Financial and non-financial motivation Lesson objective To understand how to motivate staff, both with and without financial reward

You may be asked to calculate piece rate Financial incentives Despite the varying theories on motivation it cannot be denied that money still plays a big part in motivating people Common methods include; Piece rate Commission Bonus Profit sharing (John Lewis) Performance related pay (PRP Video) You may be asked to calculate piece rate Try this; You are a 20 year old worker, paid weekly. You receive £2.50 for each widget you produce. In a particular week you worked 30 hours and produced 60 widgets. Does this work out above/below NMW?

Non-financial techniques Financial rewards have always been used but recently companies have found that; The chance to earn more might not be a motivator Financial incentive schemes are difficult to operate Individual reward schemes aren’t always effective, particularly if tasks are group tasks Other factors can be seen as more important by staff

Non-pay methods of motivation Delegation Consultation Empowerment Team working Flexible working Job enlargement Job enrichment Job rotation You are going to be given 4 pieces of paper You need to create a mind map for each non-pay method of motivation (1 on each side of the paper) Research each method and find out as much as you can about it (what it is, what it involves, how it motivates staff/ pros/cons etc.…). Add this information to your mind maps If you get stuck, move onto a different method – we will share answers as a class at the end – you can then fill in any gaps

Lets see what you came up with… Delegation Consultation Empowerment Team working Flexible working Job enlargement Job enrichment Job rotation What are they? What do they mean? How do they motivate staff?

Delegation This method involves allocating tasks to employees The manager or supervisor delegating needs to have the authority to delegate Advantages: Gives managers self confidence, empowers managers to make decisions and allocate tasks to the most appropriate member of staff Disadvantage; managers sometimes allocate tasks when overloaded with work Managers may not always choose the most suitable employee to delegate to Comedy video here

Consultation This involves giving employees a chance to be part of the decision making process Will involve employees in discussions with management on topics such as how to improve productivity, cut costs or problem solve The answer may be to introduce a quality circle to improve quality and cut costs. The introduction of this method of production will be smoother if employees are involved from the start and are part of the decision to introduce them Short video on quality circles here

Empowerment This method involves allowing employees more authority to delegate tasks to others This means that the person most suitable to make the decision gets the responsibility of taking it and can be held accountable Advantages are: Staff are recognised for their ability = trusted and given control over decisions = less frustrated with the business = increased productivity Disadvantages are; seen as cost cutting, a way of delayering, making management redundancies, makes managers insecure and has an associated cost of training Some see this as giving employees more to do for the same pay, so that managers can be made redundant

Team working This involves grouping employees to work in teams Advantages are; pooled talents, individuals can specialise, shared responsibility, ideas through brainstorming, more likely to take risks Disadvantages are; tensions can occur, not everyone gets along, teams suffer from too many meetings, a team is not the solution to every problem sometimes an individual approach would be better Life of Brian fun clip about meetings

Flexible working This involves offering a variety of working patterns so that employees can achieve a work life balance These may include; part-time, home working, term time only, job share and reduced hours Advantages are; less stress, equal opportunities as it can fit round child care; attracts talented people who might not otherwise be able to afford to work Disadvantage is hard to fit shifts and schedules to suit everyone RBS is a great example of this, read an article here, video on how it worked during Olympics here

Job rotation This method involves moving employees from one task to another Most common on a production line or in a factory Advantage is you have multi-skilled employees who can carry out more than one task, its less boring and its an easy and cost effective way to motivate employees Disadvantages are you may be moving an employee from one boring job to another so it will not motivate them, uncertainty over job changes may be demotivating and there may be a loss of output as a worker is trained in a new skill Quick cartoon here

Job enrichment This involves giving the employee a greater variety of tasks with a higher level of responsibility. For example an employee may be responsible for; planning a task, checking quality, ordering materials, scheduling activities. The advantage of this kind of incentive can motivate employees by giving them a challenge The disadvantage is it may be beyond the skills of the individual or it may be seen as more work

Job enlargement This method involves giving an employee a variety of tasks at the same level of responsibility Advantages are; less boring, less repetitive, more efficient, maximum utility out of an employee Disadvantages; seen as “more of the same”, employee may just regard it as more to do Daniel Radcliffe tries his hand at doing a receptionist’s job – look how large her job role is video

Knowledge check 3 reasons why its important for a business to motivate staff? What helps to motivate people at work according to Mayo? What is meant by self-actualisation in Maslow’s hierarchy of needs? How might a business meet its workers’ esteem needs? What is the difference between piece rates and performance-related pay? How might profit sharing motivate workers? State two advantages of flexible working to employees? Give two advantages of delegation as a means of motivating staff? What is the difference between job enrichment and job enlargement? How might job rotation help to motivate staff? State two advantages of job enrichment to a business?

Key terms Bonus Performance Related Pay (PRP) Commission Piece rates Consultation Profit sharing Delegation Team working Empowerment Motivation theories Maslow, Mayo, Herzberg, Taylor Job enrichment Job enlargement Job rotation

Exam practice Complete the exam question you have been given on John Lewis Partnership It is a 14 mark question, so you shouldn’t spend any more than 14 minutes on it I am going to give you 17 minutes total (3 minutes reading and planning time)

Answer question 2a profit sharing Level Marks Suggested content 4 5-7 Evaluation not in context = 5 marks e.g. showing possible advantages and disadvantages of this method of motivating staff at JLP e.g. partners could be demotivated if the 15% decreases the following year e.g all partners receive the same % which might be perceived by some as unfair which may lead to resentment/disputes 3 Analysis e.g. relatively high profits will be an incentive to partners to be productive because they are being well rewarded 2 2-3 Application (context) e.g. 15% is awarded back to partners 1 Knowledge e.g. a proportion of profits are awarded to employees/shareholders

Answer question 2b non-financial incentives Level Marks Suggested content 4 5-7 Evaluation not in context = 5 marks Evaluation one sided but in context = 6 Evaluation both sides but in context = 7 e.g. partners could be demotivated if they do not purchase from JLP stores as this can restrict choice/can’t afford JLP products even at a discount e.g. partners might remain working for JLP because of the pension but prove to be disillusioned and so their productivity may fall 3 Analysis e.g. non-financial benefits will be an incentive to partners to be productive because they are being well rewarded 2 2-3 Application (context) e.g. holiday centres, pensions, discounts, etc. 1 Knowledge e.g. non monetary benefits/perks

Revision Video

Your target Is to create revision materials that could be used in your exams Think about all of the topics we have covered so far, how do they link to each other? You may want to start creating A3 mind maps showing the links – this is crucially important as remember in each exam you are expected to make links between not only topics but units (mine and Mrs Murphys) E.g. monetary motivation methods could link to what you have been learning with Mrs Murphy as they can directly impact on a companies profits A lot of the concepts we learnt about marketing link, e.g. if you don’t have the right form of promotion, you won’t be able to be competitive – this could be linked to market mapping – as if you don’t know what your competition are doing how can you compete with them in terms of promotion

Topics covered Topic 1 – meeting customer needs Mass and niche markets Dynamic markets Market research Market positioning Topic 3 – marketing mix Product/service design Branding and promotion Pricing strategies Marketing strategy – product life cycle/Boston matrix

Topics covered so far Topic 4 – managing people Approaches to staffing Recruitment, selection and training Organisational structure Motivation theories Financial and non financial incentives