2.4 - Motivation and Demotivation

Question 1

Motivation

Answer 1

The factors that stimulate people to take certain actions

Question 2

Signs of Motivation

Answer 2

• Higher productivity
• Higher quality of goods and services
• Employees stay longer
• Low levels of absenteeism

Question 3

Signs of Demotivation

Answer 3

• Employees leaving
• Poor customer service
• Lower productivity

Question 4

Salary

Answer 4

Fixed annual income that is usually paid monthly

• E.g. a manager is paid $60,000 per year, which is $5,000 per month

Question 5

Wage

Answer 5

An employee is paid per ____

Question 6

Wage - Time rate

Answer 6

Employees are paid per period of time worked

• E.g. $15 per hour

Question 7

Wage - Piece rate

Answer 7

Employees are paid per unit of production

• E.g. $5 per kg of apples picked

Question 8

Piece rate - Pros

Answer 8

Reward hard workers
Encourages higher productivity

Question 9

Piece Rate - Cons

Answer 9

Encourages speed over quality
Less income stability for employees

Question 10

Commission

Answer 10

An amount of money paid to an employee as a fee or percentage for a task or for bringing new business

E.g. A payment to a salesperson for each sale made

Question 11

Commission - Pros

Answer 11

• Encourages employees to sell more
• Rewards hard work and selling skill
• Helps business control expenses

Question 12

Commission - Cons

Answer 12

• Aggressive selling techniques
• Might worsen team spirit
• Less income stability for employees

Question 13

Performance-related pay (PRP)

Answer 13

• Employees are rewarded financial according to meeting certain objectives at work
• Requires target-setting and appraisal

E.g. Good = 5% bonus, Excellent = 10% bonus

Question 14

PRP - Pros

Answer 14

Reward higher performers

Can identify lower performers

Question 15

PRP - Cons

Answer 15

Performance might be difficult to measure

Might worsen team spirit

Question 16

Profit-related pay

Answer 16

Employees are financially rewarded according to the financial performance of the business

E.g. 10% bonus if company makes a profit over $2m per annum

Question 17

Employee share ownership schemes

Answer 17

Employees are financially awarded by being given shares or share options in the business

Share options mean the shares can be bought at a certain price

Question 18

Profit-related pay and Share ownership - Pros

Answer 18

Employees feel connected to the success of the business

Encourages employees to stay longer to receive benefits

Question 19

Profit-related pay and Share ownership - Cons

Answer 19

Dilutes ownership of the business

Doesn’t identify individual high performances

Question 20

Fringe benefits (perks)

Answer 20

Non-cash forms of financial rewards
Non-financial benefits to employees

• E.g. company car, insurance, pension, low-interest loan

Question 21

Non-financial rewards

Answer 21

Methods of motivating employees that do not involve monetary payments

Question 22

Job Enrichment

Answer 22

Changing an employee’s job to include more challenging and demanding tasks

• Adding new, more complex tasks

Question 23

Job Enlargement

Answer 23

Changing an employee’s job by adding more tasks similar to what they are already doing

• Adding new, similar tasks

Question 24

Job Rotation

Answer 24

Moving an employee to different jobs in the business at a similar level of complexity

• Adding new tasks in different areas

Question 25

Pros and Cons of Job Enrichment

Answer 25

Employees can develop new skills May require employee training

Question 26

Pros and Cons of Job Enlargement

Answer 26

Variety of tasks Employees may just see it as extra work

Question 27

Empowerment

Answer 27

* Allowing employees some autonomy over their jobs - what they do and how they do it * E.g. choose own work hours, work from home * Laissez-faire leadership

Question 28

Purpose/the opportunity to make a difference

Answer 28

The opportunity to help the lives of others and to make a difference in the world E.g. doctors, nurses, teachers E.g. businesses can provide charitable work opportunities

Question 29

Teamwork

Answer 29

**The job is organized so that groups of workers can work together** Could be formal * E.g. production teams Or informal * E.g. encouraging employees to work together on a project

Question 30

Pros of Empowerment

Answer 30

Employees feel trusted - higher motivation Development of new skills

Question 31

Cons of Empowerment

Answer 31

Training costs Employees might not have the skills to choose best

Question 32

Training

Answer 32

Procedure where employees gain knowledge and skills relevant to their role in the business professional development

Question 33

Induction Training

Answer 33

The training received when employees start a new job * E.g. learning about the business, meeting new colleagues, buddy systems

Question 34

On-the-job Training

Answer 34

Training of employees that takes place at the workplace E.g. training sessions by specialists, online training, job rotation

Question 35

Off-the-job Training

Answer 35

Training of employees that takes place away from the workplace E.g. away days, conferences, part-time MBA

Question 36

Pros of Training

Answer 36

* Employees feel valued - higher motivation * Development of new skills and knowledge * Employees become more productive

Question 37

Cons of Training

Answer 37

* Training costs * Time not working to attend training * Might not be beneficial/employee may leave

Question 38

Labor Turnover

Answer 38

The number of employees leaving an organization over a period of time as a % of the total workforce (Number of workers leaving / Average # of staff) x 100

Question 39

Reasons for leaving a business

Answer 39

Quit Fired Retired Made redundant

Question 40

Pros of Low Labor Turnover

Answer 40

* Indicator of high morale and effective management * Lower costs of recruiting and induction training * Better relations with customers

Question 41

Pros of High Labor Turnover

Answer 41

* Potentially lower salaries/wages * Bring fresh ideas and thinking into the business * Low-performing employees might leave

Question 42

Appraisal

Answer 42

The method of evaluating the performance of an employee according to the job description/contract

Question 43

Formative

Answer 43

Continual process focusing on employees’ **strengths** and **weaknesses** to improve performance over time.

Question 44

Summative

Answer 44

A definitive judgment about the performance of the employee is often accompanied by a rating (e.g. Excellent) Requires goal-setting and benchmarks

Question 45

360-degree feedback

Answer 45

An employee’s performance is given by collecting opinions from various people with whom they work E.g. managers, co-workers, customers Managers often don’t know everything about the employee

Question 46

Self-Appraisal

Answer 46

An employee gives their own opinion about their performance on the job Maybe a starting point for another type of appraisal

Question 47

Recruitment

Answer 47

The process of hiring new employees in an organization

Question 48

Steps of Recruitment

Answer 48

1. **Job Opening** - Identify the need for a new employee 2. **Job Description** - What the new employee needs to do 3. **Person Description** - What skills/qualifications the new employee need 4. **Identify candidates** 5. **Receive applications** 6. **Shortlist candidates** - choose the most suitable 7. **Selection Process** 8. **Offer the job** 9. **Sign the contract**

Question 49

Internal Recruitment (Promotion within the company)

Answer 49

Hiring an employee who already works within the organization E.g. promoting a team manager to become a manager

Question 50

External Recruitment

Answer 50

Hiring an employee from outside of the organization

Question 51

Pros of Internal Recruitment

Answer 51

* Employees already know the culture and rules within the business * Organization already has experience working with the individual * Higher employee morale - other employees may see promotion opportunities in the future * Might be cheaper if can avoid the need for lengthy recruitment process

Question 52

Pros of External Recruitment

Answer 52

* Access to a wider pool of candidates * Bring fresh ideas and thinking into the business * Promoting internally might lead to resentment from other employees “left behind” * Potentially lower training costs - if person recruited has already worked in a similar role