Non-Financial Methods of Motivation (Cambridge (CIE) O Level Business Studies)

Revision Note

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

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

Last updated: 23 October 2024

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