Grade 9

Business Studies
Chapter 8 & 9

Chapter-8

Recruitment, selection and training of employees

Definitions to learn
1. Recruitment is the process from identifying that the business needs to employ someone up to the
point at which applications have arrived at the business.
2. Employee selection is the process of evaluating candidates for a specific job and selecting an
individual for employment based on the needs of the organisation.
3. A job analysis identifies and records the responsibilities and tasks relating to a job.
4. A job description outlines the responsibilities and duties to be carried out by someone employed
to do a specific job.
5. A job specification is a document which outlines the requirements, qualifications, expertise,
physical characteristics, etc., for a specified job.
6. Internal recruitment is when a vacancy is filled by someone who is an existing employee of the
business.
7. External recruitment is when a vacancy is filled by someone who is not an existing employee and
will be new to the business.
8. Part-time employment is often considered to be between 1 and 30– 35 hours a week.
9. Full-time employees will usually work 35 hours or more a week. Induction training is an
introduction given to a new employee, explaining the business’s activities, customs and procedures
and introducing them to their fellow workers.
10. On-the-job training occurs by watching a more experienced worker doing the job.
11. Off-the-job training involves being trained away from the workplace, usually by specialist
trainers.
12. Workforce planning is establishing the workforce needed by the business for the foreseeable
future in terms of the number and skills of employees required.
13. Dismissal is when employment is ended against the will of the employee, usually for not working
in accordance with the employment contract.
14. Redundancy is when an employee is no longer needed and so loses their job. It is not due to any
aspect of their work being unsatisfactory.

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15. A contract of employment is a legal agreement between an employer and employee, listing the
rights and responsibilities of workers.
16. An industrial tribunal is a type of law court (or in some countries, a legal meeting) that makes
judgments on disagreements between companies and their employees, for example, workers’
complaints of unfair dismissal or discrimination at work.
17. An ethical decision is a decision taken by a manager or a company because of the moral code
observed by the firm.

Recruitment and selection

Businesses need to start the process of recruitment and selection when:
 an employee leaves their job and they need to be replaced
 it is a new business starting up and needs employees
 it is a successful business and wants to expand by employing more people.
The recruitment process gives the business an opportunity to assess the role of employees, the nature
of their jobs and future workforce requirements.

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A. Job analysis is when the human resource department identifies the job that needs to be filled
and what are the main skills needed for this job.
B. Job description is a list of the key points about job, job title, key duties, responsibility and
accountability. Job description has several functions:
i. It is given to the applicants for the job so they know exactly what the job entails.
ii. It will allow a job specification to be drawn up, to see if the applicants ‘match up to the
job’, so that people with the right skills will be employed.
iii. Once someone has been employed, it can show whether they are carrying out the job
effectively. If a dispute occurs about the employee’s tasks, the job specification can be
referred to in order to settle these questions.
Job descriptions often also contain information about:
 the conditions of employment – salary, hours of work, pension scheme and staff welfare
 training that will be offered
 opportunities for promotion.
C. A job/person specification is a list of the qualifications, skills, experience and personal qualities
that the business is looking for.
D. Job Advertising can be done in several ways like newspapers, industrial magazines, Online
recruitment sites, such as LinkedIn, recruitment agencies (Head-hunters).
E. Methods of application: applicants need to file an application form, or by writing a cover letter
and enclose a curriculum vitae (CV) or résumé. A CV is a summary of a person’s qualifications,
experience and qualities, and is written in a standard format. A business will use/screen the cover
letters, and CVs, to see which of the applicants best match the job specification.
Methods of selection:
 Interviews are still the most widely used form of selection. Interviews can be one-to-one,
two-to-one or a panel of people to interview the applicant. Panel interviews are usually
used for more senior positions.
Some businesses include tests in their selection process, for example: Skills tests aim to show
the ability of the candidate to carry out certain tasks.
 Aptitude tests aim to show the candidate’s potential to gain additional skills. Either
general intelligence tests or more specific tests are used to assess the candidate’s ability to
train for a particular job.

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  Personality tests are used if a particular type of person is required for the job, if the job
requires the ability to work under stress or if the person will need to fit in as part of a team
of people.
 Group situation tests give tasks to applicants to complete in group situations and the
group is observed. Each applicant will be assessed on the way they work as a member of
the team and the way they tackle the tasks themselves.
F. Selecting and recommending which workers to employ: The final decision of which workers to
employ depends on several factors: work experience, educational and other qualifications, age.
Rejecting unsuccessful applicants
When the suitable applicant has been offered the job and has accepted it, the unsuccessful applicants
should be informed that they have not got the job and thanked for applying.

Difference between internal and external recruitment

Internal recruitment: Filling a vacant post with someone already employed in the business

Advantages:
 Vacancy can be filled more quickly and cheaply
 Applicants already knows how the business works
 Business already knows the strengths and weaknesses of applicants
 Workers can become motivated when they see that there is a chance for promotion
Disadvantages:
 A better candidate may have been available from outside the business
 It could cause conflict between the workers if they wanted the promotion
 Does not bring in new ideas
 The previous job of the person who has been promoted needs to be replaced
External recruitment: Filling a vacant post with somebody not already employed in the business
Advantages:
 External applicants may bring in new ideas
 Wider choice of applicants with different skills and experience
 Avoids the risk of upsetting workers when someone who is internal is promoted
Disadvantages:
 Takes longer to fill the vacancy
 More expensive because the job needs to be advertised
 Applicants will need training

Benefits and limitations of part-time and full-time workers

Part-time workers
Benefits:

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 Provides greater flexibility, so if workers are sick then part-time workers can cover their duties
 Business can often attract well-qualified workers
 May agree for a low salary as good work-life balance
 Cheaper for the employer than employing a full-time worker
 It is easier to make part-time workers redundant.
Limitations:
 Increase in induction and training costs
 Could be communication problems; more difficult to communicate with part-time employees when
they are not in work.
 Quality of service may not be as good as full-time workers
 Less committed to the organization
 less likely to seek training because the employees may see the job as temporary
Full-time workers
Benefits
 They know the business better than part-time workers
 They may be more experienced
 They may be more loyal to the business
 Available for longer hours
 Carry out more tasks
Limitations:
 Workers may not be always so motivated
 More expensive than part-time workers
 No flexible working hours

The importance of training and the methods of training

There should be clear objectives for training employees. Training is important to a business as it may
be used to:
 introduce a new process or new equipment
 improve the efficiency of the workforce
 provide training for unskilled workers to make them more valuable to the company
 decrease the supervision needed
 improve the opportunity for internal promotion
 decrease the chances of accidents

Employees should be clear about the benefits of the training or they will not work hard or take
the training seriously. Training is usually trying to achieve one or more of the following:
 To increase skills
 To increase knowledge
 To improve employees’ attitudes to encourage them to accept change and raise awareness, for
example, a need to improve customer service

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There are three types of training
 Induction Training – where the employee is given an introduction on the company’s
procedures and customs, and is introduced to their co-workers

Advantages Disadvantages
Employees settle into their job quickly Means wages are paid but no work is being
done by the worker
Workers make fewer mistakes Delays the start of work for the employee
May be a legal requirement Time consuming

 On-the-job Training – where the employee does the job while being supervised by a more
experienced worker, giving tips, suggestions and help

Advantages Disadvantages
Employee does not need to be sent away, Not recognized training qualifications
hence; travel costs are saved outside the business
Cheaper than off-the-job training Trainer might have bad habits and pass on
to employee
It ensures there is some production from the Trainer won’t be as productive because they
worker while they are training are teaching employee

 Off-the-job training – where the employee is trained away from the workplace, normally
by specialized trainers.

Advantages
a broad range of skills can be taught using
these techniques
trainings are sometimes off-work hours,
worker will still work
Employees become versatile (can be moved
around company and know what to do)
Disadvantages
Expensive to send employees off to expert
trainings
Professional training gives employees
additional qualifications, makes it easier for
employee to find another job
Worker does not produce any output during
training

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Why reducing the size of the workforce might be necessary
Workforce planning is where a business decides on the type and number of employees needed in
the future.
There are times business needs to downsize the workforce (reduce the number of employees). This
can be because of:
 introduction of automation
 falling demand for their goods or services
 factory/shop/office closure
 relocating their factory abroad
 a business has merged or been taken over and some jobs have become surplus to requirements
in the newly combined business.
If a business needs to reduce the number of employees, this can be done in one of two ways:
 dismissal; This is where a worker is told to leave their job because their work or behaviour is
unsatisfactory. For example, an employee who was constantly late for work and who, despite
being given warnings, continued to be late, would probably be dismissed. An employee who was
caught stealing or who was unable to do the job to a satisfactory standard would be dismissed.
 Redundancy, there may be occasions when a number of employees will no longer be needed,
through no fault of their own. When an employee is made redundant, they may be given some
money to compensate them for losing their job.

Which workers to make redundant?

The following factors help a business to decide which workers to make redundant and which to
retain:
 Some workers may volunteer and be happy to be made redundant – because they may have
another job they can go to; they want to retire early or they want to start their own business.
 Length of time employed by the business – workers who have worked for the business for a long
time are often retained. They will have the most experience and be the most expensive to make
redundant, if redundancy payments are made.
 Workers with essential skills that are needed by the business or whose skills could be transferable
to other departments are often retained.
 Employment history of the worker – whether they have a good/poor attendance, punctuality or
appraisal record.
 Which departments of the business need to lose workers and which need to retain workers.
Workers may also leave their job because they:
 retire (they are getting older and want to stop working)
 resign (because they have found another job)

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Legal controls over employment issues
In many countries governments have passed laws that affect the relationship between employers and
employees. The most important employment issues affected by legal controls are:
 employment contracts
 unfair dismissal
 discrimination
 health and safety
 legal minimum wage.

The contract of employment

It will set out the terms of the relationship between the employee and the employer. It will usually be
set out in writing and include:
 name of the employer and name of the employee
 job title
 date when employment is to begin
 hours to be worked
 rate of pay and any other benefits such as bonus, sick pay, pension
 when payment will be made
 holiday entitlement
 amount of notice that the employer or the employee must give to end the employment

Impact of employment contracts on employers and employees

 Both employers and employees know what is expected of them.
 It provides some security of employment to the employee.
 If the employee does not meet the conditions of the contract, then legal dismissal is allowed.
 If the employer fails to meet the conditions of the contract, for example, does not offer the
holidays the worker is entitled to, then the employee can seek legally binding compensation.

Unfair dismissal
There are laws that protect worker from unfair dismissal, employers must have a good reason to
dismiss the employee and if the employee feels that he/she has been unfairly dismissed, they can take
legal action against the employer
Impact of unfair dismissal on employer and employee
 Employer must keep very accurate records of a worker’s performance if they want to claim that
the employee has broken their contract of employment before dismissing them.
 Employees have security of employment – as long as they fulfil their contract and are not made
redundant.
 Allows employees to take their employer to an industrial tribunal if they feel they have been
treated unfairly and they may get compensation if this is found to be true.
 Makes a business less likely to treat employees unfairly as they know they may be taken to an
industrial tribunal and may have to pay compensation or give the employee their job back.

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Protection against discrimination
Discrimination at work is when the employer makes decisions that are based on ‘unfair’ reasons. The
main examples are when workers are treated differently because they:
 are of a different race or colour
 belong to a different religion
 are of the opposite sex
 are considered too old/young for the job
 are disabled in some way
Impact of discrimination on employers and employees
 Employees should be treated equally in the workplace and when being recruited, and they should
be paid equal amounts for similar work.
 If a man and a woman are both equally well-qualified for a job they should be treated equally. It
should not be the case that one rather than the other is given the job simply because of their sex.
 Employees who have a disability, are from different races or of different religions should be
treated in the same way as all other workers.
 Employers have to be careful when wording an advertisement for a job, for example, they cannot
advertise for a woman – they must say ‘person’.
 When selecting an employee for a job an employer must treat all applicants equally. If a
business does not do this, then it could be prosecuted and fined.
 By following these laws carefully, businesses should recruit and promote staff on merit alone and
this should help to increase motivation at work.

Health and safety

Health and safety laws are enforced to ensure that the environment of the workplace is safe to
work in and that the workers feel comfortable working there.
In most countries there are now laws which make sure that all employers:
 protect workers from dangerous machinery
 provide safety equipment and clothing
 provide hygienic conditions and washing facilities
 do not insist on excessively long shifts and provide breaks in the work timetable
Impact of health and safety on employers and employees
 Cost to employer of meeting the health and safety regulations, for example, better fire-fighting
equipment.
 Time needs to be found to train workers in health and safety precautions.
 Workers feel ‘safer’ and more motivated at work.
 Reduces accident rate and the cost of compensation for workers injured at work

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Legal minimum wage
This law prevents employers from exploiting workers by paying very low wages. Government
imposes minimum wage rates.
Impact of legal minimum wage on employers and employees
 It should prevent strong employers from exploiting unskilled workers who could not easily find
other work.
 As many unskilled workers will now be receiving higher wages, it might encourage employers to
train them to make sure that they are more productive.
 It will encourage more people to seek work. There should be fewer shortages of workers.
 Low-paid workers will earn more and will have higher living standards, meaning they will be
able to afford to buy more.
 It increases business costs, which will force them to increase prices.
 Some employers will not be able to afford these wage rates. They may make workers redundant
instead. Unemployment may rise.
 Other workers receiving just above the minimum wage level may ask for higher wages to keep
the same differential between themselves

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 Chapter-9

Internal and external communication

Definitions to learn
1. Communication is the transferring of a message from the sender to the receiver, who understands
the message.
2. A message is the information or instructions being passed by the sender to the receiver.
3. Internal communication is between members of the same organisation.
4. External communication is between the organisation and other organisations or individuals.
5. The transmitter or sender of the message is the person starting off the process by sending the
message.
6. The medium of communication is the method used to send a message, for example, a letter is a
method of written communication and a meeting is a method of verbal communication.
7. The receiver is the person who receives the message.
8. Feedback is the reply from the receiver which shows whether the message has arrived, been
understood and, if necessary, acted upon.
9. One-way communication involves a message which does not call for or require a response.
10. Two-way communication is when the receiver gives a response to the message and there is a
discussion about it.
11. Formal communication is when messages are sent through established channels using
professional language.
12. Informal communication is when information is sent and received casually using everyday
language.
13. Communication barriers are factors that stop effective communication of messages.

Effective communication and its importance to business

Communication ensures that all parts of a business's operations run smoothly and that employees
understand what they need to do. Everything needs to be clear to prevent costly mistakes and waste.

Effective communication involves:

The transmitter/sender sending a message to pass on information
 A medium of communication – the method for sending message (i.e. e-mail, phone, etc)
 The message being sent to the receiver
 The receiver confirming that the message has been received and responds to it (feedback)
Effective communication can help
 Reduce the risk of mistakes
 Enable faster decision-making
 Enable quicker responses to market changes
 Improve coordination between departments
 Improve morale and motivation of the workforce

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 Improve customer relationships

There are two types of communication in businesses:

 Internal Communication – communication between employees of the same business
 External Communication – communication between the business and other businesses and
individuals’ External communication has to be especially efficient because it establishes the image
and the efficiency of a business

Benefits and limitations of different communication methods including

those based on information technology
Oral communication: Most appropriate when more than two people need to discuss things. Includes
one on communication. Sender speaks to the receiver.
Benefits
 Easy to communicate
 Direct feedback
 May help build relationships between employees or even customers
 Personal contact
 Message is reinforced by the speaker’s body language
Limitations
 May be hard to make an appointment as people may be busy
 Takes up quite some time
 No permanent record
 Receiver might not listen
Written communication: Provide a permanent record of a message and can be looked at more than
once to check understanding. It is recorded in a document.
Benefits
 The information is clear and can be looked at more than once
 Message cannot be changed
 Easy to explain complicated messages
 Can be sent to many receivers
 Message can be referred to in the future “hard evidence”
Limitations
 Slower way of communicating
 Two-way communication is difficult
 Hard to check if message has been received
 Messages may be lost or destroyed
 Time consuming

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 No personal contact
Main types of written communication include:
 Purchase order
 Minutes of meeting (written record of what was discussed at a meeting)
 Agenda (Order for the conduct of a meeting)
 Memorandum (communication within the business)
 Job descriptions (written statement of what every worker's job involves)
 Invoice (Official form sent to customer requesting payment for goods)
 Company magazine
Electronic communication: Communicating via email, fax or text messaging
Benefits
 Messages received instantly
 Video chats making it more real
 Can be sent to many receivers
Limitations
 Connection problems
 Emails sometimes sent to junk
 Not everyone has electronic communication
 Equipment and software can be expensive
Visual communication: Includes presentations using graphs, charts, videos etc
Benefits
 Information more interesting
 Photographs or videos often have a greater impact than just words
 Pictures and charts are easier to understand
Limitations
 Takes time for preparation
 Costs money to create visual communication
 Details may be lost

Factors included when choosing the best method of communication:

 The importance of a written record
 The advantages to be gained from staff input / two-way communication.
 Cost - electronic media can often require expensive capital resources.
 Speed - electronic means can be quick.
 Quantity of data to be communicated.
 Whether more than one method should be used for clarity & to be sure that the message has been
received
 Size & geographical spread of the business

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How communication barriers arise and problems of ineffective
communication; how communication barriers can be reduced or
removed
How communication barriers arise:
 Language is too complex
 Channel of communication is too long
 Demotivated workers don't listen to the message properly
 Poorly disciplined workers
 Too much noise between the sender and receive
 Language barrier
Problems of communication barriers:
 Tasks are not completed which increases waste
 Damaged reputation of the business
 Higher risk of accidents
 Poor sales
 Recruitment problems
How they can be reduced or removed:
 Make sure the language used is appropriate to the receiver
 Keep the channel of communication as short as possible
 The sender must always insist on receiving feedback for they know it has been read and understood
 Physical barriers such as noise should be removed
 Management must build a culture of trust and respect between all employees

Communication Barriers and how to overcome the barriers (Summary)

Communication Barriers – things that prevent efficient communication
Problems with the sender: when language is too difficult, speaks too quickly/not clearly, communicates
wrong message
Overcome by: using understandable language, making sure message is a clear as possible by asking
questions to make sure message was understood
Problems with the medium: message may be lost/not seen by receiver, wrong medium used (i.e.,
important message on noticeboard), if message is being passed along – it might get distorted
Overcome by: sender asking for feedback/receiver always sending feedback that message is received,
selecting the appropriate channel to send message
Problems with the receiver: not listening/paying attention, receiver doesn’t trust the sender/doesn’t
want to do it
Overcome by: emphasizing importance of message, ask for feedback to ensure it was understood, using
direct communication

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