IBBusiness ManagementHLRevision Notes2. Human Resource Management2.4 Motivation & DemotivationTypes of Non-financial Rewards

Types of Non-financial Rewards (HL IB Business Management)

Revision Note

Steve Vorster

Expertise

Economics & Business Subject Lead

Non-financial Rewards to Improve Performance

  • Non-financial rewards are motivators not directly related to money

Examples of non financial rewards include job enlargement, empowerment, job rotation, job enrichment, flexible working, team working, consultation, delegation

Examples of non-financial rewards
  

  • These incentives are usually intangible and include methods that lead to recognition, praise, job satisfaction, and better work-life balance
     

Types of Non-financial Incentives & Their Links to Motivational Theory


Incentive Type
Explanation
Link to Motivational Theories

Empowerment

  • Involves giving staff the authority and resources to make decisions and take action without first receiving management approval
     
  • Increases staff sense of ownership and responsibility, leading to improved productivity

 

  • Maslow's 'Esteem' Needs as staff contribution is valued

  • A 'motivator' in Herzberg's Two Factor Theory (increase in responsibility)

Team working

  • Involves creating opportunities for staff to work collaboratively

  • Staff can share ideas and expertise, leading to improved productivity and innovation

 

  • Maslow's Love & Belonging, as well as Esteem Needs

Job enrichment

  • Involves adding more challenging or meaningful tasks to a job
     
  • Staff feel more motivated and engaged, leading to improved productivity

  • A 'motivator' in Herzberg's Two Factor Theory

Job rotation

  • Involves moving staff between different roles in the business

  • Exposes staff to new challenges and experiences which can increase motivation, understanding and skill

  • A 'motivator' in Herzberg's Two Factor Theory (the work itself)

Job enlargement

  • Involves expanding staff's job duties to include additional tasks or responsibilities
  • Engaging with a variety of tasks can increase motivation and job satisfaction, leading to improved productivity

  • Mayo's Human Relations Theory as it encourages the development of staff
  • A 'motivator' in Herzberg's Two factor Theory (the work itself)

Exam Tip

When asked to asses a compensation package on offer, consider the following before answering:

  1. The context of the business: Is it a manufacturing facility or a team of creative designers?
  2. The Industry norms: Does the data provide any insight into what competitors are doing?
  3. The balance of the compensation package: ideally it should include appropriate financial and non-financial incentives to maximise employee productivity and retention.

The case study usually provides good data which helps you to answer the above questions so refer to it as supporting evidence.

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    Steve Vorster

    Author: Steve Vorster

    Steve has taught A Level, GCSE, IGCSE Business and Economics - as well as IBDP Economics and Business Management. He is an IBDP Examiner and IGCSE textbook author. His students regularly achieve 90-100% in their final exams. Steve has been the Assistant Head of Sixth Form for a school in Devon, and Head of Economics at the world's largest International school in Singapore. He loves to create resources which speed up student learning and are easily accessible by all.