BUSINESS

STUDIES 0450
UNIT 2:
PEOPLE IN BUSINESS

• Chapter 6: Motivating Workers

• Chapter 7: Organizations & Management
• Chapter 8: Recruitment, Selection & Training of
workers
• Chapter 9: Internal & External Communication
Chapter 6: Motivating Workers
 LEARNING OBJECTIVES:
This chapter will explain:

1. The reason why people work, and the benefits of well-motivated workforce

2. The concepts of key motivational theories

3. The rewards as method of motivation (financial and non-financial rewards) what

are the factors that motivate workers
 6.1
Importance of well-motivated
workforce
MOTIVATI
6.2
NG Key Motivational Theories
WORKER
S
6.3
Methods of Motivation
TERMS DEFINITIONS
Motivation The reason why employees want to work hard and work effectively for the business
Wage A payment for work, usually paid weekly
Time rate The amount paid to an employee for one hour of work
Piece rate An amount paid for each unit of output
Salary Payment for work, usually paid monthly
Bonus An additional amount of payment above basic pay as a reward for good work
Commission Payment relating to the number of sales made
Profit sharing A system whereby a proportion of the company’s profit is paid out to employees
Job satisfaction They enjoyment derived from feeling that you have done a good job
Job rotation Involves employees swapping around and doing each specific task for only a limited time and then changing
around again

Jo enrichment Involves looking at jobs and adding tasks that require more skill and/or responsibility
Team working Involves using groups of employees and allocating specific tasks and responsibilities to them
Training The process of improving an employee’s skills
Promotion The advancement of an employee in an organisation, for example, to a higher job/managerial level
6.1: Importance of well-motivated workforce
Reasons why ppl work:
• Money MOTIVATION: The feeling that makes
• Security
• Affiliation (Social needs) employees want to work hard and effectively in
• Self-importance (esteem) a biz.
• Job satisfaction (Maslow Hierarchy of Needs)

Benefits of a well-motivated workforce:

 Improved productivity
 Low rate of absenteeism
 Low rate of labour turnover
SERVICE PROFIT CHAIN
 Better quality goods & services (can also be linked to Maslow Hierarchy of Needs)
 More competitive
All business should recognise that the value of their employee’s output, in terms of how much they
produce and the quality of it, depends on how well motivated they are to work effectively.
Employees are a business’s greatest assets!
Well-motivated workers high productivity (employees work more effectively)

increased output
higher profits  
Unhappy workers do not work effectively

low output
lower/NO profits 
 MONEY
To pay for necessities and some
luxury
SECURITY
A sense of security (ie: knowing
WHY that your job and pay are safe – you
are not likely to lose your job)
WORK???
SOCIAL NEEDS (affiliation)
Feeling part of a
group/organization, meeting
ppl, making friends at wrk
JOB SATISFACTION
Enjoyment is derived from feeling
ESTEEM NEEDS that you have done a good job
(self-importance)
Feeling important -- feeling that
the job you do is important
6.2: Key Motivational Theories

F.W. Taylor
(Scientific Management
Theory – aka: The Theory of
KEY
Economic Man)
MOTIVATIONAL
Maslow Hierarchy THEORIES
of Needs

Two Factor Theory – Fredrick

Herzberg
 KEY
MOTIVATIONAL F.W. Taylor
THEORIES (Scientific Management Theory – aka: The
Theory of Economic Man)

 Aims to REDUCE INEFFECIENCY in the workplc by finding the quickest method of performing each
tasks & then training all workers to use this method.
 All individuals are motivated by personal gains (ie: if workers are paid well, they will work more effectively)
 Taylor’s theory mainly focused on FACTORY WORKERS
 KEY
MOTIVATIONAL
THEORIES Two Factor Theory – Fredrick
Herzberg

 Human have 2 sets of needs:

I. Basic Needs (Hygiene)
II. To be able to grow psychologically (Motivators)

Motivators Factors Hygiene Factors (hygiene factors) MUST

• Achievements • Status BE SATISFIED, if not, it
• Recognition • Security will demotivate workers
• Personal growth • Work conditions
• Advancement / Promotion • r/s with boss & • Only if these are
• Work itself subordinates satisfied, can the
• Salary “motivators” factors act
as motivators for
employees
 KEY
MOTIVATIONAL
Maslow Hierarchy of Needs
THEORIES

Achieving your full potential, feeling that you have done a good job
Self-
(fulfilled by being promoted & being given more responsibility)
Actualisatio
n

Esteem Needs Having status & recognition (fulfilled by being recognised for good
work)

Friendship, belonging to a group (fulfilled by having colleagues at wrk)

Social Needs

Protection against danger & poverty (fulfilled by having job

security)
Safety/Security Needs

Food, shelter, rest (fulfilled by receiving salary)

Physiological Needs
 6.3: Methods of How happy & content a person
is with their job.
Motivation
FINANCI
NON-
FINANCIAL
AL JOB
REWARDS/ SATISFACTI
REWARD FRINGE
S ON
BENEFITS

 Wages (payment for work, usually  Promotion

 Non-Financial
weekly)  Enhanced working environment
Rewards/Motivators:
 Time Rate (payment per hour)  Job Rotation (increasing variety in
• Company car
 Piece Rate (where workers are the workplace by allowing workers to
• Discounts for company products
paid deepening on the quantity of switch form one task to another)
• Health care
products made)– BONUS system  Job Enlargement
• Children’s school fees paid for
if workers hit targets (increasing/widening tasks to increase
• Housing loans
 Salaries (payment for work, variety of workers)
• Free trips abroad (Holiday)
usually monthly)  Job Enrichment (organising work so
 Bonus that workers are encourages to use
 Commission their full abilities)
 Profit-sharing
 BONUS
An addition amount of payment
COMMISSION
above basis pay as reward for
Payment relating to the
good work
number of sales made

METHODS
OF SALARIES
PAYMENT Payment for work, usually paid
WAGES monthly
A payment for work,
usually paid weekly

PROFIT SHARING
A system whereby a proportion of the
Piece rate Time rate company’s profit is paid out to
An amount paid for The amount paid to an employees
each unit of output employee for one hour of wrk
Chapter overview: Chance to use creativity

Prestige & recognition Chance to take

Holidays
responsibility

Fringe benefits Independence

MOTIVATING
FACTORS AT ALL
A reasonable level of LEVELS Chance for promotion
pay

A clean & safe Tasks which provide a

environment Job security sense of achievement

Working with colleagues

Working hours who are friendly Interesting & stimulating
tasks
CLASS ACTIVITY:
Prepare in Exercise Book :

• Index “Chapter 6 Class Activity”

• Prepare the possible limitations of each of the payment methods (both financial &
non-financial) in table format – refer next slide
 Payment Methods Category Limitations
Wages

Time Rate FINANCIAL REWARDS

Piece Rate (provide 2 limitations for EACH
Salary payment methods)

Commission

Profit Sharing

Company car

Education paid for children NON-FINANCIAL

Discounts on company’s products REWARDS
Housing Loans (provide 2 limitations for EACH

Insurance
payment methods)
THE END ^^