Chapter-6

Motivation
19th June,2021

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 Past paper questions
Identify and explain two advantages to SF of using profit sharing.
it will motivate workers / improve efficiency so workers help business remain successful
it will creates team spirit/sense of belonging so workers may accept changes to working practices.
it will improve employee loyalty/retention so few workers leave each year
it will help in attracting new employees

Identify and explain two non-financial methods of motivation which Ruby could use.
• Job rotation could help staff to become multi-skilled and more flexible.
• Job enlargement as greater variety of work can help keep them satisfied to help meet the higher orders
during festivals
• Job enrichment which may increase quality which is important to Ruby as workers feel they have been given
more responsibility
• Team working
• Delegation OR empowerment OR decision making

TUKAN makes a range of soft drinks using flow production. All employees are paid a good wage but do not
receive non-financial rewards. A high percentage of employees leave the business each year. A common
reason given for leaving is that they have no involvement in decision-making. Last year, TUKAN’s revenue
increased by $25m but profit did not increase. The Managing Director said: ‘The economy is in the growth
stage of the business cycle. However, we need to improve efficiency. Lean production methods might help. We
need to recruit a new Operations manager who could have some ideas about this.
Identify and explain two advantages to TUKAN of introducing non financial methods.
these options does not involve money so does not increase costs of TUKAN
• Help retention so lower percentage want to leave each year
• New ideas as workers may suggest ways to improve efficiency
• Can lead to more flexible work force

Ben owns a small gardening business, which he started 15 years ago. Ben believes providing a quality service
is important to his success. Ben’s business has a number of stakeholder groups including 2 full-time and 4
part-time workers who have all been employed by him for a number of years. Each worker is expected to do
any job that Ben orders them to do. All workers are paid an hourly wage rate. They also receive a bonus if
customers recommend the business to other people. Ben is always thinking about other ways to improve the
motivation of his workers.
Explain two ways Ben could improve employee motivation. Recommend which way Ben should
choose. Justify your answer. 11/May/2018
Ben can involve workers in decision making so workers feel more important to the gardening business
Ben can use job rotation for the 6 employees so employees are not bored doing the same thing
•job enlargement
job enrichment
Ben can allow for team working which increases production and gives workers satisfaction.
Ben can offer fringe benefits
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GHT is a public limited company. It produces steel products including gates and garage doors. GHT has a flat
organisational structure and a short chain of command. GHT has many stakeholder groups including 600
employees. The Managing Director is considering introducing job rotation to improve employee motivation. He
has also been analysing some financial data.
Explain one advantage and one disadvantage to GHT of using job rotation to improve employee
motivation. 12/M/J/2021
Advantage:
• (As work more varied) fewer workers might leave from its 600 employees leading to lower
recruitment costs
• Business has a more flexible / skilled workforce leading to higher productivity/higher output
• Easier to cover / replace others when someone is absent so may be able to meet an order on time
• Can help business identify where employees work best
Disadvantage:
• Increased training needed increasing costs
• Workers may not be familiar with each task / less specialist in task / not good at all tasks lowering
quality / increase waste / leads to mistakes increasing variable cost above $60
• Takes time to learn different tasks / switch between jobs

TWH makes a range of toys using batch production. TWH’s Managing Director, Dylan, plans to invest in new
technology to reduce average costs. ‘It’s the only way to increase efficiency as I do not know how we can
improve employees’ motivation’ he said. Dylan cannot decide on whether it would be better to use retained
profits or a long term loan as the source of finance. 11/Oct/2015

(d) Identify and explain two ways that TWH could improve the motivation of its employees. [6]
• Job rotation between making different toys they are not bored doing the same thing
• training on the new technology so employees feel valued
• better communication with management so workers feel that they are important to the business so efficiency
improves
• improve pay they pay $6 as pay $.50 less per hour OR bonuses/piece rate so make more toys to get paid
above their usual wage
• improved working conditions/environment

VXH produces a range of soft drinks made from fruit using batch production. VXH uses specialization in its
factory. The business has grown quickly over the last two years. VXH has increased the number of production
workers from 40 to 80. This has increased the span of control for each manager. It has been difficult for VXH to
keep workers motivated. The Human Resources Manager has to decide whether it is better to use job rotation
or financial bonuses to improve employee motivation.

Do you think VXH should use job rotation or financial bonuses to increase employee motivation?
Justify your answer.
Job rotation:
Prevents workers becoming bored doing the same task repeatedly which could increase output
Need to provide training to the 80 employees which increases cost
Helps improve flexibility as workers can switch if someone is absent
Workers may not be good at the new task so productivity decreases
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Financial Bonus:
Increases costs to the business
Some employees may not be motivated by money
Can lead to conflict / demotivation if some workers don’t get this

HBN makes steel rods for the construction industry, using flow production. HBN uses job enrichment as one
way to motivate its 40 employees. HBN has experienced an increase in demand for steel rods as a result of
changes in the business cycle. Businesses, such as HBN, are expected to have a policy on sustainable
development. The Operations Director is considering ways to increase output of steel rods whilst maintaining
high quality.
Identify and explain one advantage and one disadvantage to HBN of using job enrichment as one way
to motivate its employees.
Advantages:
Business able to make most use of employees skills when making steel rods
Better skilled workforce / better reputation help ensure high quality
Disadvantages:
High cost of training its 40 employees
Lower productivity / lower output (as not all employees able or want to do more complex work)
Conflict with some employees (as may not be possible to offer opportunities to all) especially as use flow
production

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