- Motivation
- Desire, effort, and passion to achieve something
- Classified as intrinsic or extrinsic
- Employer objectives
- Motivation
- Minimize cost
- Prestige
- Better recruitment
- Reduced labour turnover
- Control
- Employee objectives
- Purchasing power
- Recognition
- Compensation – high direct earnings, pensions, fringe benefits
- Taylor’s Theory
- Principle of scientific management
- Workers are motivated by cash
- Productivity can be improved by relating output/productivity to pay
- Division of labour and specialisation
- Standardization of work practice (seen in production lines)
- Workers should be chosen for their job based on ability
- Differentiated piecework
- Payment based on standard level of output
- Paid extra for output beyond that level
- Criticisms
- Ignored non-financial motivators
- Non-physical contribution may not be quantified
- Repetitive and monotonous work – job dissatisfaction
- Maslow’s Hierarchy of Needs
- People have 5 basic needs:
- Physiological/basic
- Security/safety – predictability and order
- Satisfied by job security, maternity leave, fringe benefits
- Social/love/belonging
- Satisfied by teamworking, anti-discrimination
- Esteem/ego – recognition and self-respect
- Satisfied by training and development, delegation, promotion
- Self-actualisation
- Satisfied by giving freedom to employees
- Needs must be satisfied from the bottom up (basic to self-actualisation)
- Criticisms
- Needs cannot be quantified
- Ignores individuality of needs
- Herzberg’s Theory
- Two factors affected motivation
- Hygiene/maintenance factors (physical)
- Factors that meet basic needs
- Does not motivate but demotivates if not met
- Motivators (psychological)
- Achievement, recognition, responsibility, and advancement leads to higher satisfaction
- Democratic management style must be used
- Involves job enlargement, enrichment, empowerment (see below)
- Movement vs. motivation
- Movement – doing something because it needs to be done
- Based on extrinsic motivation
- Motivation – doing something because you want to
- Based on intrinsic motivation
- More important
- Individualism in terms of motivation
- Criticisms
- Does not apply to low-skill, low-wage jobs
- Some workers may not like the increased workload in job enrichment
- Adam’s Equity Theory
- Workers naturally compare their efforts/rewards to others in the workplace
- Employees should receive remuneration that reflects his efforts and competence
- Workers will be motivated if their remuneration is fair relative to others
- Inequality is by caused poor job analysis and evaluation
- Pink’s Theory
- States the importance of intrinsic motivation
- 3 factors:
- Autonomy
- Give employees control over when, how, and what they do and whom they do it with
- Mastery
- Sense of progress in work and ability
- Tasks must not be too hard or too easy to foster improvement without causing boredom or frustration
- Purpose
- Contributing to a greater cause
- Purpose and vision must be communicated
- Financial and non-financial motivation
- Theory X
- Extrinsic/financial motivation
- Managers believe that workers are lazy and must be supervised
- Theory Y
- Intrinsic/non-financial motivation
- Managers believe that workers are ambitious and enjoy their jobs
- Financial Motivation
- Wages
- Time-based
- Rate is based on worker’s experience and responsibilities
- Overtime rate for work in excess of contracted time
- Workers are rewarded for time not effort
- Piece rate
- Based on no. of items produced or sold in a given time
- Motivated to work/sell more
- Lack of financial security – pressure to sell
- Workers might sacrifice quality for quantity
- Salary
- Fixed annual rate paid on a monthly basis
- Time-rate payment
- Little incentive to work hard due to consistent pay
- Difficult to reward better workers
- Can be improved by using appraisals
- Commission
- Output based system (based on how much they sell/produce)
- Pays workers based on percentage of sales or output contributed rather than a fixed amount per unit like piece rate
- Similar advantages and disadvantages to piece rate
- Profit-related pay
- Pay linked to profits of the firm
- Strengthens employee loyalty
- Limits labor conflict (both managers and employees benefit from higher profits)
- May be too insignificant
- Performance related pay (PRP)
- Based on individual performance/ability to meet goals
- Various forms:
- Performance bonus
- Loyalty bonus
- Pay rise
- Gratuity – bonus for completing contract
- Satisfies Equity Theory
- Problems of bias or how to quantify performance
- Targets may be too unrealistic
- Employee share ownership schemes
- Giving shares for free or at a discount
- Usually only given to senior management
- Impractical for most companies
- Fringe benefits (perks)
- Meets employee’s safety needs (Maslow) at a cost
- Includes medical insurance, bonus schemes, company car, subsidised meals, discounts
- Non-financial motivation
- Job enlargement
- Horizontal expansion by increasing scope of work required
- Enhances employee pride in work, feeling of responsibility
- May lower productivity or quality because of higher workload
- Job enrichment
- Provides employee with more complex and fulfilling tasks
- Adds sense of control, pride, and achievement
- Job rotation
- Shifting of cross trained workers to other tasks
- Allows understanding of different operating areas of business
- Can reduce fatigue, since new tasks are assigned
- Employee empowerment
- Employees are delegated tasks assigned to managers
- Increases employee motivation and productivity
- Managers must share:
- Decision-making power
- Rewards (based on organizational performance)
- Knowledge/expertise needed to enhance performance
- Employees must be highly skilled, motivated, and competent
- Managers are ultimately still liable for whatever they delegate
- Teamworking
- Staff work together on a task
- Reduce boredom, build sense of belonging, greater flexibility
- Adair Model
- 3 parts or effective teams
- Tasks – must engage whole group
- Team – must work collectively
- Individual – needs of the individual are met
- Other forms of non-financial motivation
- Recognition and praise
- Working environment
- Delegation
- Worker participation