Chapter 22: Methods Of Motivation At Work

● remuneration - money paid to employees for their work or services

● Time rate - payment given to employees on the basis of the time employees spend at
work
● Gross pay- the pay before deductions
● Net pay - the pay employees take home after deductions
● Overtime - rate of pay above the normal rate to compensate employees for working
extra hours

Remuneration:
● Money paid to employees for their work or services to an organisation or business
● Taylor's theory says employees work for money
● Maslow’s theory says that money is needed to satisfy the psychological needs of
employees

Time Rates:
● Employees are paid according to the time they work or spend at work
● It is a common system that involves paying workers so much as per hour or per week
● This is the employee’s gross pay(no deductions)
● A worker’s net pay is what they take home after deductions.

Common deductions include:

● Income tax
● National insurance contributions
● Pension contributions
● Contributors to employer savings scheme
● Repayments for education or training scheme
● Trade union membership fees

● Workers may receive overtime pay and get a higher hourly rate for working extra
hours.
● Some employees are paid a salary, which is expressed in annual terms and paid
monthly
● Salaries are paid to non-manual workers and salaried workers may not be paid
overtime

Salary pay - the pay provided to non-manual employees and expressed as a yearly figure
but paid monthly
 Piece rate - payment system where workers receive an amount of money for each unit of
output produced
Performance - related pay - payment system designed for non-manual workers where
pay increases are given if performance targets are met
Incentives - something that encourages you to work harder

Piece Rates:
● Some employees are paid according to what they produce, a piece rate
● The advantage of this system is that it rewards productive workers
● This helps motivate workers and get their best
However, some disadvantages include:
● Piece rates cannot be used if the work produced cannot be measured
● The quality of the output will be affected if people work too fast
● Workers might attempt dangerous practices while trying to be quicker

Performance - Related Pay:

● Used to motivate non-manual workers
● It is targeted at employees whose output is difficult to measure
● Best works when business ideas use appraisal system to evaluate staff performance
Appraisal meetings involves:
● Discuss progress at work
● Assess whether targets have been met
● Set new targets for the next year

Disadvantages of Performance - Related pay:

● Some workers may feel that it is unfair because appraisers may be inconsistent
● The financial incentives may not be high enough to motivate employees
● Some employees may feel that the targets are too demanding
● Some employees may blame other factors if targets are not achieved

● Bonus systems - payment in addition to the basic wage for reaching targets or in
recognition of service
● Commission - payment based on the value of sales

Bonus Payments:
● Some businesses have bonus systems
● An additional pay to the salary or wage is called a bonus
● They are usually paid if employees meet targets
● The main advantage to businesses is that the money is only paid if targets are
achieved and money is earnt
● This motivates employees to meet their targets and get the bonus
Commission:
● Commission is the payment for reaching a target and is often used to reward sales
staff
● A more common method is to have a basic salary and top it with commission based
on the targets
● Taylor’s theory matches with commission

Promotion:
● Developing your career at work means improving your skills, developing new skills,
and trying to get promoted
● The chance of promotion helps motivate workers, as a promotion means a higher
pay
● The higher pay is a reward for employees who take on the additional responsibilities
● According to Herzberg, this motivates employees.

Fringe benefits - “perks” over the basic salary or wage

Fringe benefits -
● benefits in addition to basic salary or wage
● It helps satisfy Maslow’s theory

● Employees may pay less tax if they avail fringe benefits

 ● Productivity may increase as staff will be healthy and have reduced absence
● Helps attract and retain better - qualified employees
● Helps in providing security and protection for workers and families
● Fringe benefits are performance based and this helps employees be more motivated

● Herzburg said some fringe benefits cannot be used to motivate employees as they
are hygiene factors

Non-Financial Rewards:
Businesses use non-financial for many reasons. Some include:
● Some people are not motivated by money
● Some employees give more importance to non-financial rewards
● Since more and more people work in teams , individual financial rewards are less
appropriate
● Some of the motivation theories such as Maslow and Herzberg suggest that
non-financial rewards are a valuable means of motivating employees to work

Job Rotation:
● Allowing employees to change jobs from time to time makes their work more
interesting
● This helps employees have more variety and help to avoid feeling bored
● It also helps motivate employees and provide a business more flexibility
Disadvantages include:
● Training costs may rise
● Benefits of specialisation may be lost

Job Enrichment:
● Herzberg said if jobs were more interesting, workers will be better motivated and he
identified job enrichment as a possible motivator
● Job enrichment means making jobs more challenging and rewarding
● Workers should be given tasks that require responsibility and creativity, if the
business wants to motivate employees
● This might also encourage staff to aim for promotion and feel worthy and valued
Disadvantages:
● If employees are forced to take on extra work without adequate training or sufficient
resources, some of might feel displeased and this could have a negative impact on
labour productivity

Autonomy - giving workers the authority to make choices and decisions about the way
they work. Also referred to as empowerment
Autonomy:
● Some businesses allow it workers more autonomy to improve motivation
● The employees are allowed to make more choices and decisions about the way they
work
● Workers with autonomy are set a goal or task by the management and then left to
decide for themselves the best way to achieve the goal
● This gives workers control, feeling that the are trusted, more self-confidence,
motivation and could be a way of recognising their achievements
Advantages:
● Business will have higher labour productivity and there will be opportunities to
reduce the number of supervisors and managers
● Once workers are given autonomy, the workers are trusted and this reduces the need
for managers and supervisors
Disadvantages:
● Some employees may react negatively to be given autonomy
Eg- employees who don’t receive extra pay. These employees may feel that this is a
way of laying off managers and making the current employees work more and some
workers may not be confident to take new responsibilities

Large VS Small Businesses:

● At times the owners of small businesses are not aware of the motivational theories
that link to workers and their levels of motivation
● However, owners of small businesses may learn from experience
● In large businesses, where specialist human resources managers are employed, the
motivational theories are better understood and used.
● Moreover, a great deal of thought would be given the various methods to motivate
workers in the job roles specific to that organisation