Financial crisis leads to huge competitions between the international companies all over the world. According to Hall et al (2008), increasing efficiency is an essential way to preserve competitive in the market. A depressed market leads to low motivation in working because of people's unstable salaries. Generally, Taylor's approach states that a fair day's payment for a fair day's work to the employees is important. (Hall, 2008) Every individual has their own targets and demands at the heart of their motivation. (Tutor2u, 2010).In addition, absenteeism and falling productivity will lead to decreased profits because of lack of people's motivation. There is no doubt that employee motivation is connected to the companies' profits. As a motivation, financial methods and non-financial are both significant. Financial method is straight motivation with money, such as salaries and wages. Non-financial method is indirect motivation without money, such as welfare. In brief, this essay will discuss the significance of employee motivations: financial methods, including Maslow's Hierarchy of Human Needs, Taylor's approach and Performance Related Pay, and non-financial method, including human relations approach.
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Employees and employee motivations play a significant role in every company. Employees control and carry out their particular tasks in every company's organization. (Hall et al, 2008) Frederick Herzberg stated that certain factors are motivator factors that cause job satisfaction and hygiene factors in the workplace cause dissatisfaction. (NetMBA, 2007) Positive energy of employee motivation can lead to higher profits. Financial methods and non-financial methods can be used as the two cardinal methods of employee motivation.
In the short run, financial methods of motivation are efficient and indispensable for satisfying the requirements of employees. For nearly all employees, money is the major reason to work. Satisfying people's basic needs with money leads to their working motivation. According to figure 1 Maslow's hierarchy of human needs (CBC, 2009), people are generally concerned with their physiological needs first. For example, food is one of the basic needs of a human-being. Only after getting all the physiological needs, they can move to the subsequent level, safety. There is no doubt that financial methods can be used for people to satisfy their physiological needs. Financial methods can be divided into eight parts such as measured day work and profit-related pay. Taylor considers that the piece rate, which means a stable price would be paid to the employee for one unit of produce made, is a good method to motivate employees to improve their productivity. (Hall et al, 2008) However, performance related pay and profit sharing are particularly useful for people's motivation. There is a useful way of improving the cohesion among the staffs that the more profit the company gains, the higher dividend employees share. For instance, a small printing company in Norwich called Nick Bames Company gains success with financial motivation. (Hall et al, 2008) Initially, the employees of this company have a large number of work everyday and felt bored with their jobs. However, after taking performance related pay system, the employees worked effectively and focused on working more to earn more. With performance related pay system, Nick Bames Company determined that some extra money unites the goals of both employers and employees' work can also be a method to demonstrate employees' individual appreciation and may change the relationship between employers and employees. (Hall et al, 2008) With the good working atmosphere, the productivity of Nick Bames Company increased and what makes more profits. In brief, financial methods are basic ways of encouraging motivation of employees.
Figure1: Maslow's hierarchy of needs ï¼ˆCBC, 2009)
Salaries are not the unique motivations, non-financial methods are another significant form of employee motivation. Hall et al (2008) state that Maslow divided the needs of humans into five levels as figure 1, including physiological, safety, love and belonging, esteem requirements and self-actualization. Figure 1 indicates that physiological requirements are not unique needs of people. For example, when people have enough money, they will not satisfy with money all the time. After they gain sufficient capital and money, they will desire to improve their lives in other area. As a result, the operation of financial incentive schemes in different situations is complex. Company should find what their employee mostly needs and satisfy them in time. According to the human relations approach (Hall et al, 2008), some problems about independence, security and others will be connected to employees. In order to satisfy these, non-financial methods should be used to encourage people to work much harder. For instance, welfare is an effective way to motivate employees positively because of the unlimited needs, just like the BYD auto company. In the first year of BYD Auto Company to get into the auto markets, they were beginners at producing cars. (BYD Auto, 2010) Giving employees welfare to get some discounts to buy BYD cars makes the employees work harder. Although the employees of BYD had no confidence to get success in the car's market, they worked much harder together to solve the problems they had met. (BYD Auto, 2010) Soon they become one of the best car producers in China and got a huge profit. Compared to financial methods, non-financial methods may lead to much higher productivity in a company in a long run.
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Financial methods and non-financial methods have different characteristics and significances depending on different situations. Most people may meet problems, such as having no money. At this time, people's most urgent need is money. However, companies should adopt financial methods as the motivation to solve their employees' problem. Employees will work much harder to earn more salaries and bring more profits to their companies in the same time. Contrasted to financial methods, after gaining enough money, others may be more effective to motivate employees. This is the non-financial methods' significance.
To sum up, the five classifications in the figure 1 demonstrates their relationships. According to Maslow's hierarchy of human needs (CBC, 2009), financial methods and non-financial methods are related and interacting with each other. Generally, employee motivation can only achieved step by step with the two methods. Before non-financial methods, financial methods should be more effect to motivate people. Otherwise, money is the basic need and one of the motivations of financial methods in one way. However, non-financial method such as welfare is higher level than financial method in another side. In my opinion, companies should use these two methods in the right time to encourage employees to work hard with their maximum energy.