A certain amount of money needed to meet our needs. We go to work or engage in other activities in order to generate revenue. So, the money is our motivation in this case. We will discuss the peculiarities of job motivation as an element of financial management today.
Motivation is a combination of feelings of a person that lead it to certain actions.
Company management should clearly define the priorities of motivation because productivity and efficiency of labor, and thus the efficiency of the of the company activity depends on the motivation of employees
There are two main types of motivation: material (financial) motivation and non-financial (intangible) motivation.
Non-financial motivation is based on the facts that raise of employees interest in labor improving through various socio-cultural and other intangible motivational factors.
The main methods of non-financial personal motivation of employees are:
- Awarding diplomas and conferment of various honorary titles, such as “the best employee”;
- Conduction of trainings, seminars and workshops in which employees are free to raise their professional level.
- Engaging employees to take responsible decisions, thus enhancing their self-esteem.
- Position increasing and providing of additional management or supervisory functions.
The company can use other methods of intangible motivation of employees, besides the above.
The material financial motivation lies in the fact that an employee is provided by some additional material or financial benefits for his motivation
The main methods of financial motivation include:
- One-time cash awards and prizes,
- The constant increase in wages,
- Additional paid holidays and weekends,
- Free vouchers on vacations,
- Free medical and other insurance,
- Providing of discounts on company products,
- Provision of loans for the purchase of large household appliances, automobiles or housing.
Many other motivation types can be attributed to the material motivation besides listed above.
The financial manager should take into account future costs of staff motivation in the staff management plan and business plan of the company.
Also, he should analyze the actual cost of the employee’s motivation for the reporting periods.
The financial cost for intangible motivation can be quite low, but the cost for material motivation can be significant.
Direct link between the amount of costs on the motivation and performance of employees is hard to follow because it is the psychological motivation process. However, we can assume that this relationship is straightforward. More spending money on motivational measures provides a more efficient and productive work of employees.