Page 120 - Cambridge IGCSE Business Studies

Cambridge IGCSE Business Studies Section 2 People in business

Deciding which workers to recruit or make redundant
It is much easier for managers to deal with recruiting extra workers than it is to
make workers redundant.
Selecting new recruits and selecting workers to be made redundant are both
important tasks of managers and one that must be done fairly.
The process of selecting workers for redundancy must be clear and fair. Very

often a business will use the last-in, first-out method. This means that workers

who have been employed for the least amount of time will be the first to be made
redundant. However, although this system is clear and might be seen as fair, it
sometimes means that businesses lose workers who are better skilled and more
productive than workers who have been employed longer.
For this reason some employers may use more measurable criteria to select
workers for redundancy such as:
■ How productive workers are – keeping the more productive workers as they are
better for the future of the business.

■ How often workers have been late or absent from work in the past year –

workers who are often late or absent will be less productive because they are not
at work.
■ How old a worker is – perhaps those closer to retirement should be made
redundant so that younger workers can be kept on.

TEST YOURSELF
118 1 Identify two ways a workforce may need to be reduced in size.
2 State two reasons why a business might dismiss a worker.

Legal controls over employment issues

The governments of most countries have passed laws aimed at protecting workers
from being exploited by employers and dismissed unfairly. The main areas covered

by these legal controls are shown in Figure 8.7.

Contracts of
employment

Unfair
dismissal Discrimination
Legal
Controls

Minimum Health and
wage safety

Figure 8.7 Legal controls over businesses