2.1 Motivating workers

Question 1

Why do people work?

Answer 1

• Have a better standard of living
• Be secure
• Gain experience and status
• Have job satisfaction

Question 2

What is ‘motivation’?

Answer 2

The reasons why people work and ways business can encourage their staff.

Question 3

What does Taylor’s motivational theory suggest?

Answer 3

• Money = main motivator
• Piece-rate
• Training all workers using the same method

Question 4

What does Herzberg’s motivational theory suggest?

Answer 4

Hygiene factors:
- factors that demotivate if not present but don’t actually motivate employees to work harder
e.g. working conditions, salary and wage

Motivators:
- factors that directly motivate employees to work harder
e.g. giving responsibility, recognition for good work, sense of achievement, opportunities for promotion

Question 5

What are the different types of needs according to Maslow’s hierarchy?

Answer 5

• Physiological needs: basic requirements for survival
• Security needs: to be physically safe
• Social needs: to belong and have good relationships with co-workers
• Esteem needs: self-respect and to be respected by others
• Self-actualisation needs: reach your full potential and be promoted

Question 6

What are ‘financial rewards’?

Answer 6

Cash paid to workers often used to motivate them to increase their efforts

Question 7

What are the financial methods and how do they work?

Answer 7

• Hourly wage rate/Time rate: payment to workers based on a fixed amount for each hour worked
• Salary: fixed annual/monthly payment to certain grades and types of staffs (not based on hours worked or output)
• Piece-rate: payment according to output number produced
• Commission: pay based on the value of sales made by the staff (retail/salespeople)
• Performance-related pay: payment for reaching an agreed target
• Profit-sharing: additional payment to workers based on business’ profits
• Bonus scheme: additional reward, often paid for reaching a target

Question 8

What are some non-financial rewards and how do they work?

Answer 8

• Job rotation: workers swapping round, doing a specific task for a specific time then changing again (improves boredom and flexibility)
• Job enlargement: adding tasks of a similar level to a worker’s job, helps reduce boredom
• Job enrichment: adding tasks of a higher level to a worker’s job, organised so workers able to use more of skills and abilities

Question 9

Name the advantages + disadvantages of hourly wage rate / time rate.

Answer 9

Ads: Only pays workers for time they are at work
-encourages longer hours
Disads:
Does not link to quality or quantity of output

Question 10

Name the advantages + disadvantages of salary.

Answer 10

Ads:
-Measurable
-applicable
-suitable to most jobs
Disads:
-Does not link to their efforts

Question 11

Name the advantages + disadvantages of piece-rate.

Answer 11

Ads: Incentive for employees to produce higher output
Disads:
-Not quality related
-only used production jobs

Question 12

Name the advantages + disadvantages of commission.

Answer 12

Ads: Pay is linked to value of goods
Disads:
-Workers are not certain about income
-unreliable

Question 13

Name the advantages + disadvantages of bonus scheme.

Answer 13

Ads:
-Linked to performance targets
-rewards high level performance
Disads:
-Becomes expectation quickly
-depends on profit

Question 14

Name the advantages + disadvantages of fringe benefits.

Answer 14

Ads:
-Useful to make employees’ needs motivating
-make job attractive
Disads:
-More cost
-More time taken

Question 15

Name the advantages + disadvantages of profit-sharing

Answer 15

Ads: Enables to see direct link between their efforts + company profits
Disads: Company loses retained profit for growth

Question 16

Name the advantages + disadvantages of performance-related pay

Answer 16

Ads:
-Directly links pay to meeting/exceeding target
Disads:
-Not measurable
-can lose money