Welcome back to the 10th lecture of Business Studies guys, we have already left behind half of our course, I’m sure you guys must be happy too. Ok, so let’s come back to what we will be studying today, people, we all have heard of the word motivation and know how important it is if we want to achieve our goals. In our lives when we do anything it is the result of at least one motivation. Similarly in Business, motivation is the reason why employees want to work hard and work effectively for the business. Common forms of motivation are salaries, wages, without these basic motivational factors no one would like to work for a company or a firm. However there is a lot more to motivation that we will study in this lecture.



    All those things that motivate us are known as motivators. In Business, there are two types of motivators:

    1. Financial Motivators
    2. Non-Financial Motivators

    Financial Motivators


    These motivators consist of financial rewards to motivate the employee to work harder. Examples are Wages, these are weekly payments made to employee. They are either paid by cash or sent to account. The wages are calculated in different ways like Time rate. According to this method the employer attaches a specific amount of cash to every hour worked. Piece rate is another method of calculating wages, according to piece rate the more units the employee works to produce the more money he or she gets. Wages are normally paid to blue-collar workers e.g lower class.

    Salaries, however are paid monthly and the money is sent to the respective account number. It is usually fixed and doesn’t vary with the length of work.

    Apart from these two major motivators, there is commission, the bonus given on extra work, Profit sharing in which employees get part of the business’s profit and  performance related pay alongwith Share ownership. All these motivators help give incentives to the the employees to work hard.


    Non-Financial Motivators


    Apart from these motivators, there are non-financial motivators as well, these methods of motivation rely on things other than money.

    Common examples of these methods are :

    1. Children’s education fees paid by firm
    2. Health insurance
    3. Discount on firm’s products
    4. Free holiday trips


     These factors also share the aim of satisfying the needs of the employee, although not by giving him money directly.


    There is also a third and equally important way of motivating employees. Known as Job Satisfaction, it has bee3n the subject of much thought by firms and other specialists.


    Job satisfaction, quite simply, is the information derived from knowing that you have done a good job. Now we all feel proud of ourselves if we execute a task that we set for ourselves, without any error. Similarly, job satisfaction comes from this sense of achievement.

    Now that we know what job satisfaction is we must study the methods of achieving it.

    Job Rotation

    Job rotation is one such method; it is a very basic concept which calls for the swapping of workers from one job to the others so that they are not bored from doing the same job every day.  

    There are other ways of enhancing job satisfaction such as JOB ENRICHMENT and JOB ENLARGEMENT.




    Leadership, now you might be wondering why we are discussing leadership, but let me tell you that leadership matters a lot in motivating. A leader e.g who always enforces his own opinion on his/her employees, never considers their opinion to be important, and never delegates any task to them would not be a good motivator, quite on the contrary he is a dictator. This type of leadership style is known as AUTOCRATIC Leadership.

    Laissez-Faire leadership is that style of leadership style that leaves employees free to decide which method to adopt in achieving both short and long-term objectives. This is usually in the case of scientific research when scientists are left to their own devices in figuring out how something happens or should happen.

    Democratic style of leadership involves two way communication between the employer and employee. Consultation takes place and the majority opinion is adopted. Even if it is technically or morally wrong. However, in private sector this form of leadership is the most beneficial and effective in motivating employees.


    Autocratic leadership                                Democratic Leadership
























    Laissez Faire



    Do as u see fit.





    Motivation Theories

    Ok, so the only thing left now is the motivational theories section. Motivation can mean a lot to firms and people alike, the mechanisms of motivation are different for everyone as each of us is motivated by different incentives.

    Many people have studied what motivates people and, I will discuss the major motivational theorist and their theories now.



    Elton Mayo:



    An eminent theorist himself, Mayo did an experiment involn=ving two teams in a factory, this experiment became a basis for his later claims.

    He was investigating the effect of physical conditions of environment and rest in motivating people to work hard. To one team he gave all these conditions, and to the other control team, Mayo, gave none of these conditions but did consult them and asked for their participation. To his surprise, not only the experimental team achieved well but also the control team. By this he somewhat proved that it is consultation and participation that motivates employees.


    F.W Taylor:

    An engineer working in America during the late 19th century, Taylor claimed that if workers are paid more, they will be more motivated. He said that people are motivated by personal gain and therefore they will work more effectively if paid well. Many critics blame Taylor for being overly simplistic in his approach to motivation but there is no doubt that his theory did increase efficiency of businesses during his time.


    Abraham Maslow:

    Maslow created a very comprehensive picture of motivational factors . In fact, he created a whole hierarchy of human needs, whereby a worker gets motivated until he reaches his full potential. His Hierarchy of Needs is the following:

    Maslow said that financial food, money, shelter are all physiological needs and are only the most basic. After them come safety/needs( meaning job security), and so on until self-actualisation is reached. An important thing about this is that once a stage or a level is passed, it can no longer motivate the employees. E.g if physiological needs are satisfied, people cannot be motivated again by these needs rather Job Security will be their next incentive for working harder.


    Now for some questions….

    Q:1 Define Job Satisfaction.

    Ans. Job and Satisfaction are two separate words, the former means task and the latter means being at ease. This itself implies that it is such a form of motivation that comes from the feeling that you have achieved something by simply doing your job. There are various methods of achieving job satisfaction including job rotation and job enlargement.

    Q:2 “Money is the best form of motivation”. Do you agree with the statement? Explain.

    Ans. Motivation is the reason why someone wants to work hard in doing their job. It comes from both financial and non-financial rewards and is important n increasing and maintaining a business’s efficiency.

    Money is a very convenient form of motivation and is very effective in ensuring motivation among employees as it pays for all their physiological needs such as food, shelter, clothing . As according to F.W Taylor an eminent motivational theorist of late 19th century, the more money you give to employees in the form of wages, the harder and better they will work at doing their job.

    It is also the primary form of motivation as Maslow states that on the hierarchy of needs Physiological needs are the most basest forms of motivation. If we do not give money to employees. They cannot be expected to work a lot and with dedication.

    However, there are other more important factors that give birth to motivation among workers. Safety and Self esteem are two very important factors in ensuring job motivation. Of course if you give high salaries to your employees but leave them wondering whether they will have their jobs till the next day, you are not doing a good job at motivating them. Similarly, if you don’t respect your employees and keep insulting them while giving them high wages, you won’t be surprised to find that they will hate you more than anything they have ever had. As, Abraham Maslow states, that Safety and Self-esteems needs are higher than money in the hierarchy of needs, they automatically become more important.

    Consultation and discussion with employees is also very important in motivating them. As Elton Mayo found out that even when physiological needs were not provided in appropriate amounts but the workers were consulted, they still achieved the same amount of work.

    Therefore, money may be a good form of motivating people, but it definitely isn’t the best.