People - Motivation

Motivation

Incentives for employees to go to work everyday.

Financial Incentives

Monetary rewards or benefits to encourage behaviors or performance, sales bonuses and share schemes.

Sales Bonuses

Payments in cash if KPI’s are achieved.

Share Schemes

Employees are given shares in the business as rewards.

Non-financial Incentives

Rewards and recognition that go beyond monetary compensation, focusing on career development, work-life balance and employee well-being.

Skill Improvement Training

Giving employees extra training to support their personal goals.

Recognition and Reward

Publicly acknowledging good performance through rewards such as employee of the month, at staff meetings, in newsletters, etc.

Penalties for Employees

Punishment for poor performance including warning, suspension, loss of benefits, etc.

Motivational Theories

A framework to understand what motivates people. Maslow’s Hierarchy of Needs, Herzberg’s Motivation-Hygiene theory, Vroom’s Expectancy theory, Adams’ Equity theory.

Maslow’s Hierarchy of Needs

A theory developed by Abraham Maslow that states that humans have an ordered approach to meeting their needs. Created a hierarchy - physiological, safety, social, self-esteem, self-actualisation - each person requires the needs lowest in the hierarchy before moving to the next level. Business owners and managers take considerations into account when planning activities, practices and work.

Herzberg’s Two Factor Theory

A theory developed by Frederick Herzberg who expanded Maslow’s hierarchy and differentiated the factors required for employees to be satisfied at work (hygiene) and factors that motivate employees (motivators). Stated that hygiene factors, including fair pay and relationships, must be addressed in order for employees to be motivated at work and achieve their potential, for example, promotions and meaningful work. Business owners and managers should ensure that long-term motivations are emphasised in human resource plans.

Vroom’s Expectancy Theory

A theory developed by Victor Vroom who found that employees want to maximise their happiness at work and minimse their ‘pain’. States that individuals choose their behaviours based on the expected outcomes and is composed of three key elements: valence, instrumentality and expectancy. Business owners or managers must shape how the motivation and performance are managed within an organisation to design more effective reward systems, clarify performance expectations and foster a work environment where employees believe their efforts lead to desired outcomes.

Valence

Measures the value a person attaches to a given rewards. Can be extrinsic (money, promotion, time-off) or intrinsic (sense of achievement).

Expectancy

Measures the person’s confidence in being able to get the results expected. Purely subjective measure of individuals belief in themselves.

Instrumentality

Measures the extent to which an individual believes that the manager/organisation will deliver rewards that were promised.

Adams’s Equity Theory

A theory developed by John Adams who built on Maslow’s and Herzberg’s theories to consider the influence of comparisons with other employee’s motivation. States that an employee will compare their inputs at the workplace with the inputs of their workmates and expect to achieve similar outcomes, they will be motivated by what they perceive is equitable treatment in comparison to their workplace. Business owners and managers should ensure that employee inputs are fairly rewarded by equitable outcomes for all in the workplace and need to be aware of staff who feel they are not being recognised in the workplace.