Section 2 – Business Studies

Vaishnavi Bodireddy | Grade 9

Motivating Employees
Chapter 6
Why people work
• Money
• Necessities and luxuries
• Security
• Safe job and pay
• Social Needs
• Feeling like a part of a group
• Esteem Needs
• You and the job you do are important
• Job satisfaction
• Enjoyment of the fact that you have done a good job
Benefits of a well-motivated workforce
• higher output per worker
• low costs, higher profits
• willingness to accept change
• two-way communication
• suggestions
• low labour turnover
• loyal workers reduce the costs and time utilized in hiring new people
• low rate of absenteeism
• low rate of strike action
Abraham Maslow’s Hierarchy

self actualization

esteem needs

social needs

safety needs

physiological needs
Abraham Maslow’s Hierarchy
• Physiological Needs
• Food, rest, recreation, shelter.
• Wages high enough to meet weekly bills.
• Safety needs
• Protection against danger and poverty; fair treatment
• Job security
• Social needs
• Friendship, a sense of belonging
• Work colleagues who support you at work
• Esteem needs
• Having status, recognition, independence and achievement
• Recognition for a job well done.
• Self Actualization
• Succeeding to your full potential; feeling like you have done a good job NOT JUST FOR THE REWARD
• Being promoted and given more responsibility
Abraham Maslow’s Hierarchy
• If employees must be motivated to work, money isn’t the only factor.
• A sense of belonging and society comes from working, which powers
self-esteem.
• According to Maslow, each level in the hierarchy must be fulfilled
before the next level can be achieved
• Problems
• Some levels may not exist for certain individuals
• Some rewards may fit into more than one level in hierarchy
• Managers must look into the level of hierarchy that a particular job
provides and look for ways to achieve the next level.
Fredrick Winslow Taylor
• All individuals are motivated by personal gain
• ↑ pay, ↑ effective work
• Saw employees rather like machines
• Piece rate – employees are paid for the amount they have produced
• If they work hard, ↑ productivity, ↓ labour costs
• May lead to productivity gains
• Criticism:
• employees are not just motivated by money
• if an employee is unfulfilled at work, then there is no point
• practical problem: if the employee’s output cannot be measured directly.
Fredrick Herzberg
• Motivators
• Psychological growth
• ‘True’ motivators
• Hygiene factors
• Basic needs
• Must be satisfied
• If not, may act as demotivators
• Once satisfied, their effect quickly wears off
 Fredrick Herzberg
Motivators Hygiene factors

Achievement Status

Recognition Security

Personal growth/ development Work Conditions

Advancement/Promotion Company policies and administration

Work Relationship with supervisor

Relationship with subordinates

Salary
Financial Rewards
• Wages
• Paid every week  cash/directly to bank account
• Worker gets paid every week – does not have to wait for money
• Tend to be paid to manual workers
• If they employee works for longer hours, they can be paid overtime
• Incentive for additional hours when the business requires it

• Wages need to be calculated weekly – time and money

• Wage clerks are often emplyes
Financial Rewards
• Wages
• Time Rate
• Often used where it is difficult to measure the output of a worker
• Payment by the hour
• Easy to calculate wages
• Worker knows exactly how much they will be paid based on how much they work

• Often recorded on a time sheet by the Accounts Department – takes time

• Good and bad workers are paid the same amount of money
• Supervisors are needed to ensure that the workers are doing the job well
• A clocking-in system is required for accurate measurement
Financial Rewards
• Wages
• Piece rate
• workers are paid depending on the quantity of products they’ve made
• ↑ output, ↑ money
• basic rate with additional money for additional pieces produced
• applied to bonus systems – employees who produce more than the target are rewarded
• used where it is possible to measure output
• encourages workers to work faster and produce more goods

• quality may be ignored, requiring an expensive quality control system

• workers who are careful < workers who rush  unnecessary friction
• machinery breaks down = less money paid
Financial Rewards
• Salaries
• paid monthly, straight to the bank account
• usual for office management/staff
• calculated as amount of money paid per year for the job, and divided into 12
monthly amounts
• easy to calculate
• employer has money in their account for longer
• payment has to be calculated only once a month

• workers may prefer to be paid weekly

• no motivation for overtime working
Financial Rewards
• Bonuses
• lump sum paid to workers when they have worked well
• may be paid at the end of the year, or at different intervals
• are not necessary
• in addition to standard wage/salary
• workers consider them