2.4 Motivation

Question 1

The role of motivation:

Answer 1

• achieve their goals
• gain a positive perspective on their private and working lives
• create the power to change
• manage their own development
• build positive self-esteem

Question 2

Intrinsic motivation

Answer 2

Comes from within the person. People engage in an activity because they receive satisfaction from it, not because they are rewarded for doing it.

Question 3

Extrinsic motivation

Answer 3

Comes from outside of the person. Good performance is rewarded with benefits and recognition. Pay and bonuses are examples and may compensate for a lack of satisfaction from the work itself.

Question 4

Motivation theories:

Answer 4

• Taylor (scientific management)
• Maslow (hierarchy of needs)
• Herzberg (motivation-hygiene theory)
• Adams (equity theory)
• Pink

Question 5

Taylor’s motivation theory

Answer 5

Principles of scientific management assumed that employees are primarily motivated by money and that productivity could be improved by setting output and efficiency targets related to pay.

Question 6

Maslow’s motivational theory

Answer 6

Outlines five levels of needs. Lower-order needs must be met before people progress up the hierarchy.
1. Physiological needs (or basic needs)
2. Security needs (or safety needs)
3. Social needs (or love and belonging needs)
4. Esteem needs (or ego needs)
5. Self-actualisation

Question 7

Herzberg’s motivation theory

Answer 7

Looked at the factors that motivate employees:
- Hygiene factors are parts of a job that Herzberg referred to that do not increase job satisfaction but help to remove dissatisfaction, such as reasonable wages and working conditions.
- Motivators are the factors that Herzberg considered to increase job satisfaction and motivation levels.

Question 8

Adam’s motivation theory

Answer 8

Suggested that workers will naturally compare their efforts or rewards to those of others in the workplace. Individuals seek a fair balance between what they put into a job (inputs) and what they get out of it (outputs).

Question 9

Pink’s motivation theory

Answer 9

Suggests that people in modern societies are motivated by three key factors:
- Autonomy - Self-sufficient to direct our own lives
- Mastery - Self-improvement to learn and create new
things
- Purpose - Self-esteem and drive to do better by ourselves

Question 10

Employee rewards

Answer 10

A portfolio of financial and non-financial benefits that provide a competitive package to motivate staff and improve retention and performance.
Employee rewards combine:
- basic pay
- additions to basic pay
- employee benefits
- non-financial rewards

Question 11

Financial rewards are classified into two categories:

Answer 11

• payment systems providing the basic pay for a job;
• incentive schemes which are rewards to recruit, retain and motivate.

Question 12

Types of financial rewards:

Answer 12

• salary
• wages (time and piece rates)
• commission
• profit-related pay
• performance-related pay (PRP)
• employee share ownership schemes
• fringe payments (perks)

Question 13

Salary

Answer 13

Salaried employees are paid a fixed sum for a year’s work, which is paid monthly. There is flexibility over how work is organized and it is common for salaried staff to work longer than contractual hours.

Question 14

Wage - time rate

Answer 14

Employees receive a basic rate of pay per time period that they work, but not for their productivity. If the employee works more than the agreed hours, they can claim overtime payments.

Question 15

Wage - piece rate

Answer 15

Employees are paid per unit, or ‘piece’, they produce, linking reward to productivity. There is no guaranteed level of basic pay. Employees may reduce the quality of their output in order to boost the quantity they produce and may only be suitable for standardized output that can be attributed to an individual employee.

Question 16

Commission

Answer 16

Employees, e.g. sales representatives, receive a percentage of the value of the goods or services they sell in a period of time. This incentivises staff to work harder to make sales but can lead to aggressive sales techniques. Commission does not offer the security of a guaranteed income, so many firms offer a package combining basic pay with commission.

Question 17

Profit-related pay

Answer 17

Employees receive a share of the profits of the business each year. The better the firm performs, the more the employees should earn (subject to a maximum amount). Conversely, low profits or losses result in reduced reward.

Question 18

Performance-related pay (PRP)

Answer 18

Paid in addition to the individual’s basic pay, PRP payments are based on an employee achieving set targets over the year that forms part of an appraisal review. This rewards the ‘output’ of managers. Some PRP schemes reward successful and well-performing teams. PRP may include a:
- performance bonus for achieving or exceeding identified targets
- pay increase for achieving or exceeding identified targets
- loyalty bonus for employees who have been with the organisation for a long period

Question 19

Share ownership/options

Answer 19

Employees may receive part of their salary in shares, normally at less than current market prices. This is really a savings plan for employees. They can sell their shares after an agreed period of time. Employees should feel a desire to work harder to boost profits and dividends.

Question 20

Fringe benefits (‘perks’)

Answer 20

Fringe benefits are in addition to employees’ wages or salary. These benefits can help increase motivation and retain staff.

Question 21

Types of non-financial rewards:

Answer 21

• job enrichment
• job rotation
• job enlargement
• empowerment
• purpose/the opportunity to make a difference
• teamwork

Question 22

Job rotation

Answer 22

Employees move between two or more jobs in a planned manner, offering a range of work experiences requiring a variety of skills but at the same level of difficulty and complexity.

Question 23

Job enlargement

Answer 23

Job enlargement means extending the range of an employee’s duties and responsibilities (‘horizontal expansion’), contrary to the principles of specialisation. It involves the addition of tasks at the same level of skill and responsibility, motivating employees through greater variety.

Question 24

Job enrichment

Answer 24

Job enrichment builds a higher sense of challenge and achievement (‘vertical loading’) and attempts to satisfy higher-order needs. An enriched job should ideally contain:
- a range of tasks and challenges of varying difficulties (physical or mental)
- a complete unit of work – a meaningful task
- feedback, encouragement and communication
- training

Question 25

Empowerment

Answer 25

Employees are given increased participation and the decision-making powers to encourage initiative and entrepreneurial spirit. Empowerment is one stage beyond delegation because the individual is not only given a task, but also the authority to carry it out independently. It provides opportunities for promotion.

Question 26

Purpose/the opportunity to make a difference

Answer 26

Employees can be most engaged and energised when they are working for a purpose, such as contributing to the overall success of the organisation. Purpose-driven goals can be agreed through appraisal. These should not focus on profit, but on aligning individual and organisation aims. This is easier in not-for-profit organisations, e.g. charities.

Question 27

Teamwork

Answer 27

• provides worker flexibility and cooperation
• helps achieve cultural shifts within an organisation
• improves problem-solving
• taps the talents of everyone