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Keeping staff motivated is good for business. Here are some examples why:

  • Motivated workers are more productive and higher productivity usually means higher profits.
  • In a service industry, workers who are well motivated will provide a better level of customer service, keeping the customers happy.
  • Staff who are well motivated are more likely to stay with the company. They grow in experience and become even more valuable to their employer.
  • If a business successfully keeps the staff it has, the cost of recruiting and training new staff is reduced.


Contents

Non financial motivators

Most people work to satisfy needs of one kind or another. Non financial motivators are things other than money that motivate people to work. Abraham Maslow developed his hierarchy of needs based on research about what motivates people to work. He suggested that there were 5 levels of need that influence a person's behaviour.

  1. Basic needs: for food, drink and shelter
  2. Safety needs: protection against danger, threat, deprivation
  3. Social needs: the need for belonging, acceptance, friendship
  4. Self-esteem needs: reputation, status
  5. Self-actualisation: the need for realising one's own potential for continual self-development

In a hierarchy the things at the top are more important than those at the bottom. Maslow said the lower levels have to be satisfied first. Only when these needs have been satisfied will the individual strive to satisfy the higher needs. 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-actualization: Achieving your full potential. A business must ensure that promotion is possible and that there are opportunities to use initiative.
  • Employ empowerment:Due to de-centralization employees feel empowered and they know that the business trust them and their decisions.

Financial motivators

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:

Time rate or 'wages' Paying by the number of hours worked.
Piece rate Paying by the number of items (pieces) produced.
Overtime Extra pay for work done over and above normal working hours. It is usually paid at a higher hourly rate, e.g. double time means twice the normal hourly rate.
Shift payments Usually paid for working unsocial hours such as night work.
Bonus payments A special single payment for achieving a target.
Profit sharing A percentage of the company's profit is shared amongst the workers.


Paying extra money for jobs with difficult hours will usually encourage people to apply for the work.

A loyalty bonus can be used to persuade workers to stay with their employer for a long period of time. 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 perk is a payment in kind. Instead of giving money the employer might provide:

  • cars
  • 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 will make an employee reluctant to leave the business

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?

The 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


  • Motivation: The desire to do a job well.
  • Motivator: Something that encourages an employee to work.
  • Productivity: A measure of the amount of work done in a given time. For example, the number of goods produced in a week.
  • Staff turnover: The number of employees leaving a business in a set time period.
  • Human Resources Manager: The person who is responsible for making sure employees are managed effectively in a business.
  • Hierarchy: The order or levels in a structure, each level being more important than the one below it.


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