Financial Methods of Motivation (Cambridge (CIE) IGCSE Business)
Revision Note
Written by: Danielle Maguire
Reviewed by: Steve Vorster
Financial Methods of Motivation
Financial incentives are rewards or payments given to employees in return for their labour - or improved performance
The different theories of human motivation offer varying perspectives on the role of money in motivating staff
Herzberg's Two Factor Theory says that money is not generally a motivator, but the lack of it leads to dissatisfaction
Maslow's Hierarchy of Needs argues that people move through levels of needs that motivate them - their lower-order needs are closely linked to financial rewards whilst higher-order needs are rarely linked to pay
Physiological and safety needs can be partially met by providing adequate pay
Love and Belonging needs are often met by encouraging aspects such as team working
Diagram showing financial methods of motivation
An Explanation of the Financial Incentives Available to Businesses
Incentive Type | Explanation |
---|---|
Remuneration |
|
Commission |
|
Bonus |
|
Promotion |
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Fringe Benefits |
|
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