Methods of Financial Motivation Activity Worksheet

Watch the Two Teacher’s video about ‘Methods of Financial Motivation’ and complete the tasks
below to apply your knowledge.
Video link: Methods of Financial Motivation
1. Complete the table below whilst you are watching the video to explain each method of
financial motivation. You can conduct further research to improve your answer if you wish.
Ensure you clearly describe the key characteristics of each method with examples,
alongside a comparison between each method’s potential benefits and drawbacks to a
business.
Method of Description with Examples Potential Benefits Potential Drawbacks
Financial
Motivation
Remuneration Money received in exchange for work for Motivates employees, more productivity, Less efficient.
the business. How ever, the amount of
remuneration dependents on their roles in It can demotivate employees if they are
the business. forced to do overtime.

For example: Can cause conflict.

A costumer service manager receives Pressure

more than a costumer system.
Wages and salary.
Wages varies how they are paid, time rate,
piece rate, over time.
Salary fixed amount of payment.

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 Performance Better employee performance increase in Motivates them to work better. Hard to adapt
Related Pay payment.
Increase performance and efficiency. And very costly, their performance can
Bonus and commission decrease.
And morale.
Bonus reward for productivity and Can recreate a poor workplace culture and
performance. negatively impact the costumer experience
Commission additional payment received
over their salary. Calculated by amount of
sales, profits

Promotion Is when an employee progress within the Motivation, increase performance and Can cause friction and demoralise
business hierarchy. With new efficiency. employees and they may leave the
responsibility and payments. business

Fringe Benefits Additional employment additional Motivates and make employees more Can lead to demotivation and low

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 compensation provided by an employer focused. erformance
beyond an employee’s direct wages or
salaries. Increase loyalty.

Profit sharing scheme reward employees Reduce the amount of employee’s

for their contribution to the business absences.
overall profit. Able to perform better.
Pension scheme Good relationship
Healthcare insurance Happy workforce
Free meals Can make employees feel valued
Additional sick and holiday pay
Staff discount

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 2. FEATURED QUESTION (you can answer this in the box below or on YouTube via the
comments section of the video, the question is pinned at the top of the comments section,
where you can compare your answer to other viewers and you might just get some
feedback from Two Teachers personally). The question is:
 Which method of financial motivation would be the most effective method to motivate
you personally and which methods would you choose to motivate your employees if you
owned a business?

3. In your opinion, which method of non-financial motivation would be the least effective
method to motivate an employee? Ensure you justify your reasons why.

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 4. Scenario: Lucy owns a gym named Energise, she set up the business 5 years ago and it
currently has one location in a city centre, with a small team of employees (8 in total). The
business has a relatively flat workforce structure, within which every member of the team
has the same role and is trained with the expectation that they can do any task required.
Lucy is very focused on her employees and maintaining a positive workplace culture which
has led to a very happy, collaborative, and productive workforce up until this point.
However, over the past 6 months, Lucy has identified several issues that are concerning
her which she believes link to a sudden decrease in employee’s levels of motivation and
morale.
She believes her team of employees have become fractured with employees starting to
make comments or complaining about one another, whilst at the same time appearing
severely demotivated which has impacted their performance at work.
The main employee comments and complaints resolve around the following:
1. Some employees feel they are doing more work than their co-workers, especially
through the gyms personal training programme where members pay a premium and
choose a dedicated personal trainer. Some employees are much more popular than
others, but they all receive the same pay.
2. Some employees are more effective than their co-workers at signing new members up
to the gym, effectively making the business much more profit, but again they all receive
the same pay.
3. Some employees feel they have no progression route or anything to strive for due to the
flat structure of the workforce.
The only methods of financial motivation which Lucy currently uses is remuneration through
employee wages on a time rate basis. She has asked you for your advice; what financial
methods of motivation do you recommend Lucy introduces to solve the 3 issues above.
Ensure you justify each of your recommendations with supporting analysis of the benefits
and drawbacks of each one.

Solution to Issue 1:

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 Solution to Issue 2:

Solution to Issue 3:

Overall conclusion of the issues at Energise and your recommendations to Lucy:

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 5. You have 10 minutes to complete the crossword below, see if you can find all 10 Methods
of Financial Motivation within the crossword before the clock runs out.

Financial Methods of Motivation Crossword

1
2
3

4 5
6
7

10

Across Down
3. Employees receive this when they work above their 1. This type of employee pay is calculated on the
contracted hours. productivity of the employee.
5. This financial motivator can increase the productivity, 2. Often, this method of financial motivation is designed to
efficiency, and morale of both individuals and teams. save employees money rather than providing them with
7. Employees who perform better often get paid more with additional pay.
this financial method of motivation. 4. Employees progress into a new role with additional pay
8. The amount of pay employees receive is based on the with this financial method of motivation.
number of hours they work. 6. This type of remuneration is fixed.
9. This method of financial motivation is commonly used in
the sales industry.
10. This method of financial motivation rewards employees
for their contribution to the business' overall profitability.

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