There are two methods of motivating employees. They can be motivated either through financial or non-financial rewards or both.
Most employers provide both financial and non-financial rewards.
Financial rewards are;
Wages – time rate, piece rate
Salaries
Performance-based financial rewards
Profit sharing
Performance-related pay
Employee share ownership
Non-financial rewards/Fringe benefits
Medical insurance
Discounts on products or services
Discounted interest on mortgage loan
Holiday incentives
Company car
Free accommodation or allowances
Entertainment allowances
Country Club, Gym or Spa memberships
As important as motivation is important to a firm, the cost of financial rewards are also a cost to the firm. As such, most firms would aim to reduce cost, while increasing productivity by providing non-financial rewards.
RELATED CONCEPTS
Job Satisfaction
Motivation
Financial Rewards
Non-Financial Rewards
PAST YEAR QUESTIONS
Identify and explain two non-financial methods of motivation (6 marks) Feb/Mar 2018/12
Explain two ways to improve employee motivation (6 marks) May/June 2018/11
State two ways of motivating employees (2 marks) May/June 2020/11
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