Motivation

Motivation is the internal and external factors that stimulate a person's desire to do something or achieve a goal. Internal factors include pride in doing a good job; external factors include how a manager treats employees. Businesses want employees to put in effort because they want to, not just because they are paid to turn up.

Financial and non-financial methods

Financial methods reward employees with money or money-related benefits, such as pay, bonuses or fringe benefits. Promotion and fringe benefits are financial because they have a monetary value or lead to higher pay. Non-financial methods motivate through the nature of the work itself, such as giving employees more variety, challenge or control over how they complete tasks.

Choosing the right mix

Non-financial methods often cost less than financial rewards and can last longer, because they change the everyday experience of work. But financial methods may be essential where pay is low or seen as unfair: if staff believe they are underpaid compared with similar local jobs, extra responsibility may feel like more work for the same money.

A small indoor climbing centre could pay its weekend instructors a higher hourly rate and ask one instructor to design the routes on a new wall. The extra pay deals with fairness; designing the routes adds interest and responsibility. Using both can work better than relying on either alone.

The most effective method depends on the type of job, the employees' needs and the business's budget. A call-centre role handling the same enquiries all day may need financial incentives alongside varied tasks, while a role designing new products may benefit more from freedom over how work is done. A combination of financial and non-financial methods is often used.