People in Business

Motivation: theories

People work for more than money. Understanding why they work is the first step to keeping them productive — and a well-motivated workforce is measurably cheaper to run.

Why a motivated workforce matters

People work to earn a living, but also for security, the company of others, recognition and a sense of achievement. A business that meets these needs gains three concrete benefits: higher labour productivity, lower absenteeism, and lower labour turnover — the rate at which staff leave and must be replaced. Each lowers cost and protects quality.

Maslow’s hierarchy of needs

Abraham Maslow argued that human needs form a hierarchy. A need only motivates while it is unmet; once satisfied, the next level up takes over. A business can motivate at every level — from a wage that covers food, rent and bills at the base, through safe conditions, teamworking and recognition, to challenging, fulfilling work at the top.

Taylor: motivation through money

F. W. Taylor’s scientific management treated pay as the main motivator: break each job into simple, repeated tasks, then pay workers by output — a piece rate — so producing more earns more. It raises output for routine work, but ignores every non-financial need Maslow identified, and monotonous work can quickly demotivate.

Motivation: methods

If Taylor saw only money, Herzberg saw two separate forces at work — one that stops staff being unhappy, and another that actually drives them.

Herzberg: two factors

Frederick Herzberg split the causes of workplace feeling in two. Hygiene factors — pay, conditions, supervision, company policy — cause dissatisfaction when poor, but fixing them only removes unhappiness; they do not motivate. True motivators — achievement, recognition, responsibility and interesting work — are what lift effort. The practical lesson is job enrichment: redesign work to give it more challenge and responsibility.

Financial methods

A wage pays by time or by piece; a salary is a fixed annual sum paid monthly. On top sit incentives: a bonus for hitting a target, commission as a percentage of sales, and profit sharing, which hands employees a slice of the profit they helped create.

Non-financial methods

Job enrichment and job rotation add challenge and variety; teamworking meets social needs; training and clear promotion opportunities give staff a path to grow. These map directly onto Maslow’s higher levels and Herzberg’s motivators. Worked example: a sandwich shop losing a third of its counter staff every year with low morale should try non-financial methods first — a pay rise lifts morale briefly but is costly and easily matched, while job rotation and training target the cause (boredom, not just pay) at low cost.

Organisation, management and delegation

An organisational chart is a map of who does what and who answers to whom. Its shape — tall or flat — shapes how fast a business can decide and communicate.

Reading an organisational chart

A chart shows the levels of hierarchy, the chain of command running down them, and the span of control at each level. A tall structure has many levels and narrow spans: tight control, but slow communication. A flat structure has few levels and wide spans: faster and cheaper, but each manager stretches further.

Who does what

Directors set the overall strategy and are answerable to the owners. Managers run departments, make day-to-day decisions and motivate their teams. Supervisors oversee the daily work of employees and report upward. Employees carry out the tasks that deliver the product or service.

Managing and delegating

Management has five functions: planning, organising, coordinating, commanding and controlling. Doing all five alone is impossible, so managers delegate — handing authority downward. Delegation frees the manager and develops and motivates staff, but the manager stays accountable, so it demands trust as well as control.

Leadership styles and trade unions

How a manager leads is as important as how the business is structured. The right style depends entirely on the situation the business faces.

Three leadership styles

An autocratic leader decides alone and issues instructions — good when decisions are urgent or safety-critical, or staff are inexperienced, but it ignores staff ideas and can demotivate skilled workers. A democratic leader consults staff and decides together — good when staff are skilled and their input improves the decision, but slower and unsuitable when a fast call is needed. A laissez-faire leader sets goals then leaves staff to it — good for expert, self-motivated professionals, but work can drift without control. A fast-food kitchen at lunchtime needs autocratic direction; a design studio thrives under laissez-faire.

Trade unions

A trade union represents workers collectively. Membership can strengthen employees’ hand through collective bargaining over pay and conditions, and offers legal support. In return, a business may face slower negotiations and, in disputes, the threat of industrial action — though a recognised union can also give managers a single, organised channel to talk to staff.

Recruitment and selection

Getting the right people in is a process, not a gamble. Recruitment attracts applicants; selection chooses between them.

Internal versus external

Internal recruitment is faster, cheaper and motivating, and the candidate is a known quantity — but it brings in no new ideas and leaves another vacancy behind. External recruitment widens the talent pool and brings fresh thinking, at higher cost and greater risk.

The main stages

Define the role (job description and person specification); advertise through the right channel; collect applications (CV or application form) and shortlist; select using interviews and, where useful, tests; then offer the post to the best-matched candidate.

Full-time or part-time?

A full-time employee gives continuity and deep familiarity with the business; a part-time employee adds flexibility to cover peaks and can be cheaper, but may be less available and costlier per head to train. Worked example: a growing bakery needing a shift supervisor should usually promote an experienced counter assistant — for an operational role built on trust, known reliability outweighs the fresh ideas an external hire would bring.

Training and the workforce

Once staff are hired they must be trained — and, when circumstances change, sometimes let go. Both are governed by law.

Three kinds of training

Induction settles a new starter in. On-the-job training teaches while the employee works, alongside a colleague — cheap and relevant, but errors happen live. Off-the-job training takes place away from the workplace with outside experts — higher quality and no live risk, but costly and time-consuming. Worked example: a salon training trainee stylists should build safe technique off the job first, protecting paying customers, then finish on the job.

Reducing the workforce

Dismissal ends employment because of the worker — poor conduct or performance, or breaking the contract. Redundancy ends it because the role is no longer needed — through automation, falling demand or a merger — and is no fault of the worker.

Legal controls over employment

Contracts must be set out in writing. Workers cannot be sacked without fair reason or process (unfair dismissal). Hiring and treatment must not be based on protected characteristics (discrimination). The business must provide safe working conditions (health and safety). Pay cannot fall below the legal floor (minimum wage).

Communication

A business runs on information. Communication works only when the message is received and understood — which is why feedback matters as much as the message.

Choosing a method

Messages travel internally, between staff, and externally, to customers, suppliers and government. Face-to-face gives instant feedback and clear tone but leaves no record and needs everyone present. Telephone is fast and personal across distance but leaves no record. Email gives a written record and reaches many at once but is easily ignored or misread. A notice-board is cheap and seen by all but one-way with no feedback. The best method depends on speed, cost, audience and whether a record is needed.

When communication breaks down

Communication is a loop: a sender encodes a message, sends it through a medium, and the receiver responds with feedback that confirms it landed — break any link and the message fails. Common barriers and their fixes: jargon or unclear language (use plain wording matched to the receiver); the wrong medium (match method to urgency and audience); a message too long or vague (keep it short and state the action needed); no feedback (invite a reply to confirm understanding).