financial methods of motivation

-/+ = salary scheme

• (set income based on job role and calculated as an annual fee)

• + = easily comparable- appropriate where nature of work is not time specific or hard to quantify

• - = not linked to performance, little incentive to increase productivity

-/+ commission

• (bonus paid based on achieving sales target)

• + = appropriate for sales jobs, incentive to increase sales revenue for the business

• - = focus taken away from other areas of the job like customer service, little attention to aspects of job that dont directly impact commission earned

-/+ piece rate

• (payment based on number of units of output produced)

• + = appropriate for production jobs, incentive to increase output (units)

• - = employees may ignore factors like quality

-/+ Performance Related Pay

• ( salary/ bonus scheme linked to job related targets)

• += links to pay measurable targets specific to nature of job, encourages review of employee performance

• - = can be expensive if large proportion of workforce achieves targets, some areas of performance can also be very subjective, difficult to ensure PRP is fair across organisation

-/+ Profit sharing/bonus scheme

• (distributing percentage of profit across workforce)

• + = reward linked to overall success of company

• - = depends on profitability of the business

what experts say abt financial methods of motivation

• maslow= satisfy basic needs, may boost self-esteem, not satisfy higher order needs

• herzberg= hygiene factors before only prevent dissatisfaction

• taylor= rational man is driven by this

• mayo= irrelevant if social needs aren’t met