2.1.2 - METHODS OF MOTIVATION

Question 1

Examples of financial awards

Answer 1

• Wages
• Salary
• Commission
• Bonus
• Profit-sharing schemes

Question 2

Wages, define, pros and cons

Answer 2

Wages: payment for work usually paid weekly based on time or piece rate system

Advantages

• Are often low (low business cost)
• more efficient as workers are paid on time

Disadvantages

• Worker feels insecure is output fails
• Has to be calculated each week

Question 3

Salary, define, pros and cons

Answer 3

Salary: a payment for work usually paid monthly

Advantages
Easy for business to plan their costs
more job security

Disadvantages
Not motivated to make more output
Not paid for extra work
have to pay during leaves/holidays

Question 4

Commission, define, pros and cons

Answer 4

Commission: for sales people, they get a % of the value of the goods they sell

Advantages

• Motivated to make more sales
• Easy to find underperforming workers

Disadvantages

• Worried about losing job
• Aggressive sales tactics may be used which may damage brand image and reputation

Question 5

Bonus, define, pros and cons

Answer 5

Bonus: extra cash reward paid on top of normal pay

Advantages:

• Motivating
• Attracts skilled employees

Disadvantages:

• May be unrealistic targets to get a bonus
• increases costs
• motivation falls after time

Question 6

Profit-sharing schemes, define, pros and cons

Answer 6

Profit-sharing scheme: workers get an additional pay when business makes profit

Advnatges:

• Workers motivated to increase profits
• attracts skilled employees

Disadvantages:

• Shareholder profit reduced
• unfair; should be paid based on efforts

Question 7

What are some non-financial rewards?

Answer 7

• job rotation
• job enlargement
• job enrichment
• training

Question 8

Job rotation, define, pros and cons

Answer 8

Job rotation: works switch from one task to another

Advantages:

• reduces boredom
• Employees become flexible as now they know more skills

Disadvantages:

• Works for short term
• Some people may not want to switch tasks

Question 9

Job enlargement, define, pros and cons

Answer 9

Job enlargement: more tasks of similar level added

Advantages:

• makes employees flexible
• Lowers business costs

Disadvantages:

• May need training
• Will tae time for worker to adjust

Question 10

Job enrichment, define, pros and cons

Answer 10

Job enrichment: adding tasks which require more responsibility

Advantages:

• Develops self-esteem
• Less absenteeism or labour turnover

Disadvantages:
My not want advancement