Motivation in practice: financial and non-financial methods

Financial methods

• Piecework: pay per unit produced. Encourages high output (Taylor), but quality may suffer, earnings are unpredictable and it suits only measurable output. The October 2024 WBS11 paper asked candidates to assess piecework pay for delivery workers (10 marks).
• Commission: a percentage of the value of sales made, common for sales staff. Encourages selling, but may lead to pushy selling and unstable pay.
• Bonus: an extra lump sum for meeting targets or at year end. Rewards effort but can feel like an entitlement.
• Profit share: staff receive a share of the firm's profits. Encourages staff to think like owners and supports teamwork, but the link between one person's effort and profit is weak.
• Performance-related pay (PRP): pay rises or bonuses linked to an appraisal of performance against targets. Rewards good performance, but appraisals may be subjective and cause resentment.

Herzberg would warn that money may not motivate in the long term; Taylor would favour it.

Non-financial methods

• Delegation: passing authority to carry out a task to a subordinate (the manager stays accountable).
• Consultation: asking employees' views before decisions are made.
• Empowerment: giving staff the authority and resources to make decisions about their own work.
• Team working: staff work in groups with shared goals (Mayo's social needs).
• Flexible working: choice over hours and location (flexitime, home working).
• Job enrichment: giving more challenging tasks and responsibility, a vertical extension of the job (Herzberg's motivators).
• Job rotation: moving workers between tasks of a similar level to reduce boredom and multi-skill them. The June 2024 WBS11 paper asked how job rotation might help a coffee shop chain (8 marks).
• Job enlargement: adding more tasks of a similar level to the job (horizontal loading). It adds variety but may be seen as more work for the same pay.

Calculating pay

Commission example: basic pay $1,200 a month plus 4% commission on sales of $45,000 gives 1,200 + 0.04 x 45,000 = $3,000.

Piecework example: $0.35 per item and 2,400 items gives $840.

Percentages of profit for profit share: share pool / number of staff, or in proportion to salary.

Worked example

A sales assistant earns $900 a month basic plus 5% commission on all sales. In March she sells $28,000 of goods. Calculate her pay and give one drawback of commission for the business.

1. Commission = 5% x 28,000 = $1,400.
2. Total pay = 900 + 1,400 = $2,300.
3. Drawback: staff may pressure customers into unsuitable purchases, harming the brand and causing returns.

Answer: $2,300; commission may encourage pushy selling.

Check yourself

1. A garment worker is paid $0.80 per shirt and finishes 1,150 shirts in a month. Calculate her monthly pay.
   Show answer

   $920. 0.80 x 1,150 = $920.

2. An estate agent earns a basic salary of $1,500 a month plus 1.5% commission on property sold. He sells $320,000 of property in a month. Calculate his total pay.
   Show answer

   $6300. 1,500 + 0.015 x 320,000 = $6,300.

3. A firm puts 8% of its $2.5m profit into a profit-share pool, shared equally among 400 staff. How much does each receive?
   Show answer

   $500. 0.08 x 2,500,000 = $200,000; / 400 = $500.

4. Giving a worker responsibility for planning and checking their own work is
   • job enrichment
   • job enlargement
   • job rotation
   • piecework
   Show answer

   job enrichment. Vertical loading with more responsibility.

5. Adding more tasks of the same level of difficulty to a job is
   • job enrichment
   • empowerment
   • job enlargement
   • delegation
   Show answer

   job enlargement. Horizontal loading.

6. Explain how job rotation might benefit a coffee shop chain.
   Show answer

   Staff move between tasks such as making drinks, serving and cleaning, which reduces boredom and multi-skills them so they can cover absences, keeping service running.. Variety reduces boredom and multi-skilling allows cover.

7. Explain one disadvantage of piecework for a business.
   Show answer

   Workers rush to produce as many units as possible, so quality may fall and more faulty products or complaints may result.. Quantity over quality.

8. A hotel lets reception staff give guests refunds up to $100 without asking a manager. This is
   • job rotation
   • commission
   • consultation
   • empowerment
   Show answer

   empowerment. Authority to make decisions about their own work.

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Sources

• Pearson Edexcel International Advanced Subsidiary/Advanced Level in Business specification (2018)
• Pearson WBS11/01 mark scheme, June 2024
• Pearson WBS11/01 mark scheme, October 2024 series (published January 2025)

Last updated 8 November 2026. Spotted a mistake? Tell us.