2.1 Motivating Employees

Question 1

What is motivation?

Answer 1

Motivation is the reason why employees work hard and effectively for a business.

Question 2

What are the benefits of motivation in a business? Why?

Answer 2

Motivation improves productivity so motivated workers will work harder and produce more output, and the firm will make more profit as a result.

Motivated workers will arrive on time, are less likely to be absent from work (also known as absenteeism).

They are also less likely to leave the business.

Motivated workers are an asset who will go the extra mile for their business.

Motivated workers make the workplace a fun, positive environment where people want to be.

Question 3

How do we calculate labour productivity?

Answer 3

Labour productivity is output per worker measured by output divided by the number of workers.

So if 10 workers pick 4000 oranges the labour productivity is 4000 divided by 10, 400 oranges per person.

Question 4

How do we calculate the rate at which workers leave the business?

Answer 4

We can calculate the rate at which workers leave the business by dividing the total number of employees by the number of employees who left in the last year.

Question 5

Define Labour Turnover rate.

Answer 5

Labour Turnover Rate is the amount of employees leaving a business in a year and is calculated as a share of the total workforce

Question 6

Name some examples of highly motivated employees.

Answer 6

Some examples of highly motivated employees include:

a sales assistant who makes every customer feel special;
an engineer who works additional hours to make sure the product development is just right;
a teacher who always has time to answer student queries.

Question 7

Why are demotivated employees a disadvantage to a business?

Answer 7

Demotivated workers are a liability for a business, and can mean an unsatisfactory customer experience, where products are faulty or the service is inadequate.

Demotivated workers are a negative influence on co workers and bring down the whole morale of the workforce, impacting the long term success of the business.

Question 8

Explain Taylor’s idea of scientific management.
What was its impact?

Answer 8

Scientific Management is observing employees, figuring out “one best way” of completing a task, and then training all employees to do the job exactly the same way.

This had a huge impact on improving worker productivity in the early 20th century.

Question 9

What is Taylor’s theory of motivation

Answer 9

Taylor’s theory on worker motivation was that the more you pay workers, the harder they will work and the greater the output will be produced.

He argued it was best to pay workers by piece rate.
If you paid them more by how much they produced, they would work harder and output would increase.

Question 10

What was the disadvantage of Taylor’s approach?

Answer 10

His approach just focused on one human need, money (financial rewards).

It ignored other human needs like social needs (being able to form friendships at work and feel part of a team) and achievement, feeling your work has meaning and you have contributed to something bigger.

Question 11

Explain Maslow’s theory of motivation.

Answer 11

Abraham Maslow believed money was important in that it fulfilled a need to provide food and shelter, but he also believed humans had other needs and wants which needed to be satisfied before employees became fully motivated.

He ranked them on his now famous pyramid also known as the hierarchy of needs.

First physiological and safety are the most basic needs, then social, then esteem needs – feelings of achievement, respect or status.
The peak of the pyramid is self-actualisation when employees have reached their absolute full potential.

Question 12

How did Herzberg refine the Hierarchy of Needs?

Answer 12

Herzberg refined the pyramid with his two factor theory. He said that employees need certain basic needs, called Hygiene Factors, to be fulfilled by the business before they could even begin to think about motivation.

Only after the Hygiene factors (like working conditions and wages and salaries) had been taken care of, could employees be motivated using achievement, recognition and responsibility.

Question 13

Name some Hygiene Factors.

Answer 13

Company policies
Supervision
Relationship with supervisor and peers
Work conditions
Salary
Status
Security

Question 14

Name some Motivators.

Answer 14

Achievement
Recognition
The work itself
Responsibility
Advancement
Growth

Question 14

List some examples of financial rewards.

Answer 14

Wages
Salary
A bonus
Commission
Profit Sharing

Question 14

Explain wages.

Answer 14

Wages are usually paid weekly and are calculated by how many hours an employee works, times their hourly rate, or how much is produced by a worker in a factory, piece rate.

This sort of payment is often used with lower skill workers or part time employees.

Question 15

What are the advantages and disadvantages of wages?

Answer 15

Adv:
Wages allow flexibility for employees and business.

Disadv:
It may lead to feelings of job insecurity in employees as they can’t be sure how much they will be paid every week.

Question 16

Explain salaries

Answer 16

Salary is a fixed payment every month. Often used for higher skill professional jobs like teachers or managers.
In these jobs it may not be possible to use time rate or piece rate.

Question 17

What are the advantages and disadvantages of a salary?

Answer 17

Adv:
Unlike wages, employees feel greater job security in employees as they can be sure how much they will be paid every month.

Disadv:
However, it can lead to complacency in employees, so businesses may need to consider additional methods of motivating staff.

Question 18

What is a bonus?

Answer 18

A bonus is usually a one off reward. It could be for achieving a target like a driver delivering all his parcels accurately and on time. It could also be a team reward like a factory increasing production by 20%.

Question 19

What is the advantage and the disadvantage of a bonus?

Answer 19

Adv:
Bonuses gives employees a target to work towards.

Disadv:
They can be costly for the business

Question 20

What is a commission?

Answer 20

Commission is a kind of bonus where salespeople are given a percentage of the selling price if they make a sale.

If a car salesperson gets 1% of selling a $30000 car, he/she will receive $300.

Question 21

What is the advantage and the disadvantage of a commission?

Answer 21

Adv:
Encourages higher sales.

Disadv:
May lead to over pushy salespeople, who force customers to buy the most expensive products rather than what is most suitable.

Question 22

What is profit sharing?

Answer 22

Profit sharing is when employees get rewarded with a very small % of the firm’s profits annually.

E.g. In 2020 SouthWest Airlines shared 12% of $700 million profits giving each employee $1400.

Question 23

What are the advantages and disadvantages of profit sharing?

Answer 23

Adv:
It encourages a team spirit as all employees will want to make the company successful to earn more profit

Disadv:
However, with all team benefits there is the free loading problem where some individuals may be working harder than others but all employees are rewarded by the same amount.

Question 24

List some non-financial rewards.

Answer 24

Job rotation
Job enrichment
Team Working
Training
Opportunities for promotion

Question 25

What is a job rotation?

Answer 25

Job rotation is when employees switch simple tasks for a short time.

E.g. Workers in McDonald’s could swap positions between grilling burgers, cooking fries or wrapping finished products.

Question 26

What are the advantages and disadvantages of a job rotation?

Answer 26

Adv:
This will make the job more interesting than continually doing a repetitive task.

Disadv:
As the work doesn’t involve much additional responsibility or skill it is unlikely to have a huge impact on long term motivation.

Question 27

What is job enrichment?

Answer 27

Job enrichment is when employees are given additional responsibility in their day to day tasks which often requires more training and or development.

For example, a worker in a supermarket responsible for restocking the shelves, may be given responsibility for reordering inventory and handling all customer queries in this area.

Question 28

What are the advantages and disadvantages of job enrichment?

Answer 28

Adv:
This will give further motivation than simple job rotation, as the employee feels like they are developing their skills and has a sense of achievement.

Disadv:
The additional training and reorganising of job roles may be costly for a business, at least in the short term.

Question 29

What is team working?

Answer 29

Team Working is when a group of employees are given responsibility for a specific project, department or unit of work.

Question 30

What are the advantages and disadvantages of team working?

Answer 30

Adv:
This allows greater interaction by fulfilling social needs. As employees work together to achieve a specific goal it gives workers a feeling of much greater job satisfaction and accomplishment.

Disadv:
However, it means managers have to delegate responsibility to the team, and find ways of changing work processes to allow team working.

Question 31

What does training help in business?

Answer 31

Training develops workers’ skills.

Question 32

What are the advantages and disadvantages of training?

Answer 32

Adv:
As it involves considerable investment by a business employees will feel valued and will see the benefits of staying with the business if they will receive further training in the future.

Disadv:
However, training is costly and there is always the chance employees will leave the business after receiving training.

Question 33

What are opportunites for promotion?

Answer 33

Firms can reward employees by giving employees another job in the business with higher status, pay or responsibility.

Question 34

What are the advantages and disadvantages of promotion?

Answer 34

Adv:
Employees will be highly motivated to show leaders they should be promoted.

Disadv:
Unless a business is expanding very rapidly or has high labour turnover, there will be limited positions available for promotion so it may not motivate all employees.

Question 35

What are the steps in recommending and justifying appropriate methods of motivation in different circumstances?

Answer 35

– Is there evidence in the case study which shows what is currently demotivating the employees?

– Which motivational methods are suitable? Commission may not be suitable if the employees are not involved in sales

– As we learned with the motivational theorists there is some debate over the importance of money or financial rewards in motivating employees. Pay is important, but financial rewards alone won’t be enough to ensure all workers are motivated.

– Cost? Can the business afford to give all the employees a pay raise? Can they afford enough to make a difference?

Remember with evaluation you need to make a decision, justify why your choice is more suitable than the other options for this business.

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