6.4b Financial vs Non-Financial Rewards

Question 1

Ways to improve engagement and motivation

Answer 1

• Good quality environmental conditions
• Appropriate training, development and support
• Good communication

Question 2

Financial incentives examples

Answer 2

• Wages
• Salaries
• Bonus system

Question 3

Non-financial incentives

Answer 3

• Promotion
• Job enrichment
• Job enlargement

Question 4

How does piece rate payment work?

Answer 4

It is based on the number of items produced

Question 5

Advantage of piece rate payment

Answer 5

• Requires low levels of manager supervision

- Encourages high speed production

Question 6

Disadvantages of piece rate payment

Answer 6

• Workers are focused on quantity not quality
• Repetitive
• Workers are not entitled to sick pay, holiday pay or company pensions

Question 7

Commission definition

Answer 7

Financial incentive linked to achievement of sales

Question 8

How does commission work?

Answer 8

Workers are paid a bonus on top of their salary for achieving targets

Question 9

Advantages of performance related pay

Answer 9

• Employees can easily be monitored and assessed

- Targets can be set

Question 10

Disadvantages of performance related pay

Answer 10

• Discourages a team based approach
• Difficult to accurately measure performance
• Incentives may not be enough to motivate employees

Question 11

Profit sharing definition

Answer 11

A system whereby employees receive a proportion of business profits

Question 12

Advantages of profit sharing

Answer 12

• Creates direct link between pay and performance
• Team spirit
• Improve employee’s loyalty

Question 13

Share ownership definition

Answer 13

Companies give shares to their employees or sell them at favourable rates below market price

Question 14

Job enlargement definition

Answer 14

Giving workers more tasks to do of a similar nature or complexity

Question 15

Job rotation definition

Answer 15

Systematic programme of switching jobs to provide greater variety

Question 16

Job enrichment definition

Answer 16

Giving workers more interesting and challenging tasks

Question 17

Empowerment definition

Answer 17

Giving employees control over their work, and a greater role in decision making

Question 18

Advantages of team working

Answer 18

• Productivity
• Flexible workforce
• Improved quality

Question 19

Influences on the choice of rewards

Answer 19

• Organisational design
• Size of business
• PESTLE

Question 20

Advantage of commission:

Answer 20

Increases motivation and performance of sales staff

Question 21

Disadvantages of commission:

Answer 21

• Can lead to overselling
• Customers feel like they are overwhelmed by staff
• Business doesn’t know how much labour costs will be each month

Question 22

How do salary schemes work?

Answer 22

Employees have to work a minimum number of hours and produce a certain amount of work - if they do not do work required they are expected to work longer

Question 23

Advantage of salary schemes:

Answer 23

Motivates workers to work quickly while not compromising quality

Question 24

Disadvantage of salary schemes:

Answer 24

Workers cannot earn extra money by working harder

Question 25

Flexible working definition

Answer 25

When working hours and patterns are adapted to suit employees

Question 26

Types of flexible working:

Answer 26

• Flexi-time
• Compressed hours
• Annual hours
• Job-sharing
• Home-working

Question 27

What is flexi-time?

Answer 27

When employees work full time hours but can decide when to work, around fixed core hours

Question 28

How do compressed hours work?

Answer 28

Employees work a set number of hours per week, but over fewer days

Question 29

How do annual hours work?

Answer 29

Employees work a certain number of hours over the year, but they choose when to work

Question 30

How does job-sharing work?

Answer 30

Two people share one job e.g. alternate weeks

Question 31

Advantages of flexible working:

Answer 31

• Motivation and productivity
• Helps employees with children
• Home working suits families, disabled workers and those who live in remote places

Question 32

Disadvantages of flexible working:

Answer 32

• Impractical for businesses that need to serve the public during normal working hours
• Home workers distracted at home
• Job-sharing leading to confusion of responsibilities