Essential Business Management Definitions: Leadership, Motivation, and Pay

Essential Business Management Definitions

I. Leadership Styles

1. Leadership

   The art of motivating a group of people toward achieving a common objective.

2. Autocratic Leadership

   A leadership style that keeps all decision-making authority centralized within the organization.

3. Democratic Leadership

   A leadership style that promotes the active participation of workers in decision-making.

4. Paternalistic Leadership

   A style based on the approach that the manager is in a better position than the workers to know what is best for an organization.

5. Laissez-Faire Leadership

   A "hands-off" approach that delegates much of the decision-making to the workforce.

II. Motivation and Job Satisfaction

6. Emotional Intelligence (EQ)

   The ability of managers to understand their own emotions, and those of the people they work with, to achieve better business performance.

7. Self-Actualization

   A sense of fulfillment reached by feeling enriched and developed by what one has learned and achieved.

8. Motivating Factors (Motivators)

   Aspects of a worker's job that could lead to positive job satisfaction, such as achievement or recognition.

9. Hygiene Factors

   Aspects of a worker's job that have the potential to cause dissatisfaction, such as working conditions or pay.

10. Job Enrichment

    Aims to use the full capabilities of workers by giving them the opportunity to do more challenging and fulfilling work.

III. Compensation and Remuneration Methods

11. Time-Based Wage Rate

    Payment to a worker made for each period of time worked.

12. Piece Rate

    A payment to a worker for each unit produced.

13. Salary

    Annual income that is usually paid on a monthly basis.

14. Commission

    A payment to a salesperson for each sale made.

15. Bonus

    A payment made in addition to the contracted wage or salary.

16. Performance-Related Pay (PRP)

    A bonus scheme designed to reward staff for above-average work performance.

17. Profit Sharing

    A bonus for staff based on the profits of the business, usually paid as a proportion of basic salary.

18. Fringe Benefits

    Benefits given, separate from pay, by an employer to all employees.

IV. Job Structure and Employee Involvement

19. Job Rotation

    Increasing the flexibility of employees and the variety of work they do by switching from one job to another.

20. Job Enlargement

    Attempting to increase the scope of a job by broadening or deepening the tasks undertaken.

21. Job Redesign

    Involves the restructuring of a job—usually with employees' involvement and agreement—to make work more interesting, satisfying, and challenging.

22. Work Participation

    A system where workers are actively encouraged to become involved in decision-making within the organization.

23. Team Working

    Production is organized so that groups of workers undertake complete units of work.