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Business · Making human resource decisions
Motivation
Motivated staff work harder, stay longer and serve customers better. Businesses motivate staff with financial methods - pay, bonuses, commission, promotion, fringe benefits and profit sharing - and non-financial methods such as job rotation, job enrichment, autonomy and praise.
Teacher resources
The teacher copies: slides with the questions built in, the answers, and anything else attached to this lesson for whoever is teaching it.
- Motivation - Teacher Slides.pptx Teacher The lesson slides with the teacher's notes on each slide, and every question and mark scheme built in. Built from the lesson script on 28 September 2026. View
- Motivation - Teacher Notes.docx Teacher The complete notes with the teacher's notes and every model answer in full. Built from the lesson script on 28 September 2026. View
Student handouts
The same files the students see, to print or hand out.
Last Lesson
Answer from memory before the answers appear.
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What is induction training?
Training that introduces new employees to the business.
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Give one advantage of on-the-job training.
Cheap, practical, and staff keep working.
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Give one disadvantage of off-the-job training.
Expensive, staff are not working, or qualified staff may leave.
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What is a performance review?
A meeting to discuss progress against targets.
Learning Objectives
- 1Explain the importance of motivation in the workplace.
- 2Explain financial methods of motivation.
- 3Explain non-financial methods of motivation.
- 4Weigh up which methods suit different businesses and staff.
Why Motivation Matters
Motivation is the desire to work hard and do a job well.
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Productivity
Motivated staff work harder and produce more.
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Retention
Motivated staff are less likely to leave, cutting the cost of recruiting and training replacements.
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Quality and service
Staff who care about their work make fewer mistakes and treat customers better.
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Attracting staff
A business known as a good place to work finds it easier to recruit.
Financial Methods of Motivation
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Remuneration
The pay an employee receives - a wage (paid by the hour) or a salary (a fixed yearly amount). Fair pay is the foundation.
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Bonus
An extra payment for reaching a target, or at the end of a successful year.
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Commission
A percentage of the value of each sale, paid to sales staff - the more they sell, the more they earn.
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Promotion
Moving to a more senior job, with more pay and responsibility.
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Fringe benefits
Extras on top of pay: a company car, staff discounts, a gym membership, private healthcare.
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Profit sharing
Staff receive a share of the business's profit, so they gain when the business does well.
Financial Methods: For and Against
Advantages
- Money matters to everyone and meets basic needs.
- Bonuses and commission link reward directly to effort.
- Profit sharing makes staff care about the whole business.
- Easy to understand and measure.
Disadvantages
- Expensive, raising the business's costs.
- The effect can wear off quickly once people get used to it.
- Commission can make staff pushy with customers.
- Not all staff are motivated mainly by money.
Non-financial Methods of Motivation
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Job rotation
Moving staff between different tasks or jobs, to reduce boredom and build a wider range of skills.
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Job enrichment
Giving staff more challenging, interesting work and more responsibility.
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Autonomy
Giving staff the freedom to decide how to do their work.
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Praise and recognition
Thanking staff and recognising good work - from a simple thank you to employee of the month.
A Simple Thank You
Being recognised in front of colleagues makes employees feel valued. Non-financial methods like praise are cheap, and for many people feeling appreciated matters as much as their pay.
Praise and recognition cost almost nothing but can motivate as much as money.
Non-financial Methods: For and Against
Advantages
- Cheap, or free.
- Makes work more interesting and less boring.
- Staff feel trusted and valued.
- Builds skills and prepares staff for promotion.
Disadvantages
- Some staff simply want more money.
- Job enrichment and autonomy need training and support.
- Not every job can be made more interesting.
- Some staff do not want extra responsibility.
Case study
John Lewis: A Share of the Profits
The John Lewis Partnership, which owns John Lewis and Waitrose, is owned by a trust on behalf of its employees, who are called "Partners". In good years, Partners share in the business's profit through an annual bonus, paid as the same percentage of salary to everyone from shop-floor staff to directors. In some years the bonus has been worth a large share of a Partner's salary; in years when the business made a loss, there has been no bonus at all. Profit sharing gives every employee a reason to care about the whole business's success.
Motivate the Team
Suggest one financial and one non-financial method of motivation for each: sales staff in a car showroom; warehouse workers doing the same packing task all day; experienced software developers; part-time students working weekends in a café. Explain why each suits those staff.
1. A financial method for each group.
2. A non-financial method for each group.
3. Why each suits them.
A good answer shows: Suitable methods for each group - commission for car sales, job rotation for packers, autonomy for developers, flexible hours and praise for students - each justified.
Can I...?
- 1Explain why motivation matters.
- 2Explain remuneration, bonus and commission.
- 3Explain promotion and fringe benefits.
- 4Explain profit sharing.
- 5Explain job rotation.
- 6Explain job enrichment.
- 7Explain autonomy and praise.
- 8Choose methods that suit different staff.
Summary & Exam Focus
- Motivated staff are more productive, stay longer and give better service.
- Financial methods: remuneration, bonus, commission, promotion, fringe benefits, profit sharing.
- Non-financial methods: job rotation, job enrichment, autonomy, praise.
- The best method depends on the business, the job and the people.
Exam focus
Explain one benefit to a business of using non-financial methods to motivate its staff. (3 marks) (3 marks)
Match the method to the staff in the question - commission suits sales staff, but not a nurse or a warehouse packer.
Key terms
The vocabulary this lesson expects you to use. Each one is linked from the first place it appears above.
- Motivation
- The desire to work hard and do a job well.
- Remuneration
- The pay an employee receives.
- Bonus
- An extra payment for reaching a target or a good year.
- Commission
- A percentage of the value of sales paid to sales staff.
- Fringe benefits
- Rewards on top of pay, such as a company car or staff discounts.
- Profit sharing
- Staff receiving a share of the business's profit.
- Job rotation
- Moving staff between different tasks.
- Job enrichment
- Giving staff more challenging work and responsibility.
- Autonomy
- The freedom for staff to decide how to do their work.
Questions and answers
8 questions set on this lesson, with the mark schemes and model answers open.
Define the term 'commission'.
Mark scheme — 1 mark available
- Percentage of sales paid to the salesperson — 1 mark
Model answer
A payment to sales staff calculated as a percentage of the value of the sales they make.
State one non-financial method of motivation.
Mark scheme — 1 mark available
- Any one of: job rotation; job enrichment; autonomy; praise / recognition — 1 mark
Model answer
Job enrichment.
Explain one benefit to a business of using non-financial methods to motivate its staff.
Mark scheme — 3 marks available
- A benefit identified, e.g. cheap / more interesting work / staff feel trusted / builds skills — 1 mark
- First linked point of explanation — 1 mark
- Second linked point of explanation — 1 mark
Model answer
They are cheap (1). Methods such as praise and job rotation cost little or nothing, unlike pay rises or bonuses (1). This means the business can improve staff motivation and productivity without significantly increasing its costs (1).
Source: CallDirect Ltd runs a customer contact centre with 150 staff who answer phone calls all day. Staff turnover is 45% a year, and a staff survey says the work is "boring and repetitive" and staff feel "nobody notices" good work. The average pay is similar to other contact centres nearby. Evaluate whether CallDirect Ltd should use financial or non-financial methods to motivate its staff.
Mark scheme — 12 marks available
- AO2 (Application, 4 marks): uses the context - 150 staff, 45% turnover, survey comments, pay similar to rivals — Level 1-4
- AO3a (Analysis, 4 marks): chains of reasoning about financial and non-financial methods — Level 1-4
- AO3b (Evaluation, 4 marks): a supported judgement, with "it depends on" — Level 1-4
Model answer
Financial methods, such as a bonus for customer satisfaction targets, would give staff a clear reward for good work, and could reduce the 45% turnover if CallDirect paid more than nearby contact centres. However, CallDirect's pay is already similar to its rivals', and the survey does not complain about pay. A bonus would also add significantly to costs across 150 staff. Non-financial methods tackle the problems staff actually describe. Job rotation - moving staff between calls, emails and live chat - could reduce the boredom of repetitive work, and regular praise and recognition would answer the complaint that "nobody notices" good work. These methods are cheap. On balance CallDirect should focus on non-financial methods, because the survey shows the causes of high turnover are boredom and lack of recognition, not pay. However, it depends on whether rotation is practical in a contact centre; a small bonus alongside recognition might work best of all.
An estate agent earns 1% of the price of every house they sell. This is:
Why: A percentage of the value of sales is commission.
A company car and staff discounts are examples of:
Why: Extras on top of pay are fringe benefits.
Giving an employee more challenging tasks and more responsibility is:
Why: Job enrichment makes work more challenging and gives more responsibility.
Why might a pay rise NOT motivate staff for long?
Why: People quickly get used to a higher wage, so its motivating effect wears off, especially if the real problem is boring work or lack of recognition.