Motivation

AS Business Studies

Aims and Objectives

Aim:• Understand methods of motivation

Objectives:• Define motivation• Describe financial and non financial

methods of motivation• Analyse methods of motivation

Starter

• What motivates you to go to school?

• What motivates you to work part time?

• What things do you think will motivate you in your future careers?

Definition

• The factors that inspire an employee to complete a task at work.

• Will affect both quantity (output) and quality of a businesses products.

John Lewis & Motivation

• http://www.youtube.com/watch?v=2tX2GiDm5Ug

Financial Methods of Motivation

• Paying employees based on the number of units they produce.Piece Rate

• Payment based on the number of units sold.Commission

• Options include a company car, medical insurance etc.Fringe Benefits

• Percentage of companies profits distributed between employees

Profit-Sharing Scheme

• Salary is reviewed based on the contribution made in terms of the standards achieved

Quality Related Bonus Schemes

Analysing Financial Motives

• In your groups decide on the advantages and disadvantages of each financial motivation method.

Piece Rate Analysis

- Increases output per person.- Useful when production is running below the required level.

- Quality may drop which may damage brand image.- May have knock on effect on future sales/profits

Commission

- Increased revenue

- Employees may be tempted to use unethical practices leading to poor customer relations

Fringe Benefits

- Often valued more highly than wage increases by employees.

- Represent a long term commitment by the firm so could reduce flexibility.- Could be expensive

Profit Sharing Scheme

- Individuals can see their efforts making a difference- Encourages team working

- Divisive if some members of the team work harder than others but get the same rewards

Quality Related Bonus Scheme

- Employees motivated to work to highest possible standard

- In service sector difficult to measure quality

Non-Financial Motivational Methods

• How could you motivate employees non financially?

Non-Financial Motivational Methods

• Expanding the number of tasks completed by an employee.

Job Enlargement

• Varying an employee’s job on a regular basis, leading to multi skilling.Job Rotation

• Increasing the level of responsibility within a job to make work more challenging or rewarding.

Job Enrichment

Analysing Financial Motives

• In your groups decide on the advantages and disadvantages of each non-financial motivation method.

Job Enlargement

- Mistakes less likely, which reduces costs

- Training costs involved and employees expect more pay

Job Rotation

- Staff shortages can be covered more easily

- Can be complicated to organise- Employees may not develop skills evenly resulting in quality variations

Job Enrichment

- Allows employees to develop managerial skills- May lead to internal recruitment opportunities

- High training costs- May be difficult for employee to manage new workload

Which tool is better?

• Are financial methods or non-financial methods better to motivate employees?

• What may the answer depend on?