In employment, a reward given is to a worker other than extra pay. Many non-financial rewards are perks or fringe benefits such as company cars, free private medical care, and free pension entitlement.
Job satisfaction is the enjoyment derived from the feeling that you have done a good job. There are other ways that people can be motivated to be more committed to their job and work more effectively – they need to get enjoyment from doing their job.
Here are several ways in which a business can increase the job satisfaction of its employees:
Job enrichment
Job enrichment means giving workers more interesting, challenging and complex tasks. Workers should also be given the opportunity to complete a whole unit of work rather than individual separate tasks.
Job enlargement
Job enlargement means simply giving workers more tasks to do of a similar nature or complexity. This will reduce the monotony or repetition involved in a persons work but over time this will not increase a person’s satisfaction or sense of achievement.
Teamworking
Teamworking is where employees work in groups or teams. This can meet a worker’s social needs as a person can more easily build friendships and feel a sense of belonging to a unit or group and hopefully to the business as a whole. This applies in much the same way as being a member of a sports team or any other team representing a school or college.
Empowerment
Empowerment is like delegation. It is when power or authority is given to employees so they can make their own decisions regarding their working life. For instance workers have control over how to use their time and deciding the priority of tasks that need to be done. They are encouraged to consider problems they face and come up with some solutions.
Financial and Non-Financial Rewards
Thursday, 10 February 2011
Subscribe to:
Posts (Atom)
Topics
4.1.2 Methods of financial rewards
4.1.3 Non-financial rewards
4.1.3 Non-financial rewards
Topic: Motivating employees - financial rewards
There are a variety of payment systems that a business could use to motivate its employees.
Wages and Salaries
Wages are normally paid per hour worked and workers receive money at the end of the week. Overtime is paid for any additional hours worked during the week. However salaries are annual (based on a year’s work) and are paid at the end of each month.
Advantage:
Simple and easy to use for businesses
Disadvantage:
Workers may resent being paid the same as a colleague who they feel is not so productive
Time-rate
Time rates are used when employees are paid for the amount of time they spend at work.
Advantages:
Time rates are simple for a business to calculate and administer
It is easy to understand from an employee’s perspective
Disadvantages:
Does little to encourage greater productivity – there is no incentive to achieve greater output
Time-rate payroll costs have a tendency to creep upwards (e.g. due to inflation-related pay rises and employee promotion
Piece-rate
Piece-rate is paying a worker per item they produce in a certain period of time. It was recommended by the motivation theorist Taylor and had close links with working on production lines.
Advantages:
Increases speed of work and therefore productivity
Often workers not entitled to sick pay or holiday pay which reduces cost
Disadvantages:
Workers do not concentrate on quality of work as emphasis on speed of work
Workers may ignore company rules, such as Health and safety issues, in they try to speed up output
Salaries are usually a standard rate, i.e. a set amount of money, but workers may get more money if the following rewards are added to the basic salary:
Performance-related pay
This is paid to those employees who meet certain targets. The targets are often evaluated and reviewed in regular appraisals with managers. It is system that is being increasingly used in businesses in the UK.
Advantages:
Easier for managers to monitor and control their staff
Reduces the amount of time spent on industrial relations (negotiations with trade unions)
Disadvantages:
It can be difficult to measure the performance of employees in service based industries
It does not promote teamwork and can lead to workers feeling they are treated unfairly if colleagues are awarded more
Profit sharing
This is a system whereby employees receive a proportion of the company’s profits. This means staffs are in the same position as shareholders.
Advantages:
Brings employees together to work towards a common goal. Their sole aim will be the success of the company.
Increases commitment to the organisation among the employees
Disadvantages:
The salaries of the individual employees go up equally, not on the basis of merit or promotion
Workers may feel that however hard they work it will not have a noticeable effect on the company’s profit level, so therefore no incentive
Share ownership
This is a common incentive for senior managers who are given shares in the company rather than a straightforward bonus or membership of a profit sharing scheme. It means that some staffs are also shareholders.
Advantages:
Employees will work harder as they have a stake in the company, just like a shareholder has
Disadvantages:
Often only available to senior managers so can cause resentment among other staff.
Bonus
A lump sum paid to workers when they have worked well. It can be paid at the end of the year or at intervals during the year.
Wages and Salaries
Wages are normally paid per hour worked and workers receive money at the end of the week. Overtime is paid for any additional hours worked during the week. However salaries are annual (based on a year’s work) and are paid at the end of each month.
Advantage:
Simple and easy to use for businesses
Disadvantage:
Workers may resent being paid the same as a colleague who they feel is not so productive
Time-rate
Time rates are used when employees are paid for the amount of time they spend at work.
Advantages:
Time rates are simple for a business to calculate and administer
It is easy to understand from an employee’s perspective
Disadvantages:
Does little to encourage greater productivity – there is no incentive to achieve greater output
Time-rate payroll costs have a tendency to creep upwards (e.g. due to inflation-related pay rises and employee promotion
Piece-rate
Piece-rate is paying a worker per item they produce in a certain period of time. It was recommended by the motivation theorist Taylor and had close links with working on production lines.
Advantages:
Increases speed of work and therefore productivity
Often workers not entitled to sick pay or holiday pay which reduces cost
Disadvantages:
Workers do not concentrate on quality of work as emphasis on speed of work
Workers may ignore company rules, such as Health and safety issues, in they try to speed up output
Salaries are usually a standard rate, i.e. a set amount of money, but workers may get more money if the following rewards are added to the basic salary:
Performance-related pay
This is paid to those employees who meet certain targets. The targets are often evaluated and reviewed in regular appraisals with managers. It is system that is being increasingly used in businesses in the UK.
Advantages:
Easier for managers to monitor and control their staff
Reduces the amount of time spent on industrial relations (negotiations with trade unions)
Disadvantages:
It can be difficult to measure the performance of employees in service based industries
It does not promote teamwork and can lead to workers feeling they are treated unfairly if colleagues are awarded more
Profit sharing
This is a system whereby employees receive a proportion of the company’s profits. This means staffs are in the same position as shareholders.
Advantages:
Brings employees together to work towards a common goal. Their sole aim will be the success of the company.
Increases commitment to the organisation among the employees
Disadvantages:
The salaries of the individual employees go up equally, not on the basis of merit or promotion
Workers may feel that however hard they work it will not have a noticeable effect on the company’s profit level, so therefore no incentive
Share ownership
This is a common incentive for senior managers who are given shares in the company rather than a straightforward bonus or membership of a profit sharing scheme. It means that some staffs are also shareholders.
Advantages:
Employees will work harder as they have a stake in the company, just like a shareholder has
Disadvantages:
Often only available to senior managers so can cause resentment among other staff.
Bonus
A lump sum paid to workers when they have worked well. It can be paid at the end of the year or at intervals during the year.