1.4.4 Motivation in practise

• What are the advantages of a well motivated workforce?

  • Better productivity (amount produced per employee)
  • Better quality
  • Lower levels of absenteeism
  • Lower levels of staff turnover (number of employees leaving business)
  • Lower training and recruitment costs
• Motivational theorists view on play 


  Taylor - most important factor

  Other theorists - non-financial factors are more important
• Why do people go to work?

  • To earn money
  • Sense of achievement/job satisfaction
  • Belonging to a group
  • Sense of security
  • Obtaining a feeling of self worth
• What is profit sharing?

  A system whereby employees receive a proportion of company’s profits
• What is empowerment?

  Delegating power to employees so they can make their own decisions
• What is job enrichment?

  Giving employees more challenging and interesting tasks
• What is job enlargement?


  Giving employees more tasks of a similar level of complexity
• What are wages?

  • Paid by hour with pay packet normally received at end of each week
  • Often paid to lower skilled workers or to temporary staff 
  • Additional hours worked normally paid a higher rate on an overtime basis
• What are salaries?

  • Often set on an annual basis but payment is made at end of each month
  • Normally paid to managers or those higher up in a company
  • A set number of hours is not normally agreed but employment contract requires enough hours worked to get job done
• What is bonus pay and how is it used?

  • Given out when certain performance targets have been met
  • Normally applicable at manager level in a company
  • How bonuses are used:
  • A realistic yet challenging target set and therefore achieve a bonus payment
  • Only be effective if bonus payments were a significant sum
• What is overtime?

  • Additional hours worked over and above normal working hours (weekends or bank holidays)
  • Paid at a higher rate - often 1.5 or 2 times normal hourly wage
• What are the advantages of profit sharing?

  • Creates a direct link between pay and performance
  • Creates a sense of team spirit- helps remove ‘them and us’ barrier between managers and workers if all employees involved
  • May improve employee’s loyalty to company
  • Employees more likely to accept changes in working practices if can see that profits will increase overall
• What is performance related pay?


  Popular method of paying people to those employees who meet certain targets
• What are the advantages of performance related pay?

  • Senior managers can easily monitor and assess individual employee performance during appraisal process
  • Setting of targets for employees can ensure they are all closely focused to company objectives
• What are the disadvantages of performance related pay?

  • Discourages a team based approach- can create unhealthy rivalry between managers
  • Can be difficult to accurately measure performance of some workers e.g. in service sector firms
  • Incentives may not be large enough to motivate employees
• What is a piece rate payment?

  • Relatively unusual and old-fashioned way of payment
  • Pay per item produced in a certain period of time
• What are the advantages of piece rate payment?

  • Requires low levels of manager supervision
  • Encourages high speed production
  • Provides good incentive for workers who are mainly motivated by pay
• What are the disadvantages of piece rate pay?

  • Workers are focused on quantity not quality
  • It is repetitive for workers and can be demotivating
  • Workers are only used to one set method of production and may resist change
• What is commission?

  • A financial incentive linked to achievement of sales
  • Typical set-up
  • % commission for £value of sale achieved
  • Basis commission rate set at low rate
  • Higher rate offered once sales targets are achieved
  •  Main advantage – clear link between sales and remuneration (money paid)
  • Main disadvantages – sales influenced by factors outside of employee control (customer service)
• What is the Best Mix of Financial & Non-Financial Rewards?

  • Most businesses employ a mix of financial & non-financial rewards
  • The “market” largely determines the base financial rewards paid for most jobs & skills
  • Offering employees some flexibility in choosing which rewards they get often works well 
  • Ultimately, financial rewards are closely influenced by what a business can afford