Evaluation Of Financial And Non Financial Motivation Methods Accounting Essay

Aiming at actuating workers, there have been two different sorts of motive named fiscal motive and non-financial motive methods for companies to utilize. Motivation is necessary for companies ‘ operations because a deficiency of motive in the short tally will ensue in the decrease of attempt and disappearing of committedness ( Hall, D et Al, 2008 ) . Motivation can be defined as a desire that employees have to make their occupations better. There are some conventional theories of motive. For case, Taylor ‘s Scientific Management puts frontward ‘a just twenty-four hours ‘s wage for a just twenty-four hours ‘s work ‘ , which is one method of fiscal motive theories. The other two illustrations are Herzberg ‘s two-factor theory and Maslow ‘s hierarchy of demands, which include both fiscal and non-financial methods. To be critical, non-financial and fiscal have both benefits and failing, and they are suited for different people in work topographic points. For case, bluish collar workers and white collar workers may be motivated in different ways. In fact, fiscal methods so have important impacts in motive. Be similar to them, non-financial methods have functional consequences in actuating employees every bit good, non as people ‘s general ideas that non-financial is less practical.

First, fiscal incentives are efficient because fiscal methods are major about money that can besides be explained as fiscal wagess to employees, which can fulfill the basic demands of workers, such as wages and rewards, and different types of payment which involve public presentation related wage, net income sharing. As a successful illustration of efficient fiscal methods, Tesco expended out ?50 million to merely over 100,000 of its employees after keeping ?38 million-worth of portions on their net incomes for three old ages in its profit-share strategy in 2002 ( Tutor2U, n.d ) . The great illustration of fiscal methods theory for motive is Taylor ‘s, a just twenty-four hours ‘s wage for a just twenty-four hours ‘s work. Harmonizing to Maslow ‘s hierarchy of demands ( Hall, D et Al, 2008 ) , money is a cardinal demand which belongs to physiological demands for work force. In add-on, Maslow ( Hall, D et Al, 2008 ) had divided the demands of staff into five parts, for illustration, the physiological demands mentioned earlier is the footing, and the highest degree of demands is self-actualization. Furthermore, in research by Hays in 2006, 42 % of employees surveyed said they preferred fiscal wagess, while 9 % focused more on non-financial wagess. “ This shows a important addition in the figure of people preferring hard currency wagess ” ( Hays, 2009 ) . These are the grounds why raising the income may actuate people to go more efficient than other methods.

We will write a custom essay sample on
Evaluation Of Financial And Non Financial Motivation Methods Accounting Essay
or any similar topic only for you
Order now

Despite of that fiscal motive methods have important advantages ; pecuniary methods of inducement are less effectual in some state of affairss. The first 1 is that employees may be paid the same as others who are non every bit productive as them ( Tutor2U, n.d ) , which can take to unfairness and dissatisfaction that can be normally seen in team-work. In add-on, rigidness is a serious job in fiscal methods of motive, which means that some workers may bask the same income without productiveness in the given clip. Furthermore, fiscal methods may be useless for high degree employees. For illustration, some employees work in international companies can acquire high wages and rewards. “ When a demand is largely satisfied it no longer motivates and the following higher demand takes its topographic point ” ( Net MBA, 2007 ) . That is, they would pay more attending to other countries of their occupations, such as safety demands and belonging that rank a higher place in Maslow ‘s hierarchy of demands theory. In a word, those jobs of fiscal motive methods can non be ignored when making concern.

Non-financial motive methods may be more available for companies in the long tally because they are flexible, particularly for some big companies. For illustration, Microsoft employees are about skilled workers who derive satisfaction from their work itself possess a strong sense of committedness to non merely their field of professional cognition but besides to their directors as good ( Echeat, 2005 ) . Employees may execute better in their given undertakings and duties in this manner ( HR, 2010 ) . Herzberg ‘s two-factor theory has stated that there are non merely fiscal methods for actuating the work force, such as occupation satisfaction, occupation enrichment, occupation rotary motion, every bit good as authorization ( Hall, D et.al, 2008 ) . Job enrichment can give new energy to those workers who have been bored with their work and so convey higher productiveness ( Tutor2U, n.d ) . Authorization can carry through workers ‘ belonging and the little aspiration of power. Furthermore, non-financial methods of motive are valid incentives for those people who have been appeased with their incomes and inquire for higher demands of occupations. For case, the feeling of belonging every bit good as a comfy environment may be needed for employees in companies. Consequently, the benefits of non-financial motive methods are practical and should be good used.

On the other manus, non-financial incentives besides have barriers to a company on some sides, such as troubles in commanding and unfairness. First, they are difficult to run. For authorization, the power that is divided into different parts need to give to some first-class and honest employees. However, it is difficult for directors to judge whether an person can cover with authorization and decision-making well ( Tuto2U, n.d ) . Second, non-financial methods are unjust sometimes, particularly in team-work. Everyone in a squad may bask the same environment and security as just, but non all co-workers will use a same attempt, which will interrupt the balance in a squad. Non-financial methods are decidedly good for actuating the work force, but the restrictions will besides impact the net income of a house in a negative manner, which should be paid more attending to.

Based on those motive methods, there could be given some basic recommendations. The first 1 is that a concern ought non to merely utilize fiscal or non-financial methods in the procedure of making concern. “ A combination of fiscal and non- fiscal inducements help together in conveying motive and ardor to work in a concern ” ( Management Study, 2009 ) . For illustration, associating increasing rewards to bettering working environment or clasp activities after working is a functional manner to actuate bottom workers and high degree employees. Furthermore, as a non-financial method for actuating employees, preparation is efficient in bettering their abilities and acquiring more professional cognition. Another utile method is making researches between employees to do certain what they need. “ Staff studies are normally really helpful in set uping whether staff in your company is motivated and hence executing to outdo consequence ” ( Business Balls, 2009 )

All in all, making concern is a complex procedure, which needs different waies of information to do schemes. Motivation is one of the most of import elements for the operation of a company because motive is about employees which can be defined as the basic factor of a concern. For case, P & A ; G considered its employees as its most of import plus and indicated that their involvements were in assisting and bettering the company ( Hub Pages, n.d ) . Fiscal and non-financial methods of motive have different maps in work topographic points. Furthermore, non-financial methods, such as enriching occupations and authorization to actuate white collar workers could be used more expeditiously for directors to avoid defects of non-financial and fiscal methods. That is, determination shapers should be more careful in this country by doing a best usage of motive theories and in a practical manner.


Hi there, would you like to get such a paper? How about receiving a customized one? Check it out