2.

1 – Motivating Workers
Motivation
People work for several reasons:

  Have a better standard of living: by earning incomes they can satisfy their needs and wants
 Be secure: having a job means they can always maintain or grow that standard of living
 Gain experience and status: work allows people to get better at the job they do and earn a
reputable status in society
 Have job satisfaction: people also work for the satisfaction of having a job
Motivation is the reason why employees want to work hard and work effectively for the
business. Money is the main motivator, as explained above. Other factors that may
motivate a person to choose to do a particular job may include social needs (need to
communicate and work with others), esteem needs (to feel important, worthwhile), job
satisfaction (to enjoy good work), security (knowing that your job and pay are secure-
that you will not lose your job).
Why motivate workers? Why do firms go to the pain of making sure their workers are
motivated? When workers are well-motivated, they become highly productive and
effective in their work, become absent less often, and less likely to leave the job, thus
increasing the firm’s efficiency and output, leading to higher profits. For example, in
the service sector, if the employee is unhappy at his work, he may act lazy and rude
to customers, leading to low customer satisfaction, more complaints and ultimately a
bad reputation and low profits.
 

Motivation Theories
 F. W. Taylor: Taylor based his ideas on the assumption that workers were motivated by
personal gains, mainly money and that increasing pay would increase productivity (amount of output
produced). Therefore he proposed the piece-rate system, whereby workers get paid for the number of
output they produce. So in order, to gain more money, workers would produce more. He also
suggested a scientific management in production organisation, to break down labour (essentially
division of labour) to maximise output
However, this theory is not entirely true. There are various other motivators in the modern workplace,
some even more important than money. The piece rate system is not very practical in situations where
output cannot be measured (service industries) and also will lead to (high) output that doesn’t
guarantee high quality.
 

 Maslow’s Hierarchy: Abraham Maslow’s hierarchy of needs shows that employees

are motivated by each level of the hierarchy going from bottom to top. Mangers can identify which
level their workers are on and then take the necessary action to advance them onto the next level.
 One limitation of this theory is that it doesn’t apply to every worker. For some employees, for
example, social needs aren’t important but they would be motivated by recognition and appreciation
for their work from seniors.
 

 Herzberg’s Two-Factor Theory: Frederick Herzberg’s two-factor theory, wherein he states

that people have two sets of needs:
Basic animal needs called ‘hygiene factors’:
 status
 security
 work conditions
 company policies and administration
 relationship with superiors
 relationship with subordinates
 salary
Needs that allow the human being to grow psychologically, called the ‘motivators’:

 achievement
 recognition
 personal growth/development
 promotion
 work itself
According to Herzberg, the hygiene factors need to be satisfied, if not they will act as
de-motivators to the workers. However hygiene factors don’t act as motivators as
their effect quickly wear off. Motivators will truly motivate workers to work more
effectively.

Motivating Factors
Financial Motivators
 Wages: often paid weekly. They can be calculated in two ways:
 Time-Rate: pay based on the number of hours worked. Although output may
increase, it doesn’t mean that workers will work sincerely use the time to produce more- they may
 simply waste time on very few output since their pay is based only on how long they work. The
productive and unproductive worker will get paid the same amount, irrespective of their output.
 Piece-Rate: pay based on the no. of output produced. Same as time-rate, this
doesn’t ensure that quality output is produced. Thus, efficient workers may feel demotivated as
they’re getting the same pay as inefficient workers, despite their efficiency.
 Salary: paid monthly or annually.
 Commission: paid to salesperson, based on a percentage of sales they’ve made. The higher
the sales, the more the pay. Although this will encourage salespersons to sell more products and
increase profits, it can be very stressful for them because no sales made means no pay at all.
 Bonus: additional amount paid to workers for good work
 Performance-related pay: paid based on performance. An appraisal (assessing the
effectiveness of an employee by senior management through interviews, observations, comments
from colleagues etc.) is used to measure this performance and a pay is given based on this.
 Profit-sharing: a scheme whereby a proportion of the company’s profits is distributed to
workers. Workers will be motivated to work better so that a higher profit is made.
 Share ownership: shares in the firm are given to employees so that they can become part
owners of the company. This will increase employees’ loyalty to the company, as they feel a sense of
belonging.
Non-Financial Motivators
 Fringe benefits are non-financial rewards given to employees
 Company vehicle/car
 Free healthcare
 Children’s education fees paid for
 Free accommodation
 Free holidays/trips
 Discounts on the firm’s products
 

 Job Satisfaction: the enjoyment derived from the feeling that you’ve done a good job.
Employees have different ideas about what motivates them- it could be pay, promotional
opportunities, team involvement, relationship with superiors, level of responsibility, chances for
training, the working hours, status of the job etc. Responsibility, recognition and satisfaction are in
particular very important.
So, how can companies ensure that they’re workers are satisfied with the job, other
than the motivators mentioned above?

 Job Rotation: involves workers swapping around jobs and doing each specific task for
only a limited time and then changing round again. This increases the variety in the work itself and
will also make it easier for managers to move around workers to do other jobs if somebody is ill or
absent. The tasks themselves are not made more interesting, but the switching of tasks may avoid
boredom among workers. This is very common in factories with a huge production line where
workers will move from retrieving products from the machine to labelling the products to packing the
products to putting the products into huge cartons.
 Job Enlargement: where extra tasks of similar level of work are added to a worker’s job
description. These extra tasks will not add greater responsibility or work for the employee, but make
work more interesting. E.g.: a worker hired to stock shelves will now, as a result of job enlargement,
arrange stock on shelves, label stock, fetch stock etc.
 Job Enrichment: involves adding tasks that require more skill and responsibility to a job.
This gives employees a sense of trust from senior management and motivate them to carry out the
extra tasks effectively. Some additional training may also be given to the employee to do so. E.g.: a
receptionist employed to welcome customers will now, as a result of job enrichment, deal with
telephone enquiries, word-process letters etc.
 Team-working: a group of workers is given responsibility for a particular process, product
or development. They can decide as a team how to organize and carry out the tasks. The workers
take part in decision making and take responsibility for the process. It gives them more control over
their work and thus a sense of commitment, increasing job satisfaction. Working as a group will also
add to morale, fulfill social needs and lead to job satisfaction.
 Opportunities for training: providing training will make workers feel that their work is
being valued. Training also provides them opportunities for personal growth and development,
thereby attaining job satisfaction
 Opportunities of promotion: providing opportunities for promotion will get workers to work
more efficiently and fill them with a sense of self-actualisation and job satisfaction