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Financial and non-financial methods of motivation - Coggle Diagram
Financial and non-financial methods of motivation
Financial
Salary schemes- a set income based on the job role and calculated as an annual fee
Benefits:
easily comparable - appropriate where nature of work is not time specific or hard to quantify
Downsides:
not linked to performance
little incentive to increase productivity
commission - a bonus achieved after reaching a sales target
Benefits:
appropriate for sales jobs
incentive to increase sales revenue for the business
Downsides:
focus taken away from other areas of the job such as customer service
little attention to the aspects of job that do not directly impact commission earned
Piece rate - pay based on the units produced
Benefits:
appropriate for production jobs
incentive to increase output
Downsides:
employees may ignore factors such as quality
Performance related pay - A salary or bonus scheme based on job related targets.
Benefits:
links pay to measurable targets specific to the nature of the job
encourages review of employee performance
Downsides:
can be expensive if large proportion of workforce achieve their targets
difficult to ensure PRP is fair across the organisation
Bonus schemes - distributing a percentage of net profit to the workforce
Benefits:
reward linked to the overall success of the company
Downsides:
depends on the profitability of the business
Non- financial
Job design - designing the role, tasks and responsibilities in a way that maximises employee motivation
Benefits: improving job design can create new challenges and give employees autonomy over their work
Downsides: remedial/ monotonous tasks are still required in most jobs
there will always be aspects that employees don’t like
appraisal system - a system designed to review employee performance and recognise achievement - may be linked to PRP
benefits:
allows a business to recognise the achievements of employees and provides positive feedback when employees meet their targets
appraisal may create opportunities for promotion and meeting the needs of employees
Downsides:
time devoted to appraisal takes employees away from doing their actual jobs
team working - organising the workforce into teams in order to benefit from the social aspects of motivation
Benefits:
meets employees’ social needs and encourages a sense of belonging
helps employees develop a connection to the organisation through their colleagues
Downsides: individual performance is harder to identify in a team situation
ineffective workers may not be identified
employee recognition
Benefits: recognises achievement , encourages positive competition and boosts self-esteem
Downsides: only the best employees usually benefit