A-level Business AQA

Unit 6: Human resources

Motivation and engagement in practice

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INTRODUCTION:

There are two main variables that influence the motivation of staff in practice:

 Financial reward systems

 Job design and enrichment

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FINANCIAL METHODS OF MOTIVATION:

PIECE RATE:

 Payment is per unit produced.

 No sick pay, holiday pay, or pension
 Used in small-scale manufacturing.

ADVANTAGES:

 Negates need for supervision

 Managers only need to operate quality control system
 Workers can be relied upon to work fast enough to earn a living wage.

DISADVANTAGES:

 Scrap levels might be high if workers are focused entirely on speed of output.
 Products may not be of the best quality
 Workers may work hardest when they want higher earnings – may not coincide with seasonal
demand
 Makes workers resistant to change.
PERFORMANCE-RELATED PAY:

 Financial reward to those who work above average

 Used for employees who’s work achievements cannot be monitored numerically
 Targets are established for each member of staff at appraisals
 At the end of the year, managers discuss those achievements against those targets
 Those with outstanding achievements are given a 6% bonus or pay rise.

ADVANTAGES:

 Easier for managers to manage/control their staff (using the carrot not the stick)
 Reduces the influence of collective bargaining and trade unions.

DISADVANTAGES:

 Looks at individual achievement, not the achievements of a team or the whole organisation
 Doesn’t promote teamwork
 Could create rivalry between managers going for the same merit 1 spot.

FINANCIAL METHODS OF MOTIVATION:

COMMISION:

 Bonus earned on top of a basic salary

 Normally in line with meeting specific sales targets
 EG: If someone was expected to generate £80k in sales. They may earn £50 for every £1000 above that total.
 Widely used to incentivise staff
 Used in clothes shops, furniture shops, and other outlet where it takes effort to make a sale.
 NOT a motivator, it is simply a hygiene factor.

SALARY SCHEMES:

 Herzberg said every attempt to motivate people through financial incentives doomed to fail.
 This is because people would be incentivised to do the wrong thing over and over.
 Herzberg was against underpaying as well as overpaying
 He considered a salary scheme to be the best form of payment
 He also encouraged non-incentivised benefits such as pensions, sick-pay and holidays.

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JOB DESIGN AND ENRICHMENT:

ENRICHMENT:

Giving people the opportunity to use their ability.

This could be by:

 A range of responsibilities and activities

 IE: Workers must have a complete unit of work
 Responsibility for self-checking and quality control
 Job rotation.
 This requires a radical approach.

 Teamwork
 That team become managers of their own work area

ADVANTAGE: More satisfying DISADVANTAGE: The risk it could be less productive.

CHOICE AND ASSESSMENT OF FINANCIAL AND NON-FINANCIAL REWARD SYSTEMS:

Influences on financial:

 Can the rewards be clearly related to the quality and quantity of the work done?
 Are the rewards being distributed fairly?

Influences on both:

 The results of careful measurements of past reward systems

 Timescale being considered: SHORT TERM: Financial LONG TERM: Non-financial.
 The level of change the business faces: Financial rewards are difficult to change.

KEY TERM: DEFINITION:

Division of labour Subdividing a job into small repetitive fragments.
Job design Designing a job with people in mind.
Motivation Wanting to do a task.
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WORKBOOK A. REVISION QUESTIONS:

RRR: Chapter 46, Q4-6:

Q4. A fast-growing business might not have a HR manager. The tasks may be left up to the line managers.
Examine two reasons in favour of creating a HR management post within the business. (6)

The managers may not have spent time on clear HR objectives, therefore different managers may be
operating different policies.

A HR manager can help here by standardising the approach to all managers and looking at the overall HRM
from an outside perspective.

As they are a specialist in this, they may be able to highlight where the line managers are failing in their HRM
and they will be able to manage sick-pay, holidays, salaries so the line manager can get on with the task
management.

Q5. Outline two ways in which a human resources manager may be able to help increase productivity at a
clothes shop. (4)

They could offer financial incentives such as commission in order for the staff to become motivated to sell
more with the prospect of earning more.

They could offer non-financial incentives such as flexitime, annual leave, job enrichment, responsibility.
Therefore these motivating factors will help the employees increase their productivity.

Q6. Analyse the circumstances in which it might be appropriate for a manager to adopt a hard HRM. (9).

Hard HRM is an autocratic approach to management, where the manager has absolute authority, and the
workers are directed to.

One circumstance where hard HRM would be appropriate is in a time of crisis or emergency. This means that
quick, decisive action is needed in order to get the business out of crisis, because there is not time for
consulting with employees in a democratic approach. This would lead to potential arguments over the best
way forward rather than solving the issue. Therefore, hard HRM would be appropriate in emergencies in
order to make quick, strong decisions and to have all the workers on board.

Another circumstance where hard HRM would be appropriate is if the workforce are largely unskilled. This
means that the workers will need their tasks directing to because they may not have the ability or experience
to be involved in the decision-making process themselves. This would lead to potential significant errors if the
workforce were to make the wrong decisions. Therefore, hard HRM would be appropriate here in order to
have someone with the appropriate knowledge and experience to ensure the correct decisions are made.

WORKBOOK A, Pg. 299:

Q1. ‘Job design is the key to motivation’. Outline one reason why this may be true and one reason why it may
not be. (4)

TRUE: because if the job is repetitive and boring, the employee may not be engaged or motivated by it even if
the pay is good. Therefore, the job needs to be made more interesting.

NOT TRUE: because the worker could be demotivated by hygiene factors such as lack of communication or
not earning enough money. Although the job is interesting, there are factors surrounding the job that are
demotivating.

Q2. Look at the famous saying on page 297. Explain what is meant by this. (3)
 In other words, the more employees that are motivated the higher the production rates will be. If you can
motivate others, then they motivate others, your production rate can be increased.

Q3. How should a manager deal with a mistake made by a junior employee? (4)

The manager should get to the bottom of why they made that mistake.
They should then communicate with the junior employee to ensure that it doesn’t happen again.
They can do regular appraisals and set targets to improve the ability of the employee.

Q4. State three reasons why job enrichment should improve staff motivation. (3)

Complete unit of work

Teamwork, not isolated
The job becomes less repetitive and more interesting.

Q5. Distinguish the difference between job rotation and job enrichment. (4)

Job rotation is where you do a different small task every day. IE: fitting wheels one day, fitting doors the next
day. Job enrichment is changing the whole job to include a complete unit of work, and more responsibility.

Q6. How does empowerment differ from delegation? (4)

Empowerment refers to an employee getting more responsibility and power in general. Delegation is where
they get the decision-making power on a one-off occasion with approval from their manager.

Q7. Identify three advantages to an employee working in a team. (3)

They can work together on the job, gets the job done quicker.
Employee can be more motivated because they get a social side to work.
The teams can quality assess each of their products and can bounce ideas off each other/ask for help.

Q8. State two advantages and two disadvantages of performance related pay. (4)

ADVANTAGES:
 Easier for managers to manage/control their staff (using the carrot not the stick)
 Reduces the influence of collective bargaining and trade unions.

DISADVANTAGES:

 Doesn’t promote teamwork

 Could create rivalry between managers going for the same merit 1 spot.

Q9. What could be the implications of providing a profit share to senior managers but not the workforce? (5)

Workers could become dissatisfied with company policy, therefore becoming demotivated
They may not produce as much in the next year, meaning company profits would fall.
Could lead to more staff absences – costing the company money to fill those absences.

Q10. What problems may result from a manager bullying staff to ‘motivate’ them? (6)
If a manager bullies staff, the staff may become demotivated so produce less. This means that the company
will not be able to generate the same amount of revenue, causing a fall in profits.

A manager could also cause a lot of stress and staff absences, meaning the company would have to pay to fill
those absences which would increase their costs so reduce profit.

It could also cause staff to leave the company which would mean that the company would have to go
through the recruitment process and deliver the necessary training. This would also cost the company
money, and therefore profit.