OxfordAQA A-Level Business: Human resources (9725) – Revision Notes

These notes condense the human resources topic (sections 3.2.2.1 to 3.2.2.5) of the OxfordAQA International AS and A-level Business (9725) specification, Version 1.1, for International AS exams from May/June 2027 and International A-level exams from May/June 2028. All of it is International AS content, assessed in Unit 2: Managing operations, human resources and finance. If you are finishing the older 9625 specification, use your own specification. For full explanations and worked examples, read the study guide first.

Also useful: the practice questions, the course hub, the printable checklist, the exam preparation page and the free diagnostics.

3.2.2.1 HR objectives and planning

The three HR objectives named in the specification

• Number and skill level of employees
• Employee engagement
• Employee retention

HR planning tools: recruitment, training, redeployment, retention, redundancies. Purpose: match the workforce to the business’s future needs. Value: avoids skill gaps and overstaffing, controls labour costs. Limit: only as good as the sales forecast behind it.

Recruitment stages (in order)

Stage	What it produces	Why it matters
Job analysis	A study of what the role involves	Everything after it depends on it
Job description	Tasks, duties, responsibilities	Tells applicants what the job is
Person specification	Skills, qualifications, qualities needed	Used to shortlist fairly

Internal v external recruitment

	Internal	External
For	Cheaper, quicker, known candidate, motivates through promotion	Bigger pool, new ideas and skills
Against	No new ideas, creates another vacancy, may upset unsuccessful colleagues	Costlier, slower, riskier, longer induction

Selection methods – one point each way

• CV: cheap / hard to compare.
• Application form: standard information / slow to complete.
• Interview: tests communication / open to bias.
• References: outside view / often vague.
• Testing: objective on specific skills / tests only part of the job.
• Assessment centre: rounded view from several tasks / expensive.

Contracts: full time, part time, temporary, permanent, zero hours. Trade-off in every case: flexibility and lower cost for the business v security and commitment for the employee.

Training types: induction (new starters), on the job (while working, cheap, relevant), off the job (away from work, wider skills, costlier). Benefit: productivity, quality, engagement. Risk: trained staff leave.

3.2.2.2 HR data – formulas

From the specification’s Appendix: Formulae and Key data:

Measure	Formula
Labour turnover (%)	leavers in a year ÷ average number of total employees × 100
Employee retention rate (%)	employees at end of period ÷ average employees at start of period × 100
Labour productivity	output in period ÷ average employees in period
Employee costs as % of turnover	total employee costs ÷ total revenue × 100
Labour costs per unit	total labour costs ÷ units of output
Sales per employee	total sales revenue ÷ average employees
Profit per employee	total profit ÷ average employees

Plus, named in the content: % of employees still at the business one year after recruitment = recruits still there after one year ÷ number recruited × 100.

Method in steps

1. Find the average number of employees: (start + end) ÷ 2, unless it is given.
2. Put the right figure on top (leavers, output, costs, revenue or profit).
3. Multiply by 100 only for the percentage measures.
4. Give units: %, units per employee, £ per unit, £ per employee.
5. Interpret: compare with last year, competitors or a target, and say why.

Worked reminder – Marigold Couriers (average 250 employees; 30 leavers; 448,000 parcels delivered; revenue £16m; employee costs £5.6m; profit £2m)

Labour turnover        = 30 ÷ 250 × 100 = 12%
Labour productivity    = 448,000 ÷ 250 = 1,792 parcels per employee
Employee costs % rev.  = 5.6 ÷ 16 × 100 = 35%
Labour cost per unit   = 5,600,000 ÷ 448,000 = £12.50 per parcel
Sales per employee     = 16,000,000 ÷ 250 = £64,000
Profit per employee    = 2,000,000 ÷ 250 = £8,000

Context matters: the specification says measures such as labour productivity vary in different contexts. Labour-intensive services score lower on output per employee than automated production, so compare like with like.

3.2.2.3 Organisational design

Term	Meaning
Span of control	Number of people a manager directly supervises
Levels of hierarchy	Number of management layers
Tall structure	Many levels, narrow spans
Flat structure	Few levels, wide spans
Delegation	Passing authority down; accountability stays with the manager
Centralisation	Decisions made at the top
Decentralisation	Decisions passed to branches or lower levels
Employee representation rate	Share of the workforce represented by a union or other employee body
Delayering	Removing a layer of management

Influences: size, staff skills, nature of the work, culture, cost of managers, need for consistency v local responsiveness.

Delayering: for – lower salary costs, faster communication, more responsibility lower down. Against – fewer promotion steps, overloaded managers, lost experience, insecurity among remaining staff.

3.2.2.4 Motivation

Theories at a glance

Theorist	Core idea	Business use	Weakness
Taylor	Money motivates; one best way	Piece rate, close supervision, simple tasks	Ignores social and esteem needs
Maslow	Hierarchy: basic, safety, social, esteem, self-actualisation	Meet lower needs first, then higher	People do not all move up in the same order
Herzberg	Hygiene factors prevent dissatisfaction; motivators motivate	Fix hygiene, then enrich jobs	Pay treated as hygiene, which may not fit every worker

Financial methods: wages, piece rate, commission, salaries, performance-related pay, fringe benefits. Ask: does the method link reward to the output that matters, and what does it cost?

Non-financial methods: job enlargement, job enrichment, job rotation, empowerment, teamwork.

Choosing a method: nature of the work, ability to measure output, cost, management style, workforce expectations and culture. Assess effectiveness with HR data (turnover, productivity, absence) before and after.

3.2.2.5 Employer-employee relations

• Employee involvement: better decisions and commitment. Methods: consultation, trade unions, employee forums. Extent depends on management style, size, urgency, legislation and staff skills.
• Conflict causes: pay, conditions, job losses, changes to working practices, poor communication.
• Employee actions: withdraw cooperation, work to rule, leave, strike, overtime ban.
• Resolution: participation, bargaining, arbitration.
• Managing HR: technology (recruitment, nature of work, skills, remote working); people management and competitiveness; links with operations, marketing and finance; ethics (unsafe conditions, low pay).

Must-know distinctions

• Job description v person specification: the job v the person.
• Labour turnover v retention: who left v who stayed.
• Job enlargement v job enrichment: more tasks at the same level v more responsibility.
• Delegation v empowerment: passing a task with authority v giving staff the power to decide how to work.
• Consultation v bargaining: asking for views v negotiating an agreement.
• Bargaining v arbitration: the two sides negotiate v an independent third party settles.
• Work to rule v overtime ban: obeying every rule to slow work v refusing extra hours.

Quick self-test

1. A café has an average of 48 staff and 6 leave in a year. Calculate labour turnover.
2. A firm recruited 60 people; 48 were still employed one year later. What percentage were retained?
3. Labour costs are £84,000 and output is 12,000 units. Calculate labour cost per unit.
4. Employee costs are £1.5m and revenue is £5m. Calculate employee costs as a percentage of turnover.
5. A kitchen of 35 staff serves 9,450 meals in a month. Calculate labour productivity.
6. Name the stage of recruitment that lists the qualities of the ideal candidate.
7. Under Herzberg, is a pay rise a hygiene factor or a motivator?
8. Which non-financial method gives an employee more responsibility and more challenging work?
9. Give one disadvantage of a zero-hours contract for the business.
10. What is the difference between bargaining and arbitration?

Answers

1. 6 ÷ 48 × 100 = 12.5%.
2. 48 ÷ 60 × 100 = 80%.
3. £84,000 ÷ 12,000 = £7 per unit.
4. 1.5 ÷ 5 × 100 = 30%.
5. 9,450 ÷ 35 = 270 meals per employee per month.
6. Person specification.
7. Hygiene factor: it removes dissatisfaction but does not create lasting motivation.
8. Job enrichment.
9. For example, staff with no guaranteed hours may feel less committed and leave, raising recruitment costs.
10. In bargaining the two sides negotiate an agreement themselves; in arbitration an independent third party hears both sides and recommends or decides the outcome.

Where marks are usually lost

• Dividing by the end-of-year headcount when the formula needs the average number of employees.
• Leaving out units, or writing a percentage for labour productivity.
• Calculating a figure but not saying what it means for the business in the case.
• Listing Maslow’s levels without linking a level to a specific method the business could use.
• Saying Herzberg treats pay as a motivator.
• Describing delayering only as cost-cutting, ignoring the effect on promotion and workload.
• Recommending a motivation method without considering cost or whether output can be measured.
• Treating a strike as the only form of industrial action.

Official syllabus

OxfordAQA International AS and A-level Business (9725) specification, Version 1.1, for International AS exams May/June 2027 onwards and International A-level exams May/June 2028 onwards, published by OxfordAQA. Section 3.2.2 Human resources.