Motivational Theories, Payment Methods, and Non-Financial Motivators (Ch. 11)

Motivation is the desire of workers to see a job done quickly and well:

By meeting their individual objectives, motivated workers drive companies to reach their own goals (MBO).

Motivation is a management issue: effective managers are able to align workers' individual objectives to the business goal while maintaining motivation levels high.

Highly motivated workers have positive impacts on a business productivity and efficiency. They are also more likely to be loyal (reduce turnover) to their companies and keen to make suggestions for improvement. Motivated workers work hard and seek for promotion.

On the other hand, low motivation can cause several problems for a business:

• Absenteeism and lateness is likely to be high;

• Poor performance regarding the quality of work, low levels of work, and even greater waste of materials is a common consequence of low motivation;

• Accidents are also prone to increase when the workforce is demotivated;

• Labor turnover is one of the biggest problems of low motivation: there are many hidden costs to labor turnover;

• Demotivated workers also have poor response rate to orders.

---

There are many reasons why people work, for example:

The never-ending search to satisfying human needs has lead to many theories regarding motivation. These theories attempt to explain the key factors that business managers should focus on to achieve a highly motivated workforce. These theories are:

• Taylor and Scientific Management

• Human Relations Theory (Mayo)

• Maslow and the Hierarchy of Human Needs

• Herzberg Two-Factors Theory

• McClelland - Motivational Needs Theory

• Vroom - Expectancy Theory

Apart from theories to try to explain what motivates workers to work, HR managers have a few tools (called motivators) that they use to motivate the workforce. Such motivators are divided into financial and non-financial motivators.

Financial Motivators:

• Time-Based Wage Rate; and Piece Rate

• Salary and Commission

• Bonus Payment and Performance-Related Pay (PRP)

• Profit Sharing and Share Ownership Schemes

• Fringe Benefits

Non-Financial Motivators:

• Job rotation, job enlargement, job enrichment, and job redesign

• Training and development and opportunities for promotion and increased status

Employee participation are also activities that can motivate workers:

• Teamworking, Empowerment; and Quality Circles

---

Homework:

• Data Response #3 Harvard Bicycles