Grade: IX

Subject: Business Studies

Chapter 6- Motivating Employees

Why people work?
Motivated v/s Unhappy Employees
Maslow’s Hierarchy of Needs Theory
Herzberg’s Two Factor Theory
Taylor’s Theory of Motivation
Taylor’s theory requires companies to:
 Identify the fastest method to run production
 Divide the process into small tasks with a measurable output
 Establish procedures and instructions for carrying out each task
 Selecting and placing the right employees in the right jobs
 Supervise employees’ work to ensure they comply with procedures and instructions
 Record the time it takes employees to perform tasks in each section
 Train workers to make them more proficient in their respective jobs
 Paying workers based on the output they realize
 Analyze outputs and costs involved to improve production methods – if needed
Principles of Taylor’s Theory of Motivation

 Scientific method
 Matching
 Monitoring
 Harmonious cooperation
Methods of Motivation- Financial Rewards

Wage

Salary

Bonus

Commission

Profit Sharing
Time Rate
 Time rates are used when employees are paid for the
amount of time they spend at work.
 The usual form of time rate is the weekly
wage or monthly salary.
 Limitations

1. Time sheet has to be filled regularly

2. Good & bad workers are paid the same amount
3. Employment of supervisor
4. Clocking- in system to determine the number of hours
worked.
 Piece Rate
 Compensation based on a worker's quantitative output or
production, usually an agreed sum per article of work turned out.
 Piece-rate pay is also sometimes referred to as a "payment by
results system".
 This method can be successfully applied: Limitations:
• When the type of work is repetitive in nature • Workers may concentrate
on quantity to earn
• When the quantity of output can be assessed more.
• When goods quality needs to be measured • The workers will earn
• Workers are paid reasonable rates. less if machinery breaks
down,
• When a fair and acceptable piece rate is fixed
Salaries
 Paid monthly, usually in bank account of the employee
 Not paid in cash
 Calculated per year for the job performed, divided by 12
for monthly payment.
Limitations:
• Workers may prefer to be paid weekly.
• No payment for extra hours worked.
Bonus
 A sum of money added to a person's wages as a reward for
good performance.
 Paid to an individual
 Paid to all employees when target is achieved.
 Factor of motivation as employees feel RECOGNIZED.
Limitations
• Ascertains some expectations
• Difficult to manage if not paid
• Demotivation for those who don’t get it.
Commission
 Paid to sales team on each product or service sold.
 Its an addition to the existing wage or salary.
Limitations
• Selling is more important than company’s reputation for
some employees
• Non payment due to bad sales become demotivating.
• Generates too much competition.
Profit sharing
 A share of profit given to employees
 Motivate employees to work hard.
 Often given in service sector.
Limitations
• No profit no share
• Calculated as a percentage of salary so, higher paid worker
will get higher profit share causing demotivation for others.
Fringe benefits
 Fringe benefits are additions to compensation that companies give their employees.
 Some fringe benefits are given universally to all employees of a company while others
may be offered only to those at executive levels.
 Common fringe benefits: Uncommon fringe benefits 
1. Health Insurance 1. Company vehicle (car)
2. Discount on company’s
2. Life Insurance products
3. Tuition Assistance 3. Children’s education fees
4. Free accommodation
4. Childcare Reimbursement 5. Share options
5. Cafeteria Subsidies 6. Pension
7. Free trips abroad/holidays
6. Below-market Loans
7. Employee Discount
8. Personal Use of a company-owned Vehicle.
Non-financial motivation methods
 Increasing the level of job satisfaction by giving:
1. Recognition
2. Responsibility
3. Sense of achievement

 Methods to do so:
1. Job rotation
2. Job enrichment
3. Teamwork
4. Training
5. Promotion
Job Rotation
 Having more variety in their day-to-day role by avoiding
them in becoming bored with their job.
 There are two types of job rotation:
1. The employee has a number of different job roles in the
business. For example, in a car manufacturing plant, this
could mean an operator applying bumpers for part of the
day, lights for part of the day and then wheels for the rest
of the day.
2. The employee has a range of different duties within their
role. For example, a software developer might spend part
of the day developing a website and part of the day
developing a software package.
Job enrichment
 Giving employees more responsibility. However, they continue to work at
the same level in the chain of command.
 Common methods of job enrichment include:
• completing a variety of tasks
• having more flexibility in how a role is carried out
• making more decisions
• having more control of tasks and duties
• developing additional skills
• enhancing knowledge
 All these methods lead to lower absence rates, increased productivity and
higher staff retention.
Teamwork
 Team working can meet workers social needs (Maslow)
 Lead to a more multi-skilled workforce
 And shared responsibility
 Helps in increasing employee morale
 Greater sense of belonging to the company
Training
 Educational activities within an organization that are
designed to improve the job performance of an individual
or group. 
 Helps in learing new work-based skills.
 Employees can be given more challenging and rewarding
work to perform
Promotion
 Type of internal recruitment for filling post like supervisors,
team leaders, junior and senior managers.
 It involves an increase in salary, position, responsibilities,
status, and benefits.
 Benefits to the company:
1. Increased expectation of employees
2. Reduce Attrition
3. Increased productivity
4. Cost-Efficient
5. Career Growth