Chapter 6 Motivation PDF

Chapter 6
MOTIVATING EMPLOYEES
Chapter 6 - Motivating Employees

Reasons why people work
People work for a variety of reasons. The main reason why most people
work is because they need to earn money to buy food and the basic
necessities for life.
 Money
 Security
 Social needs(affiliation)
 Esteem needs (self-importance)
 Job satisfaction
Chapter 6 Motivating Employees

MOTIVATION is the reason why employees want to
work hard and work effectively for the business.

Benefits of a well motivated workforce
 High output per worker – which helps to keep costs low and increase profits
 Willingness to accept change
 Two-way communication with management
 Low labour turnover – a loyal workforce – this reduces the cost of recruiting workers who
leave
 Low rates of absenteeism
 Low rates of strike action – avoiding damage to customer relations.

MOTIVATIONAL THEORIES
F.W. TAYLOR - According to him, all employees are motivated

by personal gain and therefore, if they are paid more, they will
work more effectively.
Although F.W. Taylor's ideas resulted in big productivity gains there were several
criticisms:
 His ideas were too simplistic - employees are motivated by many things, not just
money.
 You can pay an employee more money, but if they are not satisfied, they will not
be motivated.
 A practical problem arises if you cannot easily measure an employee's output.

Human needs – MASLOW’s Hierarchy

According to Maslow…
 If employees are going to be motivated to work

effectively then the higher levels in the hierarchy must
be available to them -money alone will not increase
motivation.
 Each level in the hierarchy must be achieved before an
employee can be motivated from the next level.
 There are problems in that some levels do not appear
to exist for certain individuals, while some rewards
appear to fit into more than one level.
 Managers must identify the level of the hierarchy that a
particular job provides and then look for ways of
allowing the employees to benefit for the next level up
the hierarchy.

HERZBERG - According to Herzberg,
humans have two sets of needs:
MOTIVATORS – for a HYGIENE/MAINTENANCE

human being to be factors must be satisfied,
able to grow and if they are not, they
psychologically. will be demotivating for
the workers
Achievement recognition, Status, security, work conditions,
company policies and administration,
personal relationship with supervisor
growth/development, /subordinates and salary
advancement/ promotion,
work itself.

Methods of Motivation – financial rewards
A WAGE is payment for work, usually paid weekly.

 The worker is paid on a regular basis so doesn't have to wait long and is paid
to manual workers.
 If the worker works longer than usual, they are paid overtime.
Limitations
 It takes time and money to calculate wages weekly.

 Wage clerks are often employed to perform this task.

TIME RATE is the amount paid to an employee for one hour of work.
 This makes it easy to calculate the worker's wages.
Limitations:
 Wage calculation takes time.
 Good and bad workers are paid the same amount of money.
 Supervisors must make sure that all workers are working; this is expensive
because more supervisors are needed.
 A clocking-in system is needed to determine the hours worked by the
employees.

PIECE RATE is an amount paid for each unit of output.
 It encourages workers to work faster and produce more.
Limitations:
 Workers may concentrate on producing large quantities and ignore
quality.
 Careful workers will not earn as much as those who rush, so it is not fair.
 If machines break down, workers will earn less money. Guaranteed
minimum wage is paid to avoid this.

A SALARY is payment for work, usually paid monthly. Salaries are normally paid
straight into the bank account.
 Easy to calculate salary costs for the business.

 The employer has the money in their bank account for longer than if they
were paying wages.
 The payment has to be calculated only once a month.
Limitations:
 Workers may prefer to be paid weekly.
 No payment for extra time worked.

A BONUS is an additional amount of payment above basic pay

as a reward for good work.
Limitations:
 Can become ‘expected’ every year and if they are not paid
then employee disappointment can be difficult to manage.
 If only one or a small number of workers are paid a bonus,
then bad feelings can be caused.

COMMISSION is payment relating to the number of sales made.
Limitations
 Sales may increase in the short term if sales staff are very
persuasive and encourage people to buy.
 Can be stressful for the sales staff as a bad month make their
pay to fall.
 Too much competition between sales staff to get customers.

PROFIT SHARING is a system whereby a proportion of the

company's profit is paid out to employees.
Limitations:
 If a business makes a loss or low profits employees will be
disappointed due to no ‘profit shared’
 Higher paid workers will receive a high profit share causing a
bad feeling among low paid workers.

Fringe benefits
In addition to financial rewards, firms also give non-financial rewards like a

company vehicle, discount on firm’s product, etc. These are also called as
‘perks’ or ‘fringe benefits’.
Examples:
Company vehicle
Discount on the business’s products
Health care paid for
Free accommodation
Share options
Food and clothing
Pensions
Free trips abroad/ holidays

Motivating factors – non – financial methods
JOB SATISFACTION is the enjoyment derived from feeling that you

have done a good job. It can basically depend on following
factors,
 Pay
 Opportunities for promotion
 Working hours
 Fringe benefits
 Recognition for good work
 Chance for training

 JOB ROTATION involves workers swapping
around and doing each specific task for
only a limited time and then changing
round again.
 JOB ENRICHMENT involves looking at jobs

and adding tasks that require more skill
and/or responsibility.
Chapter 10 Marketing, competition and the customer

TEAMWORKING (AUTONOMOUS WORK GROUPS)
Team working involves using groups of workers and allocating

specific tasks and responsibilities to them.

TRAINING
TRAINING is the process of improving a

worker’s skills.
Improving a worker’s level of skill can have
beneficial effects on motivation; greater
sense of achievement and they can be given
more challenging and rewarding work to
perform.

PROMOTION
PROMOTION is the advancement of an

employee in an organisation, for example, to a
higher job/managerial level.
Employees offered promotion will feel
recognized, have a higher status and will be
given more challenging work to perform.

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Chapter 6

Chapter 6 - Motivating Employees

Chapter 6 Motivating Employees

Chapter 6 Motivating Employees

Chapter 6 Motivating Employees

F.W. TAYLOR - According to him, all employees are motivated

Chapter 6 Motivating Employees

Chapter 6 Motivating Employees

 If employees are going to be motivated to work

Chapter 6 Motivating Employees

MOTIVATORS – for a HYGIENE/MAINTENANCE

Chapter 6 Motivating Employees

A WAGE is payment for work, usually paid weekly.

 It takes time and money to calculate wages weekly.

Chapter 6 Motivating Employees

Chapter 6 Motivating Employees

PIECE RATE is an amount paid for each unit of output.

 It encourages workers to work faster and produce more.

Chapter 6 Motivating Employees

 Easy to calculate salary costs for the business.

Chapter 6 Motivating Employees

A BONUS is an additional amount of payment above basic pay

Chapter 6 Motivating Employees

COMMISSION is payment relating to the number of sales made.

Chapter 6 Motivating Employees

PROFIT SHARING is a system whereby a proportion of the

Chapter 6 Motivating Employees

In addition to financial rewards, firms also give non-financial rewards like a

Chapter 6 Motivating Employees

JOB SATISFACTION is the enjoyment derived from feeling that you

Chapter 6 Motivating Employees

 JOB ENRICHMENT involves looking at jobs

Chapter 10 Marketing, competition and the customer

Team working involves using groups of workers and allocating

Chapter 6 Motivating Employees

TRAINING is the process of improving a

Chapter 6 Motivating Employees

PROMOTION is the advancement of an

Chapter 6 Motivating Employees

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