Motivation: theories and methods

Last time

Before we start: last time, in Types of business organisation, you learned these points. Here they are again on one card. Keep them in mind, because today builds on them.

Why work hard?

Two workers do the same job in the same factory. One works carefully and is never absent; the other does the minimum. The difference is motivation. This lesson covers why motivation matters, three theories of what motivates people, and the methods businesses use.

Why motivation matters

Motivation is the reasons that make people work well and willingly. A well-motivated workforce is more productive, makes fewer mistakes, and gives better customer service. It also means lower absenteeism and lower labour turnover, so less money is spent recruiting and training new workers.

Taylor

Taylor believed workers are motivated mainly by money. Pay them for each item they make, and they will work harder. This led to piece rates and close supervision of each task. But it ignores other needs: many people want respect, friendship and interesting work too.

Maslow's hierarchy

Maslow put human needs in five levels. Once a lower need is met, the next level motivates. A business can meet each one: pay for basic needs, a contract for safety, teamwork for social needs, praise for esteem, and challenge for self-actualisation.

Herzberg

Herzberg said some factors, called hygiene factors, only stop workers being unhappy: pay, working conditions, job security and company rules. Other factors, called motivators, actually motivate: achievement, recognition, responsibility, interesting work and promotion. So pay alone does not motivate. It must be fair, but real motivation comes from the job itself.

Financial methods

Wages are paid by the hour or week; salaries are paid yearly in monthly parts. Piece rates pay for each item made. Commission pays salespeople a share of what they sell. Bonuses reward targets met. Profit sharing and share ownership give workers a share in the firm's success.

Commission

Commission motivates salespeople to sell more, because their pay rises with sales. But it can make income uncertain, and may tempt staff to push customers too hard, hurting the firm's reputation. It suits sales jobs, not jobs where output cannot be counted.

Non-financial methods

Job rotation: workers move between tasks, to reduce boredom. Job enlargement: more tasks of a similar level. Job enrichment: more responsibility and more challenging work. Teamworking: groups share tasks and decisions. Training, opportunities for promotion, and praise and recognition.

Fringe benefits

Fringe benefits are extras given in addition to pay: free health care, a company car, staff discounts, or meals. They help attract and keep workers, and meet safety and social needs. But they add to costs, and may not motivate on their own.

Methods and theories

Examiners reward answers that link a method to a theory. Here are the links.

Higher pay or commission?

Long questions ask you to compare two methods and choose one for the business in the case. Paying higher wages than competitors attracts good workers and keeps them, but raises fixed costs and may not motivate effort. Commission ties pay to sales, so costs rise only when sales do. For a shop selling to customers, commission may suit better. Justify with the case.

Mistakes that lose marks

Mistake one: saying pay is a motivator in Herzberg's theory. It is a hygiene factor. Mistake two: describing a method without saying how it raises motivation. Mistake three: in a choice question, explaining both methods but not choosing. The fix: method, how it motivates, the effect on the business, then a choice.

The full-marks tip

The full-marks tip: link each method to a need it meets: pay for basic needs, praise for esteem. In a choice question, compare the two methods for the business in the case, then choose one and say why.

On one card

So, on one card: motivation. Keep it for revision.