Business Studies – 2.4.2 Methods of motivation | e-Consult
2.4.2 Methods of motivation (1 questions)
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Answer:
Advantages (Business):
- Increased Motivation: Profit-sharing aligns employee interests with the company's success, motivating them to work harder and more efficiently.
- Improved Teamwork: Encourages collaboration and a sense of shared responsibility for the company's performance.
- Reduced Labour Disputes: Can foster a more positive relationship between management and employees.
- Attract and Retain Talent: A profit-sharing scheme can be a valuable incentive for attracting and retaining skilled employees.
Disadvantages (Business):
- Difficult to Implement: Requires careful planning and transparent accounting to ensure fairness.
- Potential for Disagreement: Disputes can arise over how profits are calculated and distributed.
- May Not be Effective if Profits are Low: If the company is struggling financially, profit-sharing may not be motivating.
- Administrative Costs: Setting up and managing a profit-sharing scheme can involve administrative costs.
Advantages (Employees):
- Increased Financial Reward: Employees benefit directly from the company's success.
- Sense of Ownership: Fosters a sense of ownership and commitment to the company.
- Improved Job Satisfaction: Can lead to higher job satisfaction and morale.
Disadvantages (Employees):
- Income Uncertainty: Income is dependent on the company's profitability, which can fluctuate.
- Potential for Disappointment: If profits are low, employees may feel disappointed.
- May Not be Sufficient: Profit-sharing may not be enough to meet employees' financial needs.