IGCSE Business Studies Section 2 – People in Business Practice Test 2026: Comprehensive All-in-One Guide for Exam Success

Pay influences motivation, and motivation affects how hard people work, which shapes productivity. When pay is competitive, employees feel valued and are more willing to put in effort, often boosting output. If pay is poor or unfair, motivation can drop and productivity may fall. But pay isn’t the only factor. The work environment, company culture, leadership, recognition, opportunities for advancement, training, and how fairly workload and conditions are managed all matter for motivation and productivity. A business that combines fair, competitive pay with positive non-financial rewards and good working conditions is more likely to see higher productivity. The other statements are too narrow or incorrect: pay does have an impact; it is not the only factor; and paying more does not automatically guarantee high productivity if other factors are poor.