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Financial motivators

Pay

Pay can be given in two ways

Wages

Often paid every week, sometimes in cash or sometimes into a bank account. It is a common way of remuneration for manual workers those who work in factories and warehouse. It can be calculated in two ways:

  • Piece Rate: this is where the workers are paid depending on the quantity of products made. The more they make the more they get paid. This system of wages is followed where the output can be counted.
  • Time Rate: This payment by the hour. The longer you work the more you get paid. This system of wages is followed where the output cannot be measured.

Salaries

Salaries are paid monthly. It is common for office and administrative staff.

Additional methods of financial motivation:

Commission: It is often paid to sales staff. The certain percentage of commission is paid to sales person who exceed a certain level of sales. It motivates the sales staff to sell more.

Profit Sharing: Employees receive a share of the profits in addition to their basic salary.

Bonus: Extra amount is paid to workers once a year or at intervals during the year as an appreciation of their hard work.

Performance related pay: Employee pay is linked to their performance in work. An Appraisal is carried out for the employee and they get paid according to their appraisal.

Share ownership: As a gesture of appreciation for the hard work of the employees a business might offer stock options to its employees. This motivates them to worker even harder because they are also the owners of the company.

 

Fringe benfits

Fringe benefits are accurately named, as they are meant to be additional compensation for work performed or for services rendered. They are intended to be viewed differently than a base salary or regular wages, but like money are designed to provide incentive for the worker. Examples of fringe benefits include:

  • Free Children education
  • Discount on firms products
  • Health care facilities
  • Company vehicle
  • Free accommodation
  • Expense for clothing and food
  • Leave travel allowance
  • Pension facilities

Non-financial Motivators

Job rotation

Where workers switch from one job to another. So a worker is doing different jobs on different times. Usually these jobs are of the same type and do not involve any extra responsibility or skills. The idea is to give variety to the worker.

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Job enlargement

It involves increasing the scope of a job or broadening the task assigned to the worker. More variety in the job carried out by the worker leads to more job satisfaction.

Job enrichment

Where employees are given greater depth to their range of tasks rather than simply a wider variety of tasks of a similar level. They take part in decision making and problem solving. They help set targets and accept responsibility for the organisation and the quality of their own work.

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Team working

This is where a group of workers is given responsibility for a particular process, product or development. The group is free to decide the way the job is done and how to organise the job. Each worker is involved in decision making and is responsible for the results. This creates a sense of purpose and commitment to the job at hand thus leading to greater job satisfaction.

 

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