Edexcel Business A Level Revision

Business ethics - The moral principles that guide the way a business behaves Remuneration - Reward for employment in the form of pay, salary, or wage, including allowances, fringe benefits, bonuses, cash incentives etc. Ethics can be reflected in the way the business recruits, motivates and rewards staff. Is it ethical to pay just the living wage? Should London businesses pay above the living wage? Should senior managers be paid higher remuneration than others in the business? Is it ethical for CEO's to be paid hundreds of more times better than the average employee in the business. The recruitment process needs to be fair and free from bias and should at least follow the law. A company needs to spend money regularly on staff training and development. The trade-off is that these strategies require a significant amount of ongoing financial investment which reduces the business's profits, at least in the short term. Rewards for staff, such as basic pay and bonuses, n...

Performance-related pay - is a scheme where wages or salaries are linked to performance in the workplace. There are many different schemes... KEY FEATURES An appraisal (review of performance) is conducted by senior managers Payment may be based on specific targets Goals and/or targets are set for the next appraisal ADVANTAGES Senior managers can easily monitor and assess individual employee performance during appraisal process Setting of targets for employees can ensure they are all closely focused to company objectives DISADVANTAGES Discourages a team based approach - can create unhealthy rivalry between managers Can be difficult to accurately measure performance of some workers e.g. in service sector firms Incentives may not be large enough to motivate employees Employees may disagree with the appraiser

Profit share -  means that an agreed share of the profits is paid to employees. KEY FEATURES Employees have an incentive to be as productive as possible Can take the form of cash or share options ADVANTAGES Creates a direct link between pay and performance Creates a sense of team spirit - helps remove 'them and us' barrier between managers and workers if all employees are involved May improve employee's loyalty to the comany Employees more likely to accept changes in working practices if they can see that profits will increase overall DISADVANTAGES Not linked to individual performance External factors can reduce profit through no fault of the employees.

Piecework - means that each production worker gets paid according to their level of output KEY FEATURES An agreed amount is set for each item produced There is an incentive to be as productive as possible ADVANTAGES Requires low levels of manager supervision Encourages high speed production Provides good incentive for workers who are mainly motivated by pay DISADVANTAGES Quality may suffer as workers try to get as much done as possible It is repetitive for workers and can be demotivating Workers are only used to one set method of production so may be resistant to change