BUSINESS STUDIES C9 UNIT 1.

6
MOTIVATING EMPLOYEES
MS AMY TAM

 
 LEARNING OBJECTIVES:
1. Understand the motivational
theories
2. Understand different methods of
motivation
THINGS NEEDED:

1. Handouts
2. Scrap paper
3. Stationery
4. Attention & Participation
 LEARNING OBJECTIVES:
1. Understand the motivational
theories
2. Understand different methods of
motivation
LEARNING OBJECTIVES

1. Understand the motivational

  theories – Taylor and Herzberg
2. Understand different methods of motivation
 LEARNING OBJECTIVES:
1. Understand the motivational
theories
2. Understand different methods of
motivation
WHAT ARE THE INTERNAL STAKEHOLDER GROUPS?

◼ Owners
 

◼ Workers
◼ managers
PRACTICE MAKES PERFECT!
CONFLICTS OF STAKEHOLDERS’ OBJECTIVES

Refer to the 2019 Nov past exam paper, what are

the possible conflicts between stakeholders?
Who are the stakeholders?
CONFLICTS OF STAKEHOLDERS’ OBJECTIVES

Who are the stakeholders?

Government
GOP
Consumers
Environmental group
Local residents
CONFLICTS OF STAKEHOLDERS’ OBJECTIVES

Government’s objectives:
Create job opportunities
Promote economic growth
GOP’s objectives:
Create job opportunities
 WHAT ARE THE POSSIBLE CONFLICTS BETWEEN
STAKEHOLDERS?

Consumer’s objectives:
◼ Cheaper electricity

◼ Green group’s objectives:

◼ Protect the environment

Local residents’ objectives:

◼ Adversely affect their living environment
ANSWER
ANSWER
 MOTIVATION THEORIES

◼ Taylor’s Motivation Theory – Scientific Management

◼ Frederick Winslow Taylor was an American mechanical engineer who
lived from 1856 to 1915.
◼ He brought an engineer’s viewpoint to the world of workplace
productivity and applied engineering principles to the factory floor.

In our scheme, we do not ask the initiative of our men. We do not want any initiative. All
we want of them is to obey the orders we give them, do what we say, and do it quick.

Frederick Taylor
WHY PEOPLE WORK AND WHAT MOTIVATION MEANS

Why people work?

WHAT ARE THE BENEFITS OF A WELL-MOTIVATED
WORKFORCE TO A BUSINESS?

Why does a business need a well-motivated

workforce?
WHAT ARE THE BENEFITS OF A
WELL-MOTIVATED WORKFORCE TO A
BUSINESS?
HUMAN NEEDS – MASLOW’S HIERARCHY
Being promoted and
more responsibility

Being recognised for

doing a good job

Social Support from work

Job security

Wages to meet daily needs

TAYLOR’S MOTIVATION THEORY – SCIENTIFIC MANAGEMENT

◼ Because Taylor believed that workers were only motivated by pay and
money, then:

∙ Workers don’t usually enjoy work. Because of this, they need to be

monitored and controlled closely. To help with this, managers should
break down each employee’s job into more manageable, bite-sized tasks.

∙ Training should be given so that all employees perform these tasks in a

standard way.

∙ Workers should be paid based on how much they produce (piece rate).
 TAYLOR’S MOTIVATION THEORY – SCIENTIFIC MANAGEMENT

◼ Sometimes it is simply called Taylorism, which is actually still in use today. This is especially so if you
need to remain competitive in a labor-intensive industry by keeping costs as low as possible. Examples
include:
◼
∙ Amazon: Pay certain warehouse staff using a piece rate basis according to how productive they are. In
fact, Amazon is even using a wrist-based tracking system to monitor staff.
∙ McDonald’s: Every McDonalds across the globe looks the same, and the instructions to create a burger
are exactly the same in every branch across the globe. Even the process of mopping the floor is exactly
the same across the globe. This breaking down jobs into bite-sized chunks and then describing the most
efficient way to do that job is an example of Taylorism in use today.
 HERZBERG’S MOTIVATION THEORY MODEL/ TWO FACTOR
THEORY

◼ These factors are:

∙ Motivators: Which can encourage employees to work harder.

∙ Hygiene factors: These won’t encourage employees to work

harder but they will cause them to become unmotivated if they
are not present.
 HERZBERG’S MOTIVATION THEORY MODEL/ TWO FACTOR
THEORY

◼ Frederick Herzberg developed the model in 1959.

◼ His motivation theories were based on his study of the work of engineers
and accountants in the USA.
◼ According to his theories, humans have two sets of human needs; one is
for the basic needs, which he called ‘hygiene’ factors or needs, and the
second is for a human being able to grow psychologically, which he
called ‘motivational’ needs of ‘motivators’.
HERZBERG’S MOTIVATION THEORY MODEL/ TWO FACTOR
THEORY
 HERZBERG’S MOTIVATION THEORY MODEL/ TWO FACTOR
THEORY

◼ Motivating factors include:

∙ Achievement: A job must give an employee a sense of achievement.

∙ Recognition: A job must provide an employee with praise and recognition of their successes.
∙ The work itself: The job itself must be interesting, varied, and provide enough of a
challenge to keep employees motivated.
∙ Responsibility: Employees should “own” their work.
∙ Advancement: Promotion opportunities should exist for the employee.
∙ Growth: The job should give employees the opportunity to learn new skills.
 HERZBERG’S MOTIVATION THEORY MODEL/ TWO FACTOR
THEORY

◼ Hygiene factors include:

∙ Company policies: These should be fair and clear to every employee. They must also be equivalent to those of
competitors.
∙ Supervision: Supervision must be fair and appropriate. The employee should be given as much autonomy as is
reasonable.
∙ Relationships: There should be no tolerance for bullying or cliques. A healthy, amiable, and appropriate
relationship should exist between peers, superiors, and subordinates.
∙ Work conditions: Equipment and the working environment should be safe, fit for purpose, and hygienic.
∙ Salary: The pay structure should be fair and reasonable. It should also be competitive with other organizations in
the same industry.
∙ Status: The organization should maintain the status of all employees within the organization. Performing
meaningful work can provide a sense of status.
∙ Security: It is important that employees feel that their job is secure and they are not under the constant threat of
being laid-off.
METHODS OF MOTIVATION (FINANCIAL METHODS)
∙ Wage
∙ Salary
∙ Bonus
∙ Commission
∙ Profit sharing
WAGE

Wage: is payment for work, usually paid weekly

∙ Often paid weekly

∙ Have to be at work for a set time, paid overtime for any
extra hours
∙ Wages tend to be paid to manual worker, such as those
who work in a factory.
 Time rate: is the amount paid to an employee for one hour of work
TIME RATE
∙ is payment by the hour.
∙ Easy to calculate the worker’s wages and the worker knows exactly how much they
will be paid for working a certain period of time.

◼ LIMITATIONS:
∙ Time-consuming to calculate the wages
∙ Good and bad workers get the same
∙ Expensive to employ supervisors to supervise the workers
∙ A clocking-in system is needed
◼ *It is difficult to measure the output of worker by the time rate.
 Piece rate: is an amount paid for each unit of output.
PIECE RATE
◼ Employees paid due to quantity produced
∙ The more the workers make, the more they get paid.
∙ A basic rate is usually paid, with additional money paid according to how many products have been
produced.
∙ Piece rates can only be used where it is possible to measure the performance of an individual or a
team.
◼ LIMITATIONS:
∙ Workers may concentrate on making a large number of products and ignore quality. A quality control
system is expensive.
∙ Friction between employees may occur as those workers who are careful may not earn as much as
those who rush.
∙ Workers are often paid a guaranteed minimum amount of money
 SALARIES

A salary is payment for work, usually paid monthly.

∙ Usually paid monthly

◼ LIMITATIONS:
∙ Workers may prefer to be paid weekly.
∙ No payment for extra time worked. Workers may be reluctant to work
longer.
◼
 BONUS
A bonus is an additional amount of payment above basic pay as reward for good
work.

∙ A bonus is a lump sum paid to workers when they have worked well.
∙ It can be paid at the end of the year or at intervals during the year.

◼ LIMITATIONS:
∙ Employees would be disappointed if they are not paid a bonus.
∙ If only a small number of employees are paid a bonus, those who are not paid a bonus
will have bad feeling.
 COMMISSION

Commission: is payment relating to the number of sales made.

◼ Commission is a payment made to employees based on the

value of sales achieved. It can form all or (more often) part of a
pay package. Commission is, therefore, a form of "incentive
pay" (see also profit-related pay, bonuses).
 COMMISSION

◼ LIMITATIONS:
∙ If the sales staff are very persuasive and encourage customers to buy,
sales only rise in the short term, but then falls again as it gets a bad
reputation.
∙ Staff may be stressed out
∙ There might be too much competition between sales staff to ‘get the
next customer’ who enters the shop
 Profit sharing is a system whereby a proportion of the
company’s profits is paid out to employees.
PROFIT SHARING
◼ “Profit sharing” refers to variable pay workplace compensation systems under which employees
receive a percentage of the company’s profits in addition to their regular salary, bonuses, and benefits.

◼ Profit sharing is often used in the service sector where it is difficult to identify an individual
employee’s contribution to the increased profits, but they will all benefit from more productive work.

◼ LIMITATIONS:
∙ If a business makes very low profits or even a loss, no ‘profit share’ will lead to employee
disappointment.
∙ The profit share is usually calculated on the basis of additional percentage of a worker’s existing wage
or salary. Therefore, higher paid workers will receive a high profit share. This could cause the lower
paid workers to have bad feeling.
 FRINGE BENEFITS
◼ Rewards received by employees in addition to their wages or
salary. Often classified as “perks” of the job
REFLECTION
◼ Identify and explain possible conflicts of objectives
Oilco’s stakeholders on the textbook.
◼ Summarize the possible conflicts with a mind map.