NAME: Year Subject: Economics

Date:------------- Objectives: Students can differentiate between financial rewards and non
financial rewards
Able to explain theories of motivation
WORKSHEET

CH 11: Motivation

Explain what is meant by a ‘quality circle’. [2]

Quality circles involve a group of workers meeting at regular intervals to discuss problems relating to operations. Meetings are typically:

• voluntary

• in normal working time

• under the leadership of their supervisor

• seeking to recommend solutions to management.

Briefly explain two ways in which employees can participate in business decision making. [3] May/June 2016 /9609 /12

Opportunities could include:

o Representation at Board level – a form of industrial democracy – protect interests of employees.

o Participation through ownership – employees hold shares.
o Collective bargaining arrangements/ trade union membership.
o Suggestion schemes – new ideas – proposals for, say, cost cutting.
o Specific organisation forums – e.g. worker co-operatives.
o Quality circles/focus/worker groups – focus on analysis and problem-solving.
o Joint management/employee committees.
o Arrangements for employee/empowerment – problem solving sessions – delegated authority.
o Laissez-faire/democratic/paternalistic management/leadership allows participation in decision making.
o Delegation.
o Opportunities to vote on decisions.

Two ways to participate soundly explained (3 marks).

Explain the possible long-term consequences for a business of low levels of employee motivation. [5] May/June 2018
Answers could include the following:

• Motivation – the factors that lead to employee desire to satisfy needs and achieve objectives.

• Low motivation can lead to poor qualitative performance – quality suffers.

• Low motivation can lead to poor quantitative performance – productivity declines.

• Absenteeism can increase.

• Work time can be spent on personal issues and/or socialising.

• Labour turnover may increase (best workers may leave).

• Accidents may increase as employees become careless and lack concentration.

• There might be more grievances/disputes.

• Employees may not respond to orders/opportunities.

• Consequences could include impacts on brand image,

competitiveness, shareholders, costs/profits, investments, ability to pay back loans, reputation and the survival prospects of the business.

Effective explanation of possible consequences for a business of

‘Money is the most important factor for motivating teachers in a school’. Discuss this view. [20] may/ june /2017/12

Answers may include:

a recognition that financial rewards are considered to be very important as a means of satisfying and motivating workers in businesses.

reference to Taylor and ‘economic man’ theory and the lowest Maslow hierarchy of needs, or Herzberg hygiene expectations.
a recognition that there are alternative and revisionary theories and explanations of worker motivation – references to Maslow, Herzberg, Mayo,
McClelland and Vroom (content and process theories).

The significance of non-financial rewards to satisfy higher order needs and to act as motivators will be explored.

Good answers will attempt to comment [using the context of school teachers] on the relative importance of financial and nonfinancial rewards
(such as recognition, challenge, self-actualisation) and understand that any judgements about significance and importance may well need to take
account of specific job situations,

specific organisational settings, and specific individual worker aspirations and expectations.

recognition that specific organisation / work / person situations will

likely suggest different combinations of theoretical and practical motivating rewards [again referring to the context of schools/school teachers].

Evaluation may well be made as a judgement is made of the relative

‘A significant investment in training and development is the best way to

improve employee effectiveness in a retail business.’[12] May/June 2018/12

Answers may include the following

Training and development aims to strengthen and update employee job-related knowledge and skills.

Retail is a ‘labour intensive’ business where customer service skills are critical.

Training and development might be part of a motivation package to improve performance.

‘Best way’ depends on a number of factors, e.g.

– the current state of employee performance

– is the extent of training and development comparable with competitors?

– the level and impact of remuneration

– past investment in training and development.

Could a more effective recruitment and selection process be more successful at improving employee performance?

It might be considered effective, but can the business afford a ‘significant’ level of investment in training and development (time and money).

Evaluative comments may well consider that the ‘best way’ all depends on the particular time and circumstances of a business and discuss
alternative ways of improving employee effectiveness in a retail business (such as more money).
Recommend how JS could improve the motivation of its employees in Department A. Justify your recommendation. [11]
M/J/2019/22
Content

• Increase pay/financial motivation – 30% of leaving employees are leaving for ‘poor pay’. However, can the government of county X afford a pay
increase?

• Non-financial motivation – 20% leaving because of a boring job (job enrichment/enlargement/rotation – improve motivating factors etc.), more
delegation etc.

• Increase levels of hierarchy to improve promotion chances. 5% of workers leaving for this reason.

• Allow movement between outlets – 5% have moved to another town – JS may be able to keep them in the business by offering them a job in
another outlet.

• Improve leadership – is JS using the right leadership styles? Do the managers need training?

• Improve training – employees are highly skilled and trained, but maybe they could be offered more to keep them in the business. In particular,
training on how to deal with customers as this is a major reason for the turnover.

• Make more social opportunities for staff

• Improve recruitment and selection processes – are people leaving because they were not the right people in the first place?

Redundancies fail to hit morale at Technoloc Ltd [book case study]

Analyse the benefits to firms such as Technoloc of having a well-motivated workforce. [8]

The benefits of a well-motivated workforce include:

• Higher productivity − motivated workers will produce higher output. This reduces the unit cost and helps make Technoloc become more
competitive.

• Lower labour turnover − only two people had left the business during a 12-month period. This reduces recruitment and training costs.

• Reduced absenteeism − absenteeism will cost Technoloc Ltd money in terms of lost production and in organising cover. It will also increase stress
on other workers, leading to demotivation.

• Long-term loyalty − the associates were willing to accept the need for difficult changes due to the recession, including a salary cut and voluntary
redundancies.

• Less need for supervision − the associates at Technoloc do not appear to need close supervision. They can be trusted to get on with their jobs with
a minimal input from supervisors. This will save Technoloc money.

• Greater input from workers − workers will be more willing to contribute ideas to help improve production methods and quality. At Technoloc,
workers are used to making suggestions that improve quality.

Essay
‘If we pay our workers well, then there is no need for any of these new ideas, such as
job enrichment.’ Discuss the validity of this view expressed by a chief executive of a car manufacturing business. [25]
Is pay the only motivator for workers?

Clearly, the chief executive takes a Taylorist view of motivation; Taylor (scientific management) believed that people work only for money. His view
of human nature was that of ‘economic man’. He suggested that piece-rate pay systems were effective in motivating workers to work more
productively. This view influenced Henry Ford. Ford’s factories applied what became the principles of mass production with the maximum possible
division of labour, rigid management control and pay as a motivator to effort.

Money provides the means for workers to achieve other goals. For example, money confers status on employees. Money provides the means to
satisfy our material desires. We live in a highly materialistic world, so money is very important in fulfilling our goals and desires. Good rates of pay
will attract recruits and help prevent dissatisfaction, thus

reducing labour turnover.

However, most motivational theories, although acknowledging the important role of pay, suggest that there are other factors that lead to effort. If
the car manufacturer wishes to motivate staff and reduce the unit costs of production,

non-financial methods of motivation should be used.

• Mayo’s human relations approach stressed the importance of teamwork and for

managers to take an interest in workers.

• Herzberg’s two-factor theory identified ‘motivators’ which motivate workers, such as achievement and recognition. Herzberg advocated job
enrichment to motivate workers.

Honda provides a good example of an organisation that stresses factors other than pay to motivate its workers. The following non-financial
methods are used:

• Honda plants are single status; this means that workers use the same canteen as managers and there is no reserved parking.

• Small teams are grouped on the production line and organise their work, thus providing responsibility and teamwork. This is an example of job
enrichment.

• Teams look for continuous improvements through solving problems.

• Teamwork improves interaction and leads to a better quality of working life.

The approach used helps to fulfill the higher-order needs of employees. These and other similar practices are features of much of the Japanese car
industry and this approach has spread throughout the industry from Land Rover to Volvo.

Evaluation may consider:

Evaluation may recognise that, whilst pay remains very important, most theorists and many chief executives accept that pay is not a sufficient
condition to motivate workers.
(a) Define the term ‘empowerment’. [2]9609/12/O/N/18
Gives power / authority / rights to employees (1) to take part in decisionmaking

(1) it is a form of delegation (1) to have more control over the business /

their working lives / over others / tasks and objectives (1) the opportunity to

perform tasks as they decide (1) it is a type of motivation (1).

(b) Briefly explain two reasons why a business might decide to empower its employees. [3]9609/12/O/N/18
Answers could include:

• To help employees feel part of the organisation / to get employees and

managers working together / to achieve the same goals.

• To generate new ideas which might benefit the business.

• To increase motivation / self-esteem / commitment of employees.

• To tap into the skills and competences of employees.

• To give employees greater control over their lives / the business.

• To reduce the burden on managers / supervisor systems and costs.

• To increase productivity and the bottom line.

• To identify skills in readiness for promotion.

• To reduce absenteeism and labour turnover.

• To attract high quality labour.

• To enhance the public image of the company.