Effective People Management Remuneration Why do Employees Want

Effective People Management Remuneration

Why do Employees Want to Work? Something drives them to do so.

Learning Outcomes How will we know when we are successful? Where do we go next? Be able to describe the different methods of remuneration. Be able to recommend suitable methods of remuneration for three different job roles. Be able to decide whether remuneration is the most important motivating factor. Be able to explain the advantages and disadvantages of the minimum wage. Be able to write an evaluation of one method of remuneration. Be able to evaluate the effect of the abolition on the minimum wage. You will be successful when: • You can explain the advantages of different methods of remuneration to skilled and unskilled workers. • You can explain the advantages and disadvantages of different methods of remuneration to employers. • You can discuss the importance of the minimum wage. Where to next? Being able to link communication to motivation (tomorrow)

Activity 1 – 5 minutes On the worksheet you have been given, join up the types of remuneration with their descriptions. You may use a text book to help you if you are stuck. LO: Be able to describe the different methods of remuneration.

Salary Share Options Bonus Commission These are extra payments over and above the basic wage or salary. They are often paid as a reward for reaching a target. These are often linked in with piece rate pay; for example, if a worker produces more than their target they will be rewarded with this. Some firms also allow their workers to have shares in the business. This can make employees feel part of the business and can give them an incentive to work hard because if the business performs better, this means more profits and, therefore, more money for the worker. These are usually paid to managers and office workers. They are usually stated at so much a year, although they are normally paid monthly. These are paid straight into employees’ bank accounts rather than in cash. Sales people may be paid a basic salary, plus a this which is a percentage of the value of sales.

This is a payment for reaching an agreed target. It may be a personal target agreed with an individual. Time Rate Piece Rate Performance Related Pay Fringe Benefits This means getting paid a certain amount for every unit of output or ‘piece’ made, i. e. the more you make, the more you get paid. This type of pay can be used only where the work of one worker can be counted or measured. Workers are paid according to the time worked. Workers are usually paid a fixed hourly or weekly rate. The rate they are paid for a week’s or an hour’s work is their basic rate. These are non-monetary rewards given to staff. Often known as ‘perks’, these are benefits other than money, paid in addition to wages or salaries. Examples include: • Company car • Discount card • Payments into a pension fund

Activity 2 – 10 minutes Salaried and hourly paid 1. 2. Write a paragraph explaining the difference between salaried and hourly paid workers. Identify and highlight at least three key terms within your explanation. LO: Be able to describe the different methods of remuneration. 11

If this is the answer, what is the question? This is a method of paying employees for their work, usually calculated on an annual basis and paid monthly. What is the question?

What is a salary?

If this is the answer, what is the question? This is a method of payment where workers are paid per item or unit they produce. What is the question?

What is piece-rate pay?

LO: Be able to describe the different types of remuneration. 1. Activity 3 – 10 minutes Draw a table in your exercise book with three columns Type of Remuneration Advantages Disadvantages Salary 2. Using the your notes and knowledge of business identify as many advantages and disadvantages of each type of remuneration as possible Extension Activity: Illustrate your advantages and disadvantages OR Explain the impact of remuneration on the motivation of: 1. Highly skilled and/ or creative workers 2. Factory workers 3. Retail workers

LO: Be able to describe the different types of remuneration. Activity 3 – 2 minutes 1. Swap sheets with your partner and read their advantages and disadvantages. 2. Add any to your table that you have missed out. Key Words Quality Cost Motivation Fairness Easy to calculate

If this is the answer, what is the question? If workers are motivated to work faster by the offer of extra money then production might be rushed and poor quality. This could lead to customer complaints which could lead to a damaged reputation and a fall in revenue. What is the question?

Explain one draw back of piece-rate pay (3 marks)

LO: Be able to explain the advantages and disadvantages of the minimum wage. Minimum Wage – 10 minutes Year 25 and over 21 to 24 18 to 20 Under 18 Apprentice October 2016 (current rate) £ 7. 20 £ 5. 55 £ 4. 00 £ 3. 40 £ 6. 95 Activity – 10 minutes 1. 2. 3. On the next full page of your exercise book create a poster explaining the advantages and disadvantages of the minimum wage. Make it look snazzy and interesting to read: neat text boxes with coloured pens etc, an illustration… Not just a list of bullet points. Extension activity: What is meant by the term minimum wage? (2)

LO: Be able to recommend suitable methods of remuneration for three different job roles. You Tell Me… Be able to decide whether remuneration is the most important motivating factor. Draw this table into your books and fill it in as we watch each Think Maslow clip. Job Fruit Picker Pixar Director or Animator Call Centre Sales Job Most Suitable Method of Remuneration Piece rate pay Salary and fringe benefits Basic salary plus commission Why Most Important Method of Motivation Unskilled job. Can measure output per worker easily – however if they rush to get more money they might damage the fruit! Money – meets physiological and safety needs by enabling food and shelter to be purchased. Highly skilled office based workers are usually paid a salary. It is easy to calculate and will remain the same whether they work more or less hours. Probably have fringe benefits such as free private medical care. Sense of fulfilment. Seeing the movie they have worked so hard on do well would drive them to want to repeat this to gain esteem and self actualisation. Being paid a percentage of what they make for a company is likely to motivate employees. Money – meets physiological and safety needs by enabling food and shelter to be purchased. Esteem needs could motivate as there are prizes for good work.

LO: Be able to write an evaluation of one method of remuneration. Be able to evaluate the effect of the abolition on the minimum wage. 10 mins - Choose one question from column A and one question from column B. Write these questions in your book and answer them. Column A Column B Evaluate the effect upon employers and employees if the government abolished the minimum wage. (8) Evaluate how important a method of remuneration salary is to highly skilled workers. (8) Explain one effect of abolishing the minimum wage (3) Explain how important commission is for motivating sales people. (3)

Check your answers • Salespeople ? • Salary to a high skilled worker? – Maslow? • Minimum wage abolition?

Some key non-financial incentives to support motivation Empowerment Delegating responsibility to employees Praise Recognition for good work Promotion Promoting staff to a position of higher responsibility Job enrichment Giving staff more challenging and interesting tasks Job enlargement Giving employees more tasks of a similar level of complexity Working environment Providing a safe, clean, comfortable environment to work in Team working Provide opportunities to work in teams

Can you think of the other advantages of having a motivated workforce? • • • Better productivity Better quality Lower levels of absenteeism Lower levels of staff turnover Lower recruitment and training costs

Test • What are the non financial methods of motivation?

Task • Create a poster explaining what Maslows Hierarchy of Needs is. • What does each level mean?

Be able to describe the different methods of remuneration. Be able to recommend suitable methods of remuneration for three different job roles. Be able to decide whether remuneration is the most important motivating factor. Be able to explain the advantages and disadvantages of the minimum wage. Be able to write an evaluation of one method of remuneration. Be able to evaluate the effect of the abolition on the minimum wage. Write a tweet explaining what you have learnt during today’s lesson. Include a #mostimportantnewpieceofinformation Stand behind your desk and wait to be dismissed, hand your tweet to me as you leave the room.