Business – 2.2 Motivation – Methods in practice | e-Consult
2.2 Motivation – Methods in practice (1 questions)
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Fringe Benefits
- Non‑cash rewards such as health insurance, pension contributions, company cars, and flexible working arrangements.
- Enhance the perceived value of employment beyond the basic wage, appealing to employees’ extrinsic needs for security and work‑life balance.
Profit‑Sharing Schemes
- Employees receive a share of the company’s profits, usually in the form of cash bonuses or stock options.
- Aligns employee interests with organisational success, fostering a sense of ownership.
Impact on Staff Retention
- Increased loyalty: When employees benefit from company success, they are less likely to leave.
- Competitive advantage: Comprehensive benefit packages differentiate the employer in tight labour markets.
Impact on Organisational Performance
- Higher engagement leads to improved productivity and lower absenteeism.
- Profit‑sharing can encourage cost‑saving ideas and innovation, as employees directly reap the financial rewards.
- Potential downside: If profits fall, payouts may be reduced, which could demotivate staff if not managed transparently.
In summary, fringe benefits and profit‑sharing complement monetary wages by addressing both security and achievement needs. When integrated effectively, they strengthen retention, boost morale, and can translate into measurable gains in performance.