Motivation in practice

Theorists identify a range of tools that firms can use in order to motivate their workers. These tools can be split into 2 groups

Monetary Rewards

This involves rewarding a wokrer in a financial sense. These rewards include:

• Payment systems
• Bonus schemes
• Staff discounts

Non-monetary rewards

This involves giving rewards other an cash. These rewards include:

• Job rotation
• Job enlargement
• Job enrichment

• Quality circles
• Participation

Herzberg recognised that money was not the only way of motivating people. Other methods available are:

• Goal setting or managementby objectives (MBO)
• Participation
• Job rotation
• Job enlargement
• Job enrichment
• Quality Cirlcles
• Flexi-time
• Perks and status symbols
• Appraisal

However, although all of these methods are valid, they can cause problems. If a firm woshes to use money to motivate then there are a number of options: Flat Rate or Time based rate, Piece rate or output based rate, commision, profit sharing and share options.

Flat rate

This is where workers are paid according to number of hours worked. This can be useful in service industires or mass production factories. However there is no incentive to work harder as the pay is not based on quality.

Piece rate

This is where workers are paid according to how much is produced. This gives workers the incentive to work quicklu in order to produce a lot of products. However due to the quick working rat, the products may be of low quality. Quality once again is not the priority to getting paid here so workers can normally get away with it.

Commision

This is where workers are paid a percentage of the value sold in products. This is useful for sales staff as it can motivate workers to increase production in order to get more sold. However if profits are small then the workers may not be paid much and will therefore lead to low wages.

Profit sharing

This is where workers get a small share of the profits that are earned. This is different to commision as workers get paid based on profit and not on the value of products sold. This can help to give a team feeling to staff to increase motivation and make them feel more of a team. However all employees will get the same. This may lead to other workers doing minimal work as they still think they will get paid the same as everyone else. There is also the fact that some people will work harder than others but will still get the same reward as others. This may cause more disagreement as staff who work harder may not be happy that they get the same bonus as someone who doesn't work hard

Share ownership

This is where workers are given free shares from the business. This can help to increase loyalty between workers and the business. However this type of pay method is only available in LTDs or PLCs so not every company can use it