Having a motivated workforce is vital for most businesses, since it can lead to higher rates of productivity, better quality output, and low rates of absenteeism and labour turnover. Using employee survey companies can be useful in measuring how your employees feel about the work environment and how you can better motivate them.

The main factors which affect the motivation of workers are pay levels, job security, promotional prospects, being given responsibilities, working conditions, fringe benefits, participation in decision-making and working in a team.

There are two basic theories of motivation; content theories and process theories. Content theories focus on what actually motivates people, they study the needs that must be satisfied in order for the employee to be motivated.

The need is either satisfied by an extrinsic reward (e.g. pay) or an intrinsic reward (e.g. recognition and praise). The Classical (Fayol), the Scientific (Taylor), the Human Relations (Mayo), and the Neo-Human Relations (Maslow, Herzberg, McGregor) schools of management thought are all content theories.

Process theories, do not concern the needs which must be satisfied in order to achieve motivation, but instead they are concerned with the thought-processes that influence workers' behaviour. There are two such theories:

Expectancy theory:

This states that workers will only act when they have a reasonable expectation that their work will lead to the desired outcome. If they believe that they possess the ability and skill to achieve the goal, then their level of effort will be great and they will be motivated.

Equity theory:

This states that each worker will wish to receive a remuneration package (equal to their pay plus fringe benefits) in return for their efforts. Each worker will only be motivated if their remuneration package is seen to be fair (or equitable) in relation to the remuneration packages received by the other workers for their efforts.

There are many different methods of payment that a business can choose from, each of which can have different effects on the level of motivation of the workforce. The main methods are:

  1. Time-rate ('flat rate') schemes.

    This payment method involves the employee receiving a basic rate of pay per time period that he works (e.g. £5 per hour, £50 per day, £400 per week). The pay is not related to output or productivity.

    Any time that the employee works above the agreed number of hours per week may make him eligible for overtime payments, often at 'time and a half' (e.g. £7.50 per hour instead of £5 per hour).

  2. Piece-rate schemes.

    This payment method involves the employee receiving an amount of money per unit (or per 'piece') that he produces. Therefore his pay is directly linked to his productivity level.

    However, it is possible that in order to boost his earnings, an employee may reduce the quality and craftsmanship per unit, so that he can produce more output in a given period of time.

  3. Commission.

    This is a common method of payment for salesmen (e.g. insurance, double-glazing, telesales). The employee receives a very small percentage (say 0.5%) of the value of the goods that he manages to sell in a period of time.

  4. Performance-related pay (PRP).

    This is a method of giving pay rises on an individual basis, related to the employee achieving a number of targets over the past year. This is common with managerial and professional workers.

  5. Profit sharing.

    This involves each employee receiving a share of the profit of the business each year, effectively representing an annual pay rise. It aims to increase the levels of effort, motivation and productivity of each employee, since their annual pay-award will be related to the profitability of the business.

    However, if the business makes low profits (or even a loss) then this is likely to have a detrimental effect on the level of motivation of the employees.

  6. Share ownership.

    A common form of payment in many PLCs is what is termed 'share options'. This basically involves each employee receiving a part of each month's salary in the form of shares (usually at a discounted price).

    This forms a profitable savings-plan for the employee, and he can sell them after a given period of time. This should motivate the employees to work harder and increase their efforts, since the share price will rise as the company becomes more profitable, therefore increasing the capital gain on their shares.

Many of these different methods of pay are likely to be supplemented by fringe benefits (or 'perks') such as private health schemes, pension schemes, subsidised meals, discounts on holidays and travel, cheap mortgages and loans, company cars and discounts when buying the company's products. The total package of pay plus fringe benefits is known as the remuneration package.

There is no universal rule for motivating employees, and there are many methods which are used by different managers to achieve the goal of a motivated and satisfied workforce. These include:

Delegation. This occurs when managers pass a degree of authority down the hierarchy to their subordinates.

Empowerment. This involves a manager giving his subordinates a degree of power over their work (i.e. it enables the subordinates to be fairly autonomous and to decide for themselves the best way to approach a problem).

Job enlargement. This involves increasing the number of tasks which are involved in performing a particular job, in order to motivate and multi-skill the employees.

Job enrichment. This is a method of motivating employees by giving them more responsibilities and the opportunity to use their initiative.

Job rotation. This involves the employees performing a number of different tasks in turn, in order to increase the variety of their job and, therefore, lead to higher levels of motivation.

Quality circles. This is a group of workers that meets at regular intervals in order to identify any problems with quality within production, consider alternative solutions to these problems, and then recommend to management the solution that they believe will be the most successful.

Teamworking. This is the opposite production technique to an assembly-line which uses an extreme division of labour. Teamworking involves a number of employees combining to produce a product, with each employee specialising in a few tasks. Cell production is an example of teamworking.

Worker participation. This refers to the participation of workers in the decision-making process, asking them for their ideas and suggestions.

Works council. This is a type of worker participation and it consists of regular discussions between managers and representatives of the workforce over such issues as how the business can improve its processes and procedures (in production or marketing, for example).

Worker-directors. These are workforce representatives who participate in the meetings held by the board of directors. Worker-directors are not very common in the UK, since employers often believe that they can slow down the decision-making process, as well as 'leaking' confidential information to employees.

Symptoms of poor motivation amongst the workforce include high rates of absenteeism and labour turnover, poor timekeeping, high rates of waste, low quality output and an increasing number of disciplinary problems.

When a poor level of motivation exists in a workforce, then the management should:

  1. Develop a strong corporate culture and team-spirit.

  2. Ensure that pay levels are fair.

  3. Design more challenging jobs.

  4. Introduce decision-making at lower levels in the organisation.

  5. Give praise and recognition to employees for their efforts and achievements.

  6. Ensure that communication flows are effective and that the relevant messages get to the relevant personnel.