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BusinessBalls - http://www.businessballs.com/maslow.htm
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will want to do well at work. They believe that the satisfaction of doing a good job is a strong
motivation. Many people interpret Theory Y as a positive set of beliefs about workers6.
Having learnt about two of the main theories of motivation, let us review the various methods of
motivating employees. Broadly categorizing, there are two main methods of motivating employees by
providing incentives - Financial Incentives & Non-Financial Incentives.
The following chart displays the various methods of motivating employees: -
Financial Incentives
Although some theorists like Herzberg believe that money is not a positive motivator (although lack of
it can de-motivate), pay systems are designed to motivate employees. Theory X approach, in particular,
argues that workers respond to financial rewards7.
Time rates are used when employees are paid for the amount of time they spend at work. Time worked
over this standard is known as overtime. Overtime is generally paid at a higher rate than the standard
time-rate reflecting the element of sacrifice by an employee.
Piece-rate pay gives a payment for each item produced it is therefore the easiest way for a business
to ensure that employees are paid for the amount of work they do. Piece-rate pay encourages effort,
but, it is argued, often at the expense of quality.
Commission is a payment made to employees based on the value of sales achieved. It can form all or
part of a pay package. Commission is, therefore, a form of incentive pay. The main advantage of
commission from an employees point-of-view is that it enables high performing sales people to earn
huge amounts. The main advantage to the employer is that the payroll cost is related to the value of
business achieved rather than just the amount produced.
Performance-related pay is a financial reward to employees whose work is either considered to have
reached a required standard, and/or is above average. Performance related pay is generally used where
employee performance cannot be appropriately measured in terms of output produced or sales
achieved. Performance-related pay has grown widely in recent years particularly in the public sector.
This is part of a movement towards rewarding individual performance which reflects individual
circumstances.
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Employee Share Ownership is an increasingly popular part of pay packages particularly for
businesses whose shares are traded on a stock exchange. Offering shares is a more complicated kind of
reward than paying employees cash. However, it can be much more effective in linking the objectives
of the business and the objectives of employees.
Pension is an arrangement to provide people with an income when they are no longer earning a regular
income from employment. The terms retirement plan or superannuation refer to a pension granted upon
retirement. This is an effective method is ensuring a long lasting relationship with the employees.
Non-Financial Incentives
It may be perceived that money is an effective motivator in your business although it may have some
effect in the short term: employees may also see factors aside from money as prime motivators,
especially for Theory Y employees8.
Job Enlargement- This involves expanding the job of an employee that has them doing more work of
a similar nature to what they already do. This may be allowing them to complete the whole task instead
of just part of it. This process ideally allows them to complete the whole process, thus increasing their
responsibility.
Job Rotation- This involves allowing employees to change the nature of their job periodically. The
purpose of this is that the employee is satisfied by reduced boredom and also motivated by the
achievement of increased skills. The business owner gains from cross-training and the potential for
feed-back and improvement ideas.
Job Enrichment- An Entrepreneur can enrich an employee's job by expanding their tasks to give a
higher level of responsibility in the nature of work they do. This will not only expand their skills, but
also give them an increased challenge (responsibility).
Apart from all these techniques, what also must be noted that the primary objective of an Entrepreneur
must be to instill confidence and enthusiasm within his employees. Since, the Entrepreneur is starting
with a new venture; the employees will be highly skeptical regarding the success of the startup and
would be concerned about their own growth. Hence, the Entrepreneur should take few small measures
that would instill confidence and boost employee morale.
Demonstrate enthusiasm - In many ways, an Entrepreneur sets the tone for his employees. If he is not
motivated, he can very well expect his employees also to be unmotivated.
Interface with employees - It's important that an Entrepreneur interacts directly with his employees on
a regular basis. A prolonged pattern of distance between him and his employees creates the perception
of a cold, uncaring autocrat rather than the caring, compassionate leader.
Celebrate accomplishments - Take time out to celebrate accomplishments as a company. When
you've asked your employees to go the extra mile to complete a major project, it's not unreasonable for
them to expect to celebrate a little bit.
Treat employees with kindness - Kindness and understanding on the Entrepreneur's part will go a
long way toward motivating your employees to help you achieve your goals as an entrepreneur. As
much as possible, try to give your employees the space they need to care for their families.
Listen - Above all else, listen to what your employees' have to say and let them know how much you
value their input. The loyalty it inspires in your employees will make it well worth your while.
BizHelp - http://www.bizhelp24.com/employment-and-personal-development/motivation-in-the-workplace-8.html
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Thus, it can be concluded that motivating employees is key to success and every Entrepreneur should
have the requisite skills and knowledge inorder to motivate the employees to influence them to work to
their fullest possible potential.
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