TFN is a travel business which sells holidays. It has 37 shops and 1000 employees. Last year TFN's profit increased to $46 million. The Managing Director knows that good customer service has helped maintain customer loyalty. He said: ‘TFN's managers use ideas from Herzberg's two-factor theory to help motivate employees. All employees are provided with off-the-job training and each manager has a wide span of control.'

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2023). The mark or mark type is shown in brackets.

1. [2] Award 1 mark per advantage (max 2).
2. Points might include:
3. Maintain/increase sales / repeat customers / customers return / not go to competitors (to buy the product)
4. Improve reputation/brand image
5. Current customers recommend / tell others about the products / less marketing/advertising needed / lower cost of marketing
6. Remain competitive
7. Easier to introduce new products
8. Easier to gain feedback/learn about trends
9. May be able to increase prices/become price inelastic
10. Other appropriate responses should be credited.
11. [2] Award 1 mark per hygiene factor (max 2).
12. Two from:
13. Working conditions/safe environment
14. Salary/wages/pay
15. (Job) security
16. Relationships with other workers
17. Relationships with supervisor
18. Other appropriate responses should be credited.
19. [4] Award 1 mark for each relevant reason (max 2).
20. Award 1 mark for each relevant reference to this business (max 2).
21. Points might include:
22. Source of finance / reinvest in the business / finance the purchase of non-current assets / pay back debts/loans for its 37 shops
23. Measure of success of business as shown by profit of $46 million/increase in profit
24. Reward for risk-taking of this travel business
25. Provides a return to shareholders / helps attract investors / pay dividends
26. Support loan applications
27. Other appropriate responses should be credited.
28. [6] Award 1 mark for identification of each relevant advantage/ disadvantage (max 2).
29. Award 1 mark for each relevant reference to this business (max 2).
30. Award 1 mark for each relevant explanation (max 2).
31. Points might include:
32. Advantage:
33. Fewer supervisors/managers needed helping reduce labour costs/expenses so may help increase its profit of $46 million
34. Faster communication leading to quicker/better decision-making in its 37 shops
35. Encourages delegation which can increase motivation of its 1000 employees
36. Disadvantage:
37. Less control so less work done/lower productivity at the travel business
38. Workers might not have skills to cope with extra responsibility leading to mistakes
39. Effective communication may be difficult/communication problems as large number of subordinates/ employees to inform/ask
40. Managers might not have the necessary skills (to manage so many people)
41. Other appropriate responses should be credited.
42. [6] Award up to 2 marks for identification of relevant points.
43. Award up to 2 marks for relevant development of points.
44. Award up to 2 marks for a justified decision as to whether off-the-job training is the best method of training for a service sector business to use.
45. Points might include:
46. Off-the-job:
47. Allows for mistakes to be made when learning lower risk of damaging reputation
48. Up to date/new skills can be gained
49. Skills might not be available in the business so benefit from new techniques/ideas
50. Use specialists/expert trainers is expensive/ increases costs
51. Travel costs increasing cash outflows
52. Other options include:
53. On-the-job training
54. Employees can carry on working so some work is done
55. Control what is taught/employees learn exact way business wants things done so workers only learn skills needed
56. Cheaper (than off-the-job) reducing (training) costs
57. Reinforce errors/bad habits of trainer reducing sales/damaging reputation
58. Trainer is less productive when training others
59. Induction training
60. Only suitable for new employees
61. Help learn culture
62. Other appropriate responses should be credited.
63. Justification might include:
64. Off-the-job training allows employees to make mistakes when learning so less likely to waste resources when working. Another method is on-the-job training which is cheaper. Off-the-job training is better especially for a service sector business because fewer mistakes can help protect the business reputation leading to extra customers helping cover the additional costs of the training.