Financial and non-financial motivators
Financial motivators
Wage or salary
- The base rate. It must be fair relative to the market and to colleagues, because employees compare — a rate that feels unfair demotivates even when it is objectively adequate.
Piece rate
- Paid per unit produced or picked. Strong driver of speed.
- Risk: it rewards quantity, so quality falls unless the rate is adjusted for standard — the incentive-design trap that AS90845 examines.
Commission
- A percentage of sales value. Common in sales roles.
- Risk: encourages selling to customers who should not be sold to, damaging repeat custom.
Performance-related pay and bonuses
- Paid for meeting targets, individually or as a team.
- Works where performance can be measured fairly and where the employee genuinely controls the outcome. Where it cannot, it is experienced as arbitrary and demotivates.
Profit sharing
- A share of the business's profit distributed to staff, usually annually.
- Builds collective motivation and connects staff to the business's overall result — but the link between one person's effort and the total profit is weak, so it works better as an expression of shared purpose than as a driver of daily effort.
Fringe benefits
- Vehicle, phone, health insurance, discounts, KiwiSaver above the minimum, extra leave.
- Valued and retained, and often cheaper for the business to provide than the equivalent cash.
Non-financial motivators
Recognition and praise
- Costs nothing and is consistently rated by employees among the strongest motivators — provided it is specific and genuine.
Responsibility and autonomy
- Being trusted to make decisions about your own work. Job enrichment means adding more demanding tasks and decision-making to a role.
Job design
- Job rotation — moving between tasks, reducing monotony.
- Job enlargement — adding more tasks at the same level, widening the role.
- Job enrichment — adding tasks with more responsibility, deepening the role. Enrichment is the strongest of the three, because it changes the level of the work rather than only its variety.
Training and development
- Signals investment in the person, increases their capability, and opens progression — one of the few motivators that also directly raises productivity.
Career progression
- A visible path. Its absence is a common reason capable people leave a flat structure.
Team working and belonging
- Being part of a group that relies on you. Mayo's central finding, and the mechanism behind whanaungatanga in a workplace.
Working conditions and flexibility
- Safe, decent conditions; hours that fit a life. Flexibility is frequently valued above a modest pay increase, particularly by staff with caring responsibilities or study commitments.
Purpose
- Understanding how the work matters, and to whom. Strongest where the business's pūtake extends beyond profit — a business returning benefit to its community gives employees a reason for effort that a competitor cannot simply outbid.
Choosing between them
| Financial motivators | Non-financial motivators |
|---|---|
| Act quickly and are easy to measure | Take longer to build |
| Recurring cost, and the effect fades as the new rate becomes normal | Often cheap or free, and self-sustaining |
| Work on extrinsic motivation | Work on intrinsic motivation |
| Can distort behaviour towards whatever is measured | Harder to game, because they are not tied to a single metric |
| Essential when pay is below market — nothing else compensates | Ineffective on their own when pay is unfair |
- The practical rule that most theory supports: pay has to be right before anything else works, and once it is right, more pay is a weaker lever than better work.