Financial Motivation Methods

Paying people to perform

Motivated staff work harder, stay longer and produce more, so a motivated workforce helps a business through better retention and higher productivity. One way to motivate is with money. A salary is a fixed yearly amount paid in monthly parts. A wage is paid by the hour or the week. Commission is extra pay earned for each sale or for hitting targets. Profit sharing gives workers a slice of the profits the business makes. This module looks at why motivation matters and at these financial methods and when each one suits a job.

Motivation words

Learn these before you match any method, and remember the best one depends on the job.

Salary against wage

Salary and wage are the two basic ways of paying for time, and they suit different jobs.

How to match method to job

Start from what the business wants the pay to do. To reward steady, reliable work, a fixed yearly amount or hourly pay fits. To push people to sell more, extra pay tied to each sale drives effort. To make everyone feel they share in success, giving a slice of the profits can bind staff to the company. Money is not the only way to motivate, but here match each financial method to the job and workforce rather than just listing them.

Match the method to how it works

Which method is this?

A salesperson is paid an extra amount for every product they sell. Which financial method is this?

• Commission, extra pay tied to sales.
• A salary, a fixed yearly amount.
• A wage, paid by the hour.
• Profit sharing across all staff.

Why motivation matters

Select the TWO benefits a business gains from a motivated workforce.

• Better staff retention, so fewer people leave
• Higher productivity from harder-working staff
• Never needing to employ any staff
• Lower quality work from the team

Work out the commission

A salesperson earns 5 pounds commission for each item sold. In one day they sell 12 items. Multiply the commission per item by the number sold to find the total commission in pounds. What is the answer?

Order how commission motivates

Put the steps by which commission motivates a worker in order, earliest first.

• The business offers extra pay for each sale
• The worker tries harder to sell more
• More sales are made
• The worker earns more and the business gains too

Complete the facts

A motivated workforce helps a business through better staff retention and higher _____. A fixed yearly amount of pay is a _____. Pay based on the hours worked is a _____. Extra pay earned for each sale is _____.

Match the job to the best method

Spot the true motivation facts

Tap the TWO statements that are true about financial motivation.

• Commission rewards a worker for each sale made
• Motivated staff give better retention and productivity
• A salary rises and falls with each sale
• Motivation makes no difference to a business

Choose the method

Read each case and choose the best financial method, with a reason.

• A car showroom wants its sales staff to sell as many cars as possible. Which method fits best?
• An accountant does steady, reliable work that does not change from month to month. Which method fits best?
• A firm wants every worker to feel they share in a good year. Which method fits best?

Explain financial motivation

Explain why motivating staff matters and how a business can use financial methods to do it, matching methods to different jobs.

• Explain two benefits a business gains from a motivated workforce
• Explain the difference between a salary and a wage
• Explain how commission motivates a sales worker
• Explain how profit sharing can motivate a whole workforce
• Finish with a judgement on which method suits a sales job and why