The document discusses motivation and financial incentives in the workplace. It covers various theories of motivation including using threat, rewards, and meeting needs and expectations. It also discusses five theories around the role of money in motivating employees. Financial incentives like bonuses are presented as a way to stimulate workers and improve productivity when contingent on performance. Both financial and non-financial incentives are recommended to be used together to achieve the best results.

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MOTIVATION
&
FINANCIAL INCENTIVES

2. BASIC MODEL OF MOTIVATION (NEEDS
AND EXPECTATION)

3. BASIC MODEL OF MOTIVATION
(NEEDS AND EXPECTATION)

4. MOTIVATIONAL THEORIES

5. MOTIVATION &
FINANCIAL INCENTIVES
In the past, threat has been used as a
motivating device in our society.
Threat is used in authoritarian societies
today to achieve objectives.
Is threat working in the workplace, in
order to increase productivity or reduce
absenteeism?

6. MOTIVATION &
FINANCIAL INCENTIVES
Management today, for many reasons,
gives rewards in order to motivate workers
and increase productivity.
By the 70TH
incentives had become an
inherent part of the operating system of
the construction industry.
Trades unions recognized the importance
of incentives as a means of enhancing
their members.

7. MOTIVATION &
FINANCIAL INCENTIVES
They used it as a general expectation of
regular incentive bonus payments,
As an essential part of an operative’s
earning.
Financial incentives stimulate workers to
put more effort into their work.
There are five theories of the role of
money in affecting the job behaviour of
employees.

8. MOTIVATION &
FINANCIAL INCENTIVES
These are:
1. Money as a generalized conditioned re-
enforcer
2. Money as a conditioned incentive
3. Money as anxiety reducer
4. Money as a “hygiene factor”
5. Money as instrument for gaining desired
outcome

9. MOTIVATION &
FINANCIAL INCENTIVES
Theorists on motivation have generally
assumed that:
intrinsic motivations such as:
achievement,
responsibility,
competence, are independent of extrinsic
motivation.

10. MOTIVATION &
FINANCIAL INCENTIVES
Extrinsic motivation such as:
high pay,
promotion,
good working relations.
The cognitive evaluation theory suggests that:
when extrinsic reward is used, such as one used
by organizations (bonus pay for performance
improvement), the intrinsic rewards of the
individual are reduced.

11. MOTIVATION &
FINANCIAL INCENTIVES
Pay or other extrinsic rewards can be effective
motivators.
However, they should be made contingent as an
individual’s performance.
Another definition for the term incentive is
“something that inspires action”.
In the construction industry it means the
attempts to increase production,
Have better performance,
 To receive increased psychological or material
rewards.

12. MOTIVATION &
FINANCIAL INCENTIVES
In order to benefit most from an incentive
scheme;
Managers need to define workers needs,
develop the goals of an incentive
programme.
If the incentives are offered in an
unstructured manner the result will be:
the opposite of what was intended.

13. MOTIVATION &
FINANCIAL INCENTIVES
Those firms who use financial and non-
financial incentives side by side are
those that produce the best results.
Motivation with pay increases,
 and promotion can often back fire,
and decrease workers motivation.

14. MOTIVATION &
FINANCIAL INCENTIVES
Managers can motivate workers without a pay
increase,
by using a simple model based on co-workers
traits and orientation.
Pay increases, or bonus payments for better
performance are an acceptable practice by
managers.
People are motivated if they are enjoying doing
what they like to do.

15. MOTIVATION &
FINANCIAL INCENTIVES
During the recession of the 1990s Lincoln
Electric Co. lost money in its foreign
operation.
Managed not to lay off any workers,
and the company even managed to
reward workers 75% of their salary in
bonus pay.

16. MOTIVATION &
FINANCIAL INCENTIVES
The production of Lincoln Electric Co. is
twice that of its rival manufacturers,
which is due to incentive plans,
which give bonuses for the company’s
additional production.
Lincoln uses a multi-faceted incentive
system comprising of:
Piecework pay.
Shared profits.

17. MOTIVATION &
FINANCIAL INCENTIVES
Year-end bonuses.
Stock ownership opportunities.
Job Security.
This incentive policy improved the
performance of the company,
which gained them a competitive
advantage within the industry.

18. MOTIVATION &
FINANCIAL INCENTIVES
 The company rewards the workers for:
1. turning out high-quality products
2. high efficiently
3. while controlling cost.
 Piecework system rewards high
productivity in Lincoln Electric Co.
 Each job is carefully rated according to
skill, effort required, and responsibility.

19. MOTIVATION &
FINANCIAL INCENTIVES
Some controversy regarding the use of
money as a motivator.
Some researchers have chosen not to
link money to workers performance,
Others have reached the conclusion
that money is a way to motivate
workers.

20. MOTIVATION &
FINANCIAL INCENTIVES
The reason for uncertainty amongst
researchers is that:
financial incentive in itself can be
satisfying depending on worker’s deferring
levels of needs.
The motivational value of money can
change according to the economic
situation of the nation.

21. MOTIVATION &
FINANCIAL INCENTIVES
During a recession, when incomes are
falling,
it will remain static,
while other expenses increase the
importance of money as a motivator
increases.

22. MOTIVATION &
FINANCIAL INCENTIVES
There are certain ways that people can be
motivated to give better performance.
It is a manager’s task to find the best way to
improve performance.
In the UK the methods in general are that:
Manual workers are motivated with financial
incentive.
Non-manual workers, especially managers, are
given none or semi-financial incentives,
or with promotion,
Or a big financial incentives such ads banks.

23. MOTIVATION &
FINANCIAL INCENTIVES
There are four determinants of labour
productivity:
1. The duration of worker effort.
2. The intensity of worker effort.
3. The effectiveness of worker effort
combined with the technology used.
4. Efficiency of worker effort.

24. MOTIVATION &
FINANCIAL INCENTIVES
Individuals seek a job, which will satisfy
their needs.
Some such as nurses or teachers seek
jobs with high intrinsic satisfaction.
So what determines motivation in the job?
Is it mainly to do with individual needs?
Or is motivation more strongly influenced
by incentives given on the job itself?

25. MOTIVATION &
FINANCIAL INCENTIVES
The job people hold is a key variable for
their motivation.
Understanding what a job requires is a
complex,
A vital requirement in trying to find ways
to improve employee performance is the
key.
There are constant changes within most
work environments,
As well as peoples performance
expectations.

26. MOTIVATION &
FINANCIAL INCENTIVES
The implication of such changes may not
be so clear to the employer and
employee.
The company reward system,
the environment,
culture of the organization,
Personal condition,
They can greatly influence the individual’s
performance.

27. MOTIVATION &
FINANCIAL INCENTIVES

28. MOTIVATION &
FINANCIAL INCENTIVES
Examine the factors,
Find which motivate your workers at work,
The style of management has an
important role to play.
In the last 2 years insecurity has become
an important and significant factor.

29. MOTIVATION &
FINANCIAL INCENTIVES
In part, this has been due to a significant
change in employment patterns,
short term contracts,
rationalization,
Agency work,
the elimination of millions of permanent
jobs being replaced increasingly by
temporary work.

30. MOTIVATION &
FINANCIAL INCENTIVES
There are two reasons why a worker is motivated
to work and perform well:
1. the nature of work,
2. the actual content of the tasks assigned to the
worker,
The most challenging and demanding task will
have less effect on motivation if:
 the content of work is congruent to the needs
and expectations of the workers involved.

31. MOTIVATION &
FINANCIAL INCENTIVES
The other reason for motivation to work
well is the work content.
This includes aspects of the work such as:
 supervision,
material resources,
work environment
etc.