No 106 SDS Jayasinghe Mawatha

Kohuwela, Nugegoda
337/1 Negombo Road, Wattala Ordinary Levels

Motivation

MOTIVATION is the reason why employees want to work hard and work effectively for the
business. DEMOTIVATION is the negative attitude towards work.

REASONS WHY PEOPLE WORK:

Money- to pay for necessities and some luxuries
Security- a sense of security
Social needs- feeling that the job you do is important
Job satisfaction-enjoyment derived from feeling that you have done a good job.

Motivation is essentially about commitment to doing something. In the context of a

business, motivation can be said to be about

"The will to work"

However, motivation is about more than simply working hard or completing tasks.
Entrepreneurs and staff can find motivation from a variety of sources.

Motivation can come from the enjoyment of the work itself and/or from the desire to
achieve certain goals e.g. earn more money or achieve promotion.

It can also come from the sense of satisfaction gained from completing something, or
achieving a successful outcome after a difficult project or problem solved.

Why does motivation matter in business? In short, people's behaviour is determined

by what motivates them. The performance of employees is a product of both their
abilities (e.g. skills & experience) and motivation. A talented employee who feels de-
motivated is unlikely to perform well at work, whereas a motivated employee can
often deliver far more than is expected from them!

Benefits of a well-motivated workforce

A well-motivated workforce can provide several advantages:

• Better productivity (amount produced per employee). This can lead to lower
unit costs of production and so enable a firm to sell its product at a lower price
• Lower levels of absenteeism as the employees are content with their
working lives
• Lower levels of staff turnover (the number of employees leaving the
business). This can lead to lower training and recruitment costs
• Improved industrial relations with trade unions
• Contented workers give the firm a good reputation as an employer so
making it easier to recruit the best workers
• Motivated employees are likely to improve product quality or the customer
service associated with a product
1
Sameer Anis
CIMA Passed Finalist, Post Graduate Diploma (University of West London)
No 106 SDS Jayasinghe Mawatha
Kohuwela, Nugegoda
337/1 Negombo Road, Wattala Ordinary Levels
MOTIVATIONAL THEORIES

F.W. Taylor’s scientific management.

The theory of “economic man” was widely held, and Taylor himself supported this notion.
The view was that man was driven or motivated by money alone and the only factor that
could stimulate further effort was the chance of earning extra money. This formed the basis
of Taylor’s main motivational suggestion – wage levels based on output (piece rate system)

Taylor’s scientific approach is given below.

Principles;

• Develop a Good method.

• That a good method increases efficiency.
• Division of labour and specialisation (division of labour leads to high productivity)
• Salary is a motivator.
• Planning should be centralised (done by top management)
• Workers must be trained to execute the plan.
• Tight supervision and control.
• Output is measured and recorded.

These are the main principles of Taylor’s theory

Limitations.

• Division of labour and specialisation in one task can make the work boring.
• It reduces job satisfaction.
• Nowadays instead of specializing workers are expected to be flexible, workers who
can handle any task.
• Money is not the only motivator. There are other ways to motivate people.
• The tight supervision can demotivated the staff; the staff might think that the
management does not trust them

2
Sameer Anis
CIMA Passed Finalist, Post Graduate Diploma (University of West London)
No 106 SDS Jayasinghe Mawatha
Kohuwela, Nugegoda
337/1 Negombo Road, Wattala Ordinary Levels
Maslow’s – hierarchy of needs.

Self
Actualisation

Esteem Needs

Social Needs

Safety/Security Needs

Physiological Needs

- People are motivated by certain needs, starting with psychological or basic needs
which are hunger, thirst, rest, shelter (most fundamental needs) if those needs are not
satisfied people can’t survive.
- Security/safety needs – security refers to job security, a good job and a steady income.
This will provide a secure future. If you have a good job and steady income you will
have financial security and will therefore not depend on others. Security also offers
physical needs.
- Social needs – refers to satisfaction from friendship and relationships. Social needs
are very important and therefore social network sites are very popular.
- Esteem needs – esteem needs are need for power, prestige, advancement and
recognition. They are very powerful needs and only people who work hard can reach
it, if they work hard they can achieve their career, get more recognition, enjoy more
power. If you belong to ‘X’ category you cannot reach that level.
- Self actualisation – this means your full potential. This is maximising satisfaction.
Every individual has a peek when he reaches that level he will get maximum
satisfaction.

3
Sameer Anis
CIMA Passed Finalist, Post Graduate Diploma (University of West London)
No 106 SDS Jayasinghe Mawatha
Kohuwela, Nugegoda
337/1 Negombo Road, Wattala Ordinary Levels
Herzberg’s two factor theory

Herzberg had close links with Maslow and believed in a two-factor theory of motivation.
He argued that there were certain factors that a business could introduce that would directly
motivate employees to work harder (motivators). However there were also factors that
would de-motivate an employee if not present but would not in themselves actually motivate
employees to work harder (hygiene factors)

a) Hygiene factor
b) Motivators
• Absence of hygiene factors in the business will lead to dissatisfaction.
• Hygiene factors are –
o Company policy and administration.
o Supervision
o Pay/salary
o Relationship with others
o Working conditions.
o Job security
o Job status
• E.g.: low pay, poor working conditions, tight supervision, lack of job security, poor
company policy, poor relationship with superiors and colleagues and low job status
will cause dissatisfaction.
• Only Motivators can lead to real satisfaction.
• Motivators are –
o Achievement – Providing opportunities for achievement. E.g.: Best Employee
of the Year.
o Career advancement – Providing opportunities to advance in the company
through internal promotions.
o Work Itself – creating work that is rewarding and that matches the skills and
abilities of the worker.
o Responsibility – If people are given more responsibility they will take it up as
a challenge which motivates them.

4
Sameer Anis
CIMA Passed Finalist, Post Graduate Diploma (University of West London)
No 106 SDS Jayasinghe Mawatha
Kohuwela, Nugegoda
337/1 Negombo Road, Wattala Ordinary Levels
• A good pay can prevent dissatisfaction, good working conditions
prevents dissatisfaction. It is incorrect to say good working conditions leads to
satisfaction.
• In a business organisation both hygiene factors and motivators have to be present.

Herzberg said pay and working conditions can be improved and these will help to remove
dissatisfaction about work; but they will not, on their own, provide conditions for motivation
to exist. Herzberg argued that it is possible to encourage someone to do a job by paying them
– he called this movement. However movement does not mean that someone wants to do the
job – that would require motivation. Motivation to do the job, and to do it well, would exist
only of the motivators were in place. Herzberg did not claim that pay does not matter, but that
it moves people to do a job and does not motivate them to do well.

Financial Rewards

Financial reward

SALARY is payment for work, usually paid monthly. It is usually paid for white-collar
workers. It is paid in to the bank account of the employee.
WAGES is payment for workers, usually paid weekly
✓ The worker is paid on a regular basis so doesn’t have to wait long and is paid to
manual workers.
✓ If the worker works longer than usual they are paid over time.
 Takes time and money to calculate wages weekly.
 Wage clerks are often employed to perform this task.

TIME RATE is when employees are paid according to the time they work.
✓ This makes it easy to calculate the worker’s wages.
✓ Wage calculation takes time.
✓ Good and bad workers are paid the same amount of money.
 Supervisors have to make sure that all workers are working: this is expensive because
more supervisors are needed.
 A clocking-in system is needed to determine the hours worked by the employees.

PIECE RATE is when the workers are paid depending on the quantity of products made.
✓ It encourages workers to work faster and produce more.
 Workers may concentrate on producing large quantities and ignore quality.
 Careful workers will not earn as much as those who rush, so it is not fair.
 If machines break down, workers will earn less money. Guaranteed minimum wage is
paid to avoid this.
5
Sameer Anis
CIMA Passed Finalist, Post Graduate Diploma (University of West London)
No 106 SDS Jayasinghe Mawatha
Kohuwela, Nugegoda
337/1 Negombo Road, Wattala Ordinary Levels

COMMISSION is payment relating to the number of sales made.

PROFIT SHARING is a system whereby a proportion of the company’s profit is paid out to
employees
BONUS is an additional amount of payment above basic pay as a reward for good work.
PERFORMANCE-RELATED PAY is pay which is related to the effectiveness of the
employee where their output can easily be measured.
SHARE OWNERSHIP is where shares in the company are given to employees so that they
become part owners in the company.

NON FINANCIAL MOTIVATORS/REWARDS

In addition to financial rewards, firms also give non-financial rewards like a vehicle, discount
on firm’s product, etc.
These are also called as perks or fringe benefits.
Fringe Benefits are non-financial rewards given to employees.

Fringe benefit – these are non cash benefits given to employees. They include company cars,
free insurance, pension schemes etc. This gives the employee higher status than the others in
the organization and will motivate significantly.

METHODS OF JOB SATISFACION

JOB SATISFACTION is the enjoyment derived from feeling that you have done a good job.
Example: Opportunities for promotion, working conditions, working hours, colleagues etc.
JOB ROTATION involves workers swapping round and doing each specific task for only a
limited time and then changing round again.
JOB ENLARGEMENT is where extra tasks of a similar level of work are added to a
workers’ job description.
JOB ENRICHMENT involves looking at jobs and adding tasks that require more skill
and/or responsibility.
AUTONOMOUS WORK GROUPS/TEAM WORKING
This is where a group of workers are given responsibility for a particular process, product or
development.

6
Sameer Anis
CIMA Passed Finalist, Post Graduate Diploma (University of West London)
No 106 SDS Jayasinghe Mawatha
Kohuwela, Nugegoda
337/1 Negombo Road, Wattala Ordinary Levels

Real life example of money as a motivator

How important are financial methods of motivations for a CEO? Sundar Pichai - the CEO of
Google - has been given a significant incentive to stay with the business and perform after
being awarded shares worth $199million.

Google is now a separate operating division of Alphabet Inc, which recently overtook
Apple as the business with the largest market capitalisation globally.

The award of shares (or "stocks" as they are called in the US) makes Pichai the
highest-paid CEO in the US according to this article in the Guardian.

7
Sameer Anis
CIMA Passed Finalist, Post Graduate Diploma (University of West London)
No 106 SDS Jayasinghe Mawatha
Kohuwela, Nugegoda
337/1 Negombo Road, Wattala Ordinary Levels

An interesting example here of financial methods of motivation - by Starbucks in China.

Starbucks has agreed to pay a proportion of the rent costs of its full-time staff. The move is
expected to benefit around 10,000 staff in China.
Starbucks continues to be committed to quite an aggressive organic growth strategy in China,
aiming to open another 500-600 stores during 2016.
The need to offer a competitive and attractive pay package will be part of the reason behind
the move to offer to pay employee rents.

8
Sameer Anis
CIMA Passed Finalist, Post Graduate Diploma (University of West London)