Financial methods of motivation
It is the role of the manager to ensure that employees within the organisation are motivated. There are several methods, financial and non-financial a manager can use to achieve this.
Time rate - employees are paid for the exact time that they work at a set amount per hour or per day. The more hours or days an employee works the larger wage they will receive.
Piece-rate - employees are paid per item they produce. The more productive an employee is the higher the wage they will receive. This will encourage people to work harder and produce more.
Commission - employees are paid a percentage of the value of their sales. Employees are encouraged to sell more as the higher their sales the more commission they will receive.
Performance-related pay - employees who reach a certain standard or achieve a certain target will be given a pay rise.
Bonus - employees are paid an additional amount on top of their basic salary for achieving targets set by the organisation.
Fair salary - a fixed amount of money paid to an employee each year usually in 12 equal instalments. This salary needs to be representative of the work the employee is completing.
Profit sharing - employees will receive a share or percentage of the profit made by the organisation. This will motivate employees to work productively because the more profitable the organisation is the more money the employee will receive.