The Effect Of Monetary Incentive On Workers Performance In Nigerian Organisation
This study focused on the effect of monetary incentive on workers performance in Nigerian organization using Ibeto Cement Co. Limited as case study”. The study specifically was aimed at evaluating the relationship between salary, wages and employee performance, determining the extent of relationship between fringe benefits and employee performance and assessing the extent of relationship between bonuses and employee performance.
The study adopted the survey research design. Population comprised the workers of Ibeto Cement Co. Limited from which 100 respondents were purposively selected as sample. Self-constructed and validated questionnaire was used for data collection.
Table of Content
- Title Page
- Table of Content
- List of Tables
- 1.1 Background of the Study
- 1.2 Statement of the Problem
- 1.3 Objective of the Study
- 1.4 Research Questions
- 1.5 Research Hypothesis
- 1.6 Significance of the Study
- 1.7 Scope of the Study
- 1.8 Limitation of the Study
- 1.9 Definition of Terms
- 1.10 Organisations of the Study
Review of Literature
- 2.1 Conceptual Framework
- 2.2 Theoretical Framework
- 2.3 Empirical Review
- 3.1 Research Design
- 3.2 Population of the Study
- 3.3 Sample Size Determination
- 3.4 Sample Size Selection Technique and Procedure
- 3.5 Research Instrument and Administration
- 3.6 Method of Data Collection
- 3.7 Method of Data Analysis
- 3.8 Validity of the Study
- 3.9 Reliability of the Study
- 3.10 Ethical Consideration
Data Presentation and Analysis
- 4.1 Data Presentation
- 4.2 Analysis of Data
- 4.3 Answering Research Questions
- 4.4 Test of Hypotheses
Summary, Conclusion and Recommendation
- 5.1 Summary
- 5.2 Conclusion
- 5.3 Recommendation
1.1 Background to the Study
The success and the survival of any organization are determined by the way the workers are remunerated and rewarded (Adams, 2013). Organizational performance is a complex phenomenon largely affected by the ability and motivation of the workforce in any firm. One of the major problems facing most employers in both public and private sectors is how to motivate their employees in order to improve performance. The field of Economics is largely based on the assumption that financial incentives improve performance (Igbaekemem, 2014). In consideration of the era of global hyper competitiveness in the business world, incentives are fundamental imperatives to derive maximum employee inputs, retention, commitment from workers and industrial harmony between the workforce and manufacturing concerns. It is generally believed that effect of financial incentives is unambiguously positive; a large monetary incentive improves employee performance. Thus, employees of an organization have motives and inner desires that are expressed in the form of actions and efforts towards job roles to meet their needs. Employee motivation is the level of energy, commitment, and creativity that a company’s workers apply to their job (Ebrurajolo, 2004).
The issue of employee performance cannot be over emphasized. The most important thing for an organization is the devotion and loyalty of its employees, which is achieved if the employees are paid with better rewards. Rewards are highly concerned to overcome dissatisfaction and to increase performance of employees (Mehta, 2014). Despite the fact that reward management has received substantial research attention, this has dwelt more on developed and emerging economies (Carton, 2004; San, Theen, & Heng, 2012), with little done in the developing economies (Agwu, 2013). Various researchers have come up with various ways to motivate people at work. However, because human beings are different from one another in terms of needs, culture, religion etc. so does what motivate them also varies. Some employees are motivated by financial and other incentives and some non-financial incentives. Managers continuously seek for ways to create a motivating environment where employees will work at their optional levels to achieve the organizational objectives. Since human resource is the most valuable resource of any organization, it must activate, train, develop and above all motivate in order to achieve individual and organizational goals. According to Silverman (2004), the central tenet of the distinction is that rewards are promised from the outset, whereas recognition is afforded in a post hoc manner. He also posits that the essential distinction is that incentives are forward looking while rewards are retrospective and that the difference is necessary when defining the objective of pay for performance. In most business and other organizations, money is actually used in keeping an organization adequately staffed and not primarily as a motivator. Any bonus scheme for manual workers should be related to criteria which are meaningful to the employees and which are capable of being measured consistently. The incentive to achieve one particular objective for example, increased volume, should not act as an incentive to worsen other standards of achievement like quality. It is therefore, important to know what induces a worker most, as many people have different needs and aspirations. Therefore, this research work examined the effects of monetary incentives on workers „performance in Nigerian organizations with references to selected firms in Anambra State.
1.2 Statement of the Problem
There have been several problems associated with financial incentives on workers‟ performance on the part of workers and managers in various business organizations. These are; Poor incentives package which have been a major factor affecting employees‟ commitment and productivity, employees lack of willingness to increase their performance because they feel that their contributions are not well recognized by their organizations and Management lacks the necessary skills that could help in the formulation of a good monetary incentive policy. The success and the survival of any organization are determined by the way the workers are remunerated and rewarded (Lawler, 2003). The reward system and motivating incentives will determine the level of employees‟ commitment and their attitude to work. According to Kreitner and Kinicki (2007), incentives are the compensation for doing work well given to a worker in the form of both financial and non-financial incentives. However, for any organization to achieve its objective in any competitive society, employers of labour must have a thorough understanding of what drives the employees to perform efficiently and reward them accordingly. There is an increasing need for organizations to develop reward systems that motivate staff to work harder.
To this effect, this study attempts to critically analyze the effect of monetary incentives on employee performance in firms within the three senatorial districts of Anambra State.
1.3 Objectives of the Study
The main aim of the study is to examine the effect of monetary incentive on workers performance in nigerian organisation.
The specific objectives are:
- To evaluate the relationship between salary, wages and employee performance.
- To determine the extent of relationship between fringe benefits and employee performance.
- To assess the extent of relationship between bonuses and employee performance.
1.4 Research Questions
The following research questions were formulated to achieve the objectives of the study:
- To what degree does salary and wages have a motivating potential in increasing employee performance in an organization?
- What is the extent of relationship between fringe benefits and employee performance?
- What is the extent of relationship between bonuses and employee performance?
The following null hypotheses were formulated to guide this study:
- Ho: Employee monetary incentives does not lead to increase productivity.
- Hi: Employee monetary incentives lead to increase productivity.
1.6 Significance of the Study
This study is to examine the employee’s financial incentives in the public sector. It will go a long way in helping future researches and student who have interest in studying employee’s financial incentives in public organization so as to increase productivity and efficiency. It will help in suggesting adequate financial incentive style practices for managers and employees who are interested in improving their employee or subordinate performances in order to achieve organizational objectives.
Also, it will helps in organization areas of problem which may winder efficient performance and to make suggestion and solution with a view to making useful recommendation which can improve the productivities of workers in manufacturing firms in Anambra State in Nigeria.
1.7 Scope of the Study
This scope of the study: the scope of the study covers the effect of monetary incentive on workers performance in Nigerian organisation using manufacturing firms in Anambra State as case study.
The study will also examine past and present literature on the related concept of the study. The findings are mainly restricted to manufacturing firms in Anambra State with exclusion of the other sectors in Nigeria.
1.8 The Limitation of the Study
There are many limitation that can serve as hindrances to the study. among them is ‘Time’ limitation in terms of available time for the activities and discourage the study of each employee. The study might require a lot of time.
Another limitation is financial constraint financial constraint can serve as limitation to the study when there is adequate finance to carryout the study, they will be difficulty there by discouraging the objective of the study.
However there may be long distance between the employee and the place where the study is conducted, this can also serve as limitation, there is problem of getting the full details or responses from the people we interviewed. To the junior staff be refused to respond to all questions for fear of losing their jobs or for been punished we have to guarantee them that their names will not be mentioned. Almost the top management staff in spite of their level of experience and quantification also refused to admit the fact that they have not full finance their subordinate.
1.9 Definition of Terms
It is the management responsibilities to create condition under which employee will willingly and voluntarily work toward organization objective because they enjoy the work and feel it’s importance to do a good work.
Thing that management must do. It can also be refer to as the duties of management.
These are thing that people want.
It can also refer to as physical need i.e. thing that can be seen or touch e.g cloth, food etc.
Need to ensure against deprivation or any other accident, it can also be referred as safety i.e. to protect the live of people life people against evil.
1.10 Organization of the Study
This research work is organized in five chapters, for easy understanding, as follows.
- Chapter one is concern with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study.
- Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature.
- Chapter three deals on the research design and methodology adopted in the study.
- Chapter four concentrate on the data collection and analysis and presentation of finding.
- Chapter five gives summary, conclusion, and recommendations made of the study.
Summary, Conclusions and Recommendations:
This chapter summarizes the findings into The effect of monetary incentive on workers performance in Nigerianorganization using Ibeto Cement Co. Limited as case study”. The chapter consists of summary of the study, summary of research findings, conclusions, recommendations and suggestions for further studies.
5.2 Summary of the Study
In this study, our focus was to examine The effect of monetary incentive on workers performance in Nigerian organization using Ibeto Cement Co. Limited as case study”. The study specifically was aimed at evaluating the relationship between salary, wages and employee performance, determining the extent of relationship between fringe benefits and employee performance and assessing the extent of relationship between bonuses and employee performance.
The study adopted the survey research design. Population comprised the workers of Ibeto Cement Co. Limited from which 100 respondents were purposively selected as sample. Self-constructed and validated questionnaire was used for data collection. The collected and validated questionnaires were analyzed using four Likert scale of Strongly Agree(SA), Agree(A), Disagree(D) and Strongly Disagree(SD), the two formulated hypotheses were tested using Chi-Square and Pearson correlation analysis. The tested alternate hypotheses were accepted.
Based on the finding of this study, the following conclusions were made:
- Employee monetary incentives lead to increase productivity
- Employee benefit scheme enhances employees productivity
- There a significant relationship between the means of salaries and remuneration and workers performance
- There is a relationship between job rank position and job satisfaction
Organizations are driven by efficiency and achievement that manifests itself in the form of tangible results for the organization, and could be rewarding for the employees. Less productive inputs and lower efficiency levels are bound to affect the business and jeopardize its sustainability and survival. Productivity is nothing but reduction in wastage of resources like men, material, machine, time, space, capital etc. It can be expressed as human efforts to produce more and more with less and less inputs of resources so that there will be maximum distribution of benefits among maximum number of people. Productivity denotes relationship between output and one or all associated inputs. Productivity is an attitude of mind. It is a mentality of progress of the constant improvement of that which exists. It is certainty of being able to do better than yesterday and continuously. It is constant adoption of economic and social life to changing conditions. It is continual effort to apply new techniques and methods. It is faith in human progress‟.
While employee motivation could be practiced in some organizations, one of the impediments to successful employee motivation is the timing of motivation. Organizations engage monetary means as part of motivation. However, this is sometime a one-time act. Any motivation that will yield dividend for organizations must be timely and continuous. This is because employee needs regular motivation, training and development and job security to continue their best practices. The human resource management or staff welfare department could structure a system that regularly ensures the motivation of employees. Management of organizations and institutions should prioritise employee motivation in order to continue in earning commitment and loyalty from the staffs of organizations. Policy makers should review employee motivation packages and develop frameworks that will highlight employee motivation packages and timing. These suggestions will go a mile in ensuring that organizational employee renders valuable services to the public and increase productivity.
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