Comparison Of The Piece Rates System Business Essay

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With the development of the modern industry, quantity and quality of production are becoming more important. To result in being more productive without upset the labors, a large amount of managers have decided to motivate the workers. In order to successfully motivate the workers, numerous economists have been researching on how to achieve a successful motivation. Eventually, in 1911, Frederick Taylor described a scientific way of motivation in his book "The principle of scientific management", in which financial motivation is the best way to motivate workers and the workers' payment should be linked to the amount of work that is finished (netmba, 2010). However, in 1954, Abraham Maslow suggested that financial motivation is not the only way nor the most useful way to motivate the workers, who also believes that human has different needs, therefore, he'd created a model in which motivations have been divided by the person's needs, which have been separated in five levels, and that low-level needs must be satisfied before high-level needs, until the worker has reached the highest level of needs which is self-actualization (netmba, 2010). Afterwards, in 1966, Frederick Herzberg point out that motivation can be divided into two ways for two kinds of staff, which is motivator factors for lazy workers who are only working for wages and hygiene factors for the people who like the job of their own and does not care much about their salary. It has been mentioned that Taylor's financial motivation methods such as piece rates payment and fringe benefits are more motivated than non-financial motivation methods, which is because most of staffs are more likely to be motivated by salary and that financial motivation can reach the basic needs of workers. However, non-financial motivations' methods such as job enlargement and improving workplace are as useful in the reality because non-financial motivation methods can motivate workers in the most suitable way and that workers are more motivated result from better working condition.

First of all, it was said that "a fair day's pay for a fair day's work" is more motivated than non-financial motivation because most of the workers in a firm are more likely to be motivated by money. For example, some companies use Taylor's piece rates payment system to stimulate staffs, according to Hall et al(2008), in 1899, Bethlehem Steel Works in the USA have practiced Taylor's piece rates payment system where the production of pig iron have raised by almost 400 per cent per man per day.

Another argument is that financial motivation methods such as fringe benefits is able to satisfy the workers' basic needs as well so that the workers can be more motivated due to decrease of worrying of health and safety. According to Hall et al(2008a), business might use fringe benefits as a method of motivation, which can fulfill the basic physiological and safety needs of workers in Maslow's theory and the hygiene factors as outlined in Herzberg's two-factor theory. For example, to motivate the workers successfully, Google offered "free meals, swimming spa, and free doctors' onsite. Moreover, engineers can spend 20% of time on independent projects"(cnnmoney, 2007) and Air Product offered free exercise classes and subsidized gym and yoga classes as well as free annual medical checks.(Hall et al, 2008b)

According to Maslow's hierarchy of needs and Herzberg's two factors theory, workers have different needs depending on which level of needs in the hierarchy the person is or the personality of the workers. There are numerous reasons that non-financial motivation methods are as useful as financial motivation methods. The most important one is that managers can find the most suitable way such as job enlargement which means "to give an employee more work to do of a similar nature" (Hall et al, 2008) or job enrichment which means "to expand the job 'horizontally' in order to provide workers greater responsibility" to stimulate workers.(Hall et al, 2008b)

In addition, a bad workplace might de-motivate workers due to workers might feel a sense of boredom after a day's job. Therefore, some managers tend to beautify the working condition. For example, according to Lanshinsky (2007), Google has changed the atmosphere in the workforce to universities. Workers are enjoying free meals during surfing on the Internet. Also, staffs in Google have corner pocket, rock climbing wall and swimming pools for relaxing.

All in all, both financial motivational and non-financial motivational methods have many advantages and useful in stimulation. For example, piece rates payment system can effectively motivate workers who work for wages and salaries and that fringe benefits can motivate workers by satisfying workers' basic needs, whereas non-financial motivation methods can have the most suitable way to stimulate staffs and that changes in the workforce can make the staffs more joyful which result in motivate people. It is possible that a bad working condition will lead to de-motivating workers, thus, managers should create a better condition for workers. Hence, managers should use both financial motivational methods and non-financial motivational methods to motivate different workers depend on the workers' personality and financial situation.

Reference section

CNNmoney (2007) [Online] 100 Best Companies to Work For 2007 (Access date: 2011-4-5)

Hall, D. et al (2008). 66: Motivation theories, Business Studies (Fourth Edition). Ormskirk: Causeway Press Ltd.

Hall, D et al (2008) 67: Financial methods of motivation, Business Studies (Fourth Edition). Ormskirk: Causeway Press Ltd.

Hall, D. et al (2008). 68: Non-financial methods of motivation, Business Studies (Fourth Edition). Ormskirk: Causeway Press Ltd.

Lashinsky, A (2007) [Online] Life inside Google (Access date: 2011-4-5)

NetMBA (2010) [Online] Frederick Taylor and scientific management (Access date: 2011-3-20)

NetMBA (2010) [Online] Maslow's hierarchy of needs (Access date: 2011-3-20)

Tutor 2 u (2011) motivation in theory - Herzberg's two factor theory (Access date: 2011-3-21)