Financial & Non-Financial Methods

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Financial Methods of Motivation

There are many ways that businesses try to motivate their employees. Often, money is used to achieve this.

Salary

Increasing the amount a worker is paid may increase their motivation. The more they get paid, the more workers will value the job, and so the more they will want to keep it and do well for the business.
It can also mean that employees enjoy the work more if there is a higher financial reward. This can also lead to motivation.
However, a salary isn’t linked to an employee’s job performance. This means that an employee will be paid the same regardless of their quality of work and quantity of output.

Commission

Commission is paid out as a percentage of the sales that staff make.
It helps to motivate employees to do what the business wants to do. If they sell more, they are happy because they earn more money and the business is happy because they make more sales.

Possibility for promotion

A business that frequently promotes employees and uses internal recruitment is likely to motivate employees to perform well and stay at the business for a longer period of time.
The possibility of getting more opportunity may motivate some employees.
Promotions often lead to salary increases.

Bonuses

Bonuses are similar to commission but they are not just linked to sales.
Bonuses can depend on the quality of the work the employees have done.
Again, employees may be more motivated to act in the way that the business wants.

Non-Financial Methods of Motivation

Non-financial methods of motivation increase motivation but give employees benefits that are not financial. Management style, fringe benefits, autonomy, job rotation and job enrichment can all increase motivation.

Management style

The style of management affects how much an employee enjoys their work and how much they feel valued by the business. If they feel valued and enjoy their work they are usually more motivated to act in the interests of the business.
Different management styles give employees different amounts of responsibility.

Fringe benefits

Fringe benefits are benefits that are not financial (non-monetary) but can be included in an employment contract.
- Company cars, health insurance and sick pay are all examples of fringe benefits.
- Aldi gives all the graduates managing its stores an Audi A4 as part of their employment package.

Job rotation

Job rotation describes an employee moving jobs within an organisation. Some employees enjoy the variety that this provides.
Organisations like IAC, which owns Tinder and Expedia, is famous for moving employees around in the businesses that it owns.

Autonomy

Autonomy is the amount of freedom to do your job that your manager or employer provides. High levels of autonomy can motivate employees.
- For example, companies like Netflix trust employees to take an appropriate amount of holiday and do not enforce a fixed amount of holiday each year.

Job enrichment

Job enrichment involves creating jobs that are challenging for employees and that aren’t very repetitive.
Specialisation and working on production lines, although efficient and cost effective may not be the most enjoyable thing for the employee.

1Business Activity & Influences on Business

1.1Business Objectives

1.1.1Business Aims

1.1.2Business Objectives

1.1.3Business Objectives Change Over Time

1.1.4End of Topic Test - Business Aims

1.1.5Diagnostic Misconceptions - Profit

1.2Types of Organisations

1.2.1Sole Traders & Partnerships

1.2.2Limited Companies

1.2.3Limited Liability

1.2.4Unlimited vs Limited Liability

1.2.5Not For Profit & Franchises

1.2.6Multinational Companies

1.2.7End of Topic Test - Business Ownership

1.2.8Application Questions - Business Ownership

1.2.9Diagnostic Misconceptions - Company vs Business

1.2.10Diagnostic Misconceptions - Owners vs Shareholders

1.3Classification of Businesses

1.3.1Sectors

1.4Decisions on Location

1.4.1Location

1.5Business & the International Economy

1.5.1Globalisation

1.5.2Exchange Rates

1.6Government Objectives & Policy

1.6.1Government Objectives

1.6.2The Government & Business Activity

1.6.3Interest Rates

1.6.4Interest Rates - Calculations

1.6.5Diagnostic Misconceptions - Recessions

1.7External Factors

1.7.1External Factors

1.8What Makes a Business Successful?

1.8.1Measuring Success

1.8.2Reasons for Failure

2People in Business

2.1Internal & External Communication

2.1.1Communication

2.2Recruitment & Selection Process

2.2.1Types of Employment

2.2.2Recruitment Stages

2.2.3Effective Recruitment

2.2.4Legal Controls Over Employment

2.2.5Diagnostic Misconceptions - Internal Recruitment

2.3Training

2.3.1Training

2.4Motivation & Rewards

2.4.1Motivation in the Workplace

2.4.2Financial & Non-Financial Methods

2.4.3End of Topic Test - The Workforce

2.4.4Application Questions - The Workforce

2.4.5Diagnostic Misconceptions - Money

2.5Organisation Structures

2.5.1Organisational Structures

2.5.2Centralised vs. Decentralised Structures

2.5.3Tall & Flat Organisations

2.5.4Functional Areas Within a Business

2.5.5End of Topic Test - Org Structure

3Business Finance

3.1Sources of Finance

3.1.1Internal & External Sources of Finance

3.1.2Factors Affecting Sources of Finance

3.2Cash Flow Forecasting

3.2.1Cash Flow

3.2.2Consequences of Cash Flow Problems

3.2.3Cash Flow - Calculations

3.2.4Solutions to Cash Flow Problems

3.2.5Diagnostic Misconceptions - Cash Flow

3.3Cost & Break-Even Analysis

3.3.1Costs, Revenue & Profit

3.3.2Profit, Average Unit Cost & Interest

3.3.3Costs - Calculations

3.3.4Revenue - Calculations

3.3.5Break-Even Analysis

3.3.6Profit & Losses - Calculations

3.3.7End of Topic Test - Finance

3.3.8Grade 9 - Finance

3.3.9Diagnostic Misconceptions - Fixed Costs

3.3.10Diagnostic Misconceptions - Break-even

3.4Financial Documents

3.4.1Financial Statements

3.4.2Income Statement

3.4.3Understanding Business Performance

3.5Account Analysis

3.5.1Business Calculations

3.5.2Gross Profit - Calculations

3.5.3Net Profit - Calculations

3.5.4Business Calculations 2

3.5.5Business Calculations 3

3.5.6Liquidity

4Marketing

4.1Market Research

4.1.1Market Research

4.1.2Forms of Market Research

4.2The Market

4.2.1Customer Needs

4.2.2Satisfying Customer Needs

4.2.3Market

4.2.4The Competitive Environment

4.2.5Market Segmentation

4.2.6Market Mapping - Price vs Quality

4.2.7End of Topic Test - Marketing

4.2.8Application Questions - Marketing

4.2.9Diagnostic Misconceptions - Competition

4.3The Marketing Mix

5Business Operations

5.1Economies & Diseconomies of Scale

5.1.1Economies of Scale

5.1.2Diagnostic Misconceptions - Economies of Scale

5.2Production

5.2.1Production Processes

5.2.2Flow and Batch Production

5.2.3Production Efficiency

5.2.4Technology & Production

5.2.5Diagnostic Misconceptions - JIT vs JIC

5.3Factors of Production

5.3.1Factors of Production

5.4Quality

5.4.1Importance of Quality

5.4.2Identifying Quality

5.4.3Total Quality Management

5.4.4End of Topic Test - Operational Decisions

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