OCR GCSE Business: People (J204)

This guide teaches section 3 People (topics 3.1 to 3.7) of the OCR GCSE (9-1) Business J204 specification, Version 2.0 (January 2026). The content sits in Business 1: business activity, marketing and people (J204/01), and the specification says learners also draw on it for the synoptic questions in Business 2.

Use it with the OCR GCSE Business hub, the printable checklist and the free diagnostics. The wider topic page is the Business activity, marketing and people study guide. For quick recall use the People revision notes, then test yourself with the People practice questions. Earlier general material is in the topic-level revision notes and the topic-level practice set.

What section 3 covers

Topic	What you need to be able to do
3.1 The role of human resources	Explain the purpose of human resources: identifying and meeting the human resource needs of a business
3.2 Organisational structures and different ways of working	Tall and flat structures; organisation chart terms; why structures differ; ways of working
3.3 Communication in business	Methods, importance, and the influence of digital communication
3.4 Recruitment and selection	Why, how (internal and external), and selection methods
3.5 Motivation and retention	Financial and non-financial methods; why motivation and retention matter
3.6 Training and development	Training methods, why businesses train, staff development and its benefits
3.7 Employment law	The impact of current legislation on recruitment and employment

3.1 The role of human resources

The purpose of human resources is to identify and meet the human resource needs of a business. That means working out how many people the business needs, with which skills, when, and then making sure they are found, kept and equipped to do the work.

Take Saltmarsh Joinery, an invented firm making fitted kitchens. Orders rise in spring. Human resources must spot that the workshop will need two more fitters by April (identifying the need) and then advertise, select and train them (meeting the need). Hiring late delays jobs; hiring too many raises wage costs.

3.2 Organisational structures and ways of working

Tall and flat structures

An organisation chart shows how a business is arranged. The specification lists these terms but gives no definitions, so the meanings below are general wording, not OCR’s:

Term	Meaning (general wording)
Chain of command	The route along which authority and instructions pass downwards through the levels, showing who reports to whom
Span of control	How many subordinates a single manager directly supervises
Subordinates	The staff a manager is directly in charge of
Authority	The power to make decisions and give instructions
Delegation	Passing a task, and the authority to carry it out, to someone lower in the structure

A tall structure has many levels and usually a narrow span of control. A flat structure has few levels and usually a wide span.

Suppose a business has 64 staff at the bottom of its chart. With a span of control of 4, the layers are 1 at the top, 4, then 16, then 64: four layers. With a span of 8, the layers are 1, 8, 64: three layers. The flat version needs 9 managers above the bottom layer, the tall version needs 21.

	Tall	Flat
Communication	Messages pass through many levels, so slower and may be distorted	Fewer levels, so quicker and clearer
Supervision	Close, because spans are narrow	Looser, so staff have more freedom
Promotion	Many steps, so clear career path	Few steps, so fewer chances to move up
Management cost	More managers to pay	Fewer managers to pay
Delegation	Less needed	Needed, because managers cannot do everything

Why businesses have different structures

Structure should fit the business: a design studio with 6 staff needs no long chain of command, while a large food factory may want narrow spans. Size, the type of work, the skills of staff and how much control owners want all matter. Effective communication is the test of a good structure: if decisions and instructions reach people quickly and accurately, the structure is working. Different job roles and responsibilities must be clear, so each person knows what they are accountable for and who they report to.

Ways of working

The meanings, benefits and drawbacks here are general explanations, not OCR wording.

Way of working	General meaning	Benefit to business	Possible drawback
Full-time	Works the normal full week set by the business	Reliable cover, staff build skills	Highest wage bill; less flexible
Part-time	Works fewer hours than full-time	Cover at busy times; lower cost when quiet	More people to manage and train
Flexible working	Hours or pattern agreed to suit worker and business	Helps recruit and keep staff	Harder to schedule cover
Temporary work	Employed for a limited period	Meets short-term demand without long commitment	Less loyalty; training may be wasted
Working from home	Does the job from home	Saves office space; widens recruitment	Harder to supervise; communication needs effort
Working whilst mobile	Works while travelling or on the move, for example sales staff using phones and tablets	Customers reached on site	Needs equipment and reliable signal
Self-employed	Runs their own business and is hired for the work	Business pays only for work done	Less control over how and when work is done

Example: Larkhill Print, an invented printer, uses three part-timers for 16 hours each. That gives 48 hours of extra cover for the Friday rush.

3.3 Communication in business

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

Method	Good for	Weakness
Letter	Formal records, contracts, official notices	Slow, costly
Email	Detailed messages and attachments, with a written record	Can be unread or ignored; tone is easily misjudged
Text	Short, urgent alerts	Little detail; informal
Phone	Quick two-way discussion	No written record unless noted
Meeting/presentation	Discussing, explaining and deciding with many people	Takes time; costs working hours
Social media	Reaching customers publicly, quick replies	Messages are public; needs monitoring
Website	Information available at any hour	Needs updating; one-way unless it has contact tools

Why communication matters

Good communication tells staff what to do, supports sound decisions, helps customers get answers and reduces mistakes. Poor communication causes delays, errors and lost sales.

The influence of digital communication

Digital methods have changed business activity. Email, messaging and video meetings let staff work from home or whilst mobile. Websites and social media let a small business reach a wide market cheaply. Customers can complain or praise in public at once, so a business must reply quickly. On the other side, staff may face information overload, security risks if data is mishandled, and the cost of equipment and training.

3.4 Recruitment and selection

Why businesses recruit

Three reasons you must know: to replace employees who leave, because of business growth, and to fill skill gaps.

Recruitment methods

Internal methods	External methods
Notice board or intranet advert; promotion of existing staff	Newspaper or trade press adverts, job websites, recruitment agencies, advert on own website
Cheaper and faster; candidate already known and motivated by promotion	Wider choice of candidates; fresh ideas and skills
Limited choice; leaves another vacancy; no new ideas	Slower and more expensive; candidate less known

Choose the method to fit the need. A joinery firm needing a specialist machinist, which nobody on site can do, must recruit externally. A supervisor vacancy could be filled internally, rewarding good staff.

A job description sets out the title, duties and responsibilities of the job. A person specification sets out the qualities, skills, experience and qualifications the ideal candidate needs.

Methods of selection

Method	Use	Limitation
CV	Summary of experience and qualifications	Candidate controls content
Application form	Same questions for everyone, easy to compare	Takes time to complete and read
Letter of application	Shows motivation and written skill	Hard to compare; may be help from others
Interview	Meets candidate, tests communication	Costly in time; first impressions may bias
Tests	Checks a skill or aptitude directly	Test must match the job
Group activities	Shows teamwork and leadership	Quiet candidates may be undervalued
References	Check past performance from a former employer	May be unhelpful or too positive

Example cost of replacing one leaver at Saltmarsh Joinery: advert £640, plus 12 hours of interview time at £25 an hour (£300), plus 30 hours of supervised induction at £18 an hour (£540). Total: £1,480. If five fitters leave in a year, the cost is £7,400. This is why retention matters.

3.5 Motivation and retention

Motivation is the desire to do a good job.

Financial methods

Method	How it works
Pay	Wages or salary; the basic reward
Bonuses	Extra payment for meeting a target. Example: 2% of sales above £40,000; sales of £52,500 give 2% of £12,500 = £250
Profit sharing	A share of profit divided among staff. Example: 5% of £84,000 profit is £4,200; shared equally among 14 staff this is £300 each
Fringe benefits	Extras such as a company car, discount or pension contribution

Non-financial methods

Praise, award schemes (for example employee of the month) and the working environment (safe, comfortable, well equipped). They cost less but may not suit someone who is struggling to pay bills.

Why motivation and retention matter

Motivated employees perform better: more output, fewer mistakes, better service. Employee retention means keeping staff. Retained staff are already familiar with the business and customers, and the business saves the time and expense of recruitment, as the £1,480 example shows. Motivation therefore supports retention, and both support the business’s performance.

3.6 Training and development

Training methods

Method	Meaning	Advantage	Disadvantage
Induction	Introduction to the business, rules, safety, people	Settles new staff quickly	Takes the time of existing staff
On-the-job	Learning while doing the actual job, with a colleague	Cheap, relevant	Trainer may pass on bad habits; slows output
Off-the-job	Learning away from the workplace, for example at a college or course	Wider, specialist input	Costly; staff away from work

Why businesses train

Reasons: development of the business, improved productivity, skill shortages, better customer service, and motivation and retention.

Staff development

Staff development is wider than training for today’s job. It includes vocational and academic qualifications and apprenticeships.

Benefits to employees: new skills, qualifications, better promotion chances, more confidence. Benefits to businesses: a more skilled workforce, ability to fill senior roles from within, higher motivation. Costs include fees, time away from work and the risk that trained staff leave.

Worked example (Larkhill Print): six staff attend a two-day off-the-job course at £180 each, so £1,080 in fees. Lost output is £95 per person per day: 6 × 2 × £95 = £1,140. Total cost £2,220. The course cuts rework from 14 to 5 hours a week at £16 an hour for 48 weeks, a saving of £6,912 a year. The saving is higher than the cost, although you should say the estimate depends on the cut in rework lasting.

3.7 Employment law

The specification asks for the impact of current legislation on recruitment and employment, with points on discrimination, employees’ right to a contract, holidays and hours of work. It names no Acts or details, so the descriptions below are general, not legal or syllabus wording.

• Discrimination. A business must not treat people unfairly in recruitment or at work because of personal characteristics. It must write adverts, shortlist and promote on ability to do the job.
• Right to a contract. Employees are entitled to a contract setting out the terms of their employment.
• Holidays. Employees have a right to paid holiday, which the business must plan for.
• Hours of work. There are rules on working hours and rest, so a business cannot simply demand any hours.

Impact: businesses must train managers, keep records and adjust rotas, which raises costs. Benefits include fairer treatment and a better reputation; breaking the law risks penalties.

Common errors

• Confusing span of control (subordinates reporting to one manager) with chain of command (the line of authority).
• Saying a flat structure has no managers; it has fewer levels.
• Calling any home-based worker self-employed. Working from home is a way of working; self-employed is about who they work for.

Frequently asked questions

What is the purpose of human resources in a business? The purpose of human resources is to identify and meet the human resource needs of a business. That means working out how many staff and which skills are needed and when, then recruiting, selecting, motivating, training and keeping them.

What areas of employment law are in OCR GCSE Business J204? The specification asks about the impact of legislation on discrimination, employees’ right to a contract, holidays and hours of work. It names no specific Acts, so answers should describe the impact in general terms.

What is the difference between span of control and chain of command? Span of control is the number of subordinates who report directly to one manager. Chain of command is the line of authority through which instructions pass from the top of the business down.

Why does digital communication matter to a business? Email, messaging and video meetings let staff work flexibly or remotely and send messages quickly. Digital channels also give cheap reach to wide markets and instant feedback from customers.

Official syllabus

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