FORM SIX COMMERCE – ORGANIZATION AND MANAGEMENT OF A BUSINESS

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METHODS OF TRAINING

1. On job training: Under this method, the worker is given training at work place by his supervisor.

   ·        This method is practical oriental.

   ·        It facilitate learning by doing.

   ·        It permit the trainee to learn at the actual equipments and in the environment of the job.

2.   Vestibule training: This method is used when a large number of workers need to be trained and where mistakes are likely to occur which will disturb production schedules.

   ·        This training method is used when it is not possible to do on job training.

   ·        Training job is entrusted to the qualified instructors.

   ·        A vestibule school is an attempt to create environment as nearly as possible to the actual work condition of the work place.

3. Special courses:These are conducted by the line managers of thee organization or specialists from the vocational educational institutes.

   ·        Many firms follow the practice of sending selected employees to training and development programmes run by various educational institutions.

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                                   REMUNERATION OF WORKERS

A firm must offer good wages attracting competent employees in the organization.

·     Workers must be adequately remunerated to support their families and raise their standard of living.

·     Compensation to workers will vary depending upon the nature of the job skills required risk involved, working conditions etc.

WAGE AND SALARY

WAGE: The term used to denote remuneration to workers doing manual or physical work. Wages are given to compensate unskilled workers for their services provided to the organization.Wages may be based on hourly daily, weekly or even monthly basis.

SALARY: This refers to monthly compensation to office employed foremen, Managers, Professionals and technical staff.

FACTORS AFFECTING WAGES

Wages paid to worker depend upon the following factors:

1. Demand for and supply of labor.
2. Ability of employers to pay.
3. Cost of living.
4. Productivity i.e the higher the productivity the higher payment.
5. Collective bargaining (trade unions).
6. Prevailing wage rates or wages paid for similar occupations in the industry.
7. The economy as a whole.
8. State regulations.Laws on minimum wage, hours of work. These laws are enacted to bring about a measure of fairness.

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METHODS SYSTEMS OF WAGE PAYMENT

a)      Those based on the time worked.i.e Time rate wage system.

b)     Those based on quantity produced. i.e Piece rate wage system.

      c)      Those which combine the features of both time and piece wages.

d)      Bonus wage system.

TIME WAGE METHOD
A worker is paid for the time spent on the job. I.e the worker is paid after the time fixed for work is completed irrespective of output or completion of the work.Wages can be determined by the following formula.
wages = no of hours worked x Rate per hour

Advantages of time wages system

1. It is simple to calculate the amount earned and to measure the time spent on the job.
2. A worker knows in advance what will be his total pay at the end of the period.
3. Equality of wages: All workers doing the same job get the same rate, therefore sense of equality prevails.
4. Better quality: The quality of work output is more important than quantity.
5. Less wastage:- Workers need not speed up their operations to earn higher wages, therefore there will be less wastage of materials.
6. This method ensure stable income to all the employees.

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         Disadvantages

1. Inefficiency: No link between wages and productivity.
2. Lack of motivation: It makes no difference between an efficient worker and lazy one since both are treated the same.
3. Increased supervision: Leads to lower productivity unless strictly supervision is provided.

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PIECE WAGE SYSTEM

Under this system, the output of work is the basis of payment. The rate of wages is determined per unit of output and is fixed in advance.

·        An efficient worker will earn higher wages as compared to an inefficient worker.

·        Wages can be determined by the following formulae

  Wages = No of units produced × rate per unit

Advantages of piece wage system

1. Incentive for higher production i.e ennglish-swahili/courage” target=”_blank”>courages workers to produce more.
2. Fairness: The system ensures fairness by correlating wages and productivity.
3. Costing: Cost of production become easier as wages are a constant factor of the units of output.
4. Lesser supervision.
5. Personnel decision: Under this system decision can be made quickly about lazy workers e.g: transfer of workers.
6. Economy: Total cost of output comes down with larger output.

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Disadvantages (Drawbacks) Of piece wage system

1.      Low quality: Due to high emphasis on the quality of production may lower the quality of products.

2.      Insecurity to workers: Workers feel insecure due to the fact that they would get lower wages during the period when their efficiency is low.

3.      Problem in industrial relations: The relationship between employees and management if lower output is caused by management negligence.

4.      More administrative work: Daily records of production for each worker.

7. MOTIVATION. Is the process of stimulating people to take the desired course of action.

• It is the act of inspiring subordinates to work hard, so that to achieve the goals of the organization
• Needs wants are used to motivate workers.

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Features of Motivation

1. Psychological concept: It is an internal feeling.
2. A person can not be motivated in part. I.e motivation is total and not peace-meal.
3. Motivation is a continuous process because human needs are ever –growing and never fully satisfied.
4. Motivation directly influence the behavior and performance of a person.
5. Motivation is a task of every manager because every manager has to inspire his subordinate to complete their jobs efficiently.
6. Motivation may be positive or negative.

           (a)Positive motivation:- This involves inspiring people to work better and appreciating work that is well done by offering rewards.

           (b)Negative motivation:- This involves forcing people to work by holding out threats or punishment.

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                              NEEDS
                           These are requirements which are necessary for human existence. e.g food.Moreover only unsatisfied needs motivate a person i.e In order to motivate a person it is
necessary to understand and satisfy their needs

CLASSIFICATION OF HUMAN NEEDS

Abraham Maslow classified human needs into five categories

1. Physiological needs/survival needs: These are basic needs which should be satisfied before all other needs e.g: Food, air.
2. Safety or security needs: These include physical safety against danger, economic security against old age, sickness e.g shelter, clothing, health, Insurance, pension security.
3. Social needs: A man is social in nature. He needs love, affection, sense of belonging, association, friendship.Therefore an Individual creates family, relatives and friends.
4. Ego or Esteem needs: Self esteem means self confidence, self respects, Esteem of others means power prestige, Independence, achievement, and recognition.
5. Self-actualization needs: Desire to be come what one can become. It involves self fulfillment and maximum possible degree of achievement.These needs are Psychological and infinite i.e. An individual is never satisfied interns of achievement because there is no limit to progress.

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                           INCENTIVES

An incentive is inducement which stimulates a person to act in a desired direction.

• An Incentive has a motivational power because it helps to satisfy a needs
• Incentives are classified into monetary and non-monetary Incentives.

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                          MONETARY INCENTIVES.These are financial incentives

• They involve payment of reward in terms of money e.g: Cash awards.
• Money is a means of satisfying physiological, safety and social needs.
• Money is considered as a symbol of power, prestige and status.

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NOTE: Employees do not work only for money, they need recognition, freedom, status, job satisfaction etc.

NON-MONETARY INCENTIVES

These are non – financial because they do not involve the flow of money and do not add to the income of the recipient

• They include challenging job, competitions, appreciation of work done, social recognition, opportunity for growth, participation in decision making.
• These incentives are more helpful in satisfying higher level than physiological needs and safety needs.

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Different between monetary incentive and non –monetary incentives

1. Monetary incentives payment of money whereas non-monetary incentives do not involve use of money.
2. Monetary incentives are tangible i.e Visible and measurable while non –monetary incentive are invisible and non-measurable.
3. Monetary incentives are used to satisfy lower level needs e.g: food, clothing, shelter while non monetary incentives are used to satisfy higher level needs like ago and self actualization.
4. Monetary incentives are used to motivate workers while monetary incentives are used to motivate managerial personnel and can be used to supplement and support the monetary incentives.

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          8.COORDINATION

Is an orderly arrangement of group efforts to provide unity of action in the pursuit of a common goal.

• It involves unifying, integrating harmonizing the activities of different departments and individuals for the achievement of common goals or objectives.

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ESSENTIALS OF EFFECTIVE COORDINATION

To achieve effective coordination, the following things must be observed

1. Clearly defined goals. Every individual must understand the overall objectives and contribution of his job to the efficiency of the business.
2. Comprehensive policies and programmes.There should be proper policies, programmes and procedures to create uniformity of actions.
3. Clear line of authority: clear authority relationships facilitates mutual cooperation which is essential for effective coordination.
4. Effective communication: Formal and Informal communication between members should be ennglish-swahili/courage” target=”_blank”>couraged.

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PRINCIPLES OF COORDINATION

1.      Coordination must not be directed in autocratic manner but rather ennglish-swahili/courage” target=”_blank”>couraged in democratic manner.

2.      It should operate vertically as well as horizontally and effected at the most appropriate time.

3.      It should be effected by direct contact between persons as immediately.

4.      It must commence at the earliest stage of planning and policy making.

5.      It must b continuous process.

TOOLS FOR ACHIEVING COORDINATION

1. Committees: These the coordination because they.

                             I.           Pool resources to solve problem.

                             II.          Coordinating conflicting functions.

                             III.         Ensures prior consultation hence lead to greater acceptance of decisions.

                             IV.         Enable executives to be trained.

2. Staff meetings: These are helpful because they:

                             I.           Give the sense of unity to the workers of the organization.

                             II.           Provide opportunity to subordinates to question superiors and provide forum for discussion.

                            III.           Inform staff of any new development and problems.

3. Conferences:- These are methods of making group discussion. They are free discussion and help company matters.These are usually organized for managers and supervisor.
4. Programmes: These are Instruments of coordination which help enables work to be performed in a systematic way.They also give an opportunity to compare results with standard and action taken where necessary.Programmes communicate decisions and hence allow delegation.

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                     9.CONTROLLING

Is the measuring and correcting of activities of subordinates ensure that events conform to plans.Or is the process of checking actual performance against the agreed standards or plans with a view to ensure adequate progress or satisfactory performance.

OBJECTIVES OF CONTROLLING

An effective system of control helps to achieve the following

1. Determining the progress of work.
2. Detecting deviations from the planned standards.
3. Investigating the causes of deviations.
4. Taking the corrective measures to check deviations.
5. Avoid loss due to faulty production.

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FEATURES/CHARACTERISTICS OF CONTROL

1. It is performed by all managers of the organization
2. Dynamic process: Review of performance ensuring results and taking corrective measures to bring life to the organization.
3. Continuous process.
4. Formal looking: It is preventive and relatives to future providing checks to individuals and the organization.
5. Action oriented: A good system of control facilitates timely action so that there is minimum waste of timee and energy.

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BENEFITS OF CONTROL

An effective control field the following advantages:-

a)      Control provides the basis for future action.

b)     An effective control system facilitates decentralization of authority.

c)      Control and planning go hand.Inter – relationship between planning and control .

d)     Control facilitates decisions taking.

e)      The existence of control system has a positive impact on behavior of the employees.

f)      Control helps in coordination of the activities of the various departments of the enterprise.

LIMITATIONS OF CONTROL

1. Business organizations can not control the external factors such as government policies and technological changes.
2. Control is an expensive process because sufficient attention has to be paid to observe the performance of the subordinates this require time and expenditure
3. Control loses us effectiveness when standards of performance can not be defined in quantitative terms e.g: It is difficult to measure employee morale.
4. The effective of control depend on its acceptance by the subordinates, if subordinates resist if they feel that it will reduce their freedom.

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Features of a good control system

A good control system has the following features

1. Emphasis on objectives.Standards of performance should base on the objectives.If objectives are not clear good results will not be achieved
2. Suitability: Control should be tailored to suit the need of the organization.
3. Simplicity: Simple to understand employees must know what is expected (their performance).
4. Flexibility: It should be able accommodate changes according to the circumstances i.e Control procedures must be changed it can’t achieve its basic purpose.
5. Forward looking: Control system should be directed forward the future.

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Qualities of a good standard of control

1. Simple and easy to understand.
2. Should be cable of being achieved with reasonable amount of effort and time.
3. Should be flexible not rigid they should be capable of being modified whenever necessary.
4. Should be consistent with the overall objectives of the organization.
5. Should be set scientifically i.e after a time studies.
6. If possible standards. Should be expressed in quantitative terms.
7. Should be set after consultation with people who are going to attain them.