2.3 Recruitment, selection and training

SBL is a fast food restaurant which sells 900 chicken burgers each week. It has 14 employees. The owner, Vicki, provides her employees with training but does not currently use delegation. She is preparing a break-even chart to help calculate SBL’s margin of safety. A partially completed break-even chart is shown in Fig. 3.1. Vicki wants to know how an economic recession might affect her business.

Explain two methods of training a business might use. Which is likely to be the best method for a service business to use? Justify your answer. [6]

FLD is a furniture retailer. It has 460 shops and 20 000 employees. Internal recruitment is used when recruiting new shop managers. The Managing Director wants to know whether job rotation is the best method of motivation for a large business to use. The Finance Director is reviewing FLD’s income statement. An extract is shown in Table 2.1. She is concerned that FLD’s gross profit is decreasing.

d) Explain two advantages to FLD of using internal recruitment when recruiting new managers. [6]
Advantage 1:
Explanation:

Advantage 2:
Explanation:

LFK is a coal-mining business. It has 135 employees who are all provided with training. After the dismissal of one of LFK’s employees there is a job vacancy for a new supervisor. External recruitment will be used. The Managing Director is preparing a cash flow forecast for LFK. An extract is shown in Table 3.1.

a) Define ‘dismissal’. [2]

d) Explain two advantages of LFK training its employees. [6]
Advantage 1:
Explanation:

Advantage 2:
Explanation:

(e) Do you think the advantages of external recruitment for a business are greater than the disadvantages? Justify your answer. [6]

SEP operates in the tertiary sector. As a social enterprise, SEP has many objectives. It collects old books from libraries and schools and sells them to customers at a low price. SEP provides training for its 10 part-time employees. SEP’s manager wants to know how the introduction of a legal minimum wage might affect a business.

c) Outline two benefits to SEP of having part-time employees. [4]

d) Explain two reasons why training is important to SEP. [6]
Reason 1:
Explanation:

Reason 1:
Explanation:

(e) Do you think the introduction of a legal minimum wage will always have a negative effect on a business? Justify your answer. [6]

RHN is a clothing retailer. It has 50 shops and 290 employees. All RHN’s employees are provided with training. Commission is used as one method of financial reward. The business often uses internal recruitment when there is a job vacancy. Last year RHN made a profit of $1.5 million. The Managing Director, as an internal user of accounts, has been analysing RHN’s statement of financial position.

d) Explain two possible reasons why providing training for its employees is important to RHN. [6]
Reason 1:
Explanation:

Reason 2:
Explanation:

(e) Do you think the advantages for a business of using internal recruitment are greater than the disadvantages? Justify your answer.[6]

DLT manufactures cups and plates in country X. Its factory uses flow production and has 75 employees. The Human Resources Director is aware that there are many legal controls over employment. DLT exports 30% of its products to country Y where it benefits from lower rates of taxation and no import quotas. DLT’s Managing Director is considering relocating its factory to another part of country X to meet the increased demand for its exports.

c) Identify four legal controls over employment. [4]
Legal control 1:
Legal control 2:
Legal control 3:
Legal control 4:

ADN is a food retailer. It has 5 shops and 300 full-time employees. All ADN’s employees receive off-the-job training. ADN has a tall hierarchical structure. Managers have a narrow span of control and all use an autocratic leadership style. ADN’s directors are planning to expand the business and cannot decide whether it is better for a business to use internal growth or external growth.

c) Outline two benefits to ADN of having full-time employees. [4]
Benefit 1:
Benefit 2:

d) Explain one benefit and one limitation to ADN of using off-the-job training. [6]
Benefit:
Explanation:

Limitation:
Explanation:

MRN is a food retailer. It has 490 shops and 70 000 employees. MRN has announced plans to close 80 of its shops. The Human Resources Director said: ‘20% of management jobs will be removed. We want to encourage delegation. MRN will continue to follow legal controls over employment.’ MRN’s directors know it is important that businesses respond to increased competition

b) Identify two legal controls over employment. [2]
Legal control 1:
Legal control 2: