Financial methods of motivation
Businesses can use a range of methods to motivate their employees. Financial The reasons an employee has for working - how driven and happy they are in their role. involves motivating employees with money and things associated with money. The main methods of financial motivation used in business are remuneration, bonuses, commission, promotion and fringe benefits.
Remuneration
Remuneration is the money employees are paid in return for working in a business. Different roles in a business are rewarded with different levels of remuneration. For example, a company director might earn £100,000 per year whereas a data entry clerk might earn £18,000 per year.
Many employees are motivated by remuneration, and pay rises can often make employees feel more motivated. Many businesses offer regular yearly increases in remuneration to help increase motivation.
Bonuses
A bonus is a form of additional remuneration. Some businesses and industries use bonuses to motivate their employees. For example, in an electronics shop, a salesperson might be awarded a £500 bonus at the end of the year for selling a large number of TVs – this could be because they made a certain number of sales, or because they created a certain amount of revenue for the business.
Often, when an employee is motivated by money, a bonus is a very good way to raise their level of motivation.
Commission
Commission is similar to a bonus. Commission is paid on top of a normal wage or salary to help motivate employees. Commission is usually given as a percentage of a sale or a specified amount of money per sale. For example, if a salesperson sells a car, they might receive 25 to 30 per cent of the profit as commission. Earning additional money is often a motivating factor for employees and generally makes them work harder.
Promotions
A promotion is another way to improve an employee’s motivation. When an employee is promoted, they are provided with a higher-ranking job and more responsibility in a business. Often, a promotion means the employee earns a higher wage and receives more financial benefits. This makes employees feel more valued by a business.
Fringe benefits
Many businesses use fringe benefits as a form of financial motivation. Fringe benefits are additional employment perks awarded to employees, such as a free gym membership, a company car, a company mobile phone, free holidays, additional holiday allowance, free parking or transport, or free food and drink. Fringe benefits are often ways of saving employees money rather than providing them with additional money.
