Non-Financial Methods of Motivation (Cambridge (CIE) IGCSE Business): Revision Note

Non -financial methods of motivation

• Non-financial incentives are rewards that are not directly related to money

• These incentives may be intangible and include methods that lead to recognition, praise, job satisfaction or improved work-life balance

Types of non-financial Incentives

• Autonomy

  • Involves giving staff the authority and resources to make decisions and take action without first receiving management approval

    • Increases staff sense of ownership and responsibility leading to improved productivity

• Job enrichment

  • Involves adding more challenging or meaningful tasks to a job

  •  Staff feel more motivated and engaged, leading to improved productivity

• Job rotation

  • Involves moving staff between broadly similar but varied roles in the business

  • Exposes staff to new challenges and experiences which can increase motivation, understanding and skill

• Teamworking

  • Teamwork may involve workers completing tasks together

  • Teamwork can increase motivation in the workplace as each member of staff has a role and a shared goal

• Training

  • Involves staff improving or learning new skills and abilities

  • This can make employees feel valued, more productive and likely to remain with the business

• Promotion opportunities

  • Employees offered promotion will feel recognised, have a higher status and will be given more challenging tasks/responsibilities to perform 

  • These benefits are closely linked to the views of both Maslow and Herzberg

Recommending a method of motivation

• When recommending a method of motivation for employees in a business, managers must recognise that individuals are motivated in different ways

• The following should also be considered

  • The context of the business

    • What type of business it it? E.g. manufacturing or sales 

    • The budget available 

    • How many workers does the organisation have?

    • Does the business currently use any methods of motivation?

    • What is the nature of the work of employees on a daily basis?

  • The balance of the compensation package

    • Ideally it should include both financial and non-financial 

    • It should be adaptable and reflect the changing needs of staff

Recommending a method of motivation