Financial and non-financial motivation in Organization - Chapter 2 - Part 3

There are many reasons why people work for an organization? It is undeniable that money, or other financial rewards, play a key role in motivating people in the workplace. It is widely accepted that poor or low pay acts as a de-motivator. Someone who feels undervalued or under-paid may soon leave to find better-paid employment.

There is a wide variety of ways in which a business can offer money (or “financial rewards”) as part of the “pay package”, including:

• Salaries: fixed amounts per month or year for performing a role; these are common for most managerial positions.
• Benefits: very common in businesses of all kinds; these include staff discounts, contributions to travel costs, staff uniforms etc.
• Time-rate pay: pay based on time worked; very common in small businesses where employees are paid per hour.
• Piece-rate pay: pay per item produced – becoming less common
•  Commission: payment based on the value of sales achieved.
•  performance-related pay: e.g. bonuses for achieving targets
• Shares: less common in small businesses, but popular in businesses whose shares are traded on stock markets
• Pensions: becoming less common and generous.  Small businesses tend not to offer pension benefits.

Most businesses recognize the need for non-financial methods of motivation. The main ones are described briefly below:

Job enlargement:  Job enlargement involves adding extra, similar, tasks to a job. In job enlargement, the job itself remains essentially unchanged.  However, by widening the range of tasks that need to be performed, hopefully the employee will experience less repetition and monotony. With job enlargement, the employee rarely needs to acquire new skills to carry out the additional task. A possible negative effect is that job enlargement can be viewed by employees as a requirement to carry out more work for the same pay.

Job rotation: Job rotation involves the movement of employees through a range of jobs in order to increase interest and motivation. Job rotation may offer the advantage of making it easier to cover for absent colleagues, but it may also reduce' productivity as workers are initially unfamiliar with a new task. Job rotation also often involves the need for extra training.

For example, an administrative employee might spend part of the week looking after the reception area of a business, dealing with customers and enquiries.  Some time might then be spent manning the company telephone switchboard and then inputting data onto a database.

Job enrichment: Job enrichment attempts to give employees greater responsibility by increasing the range and complexity of tasks they are asked to do and giving them the necessary authority. It motivates by giving employees the opportunity to use their abilities to the fullest.  Successful job enrichment almost always requires further investment in employee training.

Team working and empowerment: Empowerment involves giving people greater control over their working lives. Organizing the labor force into teams with a high degree of autonomy can achieve this. This means that employees plan their own work, take their own decisions and solve their own problems. Teams are set targets to achieve and may receive rewards for doing so. Empowered teams are an increasingly popular method of organizing employees at work.