Employee attitudes towards monetary and non-monetary incentives

Project Title An exploratory study of employee attitude towards monetary and non-monetary incentives in the public enterprises
Submitted By Mr. XXXXX XXXXXXX
MBA in HR
www.readymadeproject.com www.programmer2programmer.net
XXXXX University
Table of Contents
ABSTRACT ......................................................................................................................... 4 INTRODUCTION ............................................................................................................................................... 5 BACKGROUND OF THE STUDY ..................................................................................................................................................5 STATEMENT OF THE PROBLEM ..................................................................................................................................................6 OBJECTIVES OF THE STUDY .........................................................................................6 RESEARCH QUESTIONS ..................................................................................................................................................7 FORMULATED HYPOTHESES ..................................................................................................................................................7 SIGNIFICANCE OF TE STUDY ........................................................................................7 SCOPE/LIMITATION OF THE STUDY ..................................................................................................................................................8 DEFINITION OF TERMS ...................................................................................................8 REVIEW OF RELEVANT LITERATURE ............................................................................................................................................. 10 INTRODUCTION ................................................................................................................................................10 EFFECTS OF ORGANIZATIONAL INCENTIVES .....................................................14 VARIABLE PAY: INCENTIVES FOR PERFORMANCE ................................................................................................................................................16 TYPES OF VARIABLE PAY .......................................................................................... 18 SUCCESSES AND FAILURE OF VARIABLE PAY PLANS .......................................20 FACTORS AFFECTING SUCCESSFUL VARIABLE PAY PLANS ................................................................................................................................................20 INDIVIDUAL INCENTIVES. ................................................................................................................................................25
THEORETICAL FRAMEWORK ................................................................................... 30 RESEARCH METHODOLOGY ............................................................................................................................................. 39 INTRODUCTION ................................................................................................................................................39 RESEARCH DESIGN ........................................................................................................39 POPULATION OF STUDY ...............................................................................................40 SAMPLE AND SAMPLING TECHNIQUES ..................................................................40 INSTRUMENTS .................................................................................................................40 PROCEDURE FOR DATA COLLECTION ................................................................................................................................................42 DATA ANALYSIS ..............................................................................................................42 DATA ANALYSIS AND PRESENTATION .................................................................. 43 INTRODUCTION ...............................................................................................................43 RESPONDENTS BLO-DATA ................................................................................................................................................44 SUMMARY OF FINDINGS, CONCLUSION AND ............................................................................................................................................. 58 SUMMARY OF FINDINGS ................................................................................................................................................59 CONCLUSION ....................................................................................................................60 RECOMMENDATION ......................................................................................................61 REFERENCES ............................................................................................................................................. 62
ABSTRACT
There has been controversy as to whether Human Resources can be developed in public enterprises. It is against this background that an evaluation of Human Resources development in public enterprises was conducted. The questionnaire method was used to obtain data for the study and random sampling procedure was used in the selection of respondents from the organization under study. The sample percentage method of data analysis was used in analyzing the data obtained. The study found training, motivation; effective evaluation of employees performance can be used to develop Human Resource in public enterprises and various training methods were used to training employee in this organization. The study there fore concludes that for effective utilization of Human Resources in public Enterprises, there is need for training and development policy formulation and implementation.
INTRODUCTION
BACKGROUND OF THE STUDY
Ordinarily an enabling environment is required for employee (either as a term or individual) to improve his/her performances in order to accomplish organization goals and objectives. It is based on this background that manager suppose to know the attitude of his/her employees/subordinates in the interest of the organization. The employees could be influences through several incentives; either monetary or nonmonetary. These two forms of incentives for improve employees performance. However, there is the need more than ever before to re-discover the weakness and the strengths of incentives used in motivating employees attitudes as a basis for future improvement and also to unravel the effectiveness of the use of incentives in motivating employees. It will also reveal the problems, frustrations, anxieties that employees pass through in their work environment where certain incentives are deemphasized. It will equally assist management to engage in staff welfare development that will aid improved productivity. Productivity is concerned with the total value or volume of output in work situation while production refers to the volume, value or quantity of goods and services produced in a given period by employees productivity shows the efficiency of production. Employees attitudes and performance have an immense bearing on productivity. Job performance of employees is determined by the ability of individual employee to perform well on his job as well as the level of motivation offered by the work environment and it is of fundamental importance in productivity. The study examined the attitude of employees towards monetary and non-monetary incentives in organization with the mindset that management will appreciate the needs of the use of incentives in motivating employees attitude.
STATEMENT OF THE PROBLEM

In the past, employers of Labour complained that employees performance were efficient when they are new but with time, their efficiency and productivity decreases, in turn the employees have attributed the decreases in efficiency and productivity to the fact that employers failed to provide adequate incentives and motivation that commensurate with their job and performance. Therefore, the problems of this study can be stated as follows. The inability of the management to effectively use non-monetary incentives to improve employees performance. Employees preferences between monetary and non-monetary incentives how (the) managers applied this significantly. The composition of factors considered by employees to be non- monetary incentives. The impact of monetary incentives on employees attitude.
OBJECTIVES OF THE STUDY

The objectives of this study are as follows: To ascertain the extent of employees attitudes towards monetary and nonmonetary incentives in the course of their work. The impact of age, gender and status on employees preference for monetary and non-monetary incentives. Identification of incentives employees like best in their work place How management can use incentives to encourage employees to heighten and increase productivity.
RESEARCH QUESTIONS
These follows are the research questions for this study: What are workers attitude towards the use of monetary incentives? What are workers attitude towards the use of non-monetary incentives? What are the incentives considered by workers to be non-monetary incentives? What are the workers preferences between monetary and non- monetary incentives?
FORMULATED HYPOTHESES
These follows primaries statements were formulated as an hypotheses and subsequently tested in order to ascertain their reliability. Ho: There is no perfect relationship between employees/workers incentives motivation and productivity. Hi: There is perfect relationship between employees/workers incentives motivation and productivity. Ho: Other incentives tend to have little motivation value if monetary incentives are perceived to be adequate. Hi: Other incentives tend not to have little motivation value if monetary incentives are perceived to be adequate.
SIGNIFICANCE OF TE STUDY
There is the need now than never to rediscover the weaknesses and the strengths of incentives used in motivating employee attitude to serve as a basis for further improvement. The study will through more light into the effectiveness of the use of
incentives in motivating employees meet in their work environment, especially where incentives are emphasized. It will also help organizations to know the likely incentives to put in place in motivating employees. In addition, it will assist management to engage in staff welfare development in order to improve the output of productivity of employees. This study will also serve as a useful tool for those in the management sciences discipline who would like to carry out further research in this area.
SCOPE/LIMITATION OF THE STUDY

This study focused on the employees attitude towards monetary and non-monetary incentives using selected unionized organizations in Lagos metropolis as a study. However, several factors necessitated against proper investigation of this study; such as time factor, financial constraint and unavailable data. The researcher was faced with the time limited time for this study and in combinations of other engagements, like social engagement, work time, academic etc; financial constraint also set in and caused effective implementation and investigation; meanwhile, the organizations under study refused to realize some important data that are necessary for this study.
DEFINITION OF TERMS
Employees Attitude: This refers to a persistent tendency to feel and behave every individual employee exhibited towards a particular issue. Monetary Incentives: It refers to remuneration in money form employee received for performing his/her official duties. Non-Monetary Incentives: These are incentives that employees gained in work place, in form of promotion, training etc. This not in money term.
Job Performance: These are the available jobs in organization at a particular point in term, in which employees are employed for. Motivation: The idea of creating an enabling environment for employee to increase his/her performances in work place. The motivation may be in monetary or non-monetary form.
REVIEW OF RELEVANT LITERATURE

INTRODUCTION
According to Ubeku (1975) the key to understanding of human behavior is knowledge of human needs. People work in order to satisfy their needs and these needs can be met through monetary incentives. Monetary incentives are repayment in cash and in money form for a given work done by employees in the organization. Employees would go any extent to increase their cash income just as they will do anything to prevent their source of income from being eliminated. The fact that employees fear to lose their jobs, cash has been an extremely effective motivator simply because money is indispensable for survival in an economy. Monetary incentives in modem societies are the most transferable means of satisfying basic needs. Satisfaction of physiological, security and social needs can hardly be achieved with money. Other incentives tend to have little motivational value if monetary incentives are perceived to be inadequate. Monetary incentives take variety of forms and include wages, salary, allowances, bonus, e.t.c. According to Cole (2002), a salary system can best be considered as a mechanism by which an organization plans how to attract, retain, reward and motivate its salaried employees to provide a fair reward to those performing specified roles, to provide an incentive for employees and to keep pace with inflation. Pitfield (1980) explained that bonus provide greater rewards for output above a certain agreed level. They may be based on individual output or on the output of a group. Bonus adds flexibility to a compensation plan i.e. they are paid monthly under the terms of an annual rate of pay. It includes employees benefit which were once associated with salaried staff, but which are now being applied to all grades of employees. Salary is a fixed amount per year payable to the employee monthly and it ignores both time taken and quality produced. Drucker (1999) stated that there is a basic conflict between wage (daily pay) as living and wage as cost. As living, wage needs to be predictable,
10
continuous and adequate to the expenditures of a family, its aspirations, and its position in the society and community. Wage as a cost needs to be appropriate to the productivity of a given employment or industry. Cole (2000) posited that benefits are forms of compensation beyond wages for time worked, including various protection, mans services, pay for time not worked, and income supplements. Such benefits include housing allowance, transport allowance. In spite of the positive role monetary incentives have played, workers tend to have different attitude towards money incentives. The most common of the diverse reaction to wages and salaries by workers is that once it exceeds minimum levels, it is regarded as a measure of fairness. Pitfield (1980) posited non-monetary incentives as fringe benefits made availa6ie to staff and are regarded as an addition to wages and salaries. It consists of direct and indirect benefits. The direct benefit may include profit-sharing, sick pay, pension schemes, etc. the indirect benefits may include welfare amenities, social and recreational facilities, etc. Gellermen (1976) insisted that pay, if only it could be properly packaged would somehow bring about the desired approach to work. Adam (1999) argued that employees perception of his pay in relation to other employees of similar status could affect the satisfaction, which he gets from the job. From his work, when there is a discrepancy between what he gets and his efforts in relation to what employees of similar status gets, the employee become dissatisfied with the job. Ojo (1991) stated that managers and supervisors need to apply situational appropriate motivational factors in the context of their peculiar organizational environment. Kepner et al (2001) explained that the purpose of monetary incentives is to reward employees for excellent performance through money. He noted that monetary incentives include profit sharing, project bonuses, stock options, warrants and scheduled bonuses (e.g. Christmas and performance-linked and additional paid vacation). Traditionally, these have helped maintained a positive motivational environment for employees. The purpose of nonmonetary incentives is to reward associates for excellent job performance through opportunities. Non- monetary incentives include flexible work hours, training, pleasant work environment and sabbaticals. Employees encounter problems,
11
frustrations, and anxieties in their work environment where certain incentives are deemphasized. According to lkpefar (2003) in order to step up the incentives of employees, trade unions serve as a means of improving the terms and conditions for employees, improve rates of remunerations, raise status of employees, protect members against unfair practices and also strive for security of employment. Trade union Act 1990 provides that employee has a right to receive all benefits of employment which are expressed in documents of employment, including the letter of offer, and the condition of service and in collective agreement. S.7 of the Act provides the minimum content of the contract of service and shows the place and nature of employment, terms of work, duration and special condition of the contract. The Act also gives employees the right to health and safety at work, right to resort to court or tribunal on matters pertaining to his employment, right to belong to union may be optional in the new proposed trade union Act before the National Assembly. Parties usually fix wages of employee. However, where no rate is fixed the rate is deemed to be what is current in similar trade. Collective bargaining serves as a means for trade unions to negotiate the terms and conditions of employment. When negotiation breakdown, parties may resort to mediation, conciliation or arbitration. Government sometimes intervenes and the intervention takes the form of statutory enactments. The major statutory enactments governing contracts of employment in Nigeria are: Labour Act 198 (as amended) 1990, Factories Act (as amended) 1990, Workmens Compensation Act 1990, Trade Union Act (as amended) 1990. Kohn (1993) cited in Kepner et al stated a balance of monetary and non-monetary incentives should be used to satisfy the diverse needs and interests of employees. He argued that monetary incentives encourage compliance rather than risk taking because most rewards are based only on performance and discourages employees from being creative in their work place. Nelson (1999) also cited in Kepner et at (2001) posited that research suggests that desired monetary incentives differ for employee based on carrier stage and generation surveys by American Association of Retired Persons (AARP) have shown that most employees will work past retirement age if offered flexible schedules, part-time hours and temporary employment. Aside
12
from these types of motivational strategies, an organizations reward system is its most basic tool for managing employee motivation. An organizational reward system is the formal and informal mechanisms by which employee performance is defined, evaluated, and rewarded.
13
EFFECTS OF ORGANIZATIONAL INCENTIVES

Organizational incentives can affect attitudes, behaviors, and motivation. Thus, it is important for managers to understand and appreciate clearly their importance (Griffin Effect of Incentives on Attitudes Although employee attitudes such as satisfaction are not a major determinant of job performance, they are nonetheless important. They contribute to (or discourage) absenteeism and affect turnover, and they help establish the culture of the organization. According to Edward (1999) four major general Lzations about employee attitudes and incentives. First, employee satisfaction is influenced by how much is received and how much the individual thinks should be received. Second, employee satisfaction is affected by comparisons with what happens to others. Third, employees often misperceive the incentives of others. When an employee believes that someone else is making more money than that person really makes, the potential for dissatisfaction increases. Fourth, overall job satisfaction is affected by how satisfied employees are with both the extrinsic and the intrinsic rewards they derive from their jobs. Drawing from the content theories and expectancy theory, this conclusion suggests that several needs may cause behavior and that behavior may be channeled toward various goal. Effect of Incentives on Behaviour An organizations primary purpose in giving incentives is to influence employee behavior. Extrinsic incentives affect employee satisfaction, which, in turn, plays a major role in determining whether an employee reward system. The formal and informal mechanisms by which employee performance is defined, evaluated, and rewarded will remain on the job or seek a new job. Reward systems also influence 2002)
14
patterns of attendance and absenteeism; if rewards are based on actual performance, employees tend to work harder to earn those rewards.
15
Effect of Incentives on Motivation Incentives systems are clearly related to the expectancy theory of motivation. The effort-to-performance expectancy is strongly influenced by the performance appraisal that is often part of the reward system. An employee is likely to expend extra effort if he or she knows that performance will be measured, evaluated, and rewarded. The performance-to-outcome expectancy is affected by the extent to which the employee believes that performance will be followed by rewards. Finally, as expectancy theory predicts, each reward or potential reward has a somewhat different value for each individual. One person may want a promotion more than benefits; someone else may want just the opposite.
VARIABLE PAY: INCENTIVES FOR PERFORMANCE

Robert and Jackson (2004) states that variable pay is compensation linked to individual, team, and organizational performance. Traditionally also known as incentives, variable pay plans attempt to provide tangible rewards to employees for performance beyond normal expectations. The philosophical foundation of variable pay rests on several basic assumptions: Some jobs contribute more to organizational success than others. Some people perform better than others. Employees who perform better should receive more compensation. A portion of some employees total compensation should be contingent on performance. Contrast the assumptions with a pay system based on seniority or length of service: Time spent each day is the primary measure of contribution. Length of service with the organization is the primary differentiating factor among people.
16
Contributions to the organization are recognized through different amounts of base pay. Giving rewards to some people but not others is divisive and hampers employees working together.
17
TYPES OF VARIABLE PAY

Individual incentives are given to reward the effort and performance of individuals. Some of the most common means of providing individuals variable pay includes piece-rate systems, sales commissions, and bonuses. Others include special recognition rewards such as trips or merchandise. Two widely used individual incentives focus on employee safety and attendance. However, individual incentives can present drawbacks. One of the potential difficulties with individual incentives is that an employee may focus on what is best individually and may block or inhibit performance of other individuals with whom the employee is competing. Competition intensifies if only the top performer or winner receives incentives, which is why team or group incentives have been developed. According to Cole (2000), when an organization rewards an entire work group or team for its performance, cooperation among the members usually increases. However, competition among different teams for rewards can lead to decline in overall performance under certain circumstances. The most common team or group incentives are gain sharing plans, where employee teams that meet certain goals share in the gains measured against performance targets. Often, gainsharing programs focus on quality improvement, cost reduction, and other measurable results. Organizational incentives reward people based on the performance results of the entire organization. This approach assumes that all employees working together can generate greater organizational results that lead to better financial performance. These programs often share some of the financial gains to the firm with employees through payments calculated as a percentage of each employees base pay. Also, organizational incentives may be given as a lump-sum amount to all employees, or
18
different amounts may be given to different levels of employees throughout the organization. The most prevalent forms of organization-wide incentives are profit- sharing plans and employee stock plans. For senior managers and executives, variable pay plans often are established to provide stock options and other forms of deferred compensation that minimize the tax liabilities of the recipients. (Benneth 1990, Cole 2000, Luthans 2003)
19
SUCCESSES AND FAILURE OF VARIABLE PAY PLANS

Even though variable pay has grown in popularity, some attempts to implement it have succeeded and others have not. One study suggests that about 74% of companies have a variable pay plan of some sort. Of those, most feel these plans have been successful in aligning pay with performance for executives (79%), managers (73%), and exempt/ professionals (60%). However, only 48% felt variable pay was effective for non-exempt/administrative personnel (Alexander and Fred (2001). Most employees prefer that performance rewards increase their base pay, rather than be given as a one-time, lump-sum payment. Further, employees prefer individual rewards to group/team or organizational incentives. Incentives do work, but they are not a panacea. The enthusiasm that many employers have for variable pay is not shared universally by workers. The success of variable pay plans depends upon the circumstances.
FACTORS AFFECTING SUCCESSFUL VARIABLE PAY PLANS
According to Robert and Jackson (2004) most employers adopt variable pay incentives in order to: (1) link individual performance to business goals, and (2) reward superior performance. Other goals might include improving productivity or increasing employee retention. Variable pay plans can be considered successful if they meet the goals the organization had for them when they were initiated. A number of different elements that can affect the success of a variable pay plan. These factors have been categorized into three areas for discussion: Does the plan fit the organization?
20
Are the behaviors encouraged by the plan the ones desired? Is the plan being administered properly?
21
Does the Plan fit the Organization? In the case of variable pay, one size does not fit all. A plan that has worked well for one company will not necessarily work well for another. Obviously, the plan must be linked to the objectives of the organization. The success of any variable pay program relies on its consistency with the culture of the organization. For example, if an organization is autocratic and adheres to traditional rules and procedures, an incentive system that rewards flexibility and teamwork is likely to fail. The incentive plan is being planted in the wrong growing environment. Does the Plan Encourage the Desired Behaviors? Variable pay systems should be tied as much as possible to desired performance. Employees must see a direct relationship between their efforts and their financial rewards. Indeed, higher-performing companies give out far more incentive pay to their top performers than do lower-performing companies. Griffin (2000) Because people tend to produce what is measured and rewarded, organizations must make sure that what is being rewarded ties to meeting organizational objectives. Use of multiple measures helps assure that various performance dimensions are not omitted. For example, assume a hotel reservation center sets incentives for its employees to increase productivity by lowering their time spent per call. That reduction may occur, but customer service and the number of reservations made might drop as employees rush callers to reduce talk time. Therefore, the center should consider talk time, reservations booked, and customer satisfaction survey results. Indeed, linking pay to performance may not always be appropriate. For instance, if the output cannot be objectively measured, management may not be able to correctly reward the higher performers with more pay. Managers may not even be able to
22
accurately identify the higher performers. Under those circumstances, individual variable pay is inappropriate. (Martins and Bartol (1999)
23
Is the Plan Administered Properly? According to Robert and Jackson (2004), a variable pay plan may be complex or simple, but it will not be successful if employees do not understand what they have to do to be rewarded. The more complicated a plan is, the more difficult it will be to communicate it meaningfully to employees. Experts generally recommend that a variable pay plan include several performance criteria. However, having two or three areas to focus on should not complicate the calculations necessary for employees to determine their own incentive amounts. Managers also need to be able to explain clearly what future performance targets need to be met. Successful variable pay plans clearly identify how much is provided to employees separate from their base pay amounts. That separation makes a distinct connection between performance and pay. It also reinforces the notion that part of the employees pay must be reearned in the next performance period. An incentive system should consistently reflect current technological and organizational conditions. Offering an incentive for sales representatives to sell older-generation equipment in order to clear it out of stock might be appropriate until that merchandise is gone, but no incentive may be needed to sell high- demand items. Incentive systems should be reviewed continually to determine whether they are operating as designed. Follow-up, through an attitude survey or other means, will determine if the incentive system is actually encouraging employees to perform better. If it is not, then managers should consider changing the system. (Pitfield 1980, 1996). Nwachkwu
24
INDIVIDUAL INCENTIVES.
According to Williams (2001) that conditions necessary for the use of individual incentive plans are as follows: Identification of individual performance: The performance of each individual must be measured and identified because each employee has job responsibilities and tasks that can be separated from those of other employees. Independent work: Individual contributions result from independent work and effort given by individual employers. Individual competitiveness desired: Because individuals generally pursue the individual incentives for themselves, competition among employees often occurs. Therefore, independent competition in which some individuals win and others do not must be desired. Individualism stressed in organizational culture: The culture of the organization must be one that emphasizes individual growth, achievements, and rewards. If an organization emphasizes teamwork and cooperation, then individual incentives will be counterproductive. Piece-Rate Systems The most basic individual incentive system is the piece-rate system, whether of the straight or differential type. Under the straight piece- rate system, wages are determined by multiplying the number of units produced (such as garments sewn or customers contacted) by the piece rate for one unit. The rate per piece does not change regardless of the number of pieces produced. Because the cost is the same for each unit, the wage for each employee is easy to figure, and labor costs can be accurately predicted. (William 2001) A differential piece-rate system pays employees one piece-rate wage for units produced up to a standard output and a higher piece- rate wage for units produced over the standard. For example, assume
25
that the standard quota for a worker is set at 300 units per day and the standard rate is 14 cents per unit. For all units over the standard, however, the employee receives 20 cents per unit. But the worker producing 400 units in one day will get $62 in wages (300 x 14 cents) + (100 x 20 cents). There are many possible combinations of straight and differential piece-rate systems that can be used depending on situational factors. (Robert and Jackson 2004) Despite their incentive value, piece-rate systems are difficult to use because standards for many types of jobs are difficult and costly to determine. In some instances, the cost of determining and maintaining the standards may be greater than the benefits derived. Jobs in which individuals have limited control over output or in which high standards of quality are necessary also may be unsuited to piecework. Bonuses Alexander and Fred (2001) emphases that individual employees may receive additional compensation payments in the form of a bonus, which is a one-time payment that does not become part of the employees base pay. Generally, bonuses are less costly to the employer than other pay increases because they do not become part of employees base wages, upon which future percentage increases are figured. Growing in popularity, individual bonuses often are used at the executive levels in organizations, but bonus usage also has spread to jobs at all levels in some firms. Bonuses also can be used to reward employees for contributing new ideas, developing skills, or obtaining professional certifications. When the skills or certification requirements are acquired by an employee, a pay increase or a one-time bonus may follow. For example, a financial services firm provides the equivalent of two weeks pay to employees who master job-relevant computer skills. A bonus can recognize performance by an employee, a team, or the organization as a whole. When performance results are good, bonuses go up. When performance
26
results are not met, bonuses go down. Most employers base part of the employees bonus on individual performance and part on the company if appropriate.
27
Special Incentive Programs Numerous special incentive programs that provide awards to individuals have been used, ranging from one-time contests for meeting performance targets to rewards for performance over time. For instance, safe-driving awards are given to truck drivers with no accidents or violations on their records during a year. Although special programs also can be developed for groups and for entire organizations, these programs often focus on rewarding only high per forming individuals. Edward (1999). Awards Cash merchandise, gift certificates, and travel are the most frequently used incentive rewards. Cash is still highly valued by many employees because they have discretion on how to spend it. Another type of program recognizes individual employees for their performance or service. For instance, many organizations in service industries such as hotels, restaurants, and retailers have established employee of the month and employee of the year awards. In the hotel industry more than half of the hotels surveyed use favorable guest comment cards as the basis to provide recognition awards to desk clerks, housekeepers, and other hourly employees. The design of most group incentives is based on a self-funding principle, which means that the money to be used as incentive rewards is obtained through improvement of organizational results. A good example is gain sharing, which can be group or plant wide in its incentive scope. (Drucker 1999). Gain sharing Gain sharing is the sharing with employees of greater-than- expected in gains in profits, and/or Gain sharing attempts to increase discretionary efforts, that is, the difference between the maximum amount of effort a person can exert and the minimum amount of effort necessary to keep from being fired. Workers in many
28
organizations currently are not paid for discretionary efforts, but are paid to meet the minimum acceptable level of effort required. However, when workers demonstrate discretionary efforts, the organization can afford to pay them more than the going rate, because the extra efforts produce financial gains over and above the returns of minimal efforts. To begin a gain sharing program, management must identify the ways in which increased productivity, quality, and financial performance gain occur and decide that some of the gains should be shared with employees. (Cole 2000) The rewards can be distributed in several ways: A flat amount for all employees Same percentage of base salary for all employees Percentage of the gains by category of employees
A percentage based on individual performance against measures. Cuttan (2003) stated that the first two methods generally are preferred because they promote and reward teamwork and cooperation more than the other two methods. Where performance measures are used, only those measures that employees actually can affect should be considered. Often, measures such as labor costs, overtime hours, and quality benchmarks are used. Both organizational measures and departmental measures may be used, with the weights for gain sharing split between the two categories. Naturally, an individuals performance must be satisfactory in order for that individual to receive the gain sharing payments. Two older approaches similar to gain sharing exist. One, called Impro share, sets group piece rate standards and pays weekly bonuses when the standard is exceeded. The otherthe Scanlon plan uses employee committees and passes on savings to the employees.
29
THEORETICAL FRAMEWORK
Griffin (2002) opines that motivation is the set of forces that cause people to behave in certain ways. On any given day, an employee may choose to work as hard as possible at a job, to work just hard enough to avoid a reprimand, or to do as little as possible. The goal for the manager is to maximize the likelihood of the first behaviour and to minimize the likelihood of the last. This goal becomes all the more important when manager understand how critical motivation is in the workplace. Individual performance is generally determined by three things: motivation (the desire to do the job), ability (the capability to do the job), and the work environment (the resources needed to do the job). If an employee lacks ability, the manager can provide training or replace, the worker. If there is a resource problem, the manager can correct it. But if motivation is the problem, the task for the manager is more challenging. Individual behavior is a complex phenomenon, and the manager may be hard-pressed to figure out the precise nature of the problem and ho to solve it. Thus, motivation is important because of its significance as a determinant of performance 1998). The Need Hierarchy Approach The need hierarchy approach has been advanced by many theorists. Need hierarchies assume that people have different needs that can be arranged in a hierarchy of importance. The two best known are Maslows hierarchy of needs and the ERG theory. Maslows Hierarchy of Needs: Abraham Maslow (1954) a human relationist, argued that people are motivated to satisfy five need levels. Maslows hierarchy of needs shown in figure 2.1. At the bottom of the hierarchy are the physiological needs things like food, sex, and air that represent basic issues of survival and biological function. In organizations, thee needs are generally satisfied by adequate wages and and because of its intangible character (Jeffrey
30
the work environment itself, which provides restrooms, adequate lighting, comfortable temperatures, and ventilation. Next are the security needs for a secure physical and emotional environment. Examples include the desire for housing and clothing and the need to be free from worry about money and job security. These needs can be satisfied in the workplace by continuity (no layoffs), a grievance system (to protect against arbitrary supervisory actions), and an adequate insurance and retirement benefits package (for security against illness and for the provision of income in later life). Even today, however, depressed industries and economic decline can put people out of work and restore the primacy of security needs. Belongingness needs relate to social processes. They include the need for love and affection and the need to be accepted by ones peers. These needs are satisfied for most people by family and community relationships outside work and friendships on the job. A manager can help satisfy these needs by allowing social interaction and by making employees feel like part of a team or work group. Esteem needs actually comprise two different sets of needs: the need for a positiveimage and self-respect and the needs for recognition and respect from others. A manager can help address these needs by providing a variety of extrinsic symbols accomplishment such as job titles, comfortable offices, and similar rewards as appropriate. At a more intrinsic level, the manager can provide challenging job assignments and opportunities for the employee to feel a sense of accomplishment. The top of the hierarchy are the self-actualization needs. These needs involve realizing ones potential for continued growth and individual development. The selfactualization needs are perhaps the most difficult for a manager to address. In fact, it can be argued that these needs must be met entirely from within the individual. But a manager can help by promoting a culture wherein self-actualization is possible. For instance, a manager could give employees a chance to participate in making
31
decisions about their work and the opportunity to learn and use new information, skills, and capabilities.
32
Maslow suggests that the five need categories constitute a hierarchy. An individual is motivated first and foremost to satisfy physiological needs. As long as they remain, the individual is motivated only to fulfill them. When satisfaction of physiological needs is achieved, they cease to act as primary motivational factors and the individual moves up the hierarchy and becomes concerned with security needs. This process continues until the individual reaches the selfactualization level. Maslows concept of the need hierarchy has a certain intuitive logic and has been accepted by many managers. But research has revealed certain shortcomings and defects in the theory. Some research has found that the five levels of need are not always present and that the order of the levels is not always the same as postulated by Maslow. In addition, people from different cultures are likely to have different need categories and hierarchies. (Griffin 2002).
33
The ERG Theory Alderfer (1972) in response to these and similar criticisms, an alternative hierarchy of needs called the theory of motivation was developed. This theory collapses the need hierarchy developed by Maslow into three levels. Existence needs correspond to the physological and security needs. Relatedness needs focus, on how people relate to their social environment. In Maslows hierarchy, they would encompass both the need to belong and the need to earn the esteem of others. Growth needs, the highest Level in the ERG schema, include the needs for self-esteem and selfactualization. Although the ERG theory assumes that motivated behavior follows a hierarchy in somewhat the same fashion as suggested by Maslow,
there are two important differences. First, the ERG theory suggests that more than one level of need cause motivation at the same time. For example, it suggests that
34
people can be motivated by a desire for money (existence), friendship (relatedness), and the opportunity to learn new skills (growth) all at once. Second, the ERG theory has what been called a frustration-regression element. Thus, if needs remain unsatisfied, the individual will become frustrated, regress to a lower level, and begin to pursue those needs again. For example, a worker previously motivated by money (existence needs) may have just been awarded a pay raise sufficient to satisfy those needs. Suppose that he then attempts to establish more friendships to satisfy relatedness needs. If, for some reason, he finds that it is impossible to become better friends with others in the workplace, he eventually gets frustrated and regresses to being motivated to earn even more money. The Two-Factor Theory. Another popular content perspective is the two-factor theory of motivation. Frederick Herzberg (1959) developed his theory by interviewing 200 accountants and engineers. He asked them to recall occasions when they had been satisfied and motivated and occasions when they had been dissatisfied and unmotivated. Surprisingly, he found that different sets of factors were associated with satisfaction and with dissatisfactionthat is, a person might identify low pay as causing dissatisfaction but would not necessarily mention high pay as a cause of satisfaction. Instead, different factorssuch as recognition or accomplishment were cited as causing satisfaction and motivation. This finding led Herzberg to conclude that the traditional view of job satisfaction was incomplete. That view assumed that satisfaction and dissatisfaction are at opposite ends of a single continuum. People might be satisfied, dissatisfied, or somewhere in between. But Herzbergs interviews had identified two different dimensions altogether: one ranging from satisfaction to no satisfaction and the other ranging from dissatisfaction to no dissatisfaction. This perspective, along with several examples of factors that affect each continuum, is shown in Figure 2.2. Note that the factors influencing the satisfaction continuum-called motivation factorsare related specifically to the work content. The factors presumed to cause dissatisfaction called hygiene factorsare related to the work environment. The two-factor theory of motivation
35
36
Based on these findings Herzberg argues that there are two stages in the process of motivating employees. First, manager must ensure that the hygiene factors are not deficient. Pay and security must be appropriate, working conditions must be safe, technical supervision must be acceptable, and so on. By providing hygiene factors at an appropriate level, managers do not stimulate motivation but merely ensure that employees are not dissatisfied. Employees whom managers attempt to satisfy through hygiene factors alone will usually do just enough to get by. Thus, managers should proceed to stage twogiving employees the opportunity to experience motivation factors such as achievement and recognition. The result is predicted to be a high level of satisfaction and motivation. Herzberg also goes a step farther than most theorists and describes exactly how to use the two factor theory in the workplace. Specifically, he recommends job enrichment. He argues that jobs should be redesigned to provide higher levels of the motivation factors. Although widely accepted by many managers, Herzbergs two-factor theory is not without its critics. One criticism is that the findings in Herzbergs initial interviews are subject to different explanations. Another charge is that his sample was not
37
representative of the general population and that subsequent research often failed to uphold the theory. Robert and Lawrence (1967), At the present time, Herzbergs theory is not held in high esteem by researchers in the field. The theory has had a major impact on managers, however, and has played a key role r increasing their awareness of motivation and its importance in the workplace.
38
RESEARCH METHODOLOGY
INTRODUCTION
This chapter consist of insight into the research design and tactics for the study. It focuses on what to study, when to study and how to study; Haven consider the primary objective of the study; which examine the management of total quality and monitoring techniques in Nigerian business environment.
RESEARCH DESIGN
Essentially, field study approach survey will be adopted for this study because of its peculiar nature. Meanwhile, the survey will be conducted in the Skye Bank. However, questionnaires will be the major instrument for collecting data for this study. The questionnaires will be carefully structured and simply designed in order to ensure easy answering; to obtain consistencies in respondents responses and at same time to eliminate ambiguity and suspension. All the questions in the questionnaires are designed in open-ended style and gives alternatives to the respondents. The questionnaires will be personally distributed to the selected population of the study; and all (the) questionnaires collected will be subjected to critical analysis, appropriately synchronized and analyzed to aid a reasonable findings and conclusions for the study.
39
POPULATION OF STUDY
Population may be refers to the universe of research target audience, particularly those who fall within the category of respond to the questionnaire of this study. Therefore, the targeted population of this study consists of the Banks that are operating in Nigeria, business environment. However, the major target population for the study is Skye Bank; it shows that the staff of this organization randomly selected for the study.
SAMPLE AND SAMPLING TECHNIQUES

According to Asika (2004) sampling plan is a segment of the population; selected to represent the population as a whole, ideally, the sample represents the population in order to make accurate estimate of the thought and behaviour of the large population. This study will consider both genders (that is male and female) in this organization; regardless of their marital status, and physical challenges; in as much as he/she is mentally alert. Therefore, the sample techniques will consider fifty (50) staff randomly selected from the various branches of this banks within Lagos Metropolis.
INSTRUMENTS
Instrument are the tools, gadgets modalities and devices used to collect information that are necessary for finding reliable and valid answers to the research questions and hypothesis raised. Therefore, the major instrument use for this study is questionnaire. This instrument is reliability and validity for the fact that the drafted questionnaires were examine and compared with other colleagues work, and the questionnaires
40
were also test-and re-test within the same few selected respondents; more so, the supervisor advice and guidance also helps a lot to prove the reliability and validity of instrument.
41
PROCEDURE FOR DATA COLLECTION

The major procedure for data collection of this study is through questionnaires; the structured questionnaire will be distributed to the randomly selected population.
DATA ANALYSIS
The study will employ two major statistics tools for data analysis these tools are as follows: Sample percentage and Chi-square (X2) method
The simple percentage method will be adopted to analysis the questionnaires; while the chi-square (X2) method will be adopted to analysis for the formulated hypotheses.
42
DATA ANALYSIS AND PRESENTATION

INTRODUCTION
This chapter consists of data presentation and analysis. Descriptive statistics such as frequencies, percentages and the chi-squares (X2) statistics test were used in analyzing the data obtained. The researcher administered the questionnaires, which were divided into two parts. The first part contained demographic characteristics of the respondents while the second part was designed to answer the research questions and to elicit information on the level of monetary and non-monetary incentive required to stimulate employees attitude in an organization. However, the total number of sixty (60) questionnaires was randomly administered into the selected respondents in these organizations; and forty two (42) questionnaires were returned, these numbers of questionnaire returned were certified okay and useable for study and the number constitute 70%.
43
SECTION A
RESPONDENTS BlO-DATA
Table: Gender
Gender Male Female Total
Frequencies Cumulative frequency 26 16 42 42
Per (%) 61.9 38.1 100
Frequencies
50 40 30 20 10 0 Male Female Total Frequencies
44
Table: Marital Status Statues Married Single Divorce d Widow Widowe r Total Frequencies Cumulative frequency Per (%) 24 57.1 9 33 21.4 4 2 3 42 37 39 42 9.5 4.8 7.1 100
Frequencies 50 40 30 20 10 0 Married Divorced Widow er Frequencies
45
Table: Educational Qualifications Cumulative Qualifications SSC/GCE/NECO OND/AL/NC HND/B.Sc/ACA MBA/M.Sc Others Total Frequencies 3 5 19 11 4 42 frequency 8 27 38 42 Per (%) 7.1 11.9 45.2 26.2 9.5 100
Frequencies 50 40 30 20 10 0 SSC/GCE/NECO HND/B.Sc/ACA Others Frequencies
46
Table : Years in service
Years in service Frequencies 15 610 1115 1620 21above Total 4 6 13 13 6 42
Cumulative Per (%) frequency 10 23 36 42 9.5 14.3 31.0 31.0 14.3 100
Frequencies 50 40 30 20 10 0 15 610 1115 1620 21above Total Frequencies
47
SECTION B Q1- Well paid employee/workers may perform better on heir job. Table: Paid employees
Cumulative Positions Junior staff 21 Senior staff 14 7 Manager Total 42 35 42 50.0 33.3 16.7 100 Cumulative Responds Strongly agree Agree Disagreed Frequencies frequency 20 13 4 33 37 42 47.6 31.0 9.5 11.9 100 Per (%) Frequencies frequency Per (%)
Strongly disagree 5 Total 42
Frequencies
50 40 30 20 10 0 Strongly agree Agree Disagreed Strongly disagree Total Frequencies
48
The empirical evidence from the table 4.6 research reveals that 47.6%, 31%, 9.5% and 11.9% strongly agreed, agreed, disagreed and strongly disagreed, respectively that well paid workers/ employees may perform better on their jobs.
49
Q2- Salaries, bonus and allowances may motivates workers/ employees attitudes towards work Table: Salaries, Bonus and Allowances
Cumulative Responds Strongly agree Agree Disagreed Frequencies 21 17 2 frequency 38 40 42 Per (%) 50.0 40.5 4.8 4.8 100
Frequencies
It shows the respondents responds of 50% strongly agreed, 40.5% agreed, 4.8% disagreed and 4.8% strongly disagreed that salaries, bonus and allowances may motivates workers/employees attitudes towards work.
50
Q3- Training and development in an organization may have positive influence on employees/workers performance. Table : Training and Development
Cumulative Responds Strongly agree Agree Disagreed Frequencies frequency 18 18 2 36 38 42 42.9 42.9 4.8 9.5 100 Per (%)
Frequencies
From the responses provided in the data analyzed in table 4.8, 42.9% and 42.9% strongly agreed and agreed that training and development in an organization may have positive influences on employees/workers performances, 4.8% disagreed while 9.5% strongly disagreed.
51
Q4- Training in an organization may reduce cost and as well increase productivity. Table : Increases productivity
The analyzed responses on training and cost reduction of research questions 5 shows that 9%, 442.9%, 40.5%, 9.5% and 7.1% strongly agreed, agreed, disagreed and strongly disagreed that training in an organization may reduce cost and as well increase productivity. Details in table 4.9 above.
52
Q5- Good working conditions in an organization may improve employee performances. Table 4.10: Good working conditions
Frequencies
The empirical evidence available in table 4.10 shows that 35.7% and 45.2% of the respondents strongly agreed and agreed and agreed that good working conditions in an organization may improve employee performances; 9.5% disagreed and 9.5% strongly disagreed.
53
Q6- Any employee/worker who expects promotion and dully promoted is bound to increase his/her efforts and performances. Table : Employee Promotion
Cumulative Responds Strongly agree Agree Disagreed Frequencies 21 15 3 frequency 36 39 42 Per (%) 50.0 35.7 7.1 7.1
Strongly disagree 3
Frequencies
From the analyzed responses in table 4.11, it shows that 50%, 35.7%, 7.1% and 7.1% strongly agreed, agreed, disagreed and strongly disagreed respectively that any employee/worker who expects promotion and dully promoted is bound to increase his/her efforts and performances.
54
Q7- Employees performance appraisal may influence employee performances. Table : Performance Appraisal
Frequencies
The analysis of the responses respondent in table 4.12 shows that 38.1% strongly agreed, 45.2% agreed, 7.1% disagreed and 9.5% strongly disagreed that employee performance appraisal may influence employee performance.
55
Q8- Employees, welfare, pension, medical facilities etc may facilitate effective performances. Table : Employees welfare
Cumulative Responses Monetary Frequencies 27 frequency 42 Per (%) 64.3 35.7 100 Cumulative Responds Strongly agree Agree Disagreed Frequencies 17 17 5 frequency 34 39 42 Per (%) 40.5 40.5 11.9 7.1 100
Non-monetary 15 Total 42
Frequencies
The analyzed of respondents responses in tale 4.13 shows that 40.5%, 40.5%, 11.9% and 7.1% strongly agreed, agreed, disagreed and strongly disagreed that employees welfare, pension, medical facilities etc may facilitates effective performances.
56
57
SUMMARY OF FINDINGS, CONCLUSION AND

INTRODUCTION
This chapter consists of the summary from the data analyzed, the conclusion from the data analyzed and recommendation.
58
SUMMARY OF FINDINGS
From the data analyzed, it is find that the employee/workers that were well paid will increase in their performances, the payment in form of salaries bonus and allowances will also motivate workers/ employees attitudes towards work; more so, fringe benefit is another factor that may influence employees performances. It is also find that the non-monetary incentives such as training and development in an organization have positive influences on employee performances, training, an organization may reduce cost and as well increases productivity; good working conditions in an organization will also improve employees performances. The study find that any promoted employees will increase his/her efforts and performances in work place and employee performance appraisal influences employees performance; employee welfare, pension, medical facilities also facilitates effective performances, lastly the employee prefer monetary incentives to non-monetary incentives.
59
CONCLUSION
In view of these findings, the study thereby conclude that there is clear relationship between monetary incentives and workers performance; fringe benefit can motivate workers performance. However, some of the main objectives of training employee include, increase in productivity, lower labour turn over rate, higher morale and better co-ordination and training helps to reduce cost as it increases productivity, promotes goal congruency. Lack of training increases absenteeism rate, low output, poor quality and rejects and results in high unit cost. Non-monetary incentives, good working conditions promotion, good supervision, staff welfare, scheme, pension, medical facilities facilitates increases in employees performances and employee prefer monetary incentives to non-monetary incentives.
60
RECOMMENDATION
In any organization, incentives are a very sensitive issue not only to employer but also to the employees. Therefore, the ability of the organization to attract and retain employees depend on how much monetary and non-monetary incentives, it is prepared to offer. Poor wages and salaries as well as poor working conditions is a constant source of frustration to employees ands when they engage management in constant strife, the result is decrease productivity. Promotion, better pay fringe benefit and other social incentives are essential factor that motivate the employees to increase productivity. Therefore, it is thereby recommend that organization should strive to introduce a satisfactory incentives package to the employees, increases in salary bonus etc. This is important because employees satisfaction can motivate high performance. More so, non-monetary incentives, such as training promotion, effective performance appraisal should be encourage, employee needs adequate training to carry out their duties and employees that were promoted as well due will be motivated to increase its performances, and the management should ensure effective performance appraisal, whenever employees rating is being conducted, this should be done without any fair of favour and bias mind. Non-monetary incentives should be tailored in line with monetary incentives in order to motivate employees to put in their best and at the same time, organization should strive towards equity in the administration of monetary and non-monetary incentives.
61
REFERENCES
Books
Adams, J.S (1999): Advances in Experimental Psychology New-York. Academic Press. Bennett, R (1996) Effective Management London, Kegan Page Ltd. Cole. G.A (2000) Personal Management, London, Letts Educational. Aldine Palece. Durcker, P. F (1999) Management, Oxford. Butter Worth Heinemann, Luthans F (2003) Organizational Behaviour Boston, McGraw- Hill In Martins, D. C and Bartol K. M (1998) Management Boston McGraw Hill Nwachukwu, C. C. (1998) Management Theory and Practice. UYO. African a Feb Publishing Ltd. Pitfield, R. R. (1950) Business Organization. London, Macdonald and Evans. Otokih, S. 0. (2002) Theoretical Concepts and Scope of Management, Lagos. Vantage Publication Company. Ubeku, A. K (1979) Personal Management in Nigeria . Benin City. Ethiope Publishing Griffin R (2002) Management, Boston Houghton Mifflin Co. Edward E (1999) Pay and Organizational Effectiveness A Psychological View. New York. McGraw Hill Robert, L.M and Jackson, J (2004) Human Resource Management, London. Thomson Surth West Inc. Jeffrey P (1998): The Human Equation, Boston, Havard Business School Press. Abraham H. M (1954) Motivation and Personality, New York, Harper and Row. Alderfer C. P (1992) Existence, Relatedness and Growth, New York, Free Press. Federick, H (1999): The Motivation to Work. New York. Wiley JOURNALS Gellerman, A. P Management and subordinates Havard Business Review, May,
62
1976. Kepner K et al The Role of Monetary and Non-monetary incentives in the Workplace As influence by career stage Institute of food and agriculture sciences. University of Florisda. Gainesvills. June, 2003. Alexander D. and Fred L. Differential Effects of Incentive Motivators on work performance Academic of Journal 43 (2001) William, M. B Incentives System Fine Tunes Pay/Bonus Plans The Wall Street Journal, August 16, 2001 Robert H and Lawrence, A. W. Herzbergs Dual Factor Theory of Job Satisfaction and Motivation: A review of the Evidence and a Criticism Personnel Psychology. Winter 1967.
63

Employee attitudes towards monetary and non-monetary incentives

Загружено:

Сведения о документе

Исходное описание:

Оригинальное название

Авторское право

Доступные форматы

Поделиться этим документом

Поделиться или встроить документ

Параметры публикации

Этот документ был вам полезен?

Это неприемлемый материал?

Авторское право:

Доступные форматы

Employee attitudes towards monetary and non-monetary incentives

Загружено:

Авторское право:

Доступные форматы

Project Title An exploratory study of employee attitude towards monetary and non-monetary incentives in the public enterprises

Submitted By Mr. XXXXX XXXXXXX

STATEMENT OF THE PROBLEM

OBJECTIVES OF THE STUDY

SCOPE/LIMITATION OF THE STUDY

REVIEW OF RELEVANT LITERATURE

EFFECTS OF ORGANIZATIONAL INCENTIVES

VARIABLE PAY: INCENTIVES FOR PERFORMANCE

TYPES OF VARIABLE PAY

SUCCESSES AND FAILURE OF VARIABLE PAY PLANS

FACTORS AFFECTING SUCCESSFUL VARIABLE PAY PLANS

SAMPLE AND SAMPLING TECHNIQUES

PROCEDURE FOR DATA COLLECTION

DATA ANALYSIS AND PRESENTATION

Gender Male Female Total

Frequencies Cumulative frequency 26 16 42 42

Per (%) 61.9 38.1 100

50 40 30 20 10 0 Male Female Total Frequencies

Frequencies 50 40 30 20 10 0 Married Divorced Widow er Frequencies

Frequencies 50 40 30 20 10 0 SSC/GCE/NECO HND/B.Sc/ACA Others Frequencies

Table : Years in service

Years in service Frequencies 15 610 1115 1620 21above Total 4 6 13 13 6 42

Frequencies 50 40 30 20 10 0 15 610 1115 1620 21above Total Frequencies

Strongly disagree 5 Total 42

50 40 30 20 10 0 Strongly agree Agree Disagreed Strongly disagree Total Frequencies

Strongly disagree 2 Total 42

50 40 30 20 10 0 Strongly agree Agree Disagreed Strongly disagree Total Frequencies

Strongly disagree 4 Total 42

50 40 30 20 10 0 Strongly agree Agree Disagreed Strongly disagree Total Frequencies

Strongly disagree 3 Total 42

Strongly disagree 4 Total 42

50 40 30 20 10 0 Strongly agree Agree Disagreed Strongly disagree Total Frequencies

50 40 30 20 10 0 Strongly agree Agree Disagreed Strongly disagree Total Frequencies

Strongly disagree 4 Total 42

50 40 30 20 10 0 Strongly agree Agree Disagreed Strongly disagree Total Frequencies

Strongly disagree 3 Total 42

50 40 30 20 10 0 Strongly agree Agree Disagreed Strongly disagree Total Frequencies

SUMMARY OF FINDINGS, CONCLUSION AND

Вам также может понравиться