Improving Motivation

Improving Motivation

1. Financial

   • Piece rate
     • Paid per unit produced. No fixed salary.
       • High quantity, low quality
         • Quality control measures put in place
       • Motivates workers to produce more.
   • Salary schemes
     • Paid according to a given time period. Hourly rate or weekly/annual wage
       • Minimum no. of hours. If work isn't done, have to do overtime.
         • Motivates workers to do work on time to expected quality
           • However they can't earn extra money for working harder.
   • Commission
     • Bonus on top of salary - based on amount of sales/units produced.
       • Increases motivation and performance of sales staff
         • Can lead to overselling (customers overwhelmed by sales staff). Business does not know its labour costs
   • Performance-related pay
     • Paid based on performance of individual or overall business
       • Determined by individual or business meeting their targets. (Annual Appraisals)
         • Can lead to demoralisation of staff if only certain people get a pay increase
   • Fringe Benefits
     • Can include staff discount for company products, company car, private health, shares in the company
       • Motivates them to perform better & loyalty, leading to competitive advantage

2. Non-Financial

   • Job Enlargement
     • Give the employee more work to do at the same level
   • Job Enrichment
     • Provide more challenging work, and the training needed to do it.
       • Gives them more responsibility.
   • Empowerment
     • Give people more control over their work, & greater role in decision making.
   • Team working
     • Can lead to job enrichment & empowerment through small teams
   • Pleasant working environment
     • e.g coffee machine, mini fridge. Feel as if business is looking after them - motivates them to do their best for the business.

3. Flexible working

   • Working hours to suit the employees
     • Several types of flexible working
       • 1.) Flexi-time: Full time hours, but can decide when to work e.g 30 hours per week. Can choose what times to do it
         • 2.) Compressed hours: Employees work a set number of hours per week, but are compressed into fewer days
           • 3.) Annual hours: certain number of hours set annually, but can choose when to do it e.g holidays
             • 4.) Job sharing: two people share one job e.g working alternate weeks
               • 5.)Home working: work from home
   • Advantages
     • Improves motivation - higher productivity
       • Helps employees with children
         • Suits families, disables workers and those who live in remote places
   • Disadvantages
     • Home workers - easily distracted
       • Job sharing can to confusion over responsibility
         • It can be impractical for businesses that need to serve the public during normal working hours

4. Organisational and Job Design affect the type of Motivation

   • Organisational Design will influence the type of payment method a company chooses. E.g a company with a tall structure may choose piece rate or performance related pay as there are loads of levels of authority that can supervise productivity
     • The size of the business will also affect the payment methods chosen e.g a supermarket chain might pay its shopfloor staff an hourly rate as it is difficult to distinguish one persons work from another
       • Organisational design can also affect the non financial motivation a company chooses. E.g flat structure may not want to introduce teamworking as it adds an extra level of hierarchy. May use job enlargement/enrichment instead
         • A flat structure may use empowerment as communication is easier - staff will feel motivated as they are included in decision making
           • Businesses with a large number of high skilled workers may respond better to non financial motivation rather than financial
             • Non-financial incentives = Long term motivation (company invests time and money into getting it right)
               • Financial = Short term motivation