6.4.1 M AKING HUMAN RESOURCE DECISIONS : IMPROVING MOTIVATION AND ENGAGEMENT AQA Business 6 D ECISION MAKING TO IMPROVE HUMAN RESOURCE PERFORMANCE What motivates you at school or college? Is this the same as what motivates you at work? What will you look for in your future career to provide motivation?

6.4.1 M AKING HUMAN RESOURCE DECISIONS : IMPROVING MOTIVATION AND ENGAGEMENT  In this topic you will learn about  The benefits of motivated and engaged employees  How to improve employee engagement and motivation  The value of theories of motivation  The use of financial methods of motivation  The use of non-financial methods of motivating employees  Influences on the choice and assessment of the effectiveness of financial and non-financial reward systems

M OTIVATED AND ENGAGED EMPLOYEES  Motivation is the factors influencing the way people behave  Financial incentives  Non-financial incentives  Individual character  Desire to achieve a goal  Motivated employees will be engaged employees  Engaged employees are those who are fully committed to their role and strive to help the business achieve its objectives

M OTIVATED AND ENGAGED EMPLOYEES  Benefits:  Higher labour productivity  Lower labour turnover  Higher retention rates  Lower unit costs  Lower absenteeism  Reduced presentism  Improved customer service  Better workplace relations How would you keep workers happy?

T HEORIES OF MOTIVATION  Theories of motivation include:  Taylor’s scientific management  Maslow’s hierarchy of needs  Herzberg’s two factor theory  Each theory attempts to explain the key influences on human behaviours Why is it difficult to explain what motivates employees in the workplace?

F REDERICK W INSLOW T AYLOR (1856 – 1915)  Taylor believed that workers were not capable of understanding their tasks and should follow strict rules on how to produce products  All tasks should be studied scientifically using a study of time and motion  The most efficient way of carrying out a task will hence be identified  Each employee can then be trained and instructed in exactly how to do a job in the most efficient manner  Workers should be closely supervised  He coined the term economic man believing money is the key to motivation  His ideas are linked to piece rate, the division of labour and mass production  He is criticised for making jobs tedious American Taylor is seen as the father of ‘Scientific Management’. Write a definition for each of the terms shown in purple.

A BRAHAM H AROLD M ASLOW (1908 – 1970)  Maslow’s hierarchy of needs is based on seeing human needs as being placed in order, each need must be fulfilled before one could move on to the next  Employees can be motivated by being presented with the opportunity to achieve the next level American Maslow belongs to the Neo- Human relations school of management. He is well known for his hierarchy of needs. Higher order needs Lower order needs

F REDERICK I RVING H ERZBERG (1923 – 2000)  Job satisfaction is a key factor leading to motivation  Job satisfaction could be influenced both positively and negatively American Herzberg introduced the notion of job enrichment. In 1959 he proposed the ‘Two factor theory’ of job satisfaction. Motivating factorsHygiene factors  if present, lead to job satisfaction and hence motivation  achievement, recognition, work, responsibility, promotion and growth  if present do not lead to motivation but if absent lead to dissatisfaction  pay and benefits, company policy, workplace relationships, work conditions, status and job security Jumping for the Jelly Beans.

I N PAIRS  Select one business or industry  Identify a range of jobs within that business or industry  Explain what motivates employees in each of the jobs with reference to the 3 motivational theorists  How useful do you think motivational theories are in understanding workplace behaviour? What would Hackman and Oldham’s views be on these 3 motivational theories?

H OW TO IMPROVE EMPLOYEE ENGAGEMENT AND MOTIVATION  Financial motivators are the variety of methods that have a money value and are used to reward the workforce and influence their behaviours at work  Non-financial motivators are the methods of motivating employees through elements of job design Zappos: a case study. Does money really motivate people?

FINANCIAL METHODS OF MOTIVATION  Financial methods of motivation include:  Piece rate is when payment is based on the number of items (pieces) produced by an employee  Commission is when payment is based on the number of units sold  Salary schemes are when employees are paid a set annual sum paid in equal instalments even if working hours vary on a monthly basis e.g. a manger may work longer hours at busy times in return for no additional pay  Performance related pay (PRP) is when employees receive a bonus based on the performance of the employee measured against a pre agreed range of criteria Which motivational theorist would be in favour of piece rate pay as a financial motivator? Which financial method would motivate you? Could these be applied to sixth form studies?

NON - FINANCIAL METHODS OF MOTIVATION  Improving job design  Job enrichment  Job enlargement  Job rotation Recap. Write a definition for each method of improving job design. What would be the most effective way of attracting doctors into general practice?

NON - FINANCIAL METHODS OF MOTIVATION  Empowering employees involves delegating responsibility to employees, allowing them to use their abilities and to have a greater say in the decision- making process of the company  Team working is where employees are organised into groups and work together in order to meet set objectives

I NFLUENCES  Factors that influence the choice of methods of motivation include:  The characteristics of the workforce Skills Attitudes Training levels  The management and leadership styles Attitudes of managers Manager’s own incentives  Business objectives Costs involved in different techniques Brand image

T EST YOURSELF - 4 MINUTES End Explain Taylor’s theory of scientific management. Underline or highlight each business term used in your explanation.

T EST YOURSELF - 4 MINUTES End Explain Herzberg’s two factor theory. Underline or highlight each business term used in your explanation.

T EST YOURSELF - 4 MINUTES End Explain Maslow’s hierarchy of needs. Underline or highlight each business term used in your explanation.

T EST YOURSELF - 4 MINUTES End With the use of examples distinguish between financial and non-financial motivators.

6.4.1 M AKING HUMAN RESOURCE DECISIONS : IMPROVING MOTIVATION AND ENGAGEMENT  In this topic you have learnt about  The benefits of motivated and engaged employees  How to improve employee engagement and motivation  The value of theories of motivation  The use of financial methods of motivation  The use of non-financial methods of motivating employees  Influences on the choice and assessment of the effectiveness of financial and non-financial reward systems