Business Studies · May / June 2026 · Paper 21 · Question 4
0450
As printed in the paper
Show the answer and mark scheme
4(a)[8]
Explain four legal controls over employment that may benefit Ashanti’s employees. One mark for a benefit of each legal control (max 4). Award a maximum of one additional mark for each explanation of the benefit of the legal control in the context of YC employees. Answers might include:
Protected against unfair dismissal – shop workers will have security of employmentWill be provided with an employment contract – so that 3/4 employees will know what they will be paid / hours worked / holiday entitlementProtects against discrimination – so the sole trader owner will treat her employees equallyHealth and safety laws – protect against injury from dangerous shop equipmentShould be paid at least the legal minimum wage – so the workers in the clothes shop have a reasonable level of payRestriction on maximum hours that can be worked – so the assistant manager is not overworkedRedundancy/retrenchment payments made – so that if the new start-up no longer needs so many employees they will receive a payment Notes:Only award discrimination once i.e. age, race and gender are not separate points.Do not award trade union membership, free health care or job description.The following are too vague;paid fairly, clean environment/good working conditions. For example: The employees will be provided with an employment contract (1)
so that the 3 employees will know what hours they will be expected to work (app). Application could include: clothes;
clothes shop/YC’s shop;
sole trader;
$20 000;
shop equipment;
3/4 employees;
entering boom phase of business cycle;
assistant manager.
4(b)[12]
Consider the following two methods Ashanti could use to motivate YC’s employees. Which method should Ashanti use? Justify your answer.
commissionpaying a higher wage than competitors Level Description Sound application of knowledge and understanding of relevant business concepts using appropriate terminology. Detailed discussion of both methods. Well-justified recommendation. Candidates discussing both methods, in context and with a well-justified recommendation, including why the alternative method was rejected, should be rewarded with the top marks in the band. 9–12 Sound application of knowledge and understanding of relevant business concepts using appropriate terminology. Detailed discussion of at least one method. Judgement with some justification / some evaluation of choice made. Candidates discussing both methods in detail and applying these to the case should be rewarded with the top marks in the band. 5–8 Limited application of knowledge and understanding of relevant business concepts. Limited ability to discuss the methods with little/no explanation. Simple judgement with limited justification / limited evaluation of choice made. Candidates outlining both methods in context should be rewarded with the top marks in the band. 1–4 No creditable response. Notes:Motivation is linked to sale rather than production/output.Assume that a basic wage is paid and commission is an extra payment.Definition of commission is not rewarded on its own but understanding of commission should be implicit in the answer.Commission makes employees work harder is too vague on its own - it would make the employee work harder to sell more clothes which could lead to higher sales for the shop. Relevant points might include: CommissionEmployees receive an additional payment to their wages – the more items of clothing they sell the more commission they will earn – the more employee wages will increaseMay lead to higher sales in the shop – which may increase revenue – and possibly higher profitsThe existing sole trader will lose some profit as expenses will be higher if she is paying commission to employees – may have less incentive to invest further in the businessMay encourage shop employees to be ‘pushy’ with customers and this may damage YC’s reputation – leading to lower salesThere may be jealousy between employees if some employees are better at making sales than others – and therefore receiving more additional paymentsOther factors may affect the commission each employee receives – and employees may have no influence over – such as some items of clothing may not be popular, and sales may be low no matter what the employee doesBusiness may be short of cash due to paying commission to employees – raising costs – may lead to less retained profit for this new start-up business – so there may be less opportunity for expansion in the future Paying a higher wage than competitorsLikely to lead to lower labour turnover of the 3/4 employees – resulting in lower recruitment and training costs in the futureIs likely to make YC an attractive place to work – making recruitment easier when more employees are requiredMay only be motivating in the short term until the worker gets used to the pay levelThe tasks in the clothes shop may still be boring – and higher pay may not compensate for thisHigher wage costs than competitors for the 3/4 employees will result in higher costs overall for YC – which may make YC less competitive than the other shopsHigher wage costs may mean YC has to charge higher prices - which could lead to lower sales Recommendation Justification might include:Paying commission to YC’s 3/4 employees is the best method to choose because this may lead to higher sales in the shop and could increase revenue which may mean Ashanti will receive more profit overall. Paying a higher wage than competitors may make YC’s shop less competitive as it may have higher costs due to this and possibly higher prices.Paying a higher wage than competitors is likely to motivate the employees in the shop as they will feel more valued than the employees of competing clothes shops. This is likely to make them more loyal and less likely to leave YC, reducing labour turnover and therefore will gain higher profit in the future due to having lower costs for recruitment and training.
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