THE FROG’S EQUATION: BUSINESS STUDIES FOR IGCSE

Human Needs and Rewards

Rewards
Financial rewards: Pay may be used to give incentives to employees to
encourage them to work harder or more efficiently

Wages: payment for work, weekly. Tend to be paid to manual workers.

Time rate – payment per hour
 makes it easy to calculate wages
 takes time, good and bad workers get paid the same and more
supervisors are needed
Piece rate- payment per product produced
 encourages workers to work faster and more
 workers make more products and ignore quality
 workers that work better get paid the same as bad ones
 if machinery or supplies fail, employees earn less money

Salary: payment for work, monthly. It is calculated as an amount of money per

year and divided.
 Commissions – the more sales they make the more they get paid.
This increases sales.
 Profit sharing - employees receive a share of business profits. This
encourages them to work harder.
 Bonus – lump sum paid to well working employees.
 Performance-related pay – pay related to effectiveness. Appraisal is
often used to measure this.
 Share ownership – employees are given shares of company.
Motivates workers to do well as they will get dividends.

Non-financial motivators:
Fringe benefits- extra benefits given to employees in addition to pay
E.g. education fees, discounts, company car, free accommodation, etc.

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Paula Hohne-Tarragona
THE FROG’S EQUATION: BUSINESS STUDIES FOR IGCSE

Job satisfaction: the enjoyment derived from feeling that you have done a
good job
 Job rotation – involves workers swapping round and doing specific task
for only a limited time and then changing round again.
 Job enlargement - where extra tasks of a similar level at work are
added to a worker’s job description.
 Job enrichment – involves looking at jobs and adding tasks that require
more skill/responsibility.
 Autonomous work groups – groups of workers are given responsibility
for a particular process. They have responsibility and have a feeling of
control increasing the job satisfaction.

Management styles
Leadership: good managers and leaders are crucial for motivation
A good leader in a business can inspire and get the best out of the workface.
 Autocratic – manager expects to be in charge of business and to have
their orders followed. They keep separate from the workers and make
virtually all decisions by themselves.
 Laissez-faire – tends to make broad objectives known to employees,
but lets them make their own decisions and organize their work.
Leader has a limited role.
 Democratic – this gets employees involved in decision making. Future
plans will be openly discussed before final decision is made.

Formal and informal groups:

Formal: group designated to carry out specific tasks within a business.
Informal: group who form independently of any official groups set up
within the business and who have similar interests or something else in
common.

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Paula Hohne-Tarragona
THE FROG’S EQUATION: BUSINESS STUDIES FOR IGCSE

Motivation
Motivation: the reason why employees want to work hard and effectively

Theories
Taylor: all individuals are motivated by personal gain, so if they are paid more
they will work more efficiently. He looked at workers and saw that when they
worked hard, they were more productive and could get paid more.

Moslow: hierarchy of needs

Self-actualisation – to be creative and feeling of doing a good job
Esteem needs – self-respect and to be respected and valued by others
Social needs – rewarding relationship with other employees
Safety/security needs – to know you are physically safe
Psychological needs – food, shelter, warmth, sleep
When one level is achieved, people can move on to the next one.

Herzberg: people have two types of needs

Motivators- achievement, recognition, personal development, promotion
Hygiene– status, security, working conditions, salary, relationships

McGregor: 2 types of managers, who believe in theory X or Y

Theory X – average person doesn’t like working, has to be supervised
constantly. Motivation is from external factor, like more pay for more
output.
Theory Y – average person motivated by internal factors. Need ways to
help employees take interest in work. Greatest need is self-actualization.

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Paula Hohne-Tarragona