2.5 Financial & NON-Financial Motivators - PowerPoint Presentation

Slide1

2.5 Financial & NON-Financial Motivators

SL IB BUS MGT

MR GREENBANKSlide2

Wages – Piece Rate Pay

+

ve

– Pay is linked to effort, encourages effort

-

ve

– Difficult to maintain quality control as so many units being produced

-

ve

– Frustrations and tensions can also be caused if workers are slowed down by production stoppages, or problems elsewhere in the production lineSlide3

Wages – Time Rate Pay

Based on a given rate of pay per period of time. Any time worked above this is paid at a higher rate, or overtime. Pay is not related to output

+

ve

– encourages workers to work more hours – less absenteeism

-

ve

– Pay not linked to effort so hard working staff may be demotivated with same rate of pay as slack staffSlide4

Salary

Fixed weekly or monthly rate for a specific job.

+

ve

– meets security needs of staff as they have long term contract usually associated with salary

-

ve

– Pay not related to output so some staff who work more hours than others are demotivatedSlide5

Performance-Related Pay

Extra

incentive to encourage employees, especially during a busy period of for a one-off

job. A

method of giving individuals more money based on their personal performance.

They

are often related to the employee achieving a number of targets over the year. This is common with managerial and professional workers

.

+VE – Staff are motivated to improve productivity and quality of output to increase pay

-VE – Subjective managerial decision as to how good performance was so can demotivate staff if no specific targets are setSlide6

Commission

paid as a percentage of the value of sales made by an individual sales person.

+

ve

– Can motivate staff to increase sales which is good for company profits

-VE – can become competitive amongst staff and so this can demotivate some staff

-VE – Can cause some customers to be turned away by the business as they see the personal service as false and just a way to try and increase sales and commission for staffSlide7

Profit-Related Pay

Allows

individual employees to receive a share of profits.

Acts

both as an incentive and also allows management some flexibility when setting basic rates of pay.

Involves

each employee receiving a share of the profits of the business each year (

bonus)

.

+VE – Staff can feel more part of the

organisation

and more responsible to increase profits in order to help all staff benefit from financial bonus

-VE -

If a firm record a loss then employees may suffer from both lost earnings and a feeling that the company is performing badly.Slide8

Employee Share Ownership Schemes

involves each employee receiving a part of each month's salary in the form of shares, normally at less than current market price

.

+VE -

Employees should feel a desire to work harder and so boost profits. As a result the price of their shares may rise and they will receive higher dividends.

-VE – Some staff would prefer quick rewards both financial and non financial rather than long term shares so may not be motivate

dby

thisSlide9

Fringe Payments

the addition of such perks as private health schemes, pension schemes, subsidized meals, discounts on holidays and travel, cheap mortgages and loans, company cars and discounts when buying the company's

products

No

demotivations

really only gets staff upset if other staff earn perceived better fringe benefits than themSlide10

Non-Financial Motivators

In the 1960s and 70s there were increasing amounts of dissatisfaction with financial methods of remuneration and ideas were developed based around the 'human relations school of

management’.Slide11

Job Enlargement

this involves increasing the number of tasks, which are involved in performing a certain job.

+VE - This

should motivate and develop the multi-skill capabilities of

employees as they feel they are trusted and are more part of the

organisation

.

-VE Staff may not yet have the skills or training to perform more tasks and so lack of productivity at least during beginningSlide12

Job Enrichment

this is a system of motivation based on giving employees more responsibilities and the opportunity to use their initiative via

delegation

and

empowerment

.

+VE - This should motivate

as

they feel they are trusted and are more part of the

organisation

.

-VE Staff may not yet have the skills or training to perform more tasks and so lack of productivity at least during

beginning.Slide13

Job Rotation

This involves

allowing employees to perform a number of different tasks in turn, so increasing the variety of their job, which should help with motivation

.

+VE - This should motivate and develop the multi-skill capabilities of

employees and stop the problems of monotony/boredom

-

VE Staff may not yet have the skills or training to perform

different

tasks and so lack of productivity at least during

beginning.

Also there is a lack of

specialisation

with this approachSlide14

Teamwork

+VE – Usually gives staff more decision making responsibility in team and more control over their work which can motivate according to many theorists

-

VE – Can bring with it a power struggle within the team/a lack of direction as maybe no assigned leader/conflict and dissention amongst the teamSlide15

TeleWorking

+VE Working

remotely can often help people be more

motivated as it allows staff to work around their personal lives for convenience.

With teleworking they may be able to work a proportion of their time from home with perhaps 'hot desks' in the office that they can occupy if they need to come in for any reason. These hot desks may be shared by a number of employees.

–VE However

, the majority of their time can be spent working perhaps from

home

which can cause slack, lead to slow decision making and staff may not appreciate the lack of social connection.Slide16

Flexible Working

T

his

means working in a manner that suits the employee. This may mean flexible hours to fit around the employee's needs or perhaps even flexible patterns through the year. +VE makes staff feel like

organisation

cares for them allowing them to choose their hours to make their lives more convenient. –VE – Can lead to slack amongst workforce as they take advantage of flexibility and can also be difficult to measure staff performance working at different hours

etc