Why are businesses bothered about motivation?
Keeping staff motivated is good for business. Here's some reasons why...
- Motivated workers are more productive. Higher productivity usually means higher profits.
- Workers who are motivated are usually happier. In service industries this should lead to better customer service.
- Staff who are well motivated are more likely to stay with the company. This means they will gain experience and become more valuable to their employer.
- If a business can reduce the amount of workers leaving it can also reduce the costs of recruitment as well as maximise the value of training,
Types of Motivation
Motivation can be broken down into two categories:
- Non-Financial Motivators - These are things, other than money, that motivate people to go to work.
- Financial Motivators - This one is all about money and the way businesses can use it to motivate workers.
Non-Financial Motivators - Maslow's Hierarchy
Abraham Maslow put forward his 'hierarchy of needs' to explain why he thought people went to work.
He suggested there were five levels of 'need' that influence a persons behaviour.
1. Basic Needs
2. Safety Needs
3. Social Needs
4. Self-Esteem Needs
Maslow's Hierarchy Continued...
- In a hierarchy the things at the top are more important than those at the bottom.
- Maslow said the lower levels (basic needs) have to be satisfied first.
- Only when these needs have been satisfied will the individual strive to satisfy the higher needs (safety, social, self-esteem and self actualisation).
- For example, hungry, cold people will seek food and shelter first. Once they are well fed and comfortable, they will turn their attention to higher needs, for example the pleasure of being with colleagues.
How Can A Business Provide For These Needs?
Basic needs: A fair wage, a meal and rest facilities.
Safety needs: Job security, safe working conditions, pension schemes.
Social needs: Met by introducing team work and perhaps providing social facilities like a club or sports pitch.
Self-esteem needs: This is about how others see us at work and can be provided for by rewarding staff with status symbols like cars, offices and new job titles. Allowing staff to gain qualifications at work can boost self-esteem too.
Self-actualisation: Achieving your full potential. A business must ensure that promotion is possible and that there are opportunities to use initiative.
Money, and the way it is paid, can affect motivation to work. In your exam, you may be asked to calculate wages and bonuses or to compare one type of payment scheme to another. These are some of the most usual payment systems:
- Bonus Payments
Paying extra money for jobs with difficult hours will usually encourage people to apply for the work. Employees may not want to work longer than their contracted hours but they can often be persuaded to do so by receiving a higher rate of pay. A loyalty bonus can be used to persuade workers to stay with their employer for a long period of time.
Other Types of Motivation
A fringe benefit is a payment in kind. Instead of giving money the employer might provide:
- health insurance
- free uniform
- discounted products
- first class travel
It is often cheaper for the employer to provide goods rather than the money to buy them with. A good perk (or fringe benefit) will make an employee reluctant to leave the business.
Most examinations in this subject are based on a case study, which provides a setting for business theory.
Look carefully at your case study to see if there is any information about working conditions.
Think about the kind of financial and non financial motivators which might apply to your given case study.
Exam Question #1
You are the human resources manager of a large company. Feedback suggests many of the workers are unhappy and are looking for new jobs. Recent figures show productivity has fallen. You know that the Managing Director has said there will be no wage increases this year. What improvements could you suggest at the next management meeting which would improve motivation and productivity?
Exam Question #1 - Answer
A good answer will suggest introducing some of the following things:
- Providing a pleasant room for staff to use during breaks.
- Providing subsidised meals or improving the existing canteen.
- Giving permanent contracts of employment.
- An occupational pension scheme.
- Introducing teamworking and giving teams more say in how things are done.
- Advertising job opportunities internally.
- Introducing a newsletter or regular briefing for all staff.
- Rewarding staff with perks like company cars, insurance schemes or discounted goods.
In your answer you will need to show you know about Maslow's hierarchy of needs. Apply it to this case study, giving examples of how the company could meet workers' needs at all levels.
Exam Question #2
In your exam, you may be asked to calculate wages and bonuses or to compare one type of payment scheme to another.
Charlotte works as a care assistant at a privately run care home for the elderly. Here are details of her pay and perks.
- Basic pay - £3.50 per hour for a standard 40 hour week.
- Overtime - averages £15.75 per week. It is paid at time and a half.
- Premium payment for unsocial hours - £20 per week.
- Free meals on duty.
- Free uniform.
- Annual lump sum loyalty bonus - £360.
Exam Question #2
Read through the question again and ensure you are comfortable with all the terms and figures used. Typical questions may include:
What is her basic pay per week?
How much does she earn in total in a typical week?
How much overtime does she do in an average week?
What does she earn annually?