Motivation Methods in Practice (Cambridge (CIE) A Level Business): Revision Note

Financial motivators

• Financial incentives are rewards or payments given to employees in return for their labour or improved performance

Financial incentives and motivation theory

Advantages of using financial motivators

1. Quickly boosts performance

   • Financial rewards like bonuses or commissions can lead to an immediate increase in effort and output

2. Easy to measure and manage

   • Targets linked to pay, such as volume of sales or units produced, are clear and simple to monitor

3. Attracts skilled employees

   • High pay and incentives can help a business compete for top talent in the job market

Disadvantages of using financial motivators

1. Can reduce teamwork

   • If pay is based on individual results, employees may compete instead of working together

2. Short-term focus

   • Employees may focus only on rewards and ignore quality, customer service or long-term goals

3. Costly for the business

   • Bonuses, commission and other financial rewards can become expensive, especially if not linked to overall profit

Non-financial motivators

• Many people want challenge, recognition and opportunities for development from their work

• According to Herzberg, motivators like job enrichment, promotion, and recognition increase job satisfaction by giving responsibility and purpose

  • Empowerment and participation in decision-making help employees feel trusted, which boosts motivation

• According to Maslow, non-financial rewards meet higher-level needs like belonging, esteem and self-fulfilment

Examples of non-financial motivators

• Training and development help employees improve their skills and grow in confidence, making them feel more capable and valued

• Opportunities for promotion encourage employees to work harder by offering a clear path to higher-level roles and responsibilities

• Improved status gives employees a higher job title or position, increasing their sense of importance and recognition

• Job redesign involves changing job roles to make them more interesting or meaningful, which can reduce boredom and boost motivation

• Team working encourages collaboration and a sense of belonging, helping employees feel supported and connected

• Empowerment means giving employees the freedom to make decisions, which increases trust, confidence, and motivation

• Participation in decision-making involves employees in business decisions, making them feel respected and more committed to the outcomes

• Job enrichment adds more challenging or meaningful tasks to a role, giving employees a sense of achievement and purpose

Motivation theories in practical situations

• Businesses use motivation theories to understand what motivates their staff and then apply these ideas to improve performance, job satisfaction, and staff retention

Applying Taylor's theory

• Taylor suggested that workers should be given simple tasks and paid based on how much they produce

• Businesses may use performance-based pay systems

  • For example, factory workers are paid per unit made

  • Tasks are often simplified and repeated to improve speed and efficiency

  • Close supervision and clear instructions are given to employees

Applying Herzberg's two-factor theory

• Businesses make sure basic hygiene factors, such as fair pay and a clean and safe environment, are in place

• Then they focus on motivators by giving employees responsibility, chances for promotion or by recognising achievements

Employee participation

• Employee participation means involving workers in decisions that affect the running of the business

• This can lead to greater motivation, better communication and improved performance

  • However, it may slow decision-making, and managers must be open to listening and acting on employee input

Ways employees participate