Methods of Payment and Employee Motivation

Flashcards covering financial and non-financial methods of payment, including their definitions, benefits, problems, and associated theories, for reviewing employee motivation strategies.

What is the "Piece Rate" method of payment?

It is based on the number of items each worker produces, linked to labour productivity.

What is a benefit of the "Piece Rate" payment method?

It is likely to increase higher output.

What is a problem with the "Piece Rate" payment method?

Employees may focus more on quantity over quality.

Which management theory is the "Piece Rate" method linked to?

Taylor's theory.

How is "Commission" typically paid?

A sum of money paid upon completion of a task, usually for selling a certain amount, as a percentage of sales.

What is an advantage of using "Commission"?

It rewards employees for making more sales.

What is a disadvantage of "Commission" for a business?

It can be expensive as the business has to cover the cost when employees make sales.

Which of Maslow's needs can "Commission" help fulfill?

Self-esteem needs.

What defines a "Salary Scheme" payment system?

Employees are paid an annual salary, providing a basic, guaranteed rate.

What is a benefit of a "Salary Scheme" for employees?

It provides security and stability, allowing for consistent budgeting.

What is a drawback of "Salary Schemes" regarding employee motivation?

Employees may not work harder or more than needed since their pay is guaranteed.

Which of Maslow's needs does a "Salary Scheme" primarily address?

Safety security needs (job security).

What is "Performance Related Pay (PRP)"?

Rewarding employees based on an assessment of their personal performance.

Name a benefit of "PRP".

It can lead to higher productivity and help reduce labour turnover.

What is a problem associated with "PRP"?

It may cause conflict between employees due to constant competition.

Which management theories are associated with the motivation aspect of PRP?

Taylor's (individual output) and Maslow's (self-esteem needs).

Describe the "Profit Sharing" method.

A proportion of the business's profit is divided among its employees in the form of a bonus, on top of their salary.

What is an incentive for employees with "Profit Sharing"?

Employees will work hard because as the business succeeds, they will too, fostering cohesion.

What is a potential conflict arising from "Profit Sharing"?

It may cause conflict between shareholders and employees, as there are less profits to share as dividends.

Which of Maslow's needs does "Profit Sharing" encourage, especially through teamwork?

Social needs.

What is the definition of "Job Enlargement"?

Increasing the scope of the job, either by job rotation or job enrichment.

What is a general benefit of "Job Enlargement"?

Reduced monotony, making employees less likely to get bored.

Which theorist suggested rearranging work to include methods like job enlargement?

Herzberg.

What is involved in "Job Rotation"?

Switching jobs to provide greater variety at a similar level of challenge, allowing for skill development.

How does "Job Rotation" benefit employees?

It allows them to become knowledgeable and capable of doing multiple roles, improving motivation.

What is a problem with "Job Rotation"?

It can lead to reduced efficiency and increased training, and employees may want to specialize instead.

What is the aim of "Job Enrichment"?

Giving greater responsibility to employees and a chance to utilize their skills fully.

What is a key benefit of "Job Enrichment"?

Increased creativity, improved motivation, engagement, and enhanced job satisfaction.

What is a potential problem with "Job Enrichment"?

Employees may not want more responsibility or feel overworked. There might also be resistance to change.

What does "Empowering Employees" mean?

Giving employees the means by which they can exercise power over their working lives.

What is an advantage of "Empowering Employees"?

Reduced labour turnover and absenteeism, and improved communication.

What is a challenge related to "Empowering Employees"?

It can lead to increased risk in decision-making and higher training costs.

Which of Maslow's needs can "Empowering Employees" help address?

Maslow's esteem needs.

How is production organized when employees are "Working in Teams"?

Production is organized into large units of work where employees work together to meet shared objectives.

What is a benefit of "Working in Teams"?

All employees work towards the same goals, making it more motivating and allowing them to learn from each other.

What is a problem that can arise from "Working in Teams"?

Conflict may arise, and decision-making can take longer when consulting a large group.

Which management theorist emphasized the importance of social interaction for workers?

Mayo, as workers enjoy interacting and working together.

What are examples of "Flexible Working"?

Offering part-time contracts, working from home, or zero-hour contracts.

What is a benefit of "Flexible Working"?

Improved work-life balance for employees.