CHAPTER ONE:
INTRODUCTION
1.1
BACKGROUND
TO THE STUDY
One of the major
problems facing most organizations both public and private sector is how to
motivate their employees in order to improve performance. Economy is largely
based on the assumption that monetary incentives improve organizational
performance. It is generally believed that effect of monetary incentives is
unambiguously positive - a large monetary incentive improves employees’
performance.
The issue of organizational
performance cannot be over emphasized - the general believe is that employees
will not perform to the best of their ability unless they are motivated to do
so. 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.
Recent studies have
shown that monetary incentives can motivates employees to perform well on their
job thus improving the overall performance and productivity of the
organization. Managers continuously seek for ways to create a motivating
environment where employees will work at their high levels to achieve the
organizational objectives.
The purpose of monetary
incentives is to reward employees for excellent job performance through money. 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.
Monetary
incentives
provide a spur or zeal in the employees for better performance. Therefore, monetary
incentives really can sometimes work to accomplish the goals of a concern. The
need of monetary incentives can be:-
1.
To increase productivity,
2.
To drive or arouse a stimulus work,
3.
To enhance commitment in work
performance,
4.
To psychologically satisfy a person
which leads to job satisfaction,
5.
To shape the behavior or outlook of
subordinate towards work,
6.
To inculcate zeal and enthusiasm towards
work,
An individual who has
possessed skills, ability and knowledge will not do much without being
motivated. However, an individual with skills, ability and knowledge added with
motivation is equipped to perform his duties efficiency. Motivation is the willingness
to work - it is the drive and stimulation which enables individual to perform
their work. Some individual define motivation as money and most people are
motivated by money. Monetary rewards or incentives as a motivator are high in
developing countries due to high cost of living and low quality of lives which
they are facing. Most activities of man are related to making money. To this
extent, money is the most critical incentives to motivate workers for
organizational performance, but when money is taken away, how many people will
continue to work in Nigeria today?
In Nigeria, employees
in both public and private sectors are sometimes owed between 3-6 months’ salary
and yet they will not resigned, but continue to work because they know they
will be paid and not because they so much value the job. The truth here is that
primarily, people are motivated by monetary rewards. It is believed that man,
if motivated will go extra mile in satisfying his employer (www.eajournals.org).
1.2 STATEMENT OF THE PROBLEM
It is fundamentally unrealistic to
assume that people would continue to find satisfaction in co-operating with
organization’s affairs if no interest is shown in their individual needs and
problems.
It is agreed that in spite of
whatever gains must have been achieved in ensuring adequate compensation among
workers around the world, existing compensation programmes have failed to
attract, hold and motivate employees because the individual worker is not
considered and he or she did not participate in the planning and designing of
such incentives before its execution or implementation.
However, the economic and social
development of Nigeria depends to a great extent on the ability of the public
services to attract and retain the services of qualified man power. Therefore,
the concept of monetary incentives has economic, social, behavioral and legal
basis consequence.
1.3
OBJECTIVES OF THE STUDY
This research is to
ascertain the extent monetary incentives has impacted on organization’s
performance.
It is aimed also at identifying various motivational techniques that can be
used by management to encourage employees to heighten and increase
productivity and performance. This study will particularly attempt to appraise
the different types of motivational tools used by First Bank Nigeria Plc in
relation to their desire to achieve their corporate goals. It will assist
management to find solution to practical human resource challenges in their
place of work.
1.4 RESEARCH QUESTIONS
1. Does
monetary incentives relevant to organizational performance?
2. Does employees’
prefer monetary incentives to other forms of incentives?
3. To
what extent do monetary incentives failed to attract, hold and motivate
employees?
4. To
what extent does monetary incentives scheme lead to attainment of organizational
performance and motivation of workers?
5. Does
organizations and employees reaping benefits from monetary incentives?
6.
What are the advantages and
disadvantages of monetary incentives?
1.5
STATEMENT OF HYPOTHESES
For valid and effective
work on this topic, the following key research hypotheses would be addressed in
the course of this study. There are two
types of hypotheses, the Null hypothesis that takes the negative form and the
Directional or Alternative hypothesis that takes the positive form.
Let
H0 stand for Null hypothesis
Let H1 stand for Alternative hypothesis
HYPOTHESIS ONE:
H0: Monetary
Incentives is not relevant to organizational performance
H1: Monetary Incentives
is relevant to organizational performance
HYPOTHESIS TWO:
H0: Monetary
incentives does not motivate workers for high performance
H1: Monetary Incentives
does motivate workers for high performance
HYPOTHESIS THREE:
H0: There
is no correlation between monetary incentives and organizational performance
H1:
There is a correlation between monetary incentives and organizational
performance
1.6 SIGNIFICANCE OF THE STUDY
There
is the need now than ever to re-discover the weaknesses and the strengths of
incentives used in motivating employee attitude to serve as a basis for further
improvement. The study will throw more light into the effectiveness of the use
of monetary incentives in motivating employees. It will also unravel the
problems, frustrations, and anxieties that employees meet in their work
environment, especially where incentives are emphasized. It will help banks and
other industries to know the likely monetary incentives to put in place in
motivating employees for greater organizational performance. In addition, it
will assist management in the organization to engage in staff welfare
development in order to better the output or productivity. The study will also
serve as a useful tool for those in the management science discipline who would
like to carry out further research in this area. Monetary incentives satisfy
the basic needs of employees and this makes them more loyal to the
organization.
It is hoped that this study when
completed will assist business enterprises in their operations and enable then
to employ more money incentive schemes and other motivational variables that
would optimize the productivity and performance of their operations.
The study when completed will
identify the motivational factors and incentive variables, if any, that are
currently militating against the smooth operations of organization in area of
its performance and productivity, that management find useful for future
planning.
1.7 SCOPE AND LIMITATIONS OF THE STUDY
This study is aimed at
investigating the impact of monetary incentives on organizational performance. First
Bank of Nigeria Plc as a model organization was used.
Because of resource constraints, First
Bank of Nigeria Plc, Kumasi House Branch, Abuja, was studied. All the department and cadres of employees
were covered in the study to examine the monetary incentives in First Bank of
Nigeria Plc.
LIMITATIONS:
The researcher faced
the problems of confidentiality. The First Bank of Nigeria Plc employees
sometimes were not willing to give information. This problem was dealt with by
the researcher assuring members of staff that the information given will be
only for research purposes and was to be treated as confidential. Another
limitation was Time. The researcher is a house wife, a mother and also doubles
as a worker. Time is not always enough due to multiple events going on at the
same time.
Finally, a financial
constraint was another problem faced by the researcher; money to buy books,
moving around to various libraries etc. was one of the major limitations.
1.8
DEFINITION OF TERMS
The following are the definition
of terms used in this study, they include;
i.
Incentives: The schemes or
programs for remuneration of personnel for their contribution to
the achievement of the organizational objectives.
ii.
Objectives: The end of an objective
which is main aim of what the organization hope to achieve.
iii.
Monetary incentives: They are magnetization of incentive
inform of money, insurance coverage, profit sharing and pensions.
v.
Motivation: This refers to the drive or force to
satisfy a want (to achieve an outcome) in any organization.
vi.
Job performance: This means that an
employee achieve whatever he want under test condition.
vii.
Employment contract: A
contract entered into by an employee when he accepts an appointment by an
employer.
viii.
Exceptional performance: This occurs when an employee
puts a performance that is above the set standards.
ix:
Work: This is a task which an employee is assigned to
perform.
x.
Employee moral: This is the findings
of individuals of groups towards their goals, their associates and the organization.
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