Session 27 - financial vs non - financial motivation

Question 1

List financial methods of motivation and what they consist of

Answer 1

Wages - normally paid per hour worked weekly/monthly,
salaries - annual salery paid at end of each month,
bonuses - paid when certain targets have been achieved ,
commission - paid according to volume or value of sales achieved,
profit share - where a cut of the businesses profits are shared amongst employees,
share options - where employees have the option to buy shares in a business,
fringe benefits - add ons to basic pay e.g company car

Question 2

What is financial motivation

Answer 2

Monetary benifit offered to employees to encourage behaviour or actions which otherwise might not take place

Question 3

What is non - financial motivation

Answer 3

Benifits offered to employees that are not directly linked to financial gain

Question 4

List non - financial methods of motivation and what they consist of

Answer 4

Delegation - delegating higher level of challenge and variety to stimulate worker motivation and productivity
Consultation - business devotes time and resources to consulting staff about changes to motivate them
Empowerment - trusting workers through job enrichment, enlargement and rotation
Flexible working - allowing more flexible hours to suit personal lives increases motivation and loyalty
Team-working - employees benefit from higher motivational when they feel as part of a group

Question 5

What is piecework

Answer 5

Employees are paid per finished item or unit

Question 6

Pros/cons of piecework

Answer 6

+ experienced workers can earn more, incentive to complete work, may work more hours, fits around home working
- workers may cut corners, quality may suffer, slower workers may fall under minimum wage

Question 7

What is commission

Answer 7

On target earnings (potential top earnings are shown during advertisement)

Question 8

Pros/cons of commission

Answer 8

+ skilled salespeople can make good money, employer is not paying for downtime, motivates employees to sell
- salespeople on commission only earn no money at all, not a steady income, risky in a recession, employees may not meet needs of customers, temptation to oversell

Question 9

What is bonuses

Answer 9

Lump sum paid on top of a salary or wages

Question 10

what is profit share

Answer 10

Employees may be paid an annual dividend based on the level of profits made by the firm

Question 11

what is performance related pay

Answer 11

System of motivation introduced in the 1980s in banking and public sector. It’s measured against targets