EDEXCEL GCSE BUSINESS · PAPER 2
Motivation
Making human resource decisions · Lesson 4 of 4
Teacher copy - includes the notes for whoever is teaching from it.
Last Lesson
Answer from memory before the answers appear.
1. What is induction training?
Training that introduces new employees to the business.
2. Give one advantage of on-the-job training.
Cheap, practical, and staff keep working.
3. Give one disadvantage of off-the-job training.
Expensive, staff are not working, or qualified staff may leave.
4. What is a performance review?
A meeting to discuss progress against targets.
Learning Objectives
1. Explain the importance of motivation in the workplace.
2. Explain financial methods of motivation.
3. Explain non-financial methods of motivation.
4. Weigh up which methods suit different businesses and staff.
Why Motivation Matters
Motivation is the desire to work hard and do a job well.
▸ Productivity. Motivated staff work harder and produce more.
▸ Retention. Motivated staff are less likely to leave, cutting the cost of recruiting and training replacements.
▸ Quality and service. Staff who care about their work make fewer mistakes and treat customers better.
▸ Attracting staff. A business known as a good place to work finds it easier to recruit.
PART ONE
Financial Methods
Motivating staff with money and rewards.
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. |
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. |
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. |
Profit sharing Staff receive a share of the business's profit, so they gain when the business does well. |
Financial Methods: For and Against
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ADVANTAGES |
DISADVANTAGES |
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▸ 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. |
▸ 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. |
PART TWO
Non-financial Methods
Motivating staff without 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. |
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. |
Praise and recognition Thanking staff and recognising good work - from a simple thank you to employee of the month. |
A Simple Thank You
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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
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ADVANTAGES |
DISADVANTAGES |
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▸ Cheap, or free. ▸ Makes work more interesting and less boring. ▸ Staff feel trusted and valued. ▸ Builds skills and prepares staff for promotion. |
▸ 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
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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. |
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Partners What John Lewis calls its employee-owners |
Bonus The same percentage of salary for every Partner |
Key Terms
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Motivation The desire to work hard and do a job well. |
Remuneration The pay an employee receives. |
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Bonus An extra payment for reaching a target or a good year. |
Commission A percentage of the value of sales paid to sales staff. |
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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. |
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Job rotation Moving staff between different tasks. |
Job enrichment Giving staff more challenging work and responsibility. |
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Autonomy The freedom for staff to decide how to do their work. |
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Your Task: Motivate the Team
12 minutes
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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.
Note: The key skill is matching the method to the job and the people, not listing methods.
Can I...?
☐ Explain why motivation matters.
☐ Explain remuneration, bonus and commission.
☐ Explain promotion and fringe benefits.
☐ Explain profit sharing.
☐ Explain job rotation.
☐ Explain job enrichment.
☐ Explain autonomy and praise.
☐ Choose methods that suit different staff.
Summary
✓ 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.
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EXAM FOCUS Explain one benefit to a business of using non-financial methods to motivate its staff. (3 marks) Match the method to the staff in the question - commission suits sales staff, but not a nurse or a warehouse packer. |
Exam Practice: Motivation
Answer all questions. Use the context of the business in the question where one is given. · 25 minutes
▸ Question 1 · 1 mark · Define. Define the term 'commission'.
▸ Question 2 · 1 mark · State. State one non-financial method of motivation.
▸ Question 3 · 3 marks · Explain. Explain one benefit to a business of using non-financial methods to motivate its staff.
▸ Question 4 · 12 marks · Evaluate. Evaluate whether CallDirect Ltd should use financial or non-financial methods to motivate its staff.
Question 1 · 1 mark · Define
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“Define the term 'commission'.” |
HOW TO ANSWER IT Command word: Define. Worth 1 mark, so plan before writing.
Question 1 · mark scheme
1 mark available. Award a mark for each point made.
▸ 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.
Question 2 · 1 mark · State
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“State one non-financial method of motivation.” |
HOW TO ANSWER IT Command word: State. Worth 1 mark, so plan before writing.
Question 2 · mark scheme
1 mark available. Award a mark for each point made.
▸ Any one of: job rotation; job enrichment; autonomy; praise / recognition. 1 mark
▸ Model answer. Job enrichment.
Question 3 · 3 marks · Explain
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“Explain one benefit to a business of using non-financial methods to motivate its staff.” |
HOW TO ANSWER IT Command word: Explain. Worth 3 marks, so plan before writing.
Question 3 · mark scheme
3 marks available. Award a mark for each point made.
▸ 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).
Question 4 · 12 marks · Evaluate
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“Evaluate whether CallDirect Ltd should use financial or non-financial methods to motivate its staff.” — 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… |
HOW TO ANSWER IT Command word: Evaluate. Worth 12 marks, so plan before writing.
Question 4 · mark scheme
12 marks available. Award a mark for each point made.
▸ 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.