Key definition
Motivation — the reason why employees are willing to work diligently for a business.
Why people work
- Job security
- Job satisfaction
- To increase standard of living
- To develop skills
Benefits of a well-motivated workforce
- Reduced absenteeism
- Reduced labour turnover
- Better quality goods and services
- Increased productivity
Motivation theories
Maslow's Hierarchy — concept of human needs
Motivation of employees happens in levels. Each level of the hierarchy must be met before moving up.
Taylor's theory — money
He states that all workers are motivated by personal incentives which include money/wages.
Herzberg's theory
He states there are hygiene factors and motivating factors. If hygiene factors are not met, an employee could be demotivated. In addition, hygiene factors must be met before motivating factors, or an employee will not be effectively motivated.
| Hygiene factors | Motivating factors |
|---|---|
| Good work environment/conditions | Acknowledgment by superiors |
| Job security | Promotion |
| Good relationship with superiors | Enjoyment in the work given |
| Salary | Achievement |
Methods of motivation
Financial methods
- Piece rate — paying an employee based on the number of output.
- Time rate — paying an employee based on number of hours worked.
- Commission — paying an employee a % of the value of sale of a good sold (tertiary sector).
- Salary — a fixed pay monthly.
- Bonus — money paid annually for good performance.
- Profit-sharing — a part of the company's profit is paid to the employees.
Non-financial methods (fringe benefits)
- Company car
- Medical insurance
- Employee discounts, etc.
Making work less boring (a form of motivation)
- Job rotation — allowing employees to switch from one job to another.
- Job enlargement — increasing the variety of tasks given to an employee.
- Job enrichment — giving employees a variety of higher-skilled jobs to enhance their sense of responsibility. This method could improve an employee's skills.