Motivation in Theory & Practice (Edexcel A Level Business)

The Importance of Employee Motivation

• Motivation refers to the inner desire or willingness that propels a person to take action and achieve a specific goal or outcome

  • Motivation can be intrinsic, coming from within a person (values, beliefs etc)

  • Motivation can be extrinsic, coming from external factors (rewards or punishments)

• Motivation plays a critical role in a business's success and can have a significant impact on productivity, reliability and loyalty of the workers, and labour turnover rates

1. The impact of motivation on productivity

• Motivated employees are more productive and efficient, as they are more likely to be engaged in their work and take initiative to meet or exceed their goals

• They will generate higher levels of output and quality

• Increased productivity results in higher profits for the business

2. The impact of motivation on the reliability of workers

• Motivated employees are more likely to be reliable and dependable

• They take pride in their job, show up on time, meet deadlines, and take fewer sick days

• This leads to increased trust between the business and its employees and higher productivity

3. The impact of motivation on turnover rates

• Motivated employees are more likely to stay with the company long-term, which reduces the turnover rate

• Lower turnover rates reduce the need for costly recruitment and training

Motivation Theories: Taylor's Scientific Management

• Developed by Frederick Winslow Taylor in the early 20th century

• It focuses on breaking down complex tasks into simpler ones, standardising work processes, and providing workers with clear instructions and training to achieve maximum efficiency

• Many manufacturing businesses use Taylor's principles to structure their staff benefits, e.g. piece rate pay

  • Production lines involving human labour are often set up based on these principles

Taylor's method starts with a scientific analysis of what is involved in a job and then breaks it down into parts for which employees can be trained 

1. Study and analyse the work process

• Carefully analyse each step of the work process

• Break down complex tasks into simpler ones and identify the most efficient and effective way to perform each task

2. Standardise the work process

• This involves creating detailed procedures and instructions for each task so that workers can follow these procedures consistently

3. Select and train the workers

• Workers should be carefully selected based on their skills and abilities

• Train workers to perform their tasks efficiently and effectively

  • This training includes both technical skills and the proper attitudes and behaviours required to be successful (e.g. patience in a repetitive task)

4. Provide incentives for performance

• Scientific management emphasises the use of incentives to motivate workers

  • This may include bonuses or piece-rate pay

Ways in which Businesses use Taylor's Scientific Management

Motivation Theories: Mayo's Human Relations Theory

• Mayo's Human Relations Theory was developed by Elton Mayo in the 1930s

• It focuses on the importance of social factors in the workplace

  • These include factors such as communication, motivation, and job satisfaction

• Mayo suggests that the key to improving productivity and job satisfaction lies in understanding and improving the relationships between workers, supervisors, and management

Ways in which Businesses use Mayo's Human Relations Theory

Motivation Theories: Maslow's Hierarchy of Needs

• Maslow's Hierarchy of Needs is a theory of human motivation that outlines five tiers of human needs that must be met for individuals to reach their full potential

Maslow's Hierarchy of Needs

Maslow's Hierarchy of Needs applied to business

• Physiological Needs

  • Businesses can provide necessities for their employees

  • E.g. comfortable work environment, access to clean water and food, and adequate rest breaks

• Safety Needs

  • Businesses can provide job security, fair pay, benefits, and safe working conditions for their employees

• Love and Belonging Needs

  • Businesses can encourage teamwork and generate a sense of community within the workplace

• Esteem Needs

  • Businesses can provide recognition for employees' accomplishments and provide a positive work culture that values individual contributions

• Self-Actualisation Needs

  • Businesses can help employees achieve this need by offering opportunities for employees to pursue their passions and interests,

  • E.g. Barclay's was known for supporting elite sportspeople by allowing them time off work in the day to continue their training (the focus was on getting the job done, not having to be in at a certain time)

The Advantages & Disadvantages to Business of Applying Maslow's Hierarchy

Motivation Theories: Herzberg's Two Factor Theory

• Herzberg's theory suggests that there are two types of factors that affect employee motivation and job satisfaction

  • Hygiene factors are elements that do not necessarily lead to job satisfaction, but their absence can cause dissatisfaction, which decreases motivation, e.g poor teamwork in the workplace

  • Motivators are elements that lead to job satisfaction and motivation, e.g. increased responsibility

An explanation of how the lack of hygiene factors causes dissatisfaction while addressing the motivators increases satisfaction. Increased satisfaction leads to increased productivity and profitability

How businesses can use hygiene factors to decrease dissatisfaction

• Pay fair wages and salaries

  • If an employee is not paid a fair wage for their work, they may become dissatisfied and demotivated

• Offer excellent working conditions

  • If the workplace is dirty, unsafe, or uncomfortable, employees may become dissatisfied and demotivated

  • E.g. Google has a reputation for providing amazing workplaces, which include gourmet restaurants, laundry services and dog care

• Offer employment contracts which provide job security

  • If employees feel that their job is not secure, they may become anxious and demotivated and contribute less to the business goals

How businesses can use motivating factors to increase satisfaction

• Build a recognition and rewards culture

  • When employees are recognised and rewarded for their hard work, they are motivated to continue performing well

  • E.g. salesperson of the month award

• Offer opportunities for growth and development

  • When employees are given opportunities to learn new skills and advance in their careers, they are motivated to continue working for the company

  • E.g. set a 3 year growth plan which helps the worker move towards a n advanced role

• Provide challenging work which requires problem solving

  • When employees are given challenging work that allows them to use their skills and abilities, they are motivated to continue performing well

Financial Incentives to Improve Performance

• Financial incentives are rewards or payments given to employees in return for their labour or improved performance

Types of Financial Incentives & Their Links to Motivational Theory

Non-financial Incentives to Improve Performance

• Non-financial incentives are rewards or motivators not directly related to money

• These incentives are usually intangible and include methods that lead to recognition, praise, job satisfaction, and work-life balance

Types of Non-financial Incentives & Their Links to Motivational Theory