Examine Financial and Non-Financial Motivation
Mariam Peyton is a professional Financial Analyst. She holds a Masters degree in Economics. She specialises in financial analysis and forecasting. Her expertise includes studying the financial performance of companies, markets and entire industries looking for trends, insights and information that can help you glean rich insights for use in academic and market research.
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This essay aimed at examining both financial and non-financial motivation, looking at Financial and Non-financial Motivators and evaluating the importance of both. Key questions answered are; what is financial and non-financial motivation? Why is financial and non-financial motivation important?
In society, it has commonly been assumed that a wide stream of people work with the intention of attaining money so as to satisfy their needs and wants. This contention meets Taylor’s theory of motivation which states that money is the main force that motivates employees to work at a company. Therefore, according to Taylor’s theory, if an employer wants to motivate employees he must pay them according to their productivity and not a fixed salary because it is believed to motivate workers to work hard and without supervision.
According to Mullins (2016), motivation in its simplest form refers to the creation of incentives and a working environment that allows employees to perform to the best of their ability. It is a state of positive emotion resulting from the assessment of one's job experience.
Financial motivation refers to motivating employees using money and activities related to money. There are quite a number of methods used to financially motivate employees and some of them include; wages, salaries, performance-related pay, profit sharing, and financial fringe benefits among others.
Non-financial motivation refers to motivating employees in ways that don't involve money. Non-financial methods of motivating employees include job enlargement, job rotation, job enrichment, empowerment and training among others as mentioned by Maslow’s hierarchy theory.
However, after taking into account both financial and non-financial motivation, it is concluded the most valuable motivation strategy for companies is that of non-financial motivation reason being it gives an employee the opportunity to grow.
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Examine Financial and Non-Financial Motivation a Case Study
Key Learning Outcomes
By the end of the case, students should be able to:
- Understand the different types of motivation and how they can be used to improve employee performance and engagement.
- Understand the key factors that contribute to employee motivation in organizations, such as a supportive work environment, opportunities for career growth, and competitive compensation and benefits
- Apply strategies for improving employee motivation in organizations such as regular feedback and recognition, employee training and development programs, and open communication channels between employees and management in other organizations
1.0 INTRODUCTION
Motivation can be classified into two broad categories: financial motivation and non-financial motivation. In this essay, we will examine what financial and non-financial motivation is and why they are important. And also how the two can be used effectively in different situations in organizations.
Motivation is the inner force or impulse that drives one to achieve organizational goals. It involves the social, biological, cognitive, and emotional forces that compel an action toward a given goal. For any organization to reach its goal, a motivated workforce is the most important resource. A motivated workforce adapts the company’s philosophy and increases efficiency, building a successful organization. While it is easy for management to know what to expect from employees who share a similar background and culture, a multicultural workforce requires more time and dedication since the different employees will require different management and motivational techniques. While rewards play a major role in motivating employees, it is vital for employers to first understand their employees and what actually motivates them. While some employees see money as the main motivator, others find rewards such as raise in compensation, Promotion, positive feedback, and recognition to be more motivating.
Financial motivation refers to motivating employees using money and activities related to money. There are quite a number of methods used to financially motivate employees and some of them include; wages, salaries, performance-related pay, profit sharing, and financial fringe benefits among others.
Non-financial motivation refers to motivating employees in ways that don't involve money. Non-financial methods of motivating employees include job enlargement, job rotation, job enrichment, empowerment and training among others as mentioned by Maslow’s hierarchy theory.
Both Financial and non-financial motivation are significant aspects that influence employee behavior and performance. However, they are not mutually exclusive or incompatible. Rather, they should be used in combination and balance to achieve optimal results. Depending on the situation, different types of motivation may be more or less appropriate or effective. For example:
Financial motivation may be more suitable for tasks that are simple, routine, or quantifiable, where money can serve as a clear and direct incentive.
Non-financial motivation may be more suitable for tasks that are complex, creative, or qualitative, where money may not capture the full value or meaning of the work.
Therefore, managers should understand the needs and preferences of their employees, and tailor their motivational strategies accordingly. Doing so can create a work environment that fosters both satisfaction and performance.
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