Analysis Of Financial And Non Financial Motivation Business Essay
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Published: Mon, 5 Dec 2016
The model businesses exert different policies to motivate employees to work, especially financial motivation, because money plays the most basic and important role in our lives. Most people’s motivation for work would probably be to earn more money and support their families. After all, money can guarantee a higher standard of living. However, individuals are not the same. Someone asserts the motivation for work should be a convenient office that is near their families or the company’s better working environment. That is, non-financial motivation. By contrast, which factor is more important? In this essay, it will show the combination of non-financial motivation and financial motivation with theories such as Taylor’s Scientific Management, Maslow’s hierarchy of need and Herzberg’s two-factor theory. As a result, financial motivation and non-financial motivation are both important and supplement each other in different ways.
The first foundation of motivation is Taylor’s Scientific Management. According to Hall et al (2008), it is generally used in business and the purpose of it is to create the maximum wealth for employers and employees. Also, Taylor’s Scientific Management shows that using the financial method can encourage the employees’ working efficiency and return the benefits to the employers. For instance, HP is an international business and has a complete urging project called the total rewards program. After a limited time, when the employers assert that the employees have achieved good performance to have an impact on HP’s financial results, they will provide significant rewards including increase of the base pay, annual variable pay, long-term incentive pay, benefits and perquisites for the workers and encourage them to keep doing in the future. (Wikinvest, 2010) In this example, the HP Company’s tactics not only make the employees satisfied with their increase income, but also function effectively in term of building up a set of strong corporation value that management is so important that they are willing to be managed and manage others. However, even though financial motivation is always a good way to enhance working efficiency, it would cause bad results in some special situations. Fox Conn Company is a representative example. The Company ignored the feelings and conditions of the employees and managed the employees to overwork for more profits. Although the Company have provided the financial motivation, the suicide events told us the fact that this method had its negative side. (Chanelnewsasia, 2011)
Furthermore, Maslow’s hierarchy of need is another one. According to Hall et al (2008) sample results, it suggested that the different ‘classes’ of need could be placed into a hierarchy. In the graphic, the biological needs is the most necessary postulate and the ‘classes’ of need are satisfied from the bottom up. (Business balls, 2011) First, the biological needs such as food, drink, shelter can be satisfied by both financial motivation and non-financial motivation. The company can set up some reward program to stimulate employees to earn more money and support their own lives, or provide a more complete working environment such as staff canteen, and staff dormitory. Second, safety needs can be satisfied by non-financial motivation. The company can buy their employees health insurance and so on. Third, belongingness and love needs can also be satisfied by non-financial motivation. The company can arrange more teamwork in the work group and help them build up a good relationship with each other. Fourth, esteem needs can be satisfied by the non-financial motivation, such as the establishment of a set of corporate values. Fifth, self-actualization needs can be satisfied by non-financial motivaton. The company should provide a workplace environment that encourage and enable employees to realize personal potential, in other words, put the employees in the right positions. For instance, in area of mobile phone, even though Apple phones do not win the most quotients, it has the largest benefit of 100000 number software applications. The developers can be part of the excitement by joining the program. In the direct benefit, they can consummate the profit, promote themselves in indirect profit when others want to use your software applications. This can satisfy their needs. (Apple, 2011) As mentioned before, Maslow’s hierarchy of need can be satisfied by financial and non-financial motivations from different perspectives.
Business balls (2011)
Additionally, the third one is Herzberg’s two-factor theory. Basis of the ideas form Hall et al (2008). It consists of two categories: motivators and hygiene factors, both of which can motivate the employees in their working process. However, motivator factor can bring employees’ sense of satisfaction, while hygiene factor focuses on removing employees’ dissatisfaction. In a famous enterprise Haier’s opinion, giving workers job satisfaction is a momentous business, such as recognition for employees’ endeavor. For example, in the working section, it uses different colors to express whether the employees do higher level of job. Red stands for excellent; green for average and yellow for below average. This system as motivator factor has virtually become motivation to provide impetus for workers and help to form sense of achievement of their efforts (Slide share, 2011) In addition, it uses the policy of sales achievements to promote its employees, who create the significant sales record, to a higher position, which in consequence inspires the employees’ morale. (Haier, 2008) Apart from that, an example of Google can correspond to hygiene factors. Google attaches importance to a better working environment, and offers its employees a lot of advanced facilities in the aspect of living, eating, health and relaxing. These conditions make employees work feeling like at home and remove their disgruntled sentiment as far as possible, and ensure the gratification and reduce the Staff turnover. (Ezinearticles, 2011)
In sum, financial and non-financial motivation can be related to three theories, including Taylor’s Scientific Management, Maslow’s hierarchy of need and Herzberg’s two-factor theory. They show that the factors of financial motivation and non-financial motivation function effectively in different aspects. In addition, these examples of companies support the theories. Among them, it is generally believed that although financial method is more widely used in business and can have a direct effect on the improvement of working efficiency, it cannot solve the negative sentiment. On the other hand, the increasingly emphasis is non-financial motivation, because it can reduce the passive feelings; raise working gratification and lower brain drain rates. In short, the financial motivation and non-financial are equally momentous, the businesses need them to build a good relationship with employees and create benefit maximization for both of them.
Apple (2011) [online] App Store Affiliate Program
http://www.apple.com/itunes/affiliates/resources/documentation/app-store-affiliate-program.html Assert day (18/3/2011)
Business balls (2011) [online] Maslow’s hierarchy of need
http://www.businessballs.com/maslow.htm Assert day (18/3/2011)
Chanelnewsasia (2011) [online] Another Foxconn employee dies in China
http://www.channelnewsasia.com/stories/afp_asiapacific/view/1058808/1/.html Assert day (18/3/2011)
Ezinearticles (2011) [online] Google Sets the Standard For A Happy Work Environment
http://ezinearticles.com/?Google-Sets-The-Standard-For-A-Happy-Work-EnvironmentHYPERLINK “http://ezinearticles.com/?Google-Sets-The-Standard-For-A-Happy-Work-Environment&id=979201″&HYPERLINK “http://ezinearticles.com/?Google-Sets-The-Standard-For-A-Happy-Work-Environment&id=979201″id=979201 Assert day (18/3/2011)
Hall, D. et al (2008) [online] Business Studies ( Fourth Edition). Ormskirk: Press Ltd.
Haier(2008) [online] Values and philosophy
http://www.haier.com/abouthaier/CorporateCulture/faith5_05.asp Assert day (18/3/2011)
Slide share (2011) [online] Haier pratik – Document Transcript
http://www.slideshare.net/marvelpat/haier-pratik Assert day (18/3/2011)
Wikinvest (2010) [online] HP’s Total Rewards Program
Assert day (18/3/2011)
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