Motivation and engagement in practise

47.1 Introduction

There are two main variables that influence the motivation or staff in practise:

  • the financial reward system 
  • job design and enrichment.

These will be analysed with reference to the theories of motivation. 

1 of 7

47.2 Financial methods of motivation

Piece rate

Piecework is used in small-scale manufacturing. Its attraction for managers is that it makes supervision virtually unnecessary. All the manager needs to do is operate a quality control system that ensures the finished product is worth paying for. Day by day, the workers can be relied upon to work fast enough to earn a living wage. 

Disadvantages of piece rate:

  • Scrap levels may be high, if workers are focused on speed of output.
  • There is an incentive to provide acceptable quality, but not the best possible quality.
  • Workers will work hardest when they want higher earnings. This may not coincide at all with seasonal patterns of customer demand. 
  • Problem of change; Herzberg pointed out that the worst way to motivate is through piece rate because it reinforces behaviour. Focusing on people maximising their earning by repeating a task makes them very reluctant to produce something different or in a different way. 
2 of 7

47.2 Financial methods of motivation

Performance-related pay (PRP)

Is a financial reward to staff whose ork is considered above average. It is used for employees whose work achievements cannot be assessed simply through numerical measures (such as units produced or sold). PRP awards are usually made after an appraisal process has evaluted the performance of staff during the year.

The usual method is:

  • Establish targets for each member of staff/management at an appraisal interview. 
  • At the end of the year, discuss the individual's achievements against those targets.
  • Those with outstanding achievements are given a merit 1 pay rise or bonus worth perhaps 6% of a salary; others recieve between 0-6%.
3 of 7

47.2 Financial methods of motivation

Lack of evidence for benefits of PRP

Despite the enthusiasm they have shown for it, employers have rarely been able to provide evidence of the benefits of PRP.

This points to a problem with PRP - rewarding people does nothing to promote teamwork. Furtherore, it could create unhealthy rivalry between managers, with each going for the same Merit 1 spot. 

So why continue using PRP?

  • to make it easier for managers to manage/control their staff
  • to reduce the influence of collective bargaining and therefore trade unions. 
4 of 7

47.2 Financial methods of motivation

Commission

Is a bonus earned on top of a basic salary, usually in line with a specific achievement such as meeting a sales target. 

Commission is used widely to incentivise staff in shops where it can take effort and skill to make sales. Note that it is incorrect to write about commission as a 'motivator'. In Herxberg's terms, commission is simply a hygiene factor. 

Salary schemes

'The best way to motivate people is a salary' - Herzberg.

To Herzberg, employers must pay the right salary. He warned against underpaying people every bit as much as overpaying. And was also a fan of non-incentivised benefits such as company pensions and holdiay and sick-pay schemes.

5 of 7

47.3 Job design and enrichment

Herzberg defines job enrichment as 'giving people the opportunity to use their ability'.

It is not quick or easy to enrich the job of the production like worker or the supermarket checkout. Herzberg's definition of job  enrichment implies giving people a range of responsibilities and activities.To provide job enrichment, workers must have a complete unit of work, responsibility for quality and for self-checking, and be given the opportunity to show their abilities. 

6 of 7

47.4 Choice and assessing of (non)financial reward

Influences on the choice of whether to use financial ornon-financial rewards systems:

  • Will financial rewards motivate eg. piece rate, or will it make people feel as though the rewards are not being distributed fairly.
  • The results of careful measurement of past reward systems - what was the impact of financial incentives the last time they were used?
  • The timescale being considered; if there are urgent requirements for production over the next 6 months, financial incentives might be effective, but in the long run you want people to want to give of their best, all the time. 
  • The level of change the business faces; financial incentives are very difficult to change, because some staff will already do well out of them and fear lower earnings if there is change.

Ultimately, assessing finacial & non-financial reward systems is extremely difficult when the job is complex. Surgeons do far more than just operate on patients. So if a measurement system looks soley on operations per day, it will fail to capture the real job. Systems that claim to do so should be treated with scepticism. HR professionals are keen to find measurable solutions to complex problems, but research suggests that this is impossible. 

7 of 7

Comments

No comments have yet been made

Similar Business Studies resources:

See all Business Studies resources »See all Decision-making to improve human resource performance resources »