Chapter 7 Notes by Ethan lee, Jeremy Bland, and Bailey Olmstead
Definitions:
Compensation: the money and other benefits that employees receive by doing work
Minimum wage: the lowest hourly wage an employer can pay to an employee
Overtime: a higher hourly rate for working longer than the regular scheduled time or for working on holidays
Salary: a fixed amount of money paid to an employee on a regular schedule
Commission: a form of pay based on the amount of sales generated by the employee
Incentive: something added to the pay of an employee to encourage harder work or particular types of work
Bonus: a reward for good performance
Sales Quotas: a performance goal that an employee is expected to achieve
Piecework: a form of pay based on the amount of a particular product a person can make
Sweat shops: a piecework factory with low wages and unsafe/ unhealthy working conditions
Licensing fee: money paid to obtain a license
Royalty: the fee paid to the owner of a patient or copy right by someone who used it
Licensee: a company that leases an idea
Stock options: when a business offers employees shares of the company for a lower price
Sick pay: wages paid to an employee who is sick and is absent from work
Wellness programmes: a programme that promotes and encourages the physical and emotional health of an employee
Labour market: the way connections are established between buyers and sellers of skills
Occupational forecast: predictions about jobs
Unskilled labour: labour required for a job that almost anyone could do because it requires very little training
Semi-skilled labour: labour for positions that need training from an educational institution, employees will be effective and
productive after training
Skilled labour: labour for positions that need training from an educational institution and from previous employment
Professional labour: highly skilled/trained people in specific occupations such as accountants and electricians
Organization and Management:
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An organization is a method of combining people, finances, and physical resources
A business’ organization is designed to acquire, store, transform, and distribute goods and services to
achieve a business’ objectives
Organizational structures
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Most businesses are structured into departments, this is called departmentalization
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Most department are formed on one of five bases: function, geography, product, customers, time
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Function: a department type that’s organized by assigning roles to people putting them in charge of each
process of the service/product.
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Geography: a department type that’s organized by putting people in charge of different divisions, a
different person in each region
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Product: a department type that’s organized according to the product, examples are for music or clothing,
accessories, etc.
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Customers: a department organized by focusing their departments on different categories of customers.
Such as food distribution etc.
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Time: organized by shifts, hours etc. Variety stores, etc.
Organization Charts

Graphically shows how the company is structures, including: lines of authority, how the business is
departmentalized, the relationship of one department to another, various positions in the business

Work Teams: made up of qualified people from different departments grouped together for a specific task
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Informal Business Structure: business based on who really speaks to whom
How management functions:
Management – tries to achieve the company’s goals by deciding how best to use to business’ human, financial, and material
resources
Planning

The process of setting realistic goals for a business – both short-term and long-term and deciding how best
to achieve them
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Managers must understand these goals and develop strategies to achieve them
Organizing
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Each department within a company has its own manager, who is responsible for organizing the department

Determines tasks and duties for the department and establishes relationships with other department to
help achieve company goals

Divisional managers are a business’ executives organize department managers
Directing

Directing is focusing employees on achieving goals and to motivate their staff to work hard

Autocratic leaders do not allow their employees to participate in decision making, democratic are the
opposite

Directing involves the manager giving amenities to their employee to motivate them to work harder
Controlling

Controlling Is the method managers use to increase, maintain, or decrease the resources that they are
allocated

A company’s profit and overall income has an impact on controlling, helping them determine what they
need to do to achieve their goals
Staffing

Have a department devoted to staffing

STAFFING IS HIRING PEOPLE
Managing resources:

A managers ability to hire, train, direct, and motivate their employees is key
Purchasing
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Negotiates deals for the supply and delivery of raw materials

Just in time delivery reduces shipping costs and warehouse needs
Production

Ensures a business makes the things they’re supposed to make

Arranges raw materials to be processed into a finished product
Marketing and distribution

Tries to ensure that whenever the production department produces gets sold, the marketing manager
develops sales strategies

Includes ads, promos, publicity
Research and development

Create new products based on previous consumer needs to try and create a popular product

Uses feedback and info on the market
Finance
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The comptroller or manager of the financial department is often an accountant

They keep records of the company’s financial records and transactions and controls the companies money

Sets budgets and goals
Role of the Human Resources Manager:
The human resources manager is responsible for coordinating all activities involving the company’s employees. These
activities include:
Determining when a new employee is required and what skills they should have
Searching for applicants
Conducting interviews
Selecting the best candidate
Training new employees and organizing ongoing training for current employees
Creating programs that will help retain good employees
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Handling worker transitions.
Determining the need for a new employee:
The human resources manager looks at several things to determine whether they need a new employee, and if they
should be hired from outside the company or not, such as:
Employee turnover (rate at which employees leave the company voluntarily)
Check employee records, looking to find length of service, skill level, training received, and performance evaluations.
If there are still no suitable candidates, then employees from outside the company will be looked at. Often times this is
caused by a vacancy.
Methods used to find the right employee:
Advertise in newspapers, journals, and magazines
Recruiting on University and College campuses
Post the job at Human Resources Development Canada (HRDC)
Post the job on the company website
Use high school or University co-op programs
Hire and employee search firm (headhunter)
Use an employee referral program
Search the files of recent job applicants
The Application process and the Interview:
After the applications are looked over, interviews are conducted where often the company managers will attend and ask
the applicants questions about their skills, work ethic, values, interests, and personality. Sometimes applicants can be called back
for two or three interviews to narrow it down.
Job Training:
The human resources department coordinates orientation and training for all new employees. During Orientation, new
employees are informed of the business’s policies on compensation, work hours, benefits, rules of behavior, dress codes, health
and safety procedures etc. Some have motivational presentations, stress management training, and productivity and management
skills training.
Keeping Good Employees:
Human resources managers want to ensure their employees continue to work for their company because a high
employee turnover results in less revenue for the company, more time and money training and hiring new employees, and less
experienced and efficient employees. Because of this some companies use methods such as gyms, massages, food, and reading
rooms to convince their employees to stay with their company.
Transitions:
Human resources managers to their best to make employees leaving the company, have an easy transition in order to
maintain a good relationship with them and their relationship with the company.
Departures:
When an employee quits for whatever reason, they are often helped transition by the human resources manager. They
help with exit interviews where the employee’s future goals are discussed among other things about the employee’s experience
working for the company, such as their tips and suggestions on how to improve the company’s work environment.
Dismissals:
When an employee is laid off to cut expenses in the company, in which case the employee is typically given a
severance package which contains a final payment to tide the employee over until they find a new job. Sometimes however an
employee is dismissed if the employer does not like certain qualities of the employee or certain things the employee does or
doesn’t do. Sometimes if this persists the employer will have a corrective interview where they discuss these problems and if they
are corrected then the employee is usually secure, however if these issues are not corrected, then they will most likely face
dismissal.
Retirement:
When most people hit a certain age, and feel financially secure, they will often retire. A pension is given to these
people as long as they fit the requirements for one. This gives them a source of income even after they stopped working.