2.4 - Motivation and Demotivation Flashcards
Motivation
The factors that stimulate people to take certain actions
Signs of Motivation
- Higher productivity
- Higher quality of goods and services
- Employees stay longer
- Low levels of absenteeism
Signs of Demotivation
- Employees leaving
- Poor customer service
- Lower productivity
Salary
Fixed annual income that is usually paid monthly
- E.g. a manager is paid $60,000 per year, which is $5,000 per month
Wage
An employee is paid per ____
Wage - Time rate
Employees are paid per period of time worked
- E.g. $15 per hour
Wage - Piece rate
Employees are paid per unit of production
- E.g. $5 per kg of apples picked
Piece rate - Pros
Reward hard workers
Encourages higher productivity
Piece Rate - Cons
Encourages speed over quality
Less income stability for employees
Commission
An amount of money paid to an employee as a fee or percentage for a task or for bringing new business
E.g. A payment to a salesperson for each sale made
Commission - Pros
Encourages employees to sell more
Rewards hard work and selling skill
Helps business control expenses
Commission - Cons
Aggressive selling techniques
Might worsen team spirit
Less income stability for employees
Performance-related pay (PRP)
Employees are rewarded financial according to meeting certain objectives at work
Requires target-setting and appraisal
E.g. Good = 5% bonus, Excellent = 10% bonus
PRP - Pros
Reward higher performers
Can identify lower performers
PRP - Cons
Performance might be difficult to measure
Might worsen team spirit
Profit-related pay
Employees are financially rewarded according to the financial performance of the business
E.g. 10% bonus if company makes a profit over $2m per annum
Employee share ownership schemes
Employees are financially awarded by being given shares or share options in the business
Share options mean the shares can be bought at a certain price
Profit-related pay and Share ownership - Pros
Employees feel connected to the success of the business
Encourages employees to stay longer to receive benefits
Profit-related pay and Share ownership - Cons
Dilutes ownership of the business
Doesn’t identify individual high performances
Fringe benefits (perks)
Non-cash forms of financial rewards
Non-financial benefits to employees
- E.g. company car, insurance, pension, low-interest loan
Non-financial rewards
Methods of motivating employees that do not involve monetary payments
Job Enrichment
Changing an employee’s job to include more challenging and demanding tasks
- Adding new, more complex tasks
Job Enlargement
Changing an employee’s job by adding more tasks similar to what they are already doing
- Adding new, similar tasks
Job Rotation
Moving an employee to different jobs in the business at a similar level of complexity
- Adding new tasks in different areas
Pros and Cons of Job Enrichment
Employees can develop new skills
May require employee training
Pros and Cons of Job Enlargement
Variety of tasks
Employees may just see it as extra work
Empowerment
- Allowing employees some autonomy over their jobs - what they do and how they do it
- E.g. choose own work hours, work from home
- Laissez-faire leadership
Purpose/the opportunity to make a difference
The opportunity to help the lives of others and to make a difference in the world
E.g. doctors, nurses, teachers
E.g. businesses can provide charitable work opportunities
Teamwork
The job is organized so that groups of workers can work together
Could be formal
- E.g. production teams
Or informal
- E.g. encouraging employees to work together on a project
Pros of Empowerment
Employees feel trusted - higher motivation
Development of new skills
Cons of Empowerment
Training costs
Employees might not have the skills to choose best
Training
Procedure where employees gain knowledge and skills relevant to their role in the business professional development
Induction Training
The training received when employees start a new job
- E.g. learning about the business, meeting new colleagues, buddy systems
On-the-job Training
Training of employees that takes place at the workplace
E.g. training sessions by specialists, online training, job rotation
Off-the-job Training
Training of employees that takes place away from the workplace
E.g. away days, conferences, part-time MBA
Pros of Training
- Employees feel valued - higher motivation
- Development of new skills and knowledge
- Employees become more productive
Cons of Training
- Training costs
- Time not working to attend training
- Might not be beneficial/employee may leave
Labor Turnover
The number of employees leaving an organization over a period of time as a % of the total workforce
(Number of workers leaving / Average # of staff) x 100
Reasons for leaving a business
Quit
Fired
Retired
Made redundant
Pros of Low Labor Turnover
- Indicator of high morale and effective management
- Lower costs of recruiting and induction training
- Better relations with customers
Pros of High Labor Turnover
- Potentially lower salaries/wages
- Bring fresh ideas and thinking into the business
- Low-performing employees might leave
Appraisal
The method of evaluating the performance of an employee according to the job description/contract
Formative
Continual process focusing on employees’ strengths and weaknesses to improve performance over time.
Summative
A definitive judgment about the performance of the employee is often accompanied by a rating (e.g. Excellent)
Requires goal-setting and benchmarks
360-degree feedback
An employee’s performance is given by collecting opinions from various people with whom they work
E.g. managers, co-workers, customers
Managers often don’t know everything about the employee
Self-Appraisal
An employee gives their own opinion about their performance on the job
Maybe a starting point for another type of appraisal
Recruitment
The process of hiring new employees in an organization
Steps of Recruitment
- Job Opening - Identify the need for a new employee
- Job Description - What the new employee needs to do
- Person Description - What skills/qualifications the new employee need
- Identify candidates
- Receive applications
- Shortlist candidates - choose the most suitable
- Selection Process
- Offer the job
- Sign the contract
Internal Recruitment (Promotion within the company)
Hiring an employee who already works within the organization
E.g. promoting a team manager to become a manager
External Recruitment
Hiring an employee from outside of the organization
Pros of Internal Recruitment
- Employees already know the culture and rules within the business
- Organization already has experience working with the individual
- Higher employee morale - other employees may see promotion opportunities in the future
- Might be cheaper if can avoid the need for lengthy recruitment process
Pros of External Recruitment
- Access to a wider pool of candidates
- Bring fresh ideas and thinking into the business
- Promoting internally might lead to resentment from other employees “left behind”
- Potentially lower training costs - if person recruited has already worked in a similar role
