OxfordAQA IGCSE Business: Human resources (9225) – Revision Notes

These notes condense section 3.4 Human resources of the OxfordAQA International GCSE Business (9225) specification, version 3.1, for exams from May/June 2022 onwards. For full explanations and worked examples, read the study guide. Then test yourself with the practice questions. The course hub, the printable checklist and the free diagnostics cover the rest of the course.

Topic map

Section	Content in one line
3.4.1 Organisational structures	Span of control, chain of command, delayering, delegation; tall v flat; centralised v decentralised; communication
3.4.2 Recruitment and selection	Need for recruitment; internal v external; stages; benefits of an effective process
3.4.3 Motivating employees	Benefits of motivation; salary, wage, commission, profit sharing; non-financial methods
3.4.4 Training	Benefits; induction, on the job, off the job; costs, benefits and choice of method

The specification says specific motivational theories (such as Maslow) will not be examined.

3.4.1 Organisational structures

Term	Meaning
Organisational structure	How a business arranges people into levels and groups, showing roles and who reports to whom
Chain of command	Path of authority linking the highest and lowest posts
Span of control	Number of people directly under one manager
Delegation	Passing authority for a task, and the right to decide about it, to someone lower down
Delayering	Removing one or more levels
Centralised	Decisions made at the top
Decentralised	Decisions made lower down, often by delegation

Why have a structure: everyone knows their job and who they answer to, work is shared out, and decisions have an owner. Job roles run from directors to managers, supervisors and operatives.

	Tall	Flat
Levels / chain	Many / long	Few / short
Span	Narrow	Wide
Communication	Slower, can be distorted	Faster, more direct
Management	Close supervision, promotion steps, higher management cost	Lower management cost, more freedom, managers stretched

Method for a delayering question:

1. Count the staff in each level.
2. Divide the staff below the removed level by the managers above it to find the new span.
3. State the gain (lower cost, faster communication) and the cost (wider span, fewer promotion steps).
4. Judge whether this business can cope.

Small reminder: a manager with 5 supervisors, each with 12 workers, has a span of 5 at the top. If the supervisors go, that manager has 60 workers.

Centralised: consistent decisions and tight control, but slow and may demotivate. Decentralised: quick, local and trusting, but less control and risk of inconsistency. Choose by size, type of work and skills of staff. Structure also affects communication, because every extra level is another link where a message can be delayed or changed.

3.4.2 Recruitment and selection

Need: a vacancy from leavers or retirement, growth, a new branch or missing skills. Recruitment attracts applicants. Selection picks one.

	Internal	External
For	Cheaper, quicker, known person, promotion chance motivates	Wider choice, new ideas and skills
Against	Small choice, no new ideas, leaves another vacancy	Slower, dearer, riskier, needs settling in

Stages in order:

1. Identify the vacancy.
2. Job description and person specification.
3. Advertise.
4. Applications and shortlist.
5. Interviews (and tests).
6. References, offer, acceptance.

Benefits of doing it well, which the specification asks you to analyse: high productivity, high quality output or customer service, and staff retention. Link each to a cost saving or a sales gain. A bad hire who leaves means paying to recruit again.

3.4.3 Motivating employees

Benefits of a motivated workforce: staff retention and high productivity. Without motivation you see absence, errors and resignations.

Financial method	Key point	Strength	Weakness
Salary	Fixed yearly pay	Security, easy to budget	No link to effort
Wage	Pay per hour or week	Pay rises with hours	Income varies, may favour hours over quality
Commission	Percentage of own sales	Rewards effort	Pressure on staff, ignores teamwork
Profit sharing	Share of business profit	Staff care about the business	Payout delayed, small and uncertain

Non-financial methods:

• Styles of management: consulting and trusting staff rather than only giving orders.
• Training: shows the business values staff and builds skills.
• Greater responsibility: more decisions or more varied work.
• Fringe benefits: extras beyond pay, such as discounts, meals, health cover or a company vehicle.

Pay calculation reminder: commission is the percentage multiplied by the sales that qualify, then added to any basic pay. Profit sharing is profit × percentage shared, then divided by the number of employees.

3.4.4 Training

Benefits to the business: increased productivity, ability to deal with changes in technology, increased motivation, staff retention, high-quality goods and good customer service.

Method	What it is	Benefits	Costs
Induction	Introduction for new starters to the business, rules and job	Settles staff, reduces early errors	Time of staff running it
On the job	Learning at work, for example by shadowing	Cheap, practical, trainee keeps working	Trainer’s time, slower output, bad habits may pass on
Off the job	Learning away from work, such as an external course	Specialist teaching, wider skills, new ideas	Fees, travel, time away from the job

How to choose:

1. Add up the costs of each method, including lost output and travel.
2. Match the method to the stem: number of trainees, how specialist the skill is, size of the business.
3. Give a decision and a reason. A small business with few spare staff may prefer on the job. Specialist skills point to off the job.

Worked reminder: cost of filling a post

Verrow Pharmacy compares two ways to fill a counter vacancy. External route: advert 1,150, five interviews at 85 each and induction 300. Internal route: notice board 40, two interviews at 85 each and induction 100.

• External: 1,150 + (5 × 85) + 300 = 1,875.
• Internal: 40 + (2 × 85) + 100 = 310.
• Difference: 1,875 - 310 = 1,565 in favour of the internal route.

Cost is only one factor. The internal route leaves another vacancy to fill and gives no new ideas, so a full answer weighs this against the saving.

Evaluation frame

For an evaluate or justify question on any method (a structure, a way of recruiting, a pay system or a type of training), use this pattern: the benefit with its effect on the business, the drawback with its effect, a point from the stem that tips the balance, and a decision.

Must-know distinctions

• Recruitment (attract) and selection (choose).
• Salary (fixed yearly) and wage (hourly or weekly).
• Commission (own sales) and profit sharing (business profit).
• Delegation (passing authority down) and delayering (removing levels).
• Centralised (decisions at the top) and decentralised (decisions lower down).
• On the job (at work) and off the job (away from work).
• Induction (introduces the business) and training (builds job skills).

Quick self-test

1. Define span of control.
2. A business has 4 levels and removes one by delayering. How many levels remain?
3. A worker earns a basic 1,200 a month plus 4% commission on sales above 15,000. Sales are 41,000. Calculate total pay.
4. A worker is paid 9.80 an hour for a 40-hour week. Calculate weekly pay.
5. A business with 30 employees makes 180,000 profit and shares 4% of it equally. Calculate each share.
6. Give two benefits of internal recruitment.
7. Put in order: shortlist, advertise, interview, job description.
8. Give two examples of fringe benefits.
9. Which type of training introduces a new employee to the safety rules and layout?
10. Explain one way training can improve staff retention.
11. State one drawback of a decentralised structure.

Answers

1. The number of people a manager is directly responsible for.
2. 3 levels.
3. Commission = 4% × (41,000 - 15,000) = 1,040. Total = 1,200 + 1,040 = 2,240.
4. 9.80 × 40 = 392.
5. 4% of 180,000 = 7,200. 7,200 ÷ 30 = 240 each.
6. Any two: cheaper, quicker, the person already knows the business, promotion chances motivate other staff.
7. Job description, advertise, shortlist, interview.
8. Any two: staff discount, free meals, health insurance, company car, paid study leave.
9. Induction training.
10. Trained staff feel valued and can do the job well, so they are likelier to stay, which saves the cost of replacing them.
11. Any one: less control for senior managers, inconsistent decisions between sites, or more need for communication.

Where marks are usually lost

• Giving a definition of span of control that mentions levels instead of the number of people managed.
• Stating a benefit of delayering without the matching cost of a wider span.
• Saying external recruitment is better without using the stem.
• Mixing up the stages, or leaving out the person specification and references.
• Writing “motivation increases productivity” and stopping, with no chain of reasoning to costs or sales.
• Mistakes in pay questions: applying commission to all sales when only sales above a threshold qualify.
• Writing about named motivation theories, which the specification says will not be examined.
• Naming on the job or off the job training without costs and benefits for that business.
• Ending an evaluation without a decision.

Frequently asked questions

What is the difference between centralised and decentralised structures? In a centralised structure decisions are made at the top, giving consistency and tight control but slower decisions that may demotivate staff. In a decentralised structure decisions are made lower down, which is quicker and more trusting but gives less control and a risk of inconsistency.

What is the difference between delegation and delayering? Delegation is passing authority down to someone lower in the structure. Delayering is removing levels from the structure.

What is the difference between recruitment and selection? Recruitment is attracting people to apply for a job, while selection is choosing the right person from the applicants.

What are the benefits of training to a business? Training can increase productivity, help the business deal with changes in technology, increase motivation and staff retention, and lead to high-quality goods and good customer service.

Official syllabus

OxfordAQA International GCSE Business (9225) specification, version 3.1, OxfordAQA, for International GCSE exams May/June 2022 onwards. Section 3.4 Human resources (3.4.1 to 3.4.4).