Non-Financial Methods of Motivation (CIE IGCSE Business)

Revision Note

Danielle Maguire

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Non -financial Methods of Motivation

  • Non-financial incentives are rewards that are not directly related to money
  • These incentives may be intangible and include methods that lead to recognition, praise, job satisfaction or improved work-life balance
     

Types of Non-financial Incentives


Incentive Type


Explanation

Autonomy

  • Involves giving staff the authority and resources to make decisions and take action without first receiving management approval
    • Increases staff sense of ownership and responsibility leading to improved productivity

Job enrichment

  • Involves adding more challenging or meaningful tasks to a job
  •  Staff feel more motivated and engaged, leading to improved productivity

Job rotation

  • Involves moving staff between broadly similar but varied roles in the business
  • Exposes staff to new challenges and experiences which can increase motivation, understanding and skill

Teamworking

  • Teamwork may involve workers completing tasks together
  • Teamwork can increase motivation in the workplace as each member of staff has a role and a shared goal

Training

  • Involves staff improving or learning new skills and abilities
  • This can make employees feel valued, more productive and likely to remain with the business

Promotion Opportunities

  • Employees offered promotion will feel recognised, have a higher status and will be given more challenging tasks/responsibilities to perform 
  • These benefits are closely linked to the views of both Maslow and Herzberg

Recommending a Method of Motivation

  • When recommending a method of motivation for employees in a business, managers must recognise that individuals are motivated in different ways
  • The following should also be considered
    • The context of the business
      • What type of business it it? E.g. manufacturing or sales 
      • The budget available 
      • How many workers does the organisation have?
      • Does the business currently use any methods of motivation?
      • What is the nature of the work of employees on a daily basis?

    • The balance of the compensation package
      • Ideally it should include both financial and non-financial 
      • It should be adaptable and reflect the changing needs of staff
          

Recommending a Method of Motivation

Business Scenario

Key Considerations

Recommendations

  • Workers in chocolate biscuit factory work long shifts on a busy assembly line. They are experiencing low morale 

  • Work is often repetitive and boring
  • Workers may feel that they are not gaining new skills in their role

  • Job rotation may allow workers to experience different elements of the production line which could increase motivation and skills

  • Some members of the sales department of a major perfume brand are feeling demotivated. They discovered that they have a lower base salary than their competitors

  • This is a competitive industry for employers who want to attract and retain the best marketing talent
  • The business will not want to lose the best employees to competitors
  • Increasing salaries may be costly

  • The business should increase salaries in line with those of its competitors in order to retain staff
  • Alternatively, workers may be motivated by a higher bonus for hitting their sales targets

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Danielle Maguire

Author: Danielle Maguire

Danielle is an experienced Business and Economics teacher who has taught GCSE, A-Level, BTEC and IB for 15 years. Danielle's career has taken her from across various parts of the UK including Liverpool and Yorkshire, along with teaching at a renowned international school in Dubai for 3 years. Danielle loves to engage students with real life examples and creative resources which allow students to put topics in a context they understand.