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Classifying Needs

People seem to have different wants. In markets this creates the very desirable situation where we can trade in such a way that we are both happier as a result.

But it also means we need to try to get a handle on the whole variety of needs and begin to understand how to design organizations that maximize productivity.

Many theories posit a hierarchy of needs, in which the needs at the bottom are the most urgent and need to be satisfied before attention can be paid to the others.

Maslow’s hierarchy of need categories is the most famous example.

• Physiological
• Safety
• Belongingness
• Esteem
• Self-actualization

Specific examples of these types are given below, in both the work and home context. (Some of the instances, like “education” is actually satisfiers of the need.)

According to Maslow, lower needs must be fulfilled before the others are activated. There are some basic things that take precedence over all else.

People management – Financial methods of motivation

It is undeniable that money or other financial rewards play a key role in motivating people in the workplace. There is a wide variety of ways in which a business can offer money as part of the “pay package”,

• Salaries: fixed amounts per month or year for performing a role.
• Benefits in kind (“fringe benefits”) – These include staff discounts, contributions to travel costs, staff uniforms etc
• Time-rate pay: pay based on time worked where employees are paid per hour.
• Piece-rate pay: pay per item produced – becoming less common
• Commission: payment based on the value of sales achieved.
• Other performance-related pay: e.g. bonuses for achieving targets
• Shares and options: l popular in businesses whose shares are traded on stock markets
• Pensions – Small businesses tend not to offer pension benefits.

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