Staff as an asset v's staff as a cost.
Definition of treating staff as an asset:
Staff will be valued because employers recognise that their efforts will make the organisation perform more effectively.
This might include:
Acceptable remuneration.
Reasonable holidays and pensions.
Training.
Job security.
Opportunities for promotion.
Opportunities to solve problems, work in teams and be creative
Staff as a cost:
An approach which has the aim of maximising profit (TR minus TC).
In a business like Sports Direct the wage bill would be a significant cost.
Paying the minimum wage.
Using zero hours contracts.
Neglecting investment in training.
Having minimal 'employee rights'.
Why Sports Direct choose to treat staff as a cost:
It gives the business considerable flexibility to respond to customer demand.
Workers can be told to come in or not to come in at very short notice.
This is beneficial to the business because at very busy times in retail such as Black Friday or Christmas there can be plenty of people available in store to serve customers.
People do not like waiting to be served so this will improve the customer experience and may lead to repeat business.
Workers can be told to come in or not to come in at very short notice.
This is beneficial to the business because at very busy times in retail such as Black Friday or Christmas there can be plenty of people available in store to serve customers.
People do not like waiting to be served so this will improve the customer experience and may lead to repeat business.
Also in the warehouse internet orders can be processed quickly.
The benefit of this to Sports Direct is........
The benefit of this to Sports Direct is........
Also treating staff as a cost keeps the wage bill down.
As a consequence it allows Sports direct to maximise profits.
These profits can be used to help the business grow or returned to the owners of the business (the shareholders).
The benefits of using profits to help the business grow would be....
These profits can be used to help the business grow or returned to the owners of the business (the shareholders).
The benefits of using profits to help the business grow would be....
Treating staff as an asset.
Write a paragraph that is relevant to this business with at least two 'connectives'.
Recommendation:
In the short run treating staff as a cost has allowed the business to grow rapidly and become very profitable.
This has been 'good' for the owners of the company.
However in the long run......
This has been 'good' for the owners of the company.
However in the long run......
Can you finish this concluding paragraph?
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