The Impact Of Financial Motivation On Workers Performance In Selected Manufacturing Firms
This study is intended to examine the impact of financial motivation on workers performance. The study at hand is based on the relationship between financial incentive and workers performance. The employees made it clear that they will increase their productivity if adequate in incentives are given to them. The main objective of this research are to determine if there is a relationship between financial motivation and workers performance bearing in mind the conditions, external and internal that affect our local firms. Again, to find out to what extent money act as a behaviour modificator. There has not been a cordial relationship between the workers and employers. In most organization their auditors have been denied of misunderstanding, conflicts, confusion frustration and disputes among employees and employer, most organizations complained of ill-treatment. In this research work the simple size is 70 and the sampling technique is random sample used as probability proportionate i.e. 85 and methods of data collecting is questionnaire. The researchers also went into seeking their views and dissatisfaction in the give establishments. The worker complained about the attitude of the management towards them, their peers earn more, some better-paid worker workless, they are paid and other factors. In order to increase organisation output, the management has an assignment to accomplish, that is setting up an attainable standard of performance and behaviour for all workers to meet, all incentives should be fashioned in way that will make it dependent on final output and then right kind of behaviour. The following recommendations were made amongst others, (i) employees should be given financial incentives after the occurrence of a desired behaviour, or when the established goals are reached. Also it is recommended that this equity must be perceived by management as comparisons made not only within the organization but outside the labour market also.
This chapter comprises of back ground of the study, statement of the problem, purpose of the study, significance of the study, research question, scope of the study, limitations of the study, and definition of terms.
1.1 Background of the Study
There is a general belief that the productivity of our manufacturing firms are generally low as compared to those of other countries. This no doubt is one of the causes of the low Gross National product experienced in Nigeria today. The above coupled with the ever-increasing population results of the low capital income stop pervading the nation.
The foregoing when matched with the soaring inflationary rate leads to high cost of living and consequently low standard of living.
Whether management practitioners blame the low productivity on workers or on management. It is an established fact that the efficiency of workers constitute the efficiency of the organization. Consequently the efficiency of the organization enhance the organizational performance. Based on this analysis, all forms of organizations, ranging from small scale to large scale industries need an effective plan to motive their workers to higher performance to enable them face the competition and challenges of this economic down-turn in the country.
Considering the different view on what motivates an individual towards high performance, there has been an increased search by behavioural scientists into this problem. An examination of their work reveals that people in an industrial setting are not so different form people in other works of life. To the extent that this is true, the introduction of financial motivation will influence their behaviour. In the words of Gupta and Jenkins 1982. “Research in this area unequivocally demonstrates that money can be used to motivate the employers. The question then becomes what is a company motivational systems, some motivational system reward seniority while others still reward effective performance”.
Based on need hierarchy, there are two basic types of needs. The higher and lower order needs. A critical look at these two types of needs that workers in less developed countries are still occupied with the lower order needs. A critical look at these two types of needs that workers in less developed countries are still occupied with the lower order needs. Employers administering motivational plans for employees in Nigeria work setting should address their minds to the satisfaction of these lower order needs which are likely to motivate them.
According to Nwosu 1985 “it is important that the application of the management (Motivation) theories in Nigeria should acknowledge some basic problems of survival, viz, shelter, food and clothing.
Organization psychologists seem to believe that the motivation of employees has became Ode of them must critical task facing organizations today more especially as it concerns the use of financial motivation as a management tool. This is because all the efforts to influence performance through this technique have not consistently yielded good result. This has kept the management, experts still searching for a more effective way of motivating worker thus the researchers interest in the topic under study.
1.2 Statement of the Problem
There has been definition of financial motivation as there are writers. According to Idow 1987.
Financial motivations refer to all monetary (out comes) provided by organizationally functional ways. In this study financial motivation would be defined in terms of monetary compensation, either in form of wages individual bonuses allowances or other types of financial remunerations workers performances been defined in terms of profit level of output and goals attained by the worker within a particular time say, two years.
Studies in this topic have gained general acceptance across cultures and nations. But there is still the need for an empirical study of this sort which will evaluate the effect of financial motivation and performance based on a systematic analysis of the situations in work places in the country.
There has been a low rate of labour turnover during the last few years. This low rate of turn-over is still witnessed inspite the excess work-load that is being experienced in some of our manufacturing firms could this associated with the financial incentive they receive or because of lack of job opportunities else where?. Another consideration with regard to the uncertain effect of incentive plans on performance is the funding that although many firms believe they have tied pay to performance. Infact their pay polices tie more closely to such factors as age, seniority, job placement, sex and race. Thus, it is often difficult to assure that pay is actually tied to performance even when this management is intention.
In view of the forgoing, what readily comes to mind is whether adequate pay tends to the satisfaction in all ramification on this premise, the researchers want to examine the impact of financial motivation on workers performance in a selected manufacturing forms in Enugu urbans.
1.3 Purpose of the Study
- To know the impact of financial motivation on workers performance in selected manufacturing firm in Enugu urban.
- To determine if there is a relationship between financial motivation and workers performance bearing in mind the conditions, external and internal that affect our local firms.
- To find out to what extent money acts as a behaviour modificator.
- The study will determine the major factors to be considered when relating financial motivation to workers performance.
1.4 Significance of the Study
This study will bring to light to all employers of labour and people who wish to improve on their knowledge in motivational techniques. This is so because people go into business with the intension of making profit. Profit could be made when employees produce goods in large quantities and good quality such aims could be achieved when employees are induced to work harder.
Let’s consider the following: Policy maker, employers, employees and the researcher.
The policy makers: It initiates policies that guide the employers of labour in the economy. AN agreement collectively reached in a collective bargaining process forms the basis for the formulation of the law on the issue in question. The negotiation involving the retirement age of the workers guided the formulation of the law on the 65years of retirement. It is seen as the most rational process of determine and reviewing the terms and condition of employement. This process manifests the power relationship between the employees and employers. It goes beyond the process of negotiation between the employees and employer on issues directly affecting conditions of employment. Employers: the employer in an organization has a lot to do to make the labour put in their best at all times. An organization employs the services of the labour in order to achieve a set of predetermined target. The organization support the progressive career development of the labour by continually adding to their skills, abilities and knowledge. The knowledge of the future plan of an organization helps the employees to plan on improving themselves so as to share on the future expectation.
The employers are interested in the level of improvement in the work life of the workers. This calls for the efforts of the organization to ensure that the workers are improved through in-service training, workshops and seminars.
Employees: the employee is referred to as the worker who has a contract of employement to protect. In protecting the contract, the employee has some responsibilities to fulfill. They should effectively manage their career in order to contribute in the achievement of the organizational goals. In a modern world of ours the employees ought to be successful in their career by building and maintaining up to date skill and knowledge, the employees should keep improving on their skills of performing their functions. This can achieved through in-service training workshop and seminars. That is to say, that the workers have to stay current within their technical specialty there is every need that the employees are given the opportunity to be creative by initiating ideas that can be used to solve problems.
The researcher: the researcher believed that the study will help clear the controversy on whether there is a relationship between financial motivation and employers performance. The researcher review that employees in any organization should have the opportunity to get new, interesting and professionally challenging work experiences. When workers challenged in their daily work experiences they are bound to research on how to solve those challenging problem, thereby increasing their intellectual capacity.
1.5 Research Question
The following research questions were formulated for this study:
- What are the impact of financial motivation on workers performance in selected manufacturing firms in Enugu urban?
- What are the relationship between financial motivation and workers performance?
- What are major factors to be considered when relating financial motivation to workers performance?
- To what extent can money acts as behaviour modificator?
1.6 Scope of the Study
This study covers the impact of financial motivation on workers performance. It also focuses on their effects on the operations of selected manufacturing firms in Enugu state.
1.7 Limitations of the Study
In every human endeavour, there is bound to be some limitations, the researcher carrying out this study had some limitations.
- Attitude of respondent: it is certainly clear that not all the respondents will submit the questionnaire at the appropriate time and so the researchers’ time was seriously affected.
- Financial problem had its own militating effect during the course of this project. The population of the study was not completely covered because of fund.
- Lack of relevant research materials as a limiting factor not some of the instruments needed for the effective research.
- Time: the period that was mapped out for the study was not really enough for one to run around and collect the materials for the study. Because of this time factor most of the work has to be done in a hurry to meet the time of submission.
Summary, Conclusions and Recommendations
5.1 Summary of Major Findings
- The study was carried out solely to identify the effect of financial motivation on workers’ worker’s performance in manufacturing firms in Enugu state. Accordingly, the major findings were derived from data discussion, analysis and interpretations asfollows.
- The study clearly depicted that the working environment of the company is conducive and suitable. Majority of the worker’s agreed on its conduciveness, suitability but regarding with providing the materials and equipment’s that are need for the job, the company is very poor in supplying those materials timely 48.11% of workers were not satisfied with the availability ofmaterials.
- Almost all the respondents believe that the reward and incentive system is not based on performance and they are highly discouraged by the system. This implies that there is biased system in giving rewards to workers. Majority of the workers 42.2% believed that rewards are not giventimely.
- When workers get recognized and appreciated, they do their best to prove the skill, talents and abilities they have However, All workers’ replied that there is no recognition and appreciation from theirboss.
- The majority (81.80%) of workers disagreed that there is unsatisfactory relationship among workers and managers of the company, and also the relationship between workers is also discouraging, 34% of them claim that the relationship is poor. 52.6 % of the respondents indicated that there is no complaint handling mechanism in the company.
- 30.6 % of respondents strongly agreed that the trainings given in the company improved their skills, knowledge, and encourage them to stay at the company but regarding with the time interval of the training program majority of the respondents (36.9%) take only one training program over the past fiveyears.
- 45.9% of respondents strongly disagreed that the financial aspects like bonus, allowance are not satisfying. This implies when individuals are motivated there effort towards the job willdecrease.
- 98% of workers believed that the promotion system is not fair that makes the worker’s demotivated.
- The majority of respondents claim that the base of promotion in the company is based on the performance of the worker’s. Concerning how the evaluation is conducted, the majority of the respondents are evaluated on semi-annually bases. Regarding with feedback time workers replied that they never get there feedback at all. The study also revealed that the concern of management towards communicating performance standards of the company is verypoor.
- The results of the descriptive statistical analysis also indicated that, workers were not motivated by the motivational variables. Job security, salary, recognition, management communication style, reward and promotion of the company. However, workers were less motivated with training and working environment.
Based on the findings, working environment is positively related to worker performance, the researcher conclude that there in fact exists positive relationship between the two. This demonstrates that when working environment is not conducive financial motivation to perform the job will reduce. There is a negative and insignificant relationship between Job Security and worker Performance. workers are not certain that job security contributed to their performance.
There is positive and significant relationship between salary and worker performance. However workers were not motivated by the attractiveness of the salary because of these reason there is high turnover of bus drivers and fare collectors to other transport organizations. The researcher concluded that since the reward and incentive system of the company is not motivating to workers, the workers were forced to search a better opportunity so there is manpower turnover in the company especially bus drivers. Additionally, the reward is not given on time; this negatively affected the performance of the workers. workers need and want to be appreciated for the work that they do. If they do not feel managers or others are recognizing their contributions, then workers become dissatisfied and unmotivated. workers will normally put more effort than expected if someone will notice their effort. An under-appreciated worker may do less work. Regarding this motivational variable the companyworker’s are not motivated and feel like there is no recognition and appreciation for effective worker’s commitment.
Management communication style, it’s not open door style and workers have no chance to easily communicate with the management. Majority of the peoples have no chance to complain and they don’t have the chance to participate in decision making also. There is also unsatisfactory relationship between workers each other. the company is weak in providing adequate training for its workers who have direct interaction with customers and the training is given only on one time basis. For over the past five years, majority of the workers attended only one training program.
Majority of the workers did not agree with the promotion system of the company. Evaluation is done based on performance of the workers, however majority of them indicated it’s based on relationship among workers each other. Regarding with evaluation feedback, the company is not quick to respond. The performance standard is not clearly known by the workers too. The correlation result of the study showed that among the eight motivational factors, management communication style highly affects the performance of workers. Next to that working environment, recognition, reward, promotion, salary, training and job security affect the performance of the workers. The descriptive result of the study indicates that, workers were not motivated with the motivational factors especially job security and salary has the lowest mean value. In conclusion, motivated workers not only influence their work performance but also the whole workers performance in the manufacturing firms and business commitment.
Based on the literature review, interviews and analysis done and the discussion it is clear that workers are not motivated and hence are not performing well which affecting business performance and commitment.
Management communication motivational factor was considered as one of the most important factors influencing worker performance. However worker of the company were found less motivated in terms of this motivational factor.
The company can improve the communication by conducting meetings, performance reviews and feedback on workers performance in the manufacturing firms. Communication can be improved through performance management. Performance Management is not only for measurement of performance but provides feedback to the workers. Recognitions either verbally or formally will enhance the self-esteem of the worker. Therefore, Managers should work hard in maintaining the level of satisfaction of workers by using recognition and mechanisms’ to motivateworkers.
Training programmes based on training needs assessment should be implemented at manufacturing firms in Enugu state. Human resource management should include elements of worker motivation and worker training and development. worker training for workers will both equip them and be an excellent source of worker motivation. Salaries should be determined in accordance with the company job grades and salary scale. the company salary structure shall be designed to provide competitive remuneration by market standard and also offer incentive to grow to a higher step.
Every worker shall have the right to air its grievance when treated unfairly by the administration process. the company should provide the worker a way to express its feelings towards the job. For instance suggestion box should be available for workers to express what they felt. the company should focus on different financial packages and allowances for it’s workers. Allowances and various benefits of the company should be given to workers and should berevised.
The company shall provide the required financial, human, material, time and facility resources for the proper implementation of its organizational goals. Promotion system of the company should be given great attention. When promotions are available in the company, everyone should have equal chance of participating. Finally, the management should examine what really motivates its staff in order to enhance workers’ performance and effectiveness.
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