The Impact Of Financial Incentives On Employee Productivity In Public Sector

Project and Seminar Material for Business Administration and Management BAM

The Impact Of Financial Incentives On Employee Productivity In Public Sector


Abstract


This study was carried out to examine the impact of financial incentives on employee productivity in public sector using Kwara State Ministry of Works as case study. Specifically, the study was aimed at identifying the cause of low productivity; and examine financial factors and evaluate how they can lead to job satisfaction and increase productivity. The study employed the survey descriptive research design. A total of 100 responses were validated from the survey. From the responses obtained and analysed, the findings revealed that Employee financial incentives lead to increase productivity; Job security enhances employees productivity; There a significant relationship between the means of job security and policy formulation; There is a relationship between job rank position and job satisfaction. The study recommend 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.


Chapter One


Introduction

1.1 Background of the Study

Notable management experts such as Abram Maslow, Elton Mayo, Fedbrick Herzberg, Christ Agyris etc. has carried out studies and made recommendations on how to finance employee for effective performance.

Herzberg (1970) sees financial incentive as the management responsibilities to create objectives because they enjoy the work (not just the work) and feel it’s importance to do a good work. He emphasis economic financial incentives and also stresses ego needs.

Abraham Maslow developed a popular content theory which the state that people are finance to five groups of need and that those exist in an hierarchical order. The theories argue that lower order need in their hierarchical order are physiological needs, security needs, belonging needs, esteem needs, and self-actualization need.

The public sector of the society sees to the needs of the society at large. The primary aim is rendering of services to the public and taken care of the public welfare, such as construction of roads, building of hospitals and maternity homes, public sector to achieve the organizational objectives of societies through the institutional structure of the government, their must be highly skilled personal, capitals and materials. However, the availability of materials and high skilled personal, capitals and materials.

However, the availability of materials and high caliber personnel is not sufficient achieving efficiency and productivity in public sector management without influencing and encouraging the human involved.

Hence, management must examine the factor that promotes workers out put one of which is financial incentives. In other to achieve or improve on a particular productivity level of management must derive full potential benefits from the available human resources and this work and produce maximum productivity in order to achieve organization objective.

Difference institution, ministries, parastatals have difference financial incentives. However, not all financial factors aimed at financial employees achieve this purpose. In certain cases some financial incentives applied on employee serves as incentives and wasted financial resources.

In this project, we examine some financial factors used by the Kwara State Ministry of works and based on findings relate or determine whether these factors lead to job satisfaction and job satisfaction in terms leads to high productivity in the Kwara State Ministry of works Ilorin.


1.2 Statement of the Problems

For public organization to be efficient, employee needs to be financed in other to put in their very best because public organization are not profit maximizing organization but their aim is to satisfy the needs of the people.
Another problem is to know the best method to used in finance employee of organization. There are many way is which an employees can be finance such as better salary, job security, spirit of belonging and other kind of benefits
The major question to be answered according to Ailkihsin (1968) “how do I finance my employee to put in their very best” also there is different individual style that is to say that individual react differently to a particular style so there is the need to study each employee socio Kultural environment with a view answering the question to knowing the best method to use.


1.3 Objectives of the Study

The purpose of the study are:

  1. To identify the cause of low productivity
  2. To examine financial factors and evaluate how they can lead to job satisfaction and increase productivity.
  3. It will help in suggesting adequate financial incentive style practices for manages and employees who are interested in improving their employee or subordinate performances in order to achieve organizational objectives.
  4. The main study involves the use of questionnaires and interviews in other to get the required
    information as per effectiveness of finance style.
  5. To know the type of record that actually finance the Nigeria works in to action for production.

1.4 Significance of the Study

This study is to examine the employees 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. 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 Kwara State Ministry of works in Nigeria.


1.5 Scope of the Study

This scope of the study: the scope of the study covers the impact of financial incentives on employee productivity in public sector with particular reference to the Kwara State Ministry of Works, Ilorin.

The study will also examine past and present literature on the related concept of the study. The findings are mainly restricted to the Kwara State Ministry of work with exclusion of the other ministry of works in Nigeria.


1.6 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 losting 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.


1.7 Research Questions

  1. Does employee financial incentives lead to increase productivity?
  2. Is there any significant relationship between the means of job security and policy formulation?
  3. Is there relationship between the related position and job satisfaction.

1.8 Research Hypothesis

  1. Ho: Employee financial incentives does not lead to increase productivity.
    Hi: Employee financial incentives lead to increase productivity.
  2. Ho: There is no significant relationship between the means of job security and policy formulation.
    Ho: There is significant relationship between the means of job security and policy formulation.
  3. Ho: There is no relationship between the rank position and job satisfaction.
    Hi: There is relationship between the rank position and job satisfaction.

1.9 Historical Background of the Ministry Of Works

The Kwara State Ministry of works Ilorin is based along Ahmadu Bello Avenue road, opposite ministry of finance Head Quarters Ilorin.

In 1967, new state were created and they established of the ministry took place in 1968, followed by subsequent development of staff. The defunct Northern Nigeria Ministry of work town and country planning where merged with that work to become ministry of works and surveys in 1971 how even the survey division of the ministry of work and survey was removed and put under the military governors office living the ministry of work intact. The ministry of work remains intact until 1978, during the one year transitional period of civil rule when the ministry of land and housing was merge with that of works to become ministry of works, land and housing.

With the advent of civil rule in October 1979, the land, housing section of the ministry was covered from the ministry of works, land, and housing living the ministry of works intact.

With the military take over of the reign of government in January 1984 the ministry of works land and survey until January 1986 when land and survey section were placed under the military governors office and living the ministry of works till date.

With the civil serve reform of 1988 directorates where established in the ministry of 1988 directorates where established in the ministry of works these are:

  1. Personnel, finance and supplies by an administration as directors.
  2. Electrical engineering division headed by an electrical engineering as director,
  3. Mechanical engineering division headed by a mechanicals director.
  4. Civil engineering division head by civil engineer as director
  5. Building service division headed by a quantity survivor as director
  6. Planning research and administrator as director

1.10 Definition of Terms

Financial Incentive:

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.

Management Responsibility:

Thing that management must do. It can also be refer to as the duties of management.

Need:

These are thing that people want.

Physiological Need:

It can also refer to as physical need i.e. thing that can be seen or touch e.g cloth, food etc.

Security Need:

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.

Hierachical Order:

Arrangement of needs according to desire of people.

Belonging Need:

It can also be referred as social or love need. This is how to relate with other people i.e. show to associate with them. to express feelings, to talk with others, to accept and to be accepted.

Extreme Needs:

To consists of ego i.e. to give respect to another

Self Actualization:

This is the ability to achieve one desire i.e. to fulfill one self interest.

Social Man:

This can be refers to as people or person that are financial by social attitudes and relationship of work group managers.

Motivation:

This can be refers to as a way of encouraging employees so that they can work quality and efficiently.

Employee:

Employee is a person who is hired to provide services to a company on a regular basis in exchange for compensation and who does not provide these services as part of an independent business.

Productivity:

Is a measure of the efficiency of production. Also, is a ratio of production output to what is required to produce it (inputs).

Product:

Product is anything that is made available for sale. Also is a result of the manufacturing process, to be offered to the market place to satisfy a need of a customer.

Production:

Is the act of creating use value or “utility” that can satisfy a want or need. Also the process and methods employed to transform tangible inputs e.g raw materials, semi finished goods, to finish product.


Chapter Five


Summary, Conclusions and Recommendations:

5.1 Introduction

This chapter summarizes the findings into the “the impact of financial incentives on employee productivity in public sector using Kwara State Ministry of Works 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 impact of financial incentives on employee productivity in public sector using Kwara State Ministry of Works as case study. The study specifically was aimed at identifying the cause of low productivity; and examine financial factors and evaluate how they can lead to job satisfaction and increase productivity

The study adopted the survey research design. Population comprised the workers of Kwara State ministry of works 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.


5.3 Conclusions

Based on the finding of this study, the following conclusions were made:

  1. Employee financial incentives lead to increase productivity
  2. Job security enhances employees productivity
  3. There a significant relationship between the means of job security and policy formulation
  4. There is a relationship between job rank position and job satisfaction

5.4 Recommendations

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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