BUSINESS NOTES FOR UNIT 6: MOTIVATING WORKERS

Why people work

1. Money: to pay for necessities and luxuries
2. Security: a sense of security, for ex: knowing that your job and pay are
safe- you are not likely to lose your job
3. Social needs (affiliation): feeling part of a group or organization,
meeting people, making friends at work
4. Esteem needs (self- importance): feeling important, feeling your job is
important
5. Job satisfaction: enjoyment is derived from feeling that you have done
a good job
High productivity of business comes from a workforce that is motivated to
work effectively and from this comes increased profits.
Well- motivated workers high productivity increased output higher
profits
`Motivation theories
F. W. Taylor (1911): Money is the main motivator
all individuals are motivated by personal gain and therefore, if they are
paid more, they will work more effectively.
Criticisms against:
1. The idea is to simplistic- employees are motivated by many things
beside money.
2. If workers are unfulfilled by their work in some way, there will be no
increase the workforce, therefore no productivity will be gained.
3. A practical problem arises if you cant easily measure an employees
output.
Maslow (1954): Hierarchy of needs
Hierarchy of needs:
1. Physiological needs: food, rest, recreation, shelter, wages high enough
to pay weekly bills
2. Safety/ security needs: protection against danger, poverty; fair
treatment
3. Social needs: friendship, sense of belonging to a team, work colleagues
that support you at work
4. Esteem needs: having status and recognition achievement,
independence, being given recognition for a job well done

5. Self- actualization: succeeding to your full potential, feeling you have

done a good job for financial and personal reward, being promoted and
given more responsibility
Herzberg (1959) Hygiene and motivators
According to Herzberg, human have 2 sets of needs; one is for the basic
animal needs (hygiene factors) and the second is for a human being to be
able to grow psychologically (motivational needs or motivators).
Motivators
Achievement
Recognition
Personal growth/ development
Advancement/ promotion
Work itself
Hygiene (or maintenance) factors
Status
Security
Work conditions
Company policies and administration
Relationship with supervisor
Relationship with subordinates
Salary
Motivating factors financial rewards/ motivators
Three factors which can motivate employees:
Financial rewards
Non- financial rewards
Introducing ways to give job satisfaction
FINACIAL REWARDS
Pay may give incentives to employees to encourage them to work harder
and more effectively. There are 4 main forms of payment:

Wages: often paid every week, sometimes in cash or into a bank

account

workers get paid on a regular

basis & dont have to wait
long for their money
workers can get extra
payment for working overtime

weekly calculations are

required which takes time &
money
wages clerks perform this task

Time rate: payment by the hour (payment for a period of time

Easy to calculate wages

Workers know exactly what
they will be paid for working a
certain period of time

The system required takes

time
Good and bad workers get
paid the same
More supervisors are
demanded to watch the
workers
Clocking- in system is needed
to determine number of hours
worked by the employees

Piece rate: depending on the quantity of products made by workers;

can also come with additional money

Encourages workers to work

faster and produce more
goods

Negatively affects the quality

=>
1. quality control system is
needed = expensive
2. damage the reputation of
the business
can be not fair for careful
workers
if machinery breaks down,
employees may earn less
money

Salaries: are paid monthly normally straight into a bank account, not
paid in cash. Rewards can be added to the basic salary:

Commission

Profit sharing

Often paid to sales staff

Similar to piece rate
If sales staffs are persuasive
and try to make customers
buy what they dont really
want, this can bring bad
reputation and long- term
decrease in sale
Can be stressful for workers
Often used in service where

Bonus

Performance- related pay

Share ownership

its difficult to know an

individuals contribution to the
increased profit but do benefit
the business
A lump sum paid to workers
At the end of year or intervals
during year
Linked to the effectiveness of
their work
Often used when output cant
be measured
Use system of appraisal where
immediate superior observe a
workers work, talk to their
colleagues and have an
interview with them about
their result
Shares are given to workers
They can get dividends if the
company does well
Improves employee loyalty as
they will be more responsible
and important to the company

Motivating factors non- financial rewards

They can be called perks or fringe benefits and may include:

Company vehicle
Discounts on the firms products
Health care paid for
Childrens education fees paid
Free accommodation
Share options
Generous expense accounts
Pension paid for
Free trip abroad/ holidays

Job satisfaction

Pay
Opportunities for promotion

Working conditions
Fringe benefits or non- financial rewards
How employees are treated or managed
Working hours
Colleagues
Nature of work
Level of responsibility
Sense of achievement derived from job
Recognition for achievements
Chance for training
Status of the job

Job rotation involves workers swapping round and doing a certain task for a
limited amount of time and then changing again.
Increases variety in work
Easier for manager to organize when problem occurs
Job enlargement is where extra tasks are added to a workers job
description. This doesnt mean extra work or responsibility but greater
variety to the work and increases job satisfaction.
Job enrichment involves looking at jobs and adding tasks required more
skill and responsibility. Extra training may be needed.
Autonomous work groups or team- working
Workers can be more involved in the decision making and be more
responsible
Feel committed