2.4.

Motivation

 Motivation
 Recognition
 Compensation – high direct earnings, pensions, fringe benefits
 Taylor’s Theory
 Principle of scientific management
 Workers are motivated by cash
 Productivity can be improved by relating output/productivity to pay
 Division of labour and specialisation
 Standardization of work practice (seen in production lines)
 Workers should be chosen for their job based on ability
 Differentiated piecework
 Payment based on standard level of output
 Paid extra for output beyond that level
 Criticisms
 Ignored non-financial motivators
 Non-physical contribution may not be quantified
 Repetitive and monotonous work – job dissatisfaction
 Maslow’s Hierarchy of Needs
 People have 5 basic needs:
 Physiological/basic
 Satisfied by payment
 Security/safety – predictability and order
 Satisfied by job security, maternity leave, fringe benefits
 Social/love/belonging
 Satisfied by teamworking, anti-discrimination
 Esteem/ego – recognition and self-respect
 Satisfied by training and development, delegation, promotion
 Self-actualization
 Satisfied by giving freedom to employees
 Needs must be satisfied from the bottom up (basic to self-actualisation)
 Criticisms
 Needs cannot be quantified
 Ignores individuality of needs

 Herzberg’s Theory
 Two factors affected motivation
 Hygiene/maintenance factors (physical)
 Factors that meet basic needs
 Does not motivate but demotivates if not met
 Motivators (psychological)
 Achievement, recognition, responsibility, and advancement leads to higher
satisfaction
 Democratic management style must be used
 Involves job enlargement, enrichment, empowerment (see below)
  Movement vs. motivation
 Movement – doing something because it needs to be done
 Based on extrinsic motivation
 Motivation – doing something because you want to
 Based on intrinsic motivation
 More important
 Individualism in terms of motivation
 Criticisms
 Does not apply to low-skill, low-wage jobs
 Some workers may not like the increased workload in job enrichment
 Adam’s Equity Theory
 Workers naturally compare their efforts/rewards to others in the workplace
 Employees should receive remuneration that reflects his efforts and competence
 Workers will be motivated if their remuneration is fair relative to others
 Inequality is by caused poor job analysis and evaluation
 Pink’s Theory
 States the importance of intrinsic motivation
 3 factors:
 Autonomy
 Give employees control over when, how, and what they do and whom they do it
with
 Mastery
 Sense of progress in work and ability
 Tasks must not be too hard or too easy to foster improvement without causing
boredom or frustration
 Purpose
 Contributing to a greater cause
 Purpose and vision must be communicated
 Financial and non-financial motivation
 Theory X
 Extrinsic/financial motivation
 Managers believe that workers are lazy and must be supervised
 Theory Y
 Intrinsic/non-financial motivation
 Managers believe that workers are ambitious and enjoy their jobs
 Financial Motivation
 Wages
 Time-based
 Rate is based on worker’s experience and responsibilities
 Overtime rate for work in excess of contracted time
 Workers are rewarded for time not effort
 Piece rate
 Based on no. of items produced or sold in a given time
 Motivated to work/sell more
 Lack of financial security – pressure to sell
 Workers might sacrifice quality for quantity
  Salary
 Fixed annual rate paid on a monthly basis
 Time-rate payment
 Little incentive to work hard due to consistent pay
 Difficult to reward better workers
 Can be improved by using appraisals
 Commission
 Output based system (based on how much they sell/produce)
 Pays workers based on percentage of sales or output contributed rather than a
fixed amount per unit like piece rate
 Similar advantages and disadvantages to piece rate
 Profit-related pay
 Pay linked to profits of the firm
 Strengthens employee loyalty
 Limits labor conflict (both managers and employees benefit from higher profits)
 May be too insignificant
 Performance related pay (PRP)
 Based on individual performance/ability to meet goals
 Various forms:
 Performance bonus
 Loyalty bonus
 Pay rise
 Gratuity – bonus for completing contract
 Satisfies Equity Theory
 Problems of bias or how to quantify performance
 Targets may be too unrealistic
 Employee share ownership schemes
 Giving shares for free or at a discount
 Usually only given to senior management
 Impractical for most companies
 Fringe benefits (perks)
 Meets employee’s safety needs (Maslow) at a cost
 Includes medical insurance, bonus schemes, company car, subsidised meals,
discounts
 Non-financial motivation
 Job enlargement
 Horizontal expansion by increasing scope of work required
 Enhances employee pride in work, feeling of responsibility
 May lower productivity or quality because of higher workload
 Job enrichment
 Provides employee with more complex and fulfilling tasks
 Adds sense of control, pride, and achievement
 Job rotation
 Shifting of cross trained workers to other tasks
 Allows understanding of different operating areas of business
 Can reduce fatigue, since new tasks are assigned
 Employee empowerment
 Employees are delegated tasks assigned to managers
 Increases employee motivation and productivity
 Managers must share:
 Decision-making power
 Rewards (based on organizational performance)
 Knowledge/expertise needed to enhance performance
 Employees must be highly skilled, motivated, and competent
 Managers are ultimately still liable for whatever they delegate
 Teamworking
 Staff work together on a task
 Reduce boredom, build sense of belonging, greater flexibility
 Adair Model
 3 parts or effective teams
 Tasks – must engage whole group
 Team – must work collectively
 Individual – needs of the individual are met
 Other forms of non-financial motivation
 Recognition and praise
 Working environment
 Delegation
 Worker participation
 Monthly awards for employee of the month