OCR GCSE Business: People (J204) – Revision Notes

These are condensed notes for section 3 People (3.1 to 3.7) of the OCR GCSE (9-1) Business J204 specification, Version 2.0 (January 2026), part of Business 1: business activity, marketing and people (J204/01). For full explanations read the People study guide, then try the People practice questions.

Other pages: OCR GCSE Business hub, printable checklist, free diagnostics, the topic-level revision notes and the topic-level study guide.

3.1 Role of human resources

Purpose: identify and meet the human resource needs of a business.

• Identify: how many staff, which skills, when.
• Meet: recruit, select, motivate, train and keep them.
• Example: Birchwood Bikes, an invented repair shop, expects a busy summer. It must spot the need for a second mechanic in May, not in July.

3.2 Structures and ways of working

Terms (general meanings; the specification lists the terms without definitions)

Term	Short definition
Chain of command	Route that authority and instructions follow down the levels
Span of control	How many subordinates one manager directly supervises
Subordinates	Staff a manager is in charge of
Authority	Power to make decisions and give instructions
Delegation	Passing a task and the authority for it down the structure

Tall v flat

	Tall	Flat
Layers	Many	Few
Span	Narrow	Wide
Communication	Slower, risk of distortion	Faster
Promotion	Many steps	Few steps
Delegation	Less	More

A quick check: with a span of 5 and 125 staff at the bottom, the layers are 1, 5, 25, 125. That is four layers. Five managers each supervising 25 staff would give 1, 5, 125, only three.

Why structures differ

• Business size, type of work, skills of staff and how much control the owner wants.
• Effective communication: instructions and information must reach the right people quickly.
• Different job roles and responsibilities need to be clear.

Ways of working

Way (general meanings)	One-line meaning	Key plus	Key minus
Full-time	Normal full week	Reliable cover	Highest cost
Part-time	Fewer hours	Matches busy times	More people to manage
Flexible working	Hours agreed to suit both	Attracts and keeps staff	Rota harder
Temporary	Fixed period	Short-term demand	Less loyalty
Working from home	Job done at home	Less office space	Harder supervision
Working whilst mobile	Working on the move	Reaches customers	Needs equipment and signal
Self-employed	Runs own business	Pay for work done only	Less control

3.3 Communication

Methods: letter, email, text, phone, meeting/presentation, social media, website.

Choose…	When
Letter	Formal record needed
Email	Detail plus a written record
Text	Short and urgent
Phone	Quick two-way answer
Meeting/presentation	Discussion with a group
Social media	Public, fast customer contact
Website	Information open at all hours

Importance: staff know what to do; fewer errors; better decisions; customers served well.

Digital influence: faster messages, remote working, cheap reach to wide markets, instant customer feedback. Risks: information overload, data security, equipment costs and training.

3.4 Recruitment and selection

Why recruit: replace employees who leave, business growth, skill gaps.

Internal	External
Promotion or move of existing staff	Adverts, job websites, agencies
Cheaper, quicker, known candidate	Wider choice, new ideas
Narrow choice, leaves a vacancy	Slower, dearer, unknown candidate

• Job description: what the job involves.
• Person specification: what the candidate needs to be like.

Selection methods: CV, application form, letter of application, interviews, tests, group activities, references.

Method in steps:

1. Spot the vacancy and its reason.
2. Write the job description and person specification.
3. Choose internal or external methods.
4. Shortlist from CVs, forms or letters.
5. Select using interviews, tests, group activities and references.

Matching method to need: a rare skill points to external recruitment and a test; a team leader post points to internal promotion and an interview.

3.5 Motivation and retention

Financial	Non-financial
Pay	Praise
Bonuses	Award schemes
Profit sharing	Working environment
Fringe benefits

Small calculations to practise:

• Bonus: 3% of sales above £30,000, with sales of £44,000, is 3% of £14,000 = £420.
• Profit sharing: 5% of £90,000 profit is £4,500; split between 12 staff, £375 each.
• Leavers: 3 leavers at £1,200 each to replace costs £3,600.

Why motivation matters: better performance and helps retention. Why retention matters: staff already know the business and customers, and the business saves the time and expense of recruitment.

3.6 Training and development

Method	Meaning	Plus	Minus
Induction	Introduction to the business	Quick settling in	Takes time
On-the-job	Learn while working	Cheap, relevant	Slower output, bad habits
Off-the-job	Learn away from work	Specialist	Costly, time away

Why train: development of the business, productivity, skill shortages, customer service, motivation and retention.

Staff development: vocational and academic qualifications, apprenticeships.

Benefits to employees	Benefits to businesses
New skills and qualifications	More skilled workforce
Promotion chances	Easier to fill senior roles
Confidence	Higher motivation and retention

3.7 Employment law

The specification names the four areas below but no Acts or details, so this table is general wording. Describe how current legislation affects recruitment and employment in general terms.

Area	Impact in general terms
Discrimination	Fair treatment in recruitment and at work; decisions on ability to do the job
Right to a contract	Terms of employment must be set out
Holidays	Paid holiday to plan for
Hours of work	Rules on hours limit what a business can ask

Business impact: higher admin and training costs, versus fairer treatment and a stronger reputation.

Case-study skills

Use the command word to set the shape of your answer.

Command word	What to do
State, identify	Give the point; no explanation needed
Define	Give the exact meaning of the term
Calculate	Show the working, then the answer with units
Explain	Make a point, then say why or what follows
Analyse	Build a chain: point, effect on the business, consequence
Evaluate, justify	Weigh both sides, then reach a reasoned judgement that refers to the business
Recommend	Choose an option and support it

A reliable chain for people questions: name the method, link it to the business in the stem (its size, its staff, its customers), explain the effect, then say whether the effect is likely to be large or small and why. Time, cost and the needs of the particular business are the usual deciding factors.

Worked reminder: Birchwood Bikes must choose between promoting a current mechanic and advertising externally. Internal route: cheaper and faster, and the person is known, but it leaves a vacancy and brings no new ideas. External route: more choice and new skills, but dearer and riskier. If the shop needs a wheel-building specialist that nobody has, external recruitment is better; if it needs a reliable shift leader, promotion is more likely to suit.

Must-know distinctions

• Span of control is about numbers of subordinates; chain of command is about the line of authority.
• Recruitment is finding applicants; selection is choosing between them.
• Job description is the job; person specification is the person.
• Induction suits people who have just joined; on-the-job and off-the-job methods can be used with anyone.
• Training is for the current job; development looks wider.
• Financial motivation is money or money-linked; non-financial is not.

Quick self-test

1. State what is meant by span of control.
2. State two reasons a business might recruit.
3. Identify one internal and one external recruitment method.
4. Name two ways of working other than full-time.
5. A manager has 3 team leaders, each in charge of 5 staff. What is the manager’s span of control?
6. Calculate a bonus of 3% on sales above £30,000 when sales are £44,000.
7. State two financial methods of motivation.
8. Give one benefit of on-the-job training and one drawback.
9. Explain one way employment law may affect a business’s recruitment.
10. Explain why retaining staff may save a business money.

Answers

1. The number of subordinates who report directly to a manager.
2. Any two of: replace employees who leave, business growth, skill gaps.
3. Internal: promoting or moving a current employee. External: an advert on a job website.
4. Any two of: part-time, flexible working, temporary work, working from home, working whilst mobile, self-employed.
5. 3, because the manager’s direct subordinates are the three team leaders.
6. 3% of £14,000 = £420.
7. Any two of: pay, bonuses, profit sharing, fringe benefits.
8. Benefit: cheap and relevant to the actual job. Drawback: the trainer may pass on bad habits or output may slow.
9. Anti-discrimination rules mean the business must advertise and select on ability to do the job, not on personal characteristics, so adverts and interview questions need care.
10. Staying staff already know the business and customers, and the business avoids the time and expense of advertising, interviewing and inducting replacements.

Where marks are usually lost

• Giving the definition of span of control as “how many people are in the business”.
• Listing methods without applying them to the business in the case study.
• Mixing up recruitment and selection.
• Writing “better pay” as a non-financial method.
• Calling every part-timer or home worker self-employed.
• Not weighing both sides when asked to evaluate or justify.
• Describing employment law in detail you are unsure of instead of keeping to general impact.
• Forgetting units or the working in a calculation.

Frequently asked questions

What is span of control? Span of control is the number of subordinates who report directly to a manager. It is not the number of people in the whole business, which is a common wrong definition.

What is the difference between a job description and a person specification? A job description sets out what the job involves, such as its title, duties and responsibilities. A person specification sets out what the candidate needs to have, such as skills, qualifications and experience.

What are the main reasons a business recruits? In OCR GCSE Business (J204) the three reasons are to replace employees who leave, because of business growth, and to fill skill gaps.

Why does employee retention matter? Retained staff already know the business and its customers, and keeping them saves the time and cost of recruiting and training replacements. Motivation helps retention, and both support the business’s performance.

Official syllabus

OCR GCSE (9-1) Business J204, Version 2.0 (January 2026), published by OCR, section 3 People.