerance for
waiting.
High visibility= restaurant. Low visibility= beef producer.
Technology: It makes task more effective and efficient, high-tech or low-tech, less
employees needed, increasingly important, cost is also relevant, allows more work to
be done in a shorter time, machinery/manufacturing technology-robotics, CAD and
CAM.
Task Design: is how the task will be completed. It allows for ongoing analysis and
adjustments in each activity to ensure continuous improvement in productivity.
Classifying job activities, what needs to be done, making it easy for an employee to
successfully complete tasks, job analysis, can be cone after a skills audit is conducted.
Process layout: arrangement of machines in a sequence-grouped together by
function/process they perform
Monitoring- the systematic collection and analysis of information as a task
progresses. These include: quality, speed, dependability, flexibility, customisation and
costs. It is aimed at improving the efficiency and effectiveness of an operations
process. The purpose of it is to see if resources have been allocated properly and are
being used efficiently.
Control- a function that aims at keeping the businesss actual performance as close
as possible to what was planned by making adjustments to the operation process. It is
about assessing the performance of a business.
Improvement- suggests that adjustments and readjustments may need to be made
to day-to-day activities in the short term and even the entire operations process in the
long term. There can be improvements in: quality, speed, dependability, flexibility and
cost.
Outputs
-customer service
-warranties
Outputs: good or service provided/delivered to a customer, are the final products
that a business offers to customers.
Customer service- is a service provided to customers before, during and after a
purchase. It is an intangible output that requires extensive contact with customers.
Good customer service will increase customer satisfaction. How a business meets and
exceeds the expectation of customers in all aspects of its operations, key in
developing long-term relationships.
Warranties- an assurance that a business stands by the quality claims of the
products that they make and provide to the market. Agreement to fix defects in
products, an assessment of warranty claims can help a business to adjust
transformations processes to be more effective.
Operations strategies
easier, cheaper access to global markets, privacy and security issues, and increased
risk of purchasing unsatisfactory or faulty materials.
Global sourcing: business acquires the inputs it needs for production across the
borders of a number of countries. A business seeks to find the most cost effective
location for manufacturing a product, even if the location is overseas, may be cheaper
to purchase inputs from overseas than create them, keep control over complex supply
chains, lower costs, loss of control over quality, reliability and costs, slower lead times.
FIFO (first-in-first-out): first goods produced are the first ones sold/used, therefore
the cost of each unit sold/used is first recorded, can be used if price of supplies/goods
remain relatively stable, used when products have a used-by date.
JIT (just-in-time): ensures exact amount of products or materials arrive only as they
are needed, can save money as it eliminates inventories but require flexible
operations/reliable suppliers.
Quality management
-control
-assurance
-improvement
Quality management: involves setting performance objectives that clearly set
quality as a foremost goal.
Quality Control- involves checking transformed and transforming resources in all
stages of the production processes, failure to meet pre-determined targets=corrective
action
Quality Assurance- involves monitoring and evaluation of the various processes of a
project, service or facility to ensure that a minimum level of quality is being achieved
by the production process. Assures set standards are met, pre-determined (universal)
quality standards
Quality Improvement- involves continuous improvement in all functional areas to
reduce the rate at which mistakes occur. Ongoing commitment to improving
goods/service and total quality management-quality is a commitment/responsibility of
all staff
Global sourcing: refers to the process of acquiring raw materials, services and
various parts that are needed to manufacture goods or services. A business may use a
global web strategy.
Economies of scale: occur when the amount of production increases and as a result
of this increased output there is a decrease in the cost of production per unit of
output.
Scanning and learning: involves monitoring a businesss internal and external
environment so that it can gather, analyse and use information for tactical or strategic
purposes. Scanning the global environment to identify and learn the critical global
trends that may impact on the business.
Research and development: helps business to creating ideas for new products or
services that will give them a leading edge over other businesses.
Marketing
Role of marketing
Strategic role of marketing goods and services
Central and strategic role brings the products of the business and customers
together to increase the market share of the business.
Mass= market for goods appealing to the majority of customers, e.g. milk, bread,
electricity
Niche= smaller markets for more specialised goods/services, appealing to fewer
people, e.g. luxury cars.
Influences on marketing
Factors influencing customer choice psychological,
sociocultural, economic, government
Psychological: personal characteristics of an individual (perception, attitudes,
lifestyle, personality and self-concept).
Sociocultural: forces exerted by other people and groups (family and roles, religion,
culture, peers).
Economic: the amount of money available to spend (boom, recession).
Government: policies and laws directly/indirectly influence business activity and
consumers spending habits (interest rates, fiscal and monetary policies, age
restrictions, income tax).
Consumer laws
-deceptive and misleading advertising
-price discrimination
-implied conditions
-warranties
The Competition and Consumer Act 2010 attempts to promote fair and competitive
behaviour in the marketplace.
Deceptive and misleading advertising= overstating benefits, offering discounts
and special offers that dont exist, bait and switch advertising (promotes a product
that is heavily discounted even though the business has very little supplies).
Price discrimination= the process of a business giving preference to some retail
stores by providing them with stock at lower prices than is offered to the competitors
of those retailers.
Implied conditions= terms unspoken or written in a contract. The product needs to
be good quality, of reasonable standard and fit for purpose.
Warranties= a promise by the business to repair or replace faulty products. A
business must either refund or exchange goods recognised as faulty at the time of
leaving the store, this is an implied warranty.
Ethical behaviour refers to the generally accepted code of behaviour. When marketing
a business should act in an ethical way. They need to consider health concerns, social
obligations, cost of marketing, sugging and fair competition.
Truth, accuracy and good taste in advertising: it is expected that all promotional
material is truthful, accurate and in good taste. Consumers have a right to accurate
and truthful information from businesses about their purchases.
Products that may damage health: restrictions on products that damage health,
e.g. tobacco smoking
Engaging in fair competition: business behaviour must be fair and ethical towards
their competitors.
Sugging: selling under the guise of a survey. This is not illegal but it is unethical as it
involves an invasion of privacy and deception.
Marketing processes
Elements of the marketing plan are:
1.
2.
3.
4.
5.
6.
7.
Executive summary
Situational analysis
Market research
Establishing marketing objectives
Identifying the target market
Developing marketing strategies
Implementing, monitoring and controlling.
2. Market research
Primary research: surveys, interviews, observations, experiments
Secondary research: *can be internal or external-census, data, competitors sales
data, annual reports
Demographic
Sociocultural
Geographic
Psychographic
Marketing strategies
Market segmentation, product/service differentiation and
positioning
Identifying the niche markets within the mass market by grouping people with similar
characteristics.
Demographic: age, sex,
Geographic: location
Psychographic: lifestyle, social class, personality
Behavioural: consumer loyalty, purchase occasion, benefits sought, usage rate
Product/service differentiation= how a business separate themselves from the
competition. Price, product quality, providing after-sales.
Positioning= process or marketers creating an image/identity for their product,
brand and organisation. These can be based on factors such as price, quality, value,
Promotion
-elements of the promotion mix advertising, personal selling
and relationship marketing, sales promotions, publicity and
public relations
Place/distribution
-distribution channels
-channel choice intensive, selective, exclusive
-physical distribution issues transport, warehousing, inventory
Distribution channels: routes taken to get the product from the business to the
customer, e.g. ProducerRetailerCustomer.
Channel choice:
Intensive- saturate the market, e.g. milk
Selective-moderate proportion of all possible outlets, e.g. clothes sold in
department stores, e.g. big W
Exclusive-the use of only one retail outlet for a product in a large geographic
location, e.g. boutique.
Physical distribution issues:
Transport- needed to deliver products to stores.
Warehousing- involved in receiving, storing and dispatching goods.
Inventory- (stock) need inventory control to maintain quantities and varieties.
Processes: the flow of activities that a business will follow in its delivery of a service.
Physical evidence: the environment in which the service will be delivered, e.g.
signage, brochures, calling cards, website, etc.
E-marketing
The practice of using the internet to perform marketing activities. Webpage, podcasts,
sms, blogs, web 2.0, social media advertising.
Global marketing
-global branding
-standardisation
-customisation
-global pricing
-competitive positioning
Many TNCs adopt global marketing, e.g. Coca-Cola.
Global branding: worldwide use of a name, term, symbol, logo to identify a sellers
products.
Standardisation: the needs it satisfies are the same throughout the world, e.g.
mobiles
Customisation: the needs it satisfies are different between countries, e.g.
McDonalds menus.
Global pricing: customised, market-customised, standardised.
Competitive positioning: how a business will differentiate its products from other
businesses.
Finance
The planning and monitoring of a businesss financial resources in order
to allow the business to achieve its financial objectives.
Efficiency is the ability of the business to maximise its costs and manage its assets so
that maximum profit is achieved with the lowest possible level of assets.
Liquidity:
Liquidity refers to the ability of the business to pay short-term liabilities using its
current assets. Therefore the current assets need to be greater than current liabilities.
Solvency:
Solvency is the extent to which the business can meet its financial commitments in
the longer term (12 months+).
Short-term:
Short-term financial objectives are the tactical (one to two years) and operational (day
to day) plans of the business. They are mainly concerned with managing cash flow
and ensuring that the balance between current assets and current liabilities is positive
for the business.
Long-term:
Long-term financial objectives are the strategic plans of the business. They are mainly
concerned with the growing of the business and tend to be broad goals, e.g.
increasing profit and market share.
Ordinary shares are the usual way that an investor can buy part ownership of a public
company (a business listed on the Australian Securities Exchange or ASX).
New issues: a security that has been issued and sold for the first time on a public
market; sometimes referred to as primary shares or new offerings.
Rights issues: the privilege granted to shareholders to buy new shares in the same
company.
Placements: allotment of share, debentures, etc. made directly from the company to
investors.
Share purchase plans: an offer to existing shareholders in a listed company the
opportunity to purchase more shares in that company without brokerage fees. The
shares can also be offered at a discount to the current market price.
Private equity
Private equity refers to securities that are held in companies that are not listed and
not publicly traded in the Australian Securities Exchange (ASX). The aim of the private
company (like the publically listed companies who sell ordinary shares) is to raise
capital to finance future expansion/investment of the business.
Companies and corporations in Australia pay company tax on profits. Company tax is
paid before profits are distributed to shareholders as dividends.
Financial needs are essential to determine where a business is headed and how it will
get there. Important financial information needs to be collected before future plans
can be made. A new business will have to determine its start-up costs, e.g. cost of
equipment and employees. Once a business has begun operations financial
information from balance sheets, incomes statements and cash flow statements need
to be analysed to determine if profits can be given to shareholders.
Budgets
Budgets provide information in quantitative terms (facts and figures) about
requirements to achieve a particular purpose. Budgets are often prepared to predict a
range of activities relating to short-term and long-term plans and activities. Budgets
can be operating, project or financial.
Operating budgets- relate to the main activities of a business and may include
budgets relating to sales, production, raw materials, direct labour, expenses and cost
of goods sold.
Project budgets- relate to capital expenditure and, research and development.
Financial budgets- relate to financial data of a business and include the budgeted
income statement, balance sheet and cash flows.
Record systems
Record systems are the mechanisms employed by a business to ensure that data is
recorded and the information provided by record systems is accurate, reliable,
efficient and accessible.
Financial risks
These are the risks to a business of being unable to cover its financial obligations,
such as the debts that a business incurs through borrowings, both short-term and
longer term.
Financial controls
Financial controls are the policies and procedures that ensure that the plans of a
business will be achieved in the most efficient way. This enables the manager to
determine if the objectives set were achievable or need to be reassessed.
Disadvantages:
Costs to a business-establishment
costs and ongoing fees and charges
Security is required by the business
Equity financing
Related to the internal sources of finance in the business. It is the money lent to the
business in exchange for ownership, including start-up capital.
Advantages:
Remains in the business for an
indefinite time
Disadvantages:
Requires sufficient profits to be
made so that the business can
continue to operate
Lower profits and lower returns for
the owner
Equity is hard to obtain and can
take time to organise and,
therefore, may limit growth
Not tax deductible
When a business identifies and plans to meet its financial objective, it is necessary to
match the terms of finance with its purpose. This requires a business to consider:
The terms, flexibility and availability of finance
The cost of each source of funding- equity and debt
The structure of the business- small business and public company
Opening Balance
12
15
-4
-6
-8
-5
-3
10
Revenue
26
24
20
14
15
12
20
27
Expenses
20
20
17
14
15
11
16
10
12
10
15
Closing Balance
12
15
-4
-6
-8
-5
-3
10
22
Income statement
The income statement outlines the level of revenue (sales), cost of goods sold
(opening stock+purchases-closing stock) and operating expenses. It calculates
whether a business have made a profit or loss over a particular period of time, usually
a year.
Income Statement
Caroline-Anne's IT Supplies
For year ending 30 June 20X2
Sales
360 000
10 000
(+) Purchases
120 000
4 000
(-)Inventory 30 June
8 000
126 000
Gross Profit
234 000
5 000
Depreciation
1 000
Wages
50 000 56 000
General expenses
Insurance
4 000
Rent
34 000
Utilities
6 000 44 000
Financial expenses
Interest on loan
Interest on mortgage
Net profit
Balance sheet
13 000
3 000 16 000
116 000
118 000
The balance sheet is a statement showing the total value of a business on a particular
day (snapshot). It is based on the accounting equation: Assets (A) = Liabilities (L) +
Owners Equity (E)
Balance Sheet
El-Caf Pty Limited
As at 31 December 2000
Current Assets
Cash
1 300
Accounts receivable
3 000
Inventory
3 000
7 300
Non-Current Assets
Plant and machinery
10 000
Buildings
140 000
Good will
50 000
Total Assets
200 000
207 300
Current Liabilities
Accounts payable
14 300
Overdraft
6 000
20 300
Non-Current Liabilities
Bank Loan
34 000
Mortgage
70 000
Total Liabilities
104 000
124 300
Owner's Equity
Capital
75 000
Retained Earnings
8 000
Total L & OE
83 000
207 300
Financial ratios
-liquidity- current ratio (current assets current liabilities)
-gearing- debt to equity ratio (total liabilities total equity)
NET PROFIT
Net Profit Ratio = Net Profit Sales X 100%
The profit or return to the owners. The higher the ratio the better.
RETURN ON EQUITY
Return on Equity Ratio = Net Profit Total Equity X 100%
How effective the funds contributed by the owners have been in generating profit. The
higher the ratio or percentage, the better the return for the owner.
Efficiency
Efficiency is the ability of the firm to use its resources effectively in ensuring financial
stability and profitability of the business. The more efficient the firm, the greater its
profits and financial stability.
EXPENSE
Expense Ratio = Total Expenses Sales X 100%
The amount of sales that are allocated to individual expenses, the lower the better,
the more efficient.
ACCOUNTS RECEIVABLE TURNOVER
Accounts Receivable Turnover Ratio = Sales Accounts Receivable X 100%
The effectiveness of a firms credit policy and how efficiently it collects its debts. High
turnover ratios indicate that business has efficient debt collection. The bigger the
number the worse it is.
Comparative ratio analysis
Over different time periods: comparing ratios for a business over various periods to
identify trends and assist with interpretation of ratio results.
Against common standards: such as industry averages and benchmarks to assist a
mangers interpretation and decision-making on the businesss performance.
With similar businesses: comparing ratios from businesses in the same industry and of
the same size will give further insight into the performance of a business.
Record keeping- all accounting processes depend on how accurate and honest
data is recorded in financial reports
GST obligations- businesses have an ethical and legal obligation to comply with
GST reporting requirements
Reporting practices- accurate financial reports are necessary for taxation
purposes as well as for other stakeholders.
Businesses are to not make the business look better than it actually is by adding
revenues that do not exist
Businesses should show all liabilities and expenses in the balance sheets and
income statements
Accountants must display integrity, confidentiality and a high level of
professional and technical ability
Financial managers and accounts cannot be creative when recording
transaction and preparing financial reports in order to make the business appear
more profitable
Managers should not use the businesss credit cards for personal expenses
the cost of the loan to other sources of finance to find that most appropriate and cost
efficient source.
Overdrafts: a relatively cheap and convenient form of short-term borrowing.
Businesses may control overdrafts by ensuring that all cash received is promptly
deposited in the businesss account to reduce the amount owing.
Strategies
Leasing: the hiring of an asset from another person or company. By leasing assets the
business maintains more working capital to invest in other assets and opportunities
for expansion of the business.
Sale and lease-back: involves the selling of assets such as buildings and equipment
and leasing them back from the purchaser. This increases a businesss liquidity as the
cash that is obtained from the sale is used as working capital.
Profitability management
-cost controls- fixed and variable, cost centres, expense
minimisation
-revenue controls- marketing objectives
Profitability management: involves the control of both the businesss expenses and its
revenue.
Cost controls
Fixed and Variable costs: fixed costs do not change when the levels of activity
changes, e.g. rent, insurance. To minimise fixed costs it is essential to negotiate
satisfactory arrangements initially or to take advantage of discounts for early
payments. Variable costs change proportionally with the level of operating activity in a
business, e.g. advertising, employee wages, overtime payments. Strategies to reduce
variable costs include: negotiating discounts with all suppliers, reducing the number of
suppliers and/or switching to a cheaper supplier.
Cost Centres: the expenses associated with each key business function. Businesses
attempt to control costs by allocating a proportion of total costs (direct and indirect) to
particular parts of the business. These cost centres are then responsible and held
accountable for the costs that they incur.
Expense Minimisation: the reduction of costs and expenses in order to maximise the
profits and gain a competitive advantage. Strategies include outsourcing, sales and
lease-back, replacing labour with technology and improving budget and accountability.
This is done to reduce expenses consuming valuable resources within the business.
Revenue controls
Marketing Objectives:
Sales objectives- the link between the marketing plan and the financial plan.
Sales targets are to maximise sales, increase the turnover of stock and
maximise revenues. Need to set targets to generate maximum revenue.
Sales mix- the range of products and services sold by the business. Businesses
should control this by maintaining a clear focus on the important customer base
when deciding whether to diversify or extend product ranges or ceasing
production. Need to review each products profit-margin contribution
Pricing policy- is necessary as the setting of prices is a complicated task and
staff need to be aware of the business strategy for pricing. The main aim of
pricing policy is to balance sales with profits. Pricing decisions should be closely
monitored and controlled. Overpricing could fail to attract customers, while
under-pricing may bring higher sales but may still result in cash shortfall and
low profits. Need to review price penetration, price skimming, price points and
discounts.
Human Resources
Role of human resource management
The management of the total relationship between employer and
employee.
Strategic role of human resources
Ensures that the business has well trained staff that will benefit the business in the
long-term. By being proactive and adopting a long-term approach, managers may
seek to improve a diverse range of human resource issues within the business, e.g.
policies and practices. The business must also develop appropriate performance
review measures to examine the effectiveness and efficiency of their employees.
decline in the hiring of new employees may be present to ensure the business is
liquid.
Outsourcing
-human resource functions
-using contractors- domestic, global
Outsourcing- when a company takes a part of its business functions and gives it to
another company to complete.
Human resource functions
The human resource function is the second most frequently outsourced after
information technology.
The most commonly outsourced human resource functions include: recruitment,
induction, leadership training, mediation, outplacement and payroll. However,
businesses need to realise that outsourcing may not solve the problems that it was
supposed to. There are a number of disadvantages involved in outsourcing human
resources including: cost saving are not always achieved, employee unrest, problems
with outside HR provider, loss of control, and reasons for outsourcing the HR function
are not clear.
Using contractors
A contractor works for many employers as once the contract has been completed they
are free to offer their services to any other business. Contractors have independence
and are not subject to the regulations and directives of the business.
Domestic: domestic subcontracting is very common and avoids the need to employ
additional in-house staff, along with all the overhead expenses involved. Some risks
include: loss of customer contact.
Global: using global contractors as an external provider of services allows the
Australian business to access the use of labour without having to consider issues such
as minimum labour requirements and WH&S.
Key influences
Stakeholders- employers, employees, employer associations,
unions, government organisations, society
Each stakeholder seeks to protect and promote its own interests.
Employers
The individual or organisation that pays others to work for them. They are often the
owners and take responsibility in the organisations goals. They handle HR
management on a daily basis. Employers responsibilities are increasing due to recent
legislation requiring them to resolve disputes and negotiate agreements.
Employees
An individual who provides his or her skills to a business in return for a regular source
of income. They are now considered in the decision making process and workers can
now work from home to accommodate a work-life balance. Labour shortages are
looming due to aging population.
Employer associations
Organisations that aim to promote the interests of employers within the business
environment. They lobby governments to develop policies that enhance the interests
of the employer and consult with governments on changes to key policy issues. They
provide advice, negotiate agreements and make submissions to safety net wage
cases.
Unions
Are organisations formed by employees in an industry, trade or occupation to
represent them in efforts to improve wages and working conditions for members. They
provide representation in disputes, free or discounted legal services, superannuation
schemes, cheap home loans, training through TAFE, insurance and WH&S advice.
Government organisations
Government departments oversee legislation relating to employment relations. They
establish the legal framework by which employers, employees and trade unions
coexist and operate within the employment relationship.
Society
Workplace practices are reflective of behaviours that are upheld within society. Issues
such as discrimination and harassment are becoming publicised. Businesses must act
consistent with the views of society.
Economic
Economic factors impact on the demand for labour and the pressure of wage growth.
It involves the economic cycle, inflation and globalisation. Globalisation has increased
competitive pressures on businesses with many increasingly recruiting or outsourcing
functions offshore.
Technological
Changes in technology require employees to be trained in new technology. It can lead
to: increased levels of productivity, lower costs and improved profitability. It can
however lead to job losses and employees can lead to feeling less valued.
Living standards
Australias high living standards include: WH&S, regular wage increases, performance
bonuses, fringe benefits and leave and superannuation benefits. There is pressure
from global competition and conflict for desire of high living standards and work-life
balance.
Acquisition
Acquisition is the obtaining of employees. It requires the manager responsible for
employment relations to make decisions about and take action on planning the
organisations human resources needs, recruiting staff and selecting staff.
Acquisition involves analysing the internal environment (businesss goals and culture,
focus on cost containment, growth, downsizing, improved customer service or quality)
and the external environment (economic condition, competition, technology, and the
legal, political and social factors).
Recruitment: the process of locating and attracting the right quantity of staff to
apply for employment vacancies or anticipated vacancies at the right cost.
Selection: involves gathering information about each applicant and using that
information to choose the most appropriate applicant.
Placement: involves locating the employee in a position that best utilises the skills of
the individual to meet the needs of the business.
Development
Training:
Organisational development:
Performance appraisals:
Maintenance
Employee participation:
Benefits:
Anti-discrimination
Equal Employment Opportunities
Work, Health and Safety
Taxation
Social justice legislation
Bullying and sexual harassment
Separation
Separation is the ending of an employment relationship and can be either voluntary or
involuntary. Voluntary separation may take the form of resignation, relocation,
voluntary redundancy or retirement. Involuntary separation may take the form of
contract expiry, retrenchment or dismissal.
Dismissal:
Unfair Dismissal:
Participative/Democratic:
Delegative:
Recruitment: the process of locating and attracting the right quantity and quality of
staff to apply for employment vacancies or anticipated vacancies at the right cost.
Internal or External Recruitment:
Internal: involves filling job vacancies with people from within the business.
External: involved filling job vacancies with people from outside the business.
Benefits:
The employee has an improved understanding of their role and what needs to
be done.
The employer is able to identify and problems
Allows the employee to be aware of their personal goals
Developmental:
Focused on using data to develop the individual skills and abilities of employees,
so they improve their effectiveness in their role, overcome weaknesses and are
prepared for promotion.
Year round periodic feedback and shared discussion that is both emphatic and
goal focused
Administrative:
Individual or group:
Performance pay:
The process of linking part of an employees income to their performance at work
This concept recognises that employee motivation comes from financial benefits
Advantages= performance may improve, it encourages unmotivated staff and
inefficient individuals
Disadvantages= the performance of employees may be difficult to measure for
some jobs, some employees may seek non-financial rewards.
Uses the staff with the most appropriate skills for a particular role and
location
Builds a pool of managers with global experience
Can be complex and expensive- local employment regulations, relocation and
retraining costs.
Workplace disputes
-resolution- negotiation, mediation, grievance procedures,
involvement of courts and tribunals
Corporate Culture:
Refers to the values, ideas, expectations and beliefs shared by members of the
business.
The indicators that reveal a workplace has a poor corporate culture include:
High turnover rates indicate that employees are dissatisfied with their job, that
there is a problem with HR in the organisation and poor employment relations
High rates lead to a loss of productivity, profitability, corporate knowledge and
skills
Absenteeism:
Refers to employee absences, on an average day, without sick leave or leave
approves in advance.
High levels may indicate: workers are dissatisfied, conflict within workplace,
stressed, sickness, and personal needs/family issues.
Accidents:
Level of Disputation:
The greater number of disputes the more likely that the workforce is unhappy or
there is a poor working relationship between the employer and employee
Disputes may arise as a result of managerial policy, discrimination and use of
outsourcing
Formal grievance procedures are an indicator of poor quality relationships in the
workplace
Worker Satisfaction:
Refers to whether employees are happy and content and fulfilling their desires at work