How do businesses motivate their staff using both money and other rewards?
Motivation: why motivation matters, financial methods such as wages, salaries, bonuses and commission, and non-financial methods such as job enrichment, teamwork, fringe benefits and praise.
A CCEA GCSE Business Studies guide to motivation. Covers why motivation matters to a business, financial methods such as wages, salaries, bonuses, commission and piece rate, and non-financial methods such as job enrichment, teamwork, fringe benefits, praise and promotion, and how to choose methods that suit the business.
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What this dot point is asking
You need to explain why motivation matters to a business, the main financial methods of motivation, and the main non-financial methods, and to weigh which works best. CCEA examiners reward precise terms, developed reasons rather than lists, and the ability to recommend methods for the business in the stimulus. Motivation matters because motivated staff work harder, produce better quality and service, take less time off and are more likely to stay, all of which raise productivity and help a business develop.
Why motivation matters
Motivation is the desire or willingness of employees to work hard and do their job well.
Financial methods of motivation
Financial methods reward employees with money or money's worth.
Non-financial methods of motivation
Non-financial methods motivate without extra pay, by making work more satisfying.
Worked example: motivating a workforce
A common exam task is to recommend motivation methods for a described business.
Why this matters
Motivation links to how a business manages and keeps its people, and connects to training, recruitment and the firm's overall success. Motivated staff raise productivity, quality and service and stay longer, cutting the cost of recruiting and training replacements. In the exam, the most valuable skills are explaining why each method motivates, rather than listing methods, and recommending a balanced mix of financial and non-financial methods suited to the staff and the business in the stimulus.
Try this
Q1. Define motivation. [2 marks]
- Cue. The desire or willingness of employees to work hard and do their job well.
Q2. State two financial methods of motivation. [2 marks]
- Cue. Any two: wages, salaries, bonuses, commission, piece rate, or profit sharing.
Q3. Give one non-financial method of motivation. [1 mark]
- Cue. Job enrichment, job rotation, teamwork, fringe benefits, praise, training or promotion.
Exam-style practice questions
Practice questions written in the style of CCEA exam questions on this dot point, with worked answer explainers. The year tag is the paper they imitate, not the source.
CCEA Unit 2 (style)4 marksExplain two non-financial methods a business could use to motivate staff.Show worked answer →
An explain question testing AO1 and AO2. Name a method, then develop why it motivates, for two marks each.
Job enrichment: giving employees more interesting and responsible tasks makes work more satisfying, so staff feel valued and work harder.
Praise and recognition: thanking staff and recognising good work makes them feel appreciated, which raises morale and effort without extra pay.
Other valid points include teamwork, training and promotion opportunities. The mark is for the method plus a developed reason why it motivates, not a bare list.
CCEA Unit 2 (style)6 marksDiscuss whether financial or non-financial methods are the better way to motivate staff.Show worked answer →
An extended question testing AO2 and AO3. Weigh both, then judge.
Financial methods: bonuses, commission and pay rises give a clear, immediate reward and can quickly raise effort, but their effect can wear off and they cost the business money.
Non-financial methods: job enrichment, teamwork, praise and promotion make work more satisfying and can motivate over the long term at low cost, but they may not be enough if pay is felt to be too low.
Judgement: argue that a fair wage matters first, but once pay is acceptable, non-financial methods often have a longer-lasting effect, so the best approach usually combines both, suited to the staff and the business. A supported judgement reaches the top band.
Related dot points
- Recruitment and selection: the stages of recruitment, the job description and person specification, internal versus external recruitment, and the methods used to select the best candidate.
A CCEA GCSE Business Studies guide to recruitment and selection. Covers the stages of the recruitment process, the job description and person specification, the advantages and disadvantages of internal and external recruitment, and the selection methods a business uses to choose the best candidate.
- Training and appraisal: induction, on-the-job and off-the-job training, the benefits of training to the business and the employee, and the purpose of staff appraisal.
A CCEA GCSE Business Studies guide to training and appraisal. Covers induction training, on-the-job and off-the-job training and their advantages and disadvantages, the benefits of training to the business and the employee, and the purpose and benefits of staff appraisal.
- Business success and failure: how success is measured, the internal and external causes of business success, and the main reasons businesses fail.
A CCEA GCSE Business Studies guide to business success and failure. Covers how success can be measured, the internal and external factors that help a business succeed, and the main causes of business failure such as poor cash flow, weak management, lack of demand and strong competition.
- Stakeholders: the groups that have an interest in a business (owners, employees, customers, suppliers, the local community and the government), what each wants from the business, and how stakeholder interests can conflict.
A CCEA GCSE Business Studies guide to stakeholders. Covers who the stakeholders of a business are, owners, employees, customers, suppliers, the local community and the government, what each group wants from the business, and how their interests can conflict, with worked exam technique.
- Health and safety: the importance of health and safety legislation in the workplace, the responsibilities of employers and employees, and the benefits to a business of a safe working environment.
A CCEA GCSE Business Studies guide to health and safety. Covers why health and safety legislation matters, the responsibilities employers and employees each have for a safe workplace, the consequences of breaking the law, and the benefits to a business of providing a safe working environment.
Sources & how we know this
- CCEA GCSE Business Studies specification — CCEA (2017)