AS Business Studies

Aim: Understand methods of motivation Objectives: Define motivation Describe financial and non financial methods of motivation Analyse methods of motivation

What motivates you to go to school? What motivates you to work part time? What things do you think will motivate you in your future careers?

The factors that inspire an employee to complete a task at work. Will affect both quantity (output) and quality of a businesses products.

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Paying employees based on the number of units they produce. Piece Rate Payment based on the number of units sold. Commission Options include a company car, medical insurance etc. Fringe Benefits Percentage of companies profits distributed between employees Profit-Sharing Scheme Sal ary is revi ew ed bas ed on the con trib uti on ma de in ter ms of the sta nda rds ach iev ed Quality Related Bonus Schemes

In your groups decide on the advantages and disadvantages of each financial motivation method.

- Increases output per person. - Useful when production is running below the required level. - Quality may drop which may damage brand image. - May have knock on effect on future sales/profits

- Increased revenue - Employees may be tempted to use unethical practices leading to poor customer relations

- Often valued more highly than wage increases by employees. - Represent a long term commitment by the firm so could reduce flexibility. - Could be expensive

- Individuals can see their efforts making a difference - Encourages team working - Divisive if some members of the team work harder than others but get the same rewards

- Employees motivated to work to highest possible standard - In service sector difficult to measure quality

How could you motivate employees non financially?

Expanding the number of tasks completed by an employee. Job Enlargement Varying an employee’s job on a regular basis, leading to multi skilling. Job Rotation Increasing the level of responsibility within a job to make work more challenging or rewarding. Job Enrichment

In your groups decide on the advantages and disadvantages of each non-financial motivation method.

- Mistakes less likely, which reduces costs - Training costs involved and employees expect more pay

- Staff shortages can be covered more easily - Can be complicated to organise - Employees may not develop skills evenly resulting in quality variations

- Allows employees to develop managerial skills - May lead to internal recruitment opportunities - High training costs - May be difficult for employee to manage new workload

Are financial methods or non-financial methods better to motivate employees? What may the answer depend on?