PowerPoint Guide

The news icon

is hyperlinked The film icon is The discuss The writing
to a related hyperlinked to icon indicates icon indicates a
article or a related clip. suggested written activity
website. Simply click to points to or question
Simply click to access discuss time
access
3.4 Human Resources
3.4.3 Motivation
 Key elements to this topic

Importance of
Methods to
motivation in
motivate staff
the workforce
 What is motivation?
Motivation is essentially about the
commitment to do something.
In the context of a business, motivation
can be said to relate to “the will to work”
i.e. the desire to work very hard and at a
high standard. Having a motivated
workforce can help a business become
more successful.
 Benefits to a business of having a
motivated workforce

Staff will produce more in the same amount of time, increasing productivity levels

Low levels of absenteeism as the employees are content with their working lives and will
therefore motivate themselves to attend work, even if they feel “under the weather!”

High levels of staff retention lowering training and recruitment costs

It will give the business a good reputation as an employer making it easier to recruit the
best workers in the future

Motivated employees will care about the quality of their work, which can improve product
quality and customer service levels
 Concept links

Can you link

these concepts?
Competitive
market
Flexibility in
pricing

Average unit
costs Sentence
starter - One benefit
to a small business of having a
Productivity
motivated workforce is…
 Concept links

Sentence starter - One benefit

to a small business of having a
motivated workforce is…
Competitive
which is important if
the small business is
market
This will mean
Flexibility in operating in a highly
that the small
pricing competitive market
business will have
This will lower with larger businesses
more flexibility
average unit that may benefit from
Average unit when pricing its
economies of scale.
costs costs, as the products…
employees
wages are
Productivity
spread across
Employees will work more units.
harder and produce
more products in a
shorter or the same
period of time.
 Methods of motivation
Everyone is motivated by different
factors. There are two main methods of
motivation that businesses use:

Non-financial
Financial methods
methods of
of motivation
motivation
 Financial methods of motivation

Money, or other financial rewards, play a key role in motivating people in the
workplace. Key financial methods of motivation that businesses use are:

Salary: Wage: Commission: Profit share:

Workers are paid, Payment made to an
A fixed amount is employee based on Staff will receive
either weekly or
paid by the the value of sales their usual hourly
monthly, by the hour
employer to the achieved over a wage or salary, but
according to the time
employee on a worked; any additional specific period of time.
an additional
Employees may be payment is made
Note: thathours
regular basis, commission
on top of the can be seen
paid
as
purely
a
on
type of piece
usually monthly. It contracted hours will on top of this
rate. Piece rate is where workers
be classed as overtime commissionareorpaid
paid aaccording
linkedtoto the
is often expressed low basicproduce.
salary or
as an annual sum. how
and maymany
be paidproducts
at a they performance of the
higher does
hourly rate. wage with commission business.
How this differ to commission?
added on top.
 Which payment method?

Identify the payment method each statement refers to:

Salary Wage Commission Profit share
Paid the same amount regardless of how hard or
how many hours that are worked
Employees will work harder to ensure the
business as a whole performs better
Once full time hours have been worked, any
additional hours may be paid at a higher hourly
rate

Will encourage individual employees to sell as

many products as possible
Payment may be low or non-existent due to
changes in the market that are out of the
employees’ control

May result in lots of competition between sales

staff
 Which payment method?

Identify the payment method each statement refers to:

Salary Wage Commission Profit share
Paid the same amount regardless of how hard or
how many hours that are worked
Employees will work harder to ensure the
business as a whole performs better
Once full time hours have been worked, any
additional hours may be paid at a higher hourly
rate

Will encourage individual employees to sell as

many products as possible
Payment may be low or non-existent due to
changes in the market that are out of the
employees’ control

May result in lots of competition between sales

staff
Which method of payment would be
best for each of the following roles?

Office workers

Hourly wage Commission

Salary/profit share
Piece rate/Hourly Salary
 Are financial methods effective in
motivating staff?
There is no doubt that most people are motivated, at least
in part, by the financial rewards they gain from their work.
Therefore getting employee pay right is a crucial task for a
business.
Someone who feels undervalued or under-paid may soon
leave to find better-paid employment. However, paying
people more does not always increase employee
motivation. More money can help people feel better about
their work, but it is unlikely to encourage them to work
harder or to a higher standard in the long term.
 Non-financial methods of motivation

These methods of motivation do not involve the direct payment of

money. Key non-financial methods that businesses use are:
Job enlargement: Job enrichment: Training: Management style:

Job enlargement Job enrichment Different management

gives staff a greater involves workers Training will motivate styles will motivate in
variety of tasks to being given greater staff to do their different ways.
perform (not responsibility and a existing job well, learn Autocratic means that
wider range of more new techniques or be employees are told what to
necessarily more
complex and trained for future do, when and how to do it;
challenging) which
challenging tasks, posts, including they are not involved in
should make the resulting in promotions; decision-making
work more employees employees will feel Democratic involves giving
interesting. This may experiencing an more valued and loyal more freedom to workers
take place through increased sense of to the business. and more say in decision-
job rotation. achievement. making
 Management styles and motivation

Identify the management style that is being shown in each picture

and explain how it may motivate employees in a business

Management style?
Explanation:

Management style?
Explanation:
Thoughts: Management styles and
motivation
Management style: Autocratic
Explanation: Although employees are not directly
involved in decision-making, in certain low skilled
professions, workers may prefer this management
style, as they will be clear of the tasks they need to
perform and would prefer being told what to do,
increasing their efficiency

Management style: Democratic

Explanation: Employees will be motivated by
managers involving them in the decision-making
process; this means that staff members will “buy into”
decisions made and be motivated to work harder, as
they will feel that the business values their input
 Fringe benefits
Fringe benefits, often known as perks, are extra items
that are given to employees whilst they work in a
business.
Examples of these include: company cars, travel
subsidies, childcare provision, free lunches, staff
uniforms and staff discounts.
The type of fringe benefits that are given to employees
would be appropriate to the size, nature and finances
available within the firm. Fringe benefits can be
expensive, but can help improve staff retention rates.
 Context corner

Watch the video clip about working at

Google

1. Identify as many fringe benefits as you can

2. Explain why you think Google provides all

these different perks to its employees
 How would you motivate?

Identify the best way to motivate

employees in the following
situations.
Be prepared to justify your
responses.
 Motivate me (1)
The business has recorded
record profits, as staff
have outperformed their
yearly sales targets.
However, they are now
lacking enthusiasm to
carry on working as hard,
as their salaries are less
than rival businesses.
Motivate me (2)

Many production
line workers are
getting
demotivated by
the monotony of
their work
 Motivate me (3)

An ambitious, talented
employee is looking
for promotion in the
next six months, but
currently lacks the
skills he needs to
reach the next level in
the hierarchy..
Motivate me (4)
An employee has
many ideas that
he feels, if shared
and
implemented, will
improve the
organisation.
 Ideas…How would you motivate?

1. The business has recorded record profits, as staff have outperformed their
yearly sales targets. However, they are now lacking enthusiasm to carry on
working as hard, as their salaries are less than rival businesses.
Profit sharing, increase in salary to match or exceed rivals (the business has record
profits, so it can be assumed that it could afford this!)
2. Many production line workers are getting demotivated by the monotony of
their work.
Job enlargement – giving employees different tasks to complete/job rotation
3. An ambitious, talented employee is looking for promotion in the next six
months, but currently lacks the skills he needs to reach the next level in the
hierarchy.
Training
4. An employee has many ideas that he feels, if shared and implemented, will
improve the organisation.
Democratic management style introduced, staff forums
 Recap: Check your understanding (1)

Financial methods of motivation - Match the description to the term

A Payment made according to how many products
1. Hourly Paid
are produced.
B Employees are paid a percentage of the value of
2. Salary products that they sell.
C A fixed wage rate is paid per hour for a set
3. Overtime
number of hours worked.
D An additional payment is made which is
4. Piece Rate
dependent on how well the business is performing.
E An employee is paid a set amount for the year,
5. Profit Sharing which he/she usually receives in monthly
instalments.
F An extra payment is made for additional hours
6. Commission worked.
 Recap: Check your understanding (2)

Explain two reasons why it is important to a business that its:

1. employees feel motivated at work

Increases labour productivity rates; increases efficiency; less
supervision required of staff; higher quality and customer service
standards
2. staff retention rates are high
To lower costs of recruitment and selection; to retain skill base
3. employee productivity levels are high
Will ensure that average units costs are low, as fixed costs are spread
across more units, giving the business more flexibility in pricing or
allowing the business to receive a higher profit margin