Financial motivation rewards effort with money. Non-financial motivation rewards effort with something else, such as recognition or growth. A case answer chooses the method that fits the workers and the job.
This lesson is part of SPM Business human resources. It builds on the terms in recruitment, training and performance concepts.
How do the two kinds compare?
| Method | Type | Suits | Risk |
|---|---|---|---|
| Commission | Financial | Sales work where effort changes sales | Workers may rush or ignore service |
| Bonus | Financial | Team targets that are clear and measured | Stops motivating if the target feels unreachable |
| Recognition | Non-financial | Workers who value respect and status | Seen as empty if pay feels unfair |
| Training | Non-financial | Workers who want to grow | Costs time and money, and workers may leave after |
No method is best everywhere. The case decides.
How does commission work in numbers?
Bengkel Cahaya sells car accessories. Nadia earns a basic salary of RM1 800 each month plus 5% commission on her sales. Last month she sold RM20 000 of accessories.
Commission is 5% × RM20 000 = RM1 000. Total pay is RM1 800 + RM1 000 = RM2 800.
The link between effort and pay is clear, so commission suits this job. The owner must still watch service quality, because a worker paid per sale may push customers too hard.
What does an applied choice sound like?
A list says, “Bonus, commission and recognition are motivators.” An applied answer says, “Bengkel Cahaya should use commission for Nadia, because her sales change directly with her effort. It should add recognition for good customer feedback, so she does not chase sales at the cost of service.”
The answer picks a method, uses a case fact and adds a second method for balance.
Which mistakes cost marks?
- Saying money always motivates, with no link to the workers in the case.
- Choosing commission for a job with no sales, such as a storekeeper.
- Naming a method without stating its effect on effort or behaviour.
A quick test helps: ask, “What does the worker control in this job?” Reward that.
Check yourself
A fictional bakery team of six shares one oven. The owner offers a RM300 team bonus if no order is late for each month, and gives a “Baker of the Month” certificate. Name the financial and non-financial methods, and say one risk of the bonus.
Answer
The bonus is financial and the certificate is non-financial recognition. A risk: because the bonus depends on the whole team, one careless worker can cost everyone the reward, which may cause tension. The owner could reduce this by keeping the target clear and sharing feedback early in the month.
What to study next
Put motivation to work in planning staffing for a fictional case, then try the human resources practice set.
If you want a teacher to test your choices on new cases, see online one-to-one Business tuition.