Financial methods of motivation

Financial methods of motivation

1. pay is the money earned by workers as a reward for the work they do

   • Two methods of pay are wages and salaries
     • salaries is a set amount for the year paid in 12monthly instalments
     • wages is the amount you get paid weekly
   • Pay is a cost to the business. High costs may reduce profits

2. Profit sharing is where workers receive some money made b the business

   • a business sets a portion of its profits which is shared out to workers
   • This is a cost to the business. Shareholders may feel that profit sharing reduces their dividends

3. Bonus is an additional payment made to workers who achieve a target

   • Its paid on top of your wages or salary. It is performance related
   • Targets need to be realistic or workers may not be able to achieve them

4. Fringe Benefits are additional benefits that workers receive on top of their pay

   • Its a cost to the business therefore it may reduce profits
   • These are benefits other than money that a worker may receive on top of their pay for example car allowance