3.5 Motivation and retention

The importance of employee motivation

Motivation is where a business rewards staeort. There are many advantages to this.

• Improved performance
• Less absences
• High employee retention

The importance of employee retention

• Maintain an experienced workforce
• Reduces recruitment and training costs
• Saves time needed to recruit and train new staff
• Improves business reputation, making it easier to recruit

Financial methods of motivation

Financial motivation includes methods that provide employees with a monetary reward for their work.

• Pay: makes them willing to work more hours to earn money

• Bonuses: reward for meeting certain objective or completing a task well

• Profit sharing: given percentage of profits on-top of salary to convince workers to focus on making more profit

• Fringe benefits: benefits that would usually cost money given for free such as a car or private healthcare

  • Increases productivity
  • Improves mental health
  • Expensive to provide
  • Sometimes short-term, meaning it is easily forgotten

Non-financial methods of motivation

Non-financial motivation is motivation that recognises staff efforts without the financial cost.

• Praise
• Award schemes
• Working environment