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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

XXXXX University

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Table of Contents

ABSTRACT 4

INTRODUCTION 5

BACKGROUND OF THE STUDY 5STATEMENT OF THE PROBLEM 6OBJECTIVES OF THE STUDY 6RESEARCH QUESTIONS 7FORMULATED HYPOTHESES 7SIGNIFICANCE OF TE STUDY 7SCOPE/LIMITATION OF THE STUDY 8DEFINITION OF TERMS 8

REVIEW OF RELEVANT LITERATURE 9

INTRODUCTION 9EFFECTS OF ORGANIZATIONAL INCENTIVES 12VARIABLE PAY: INCENTIVES FOR PERFORMANCE 13

TYPES OF VARIABLE PAY 15

SUCCESSES AND FAILURE OF VARIABLE PAY PLANS 17FACTORS AFFECTING SUCCESSFUL VARIABLE PAY PLANS 17INDIVIDUAL INCENTIVES. 20

THEORETICAL FRAMEWORK 24

RESEARCH METHODOLOGY 31

INTRODUCTION 31RESEARCH DESIGN 31POPULATION OF STUDY 32SAMPLE AND SAMPLING TECHNIQUES 32INSTRUMENTS 32PROCEDURE FOR DATA COLLECTION 33DATA ANALYSIS 33

DATA ANALYSIS AND PRESENTATION 34

INTRODUCTION 34

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RESPONDENTS BLO-DATA 35

SUMMARY OF FINDINGS, CONCLUSION AND 47

INTRODUCTION 47SUMMARY OF FINDINGS 48CONCLUSION 49RECOMMENDATION 50

REFERENCES 51

Books 51

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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 employee’s 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.

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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 non-monetary. These

two forms of incentives for improve employee’s performance.

However, there is the need more than ever before to re-discover the weakness and the

strengths of incentives used in motivating employee’s 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 de-emphasized. 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 employee’s

attitude.

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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 non-

monetary 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.

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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.

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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 employee’s 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.

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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 employee’s 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, 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

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industry.

Cole (2000) posited that benefits are forms of compensation beyond wages for time

worked, including various protection, man’s 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 employee’s 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 non-

monetary 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, 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

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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,

Workmen’s 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 from these types of motivational strategies, an organization’s 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.

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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

2002)

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 organization’s 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 patterns of

attendance and absenteeism; if rewards are based on actual performance, employees tend

to work harder to earn those rewards.

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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.

Contributions to the organization are recognized through different amounts of

base pay.

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Giving rewards to some people but not others is divisive and hampers employees

working together.

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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 employee’s base pay. Also, organizational incentives

may be given as a lump-sum amount to all employees, or different amounts may be given

to different levels of employees throughout the organization.

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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)

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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?

Are the behaviors encouraged by the plan the ones desired?

Is the plan being administered properly?

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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 accurately

identify the higher performers. Under those circumstances, individual variable pay is

inappropriate. (Martins and Bartol (1999)

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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, Nwachkwu

1996).

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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 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

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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 employee’s 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 week’s 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 results

are not met, bonuses go down. Most employers base part of the employee’s bonus on

individual performance and part on the company if appropriate.

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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 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

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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 individual’s

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 other—the Scanlon plan—uses employee committees and passes on savings to the

employees.

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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 and because of its intangible character (Jeffrey

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 Maslow’s hierarchy of needs and the ERG theory.

Maslow’s Hierarchy of Needs: Abraham Maslow (1954) a human relationist, argued that

people are motivated to satisfy five need levels. Maslow’s 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 the work

environment itself, which provides restrooms, adequate lighting, comfortable

temperatures, and ventilation.

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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 one’s 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 positive-image

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

one’s potential for continued growth and individual development. The self-actualization

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 decisions about their work and

the opportunity to learn and use new information, skills, and capabilities.

25


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 re-main, 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 self- actualization level. Maslow’s 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).

26


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 Maslow’s 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 self-actualization.

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 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

27


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 dissatisfaction—that is, a person might identify “low pay” as

causing dissatisfaction but would not necessarily mention “high pay” as a cause of

satisfaction. Instead, different factors—such 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 Herzberg’s 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 factors—are related specifically to the work content. The factors presumed to

cause dissatisfaction—called hygiene factors—are related to the work environment.

The two-factor theory of motivation

28


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 two—giving 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, Herzberg’s two-factor theory is not

without its critics. One criticism is that the findings in Herzberg’s initial interviews are

subject to different explanations. Another charge is that his sample was not

representative of the general population and that subsequent research often failed to

uphold the theory. Robert and Lawrence (1967), At the present time, Herzberg’s theory is

29


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.

30


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.

31


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 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.

32


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.

33


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

employee’s 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%.

34


SECTION A

RESPONDENTS BlO-DATA

Table: Gender

Gender Frequencies Cumulative frequency Per (%)

Male 26 61.9

Female 16 42 38.1

Total 42 100

0

10

20

30

40

50

Male Female Total

Frequencies

Frequencies

35


Table: Marital Status

Statues Frequencies Cumulative frequency Per (%)

Married 24 - 57.1

Single 9 33 21.4

Divorced 4 37 9.5

Widow 2 39 4.8

Widower 3 42 7.1

Total 42 100

0

10

20

30

40

50

Married Divorced Widow er

Frequencies

Frequencies

36


Table: Educational Qualifications

Qualifications Frequencies

Cumulative

frequency

Per (%)

SSC/GCE/NECO 3 - 7.1

OND/AL/NC 5 8 11.9

HND/B.Sc/ACA 19 27 45.2

MBA/M.Sc 11 38 26.2

Others 4 42 9.5

Total 42 100

0

10

20

30

40

50

SSC/GCE/NECO HND/B.Sc/ACA Others

Frequencies

Frequencies

37


Table : Years in service

Years in service

Frequencies

Cumulative

frequency

Per (%)

1—5 4 - 9.5

6—10 6 10 14.3

11—15 13 23 31.0

16—20 13 36 31.0

21—above 6 42 14.3

Total 42 100

0

10

20

30

40

50

1—5 6—10 11—15 16—20 21—above Total

Frequencies

Frequencies

38


SECTION B

Q1- Well paid employee/workers may perform better on heir job.

Table: Paid employees

Positions Frequencies

Cumulative

frequency

Per (%)

Junior staff

Senior staff

Manager

21

14

7

-

35

42

50.0

33.3

16.7

Total 42 100

Responds Frequencies

Cumulative

frequency

Per (%)

Strongly agree 20 - 47.6

Agree 13 33 31.0

Disagreed 4 37 9.5

Strongly disagree 5 42 11.9

Total 42 100

0

10

20

30

40

50

Strongly agree Agree Disagreed Stronglydisagree

Total

Frequencies

Frequencies

39


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.

40


Q2- Salaries, bonus and allowances may motivates workers/ employees attitudes

towards work

Table: Salaries, Bonus and Allowances


Cumulative

frequency

Per (%)


Agree 17 38 40.5

Disagreed 2 40 4.8


Total 42 100

0

10

20

30

40

50


Total

Frequencies

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.

41


Q3- Training and development in an organization may have positive influence on

employees/workers performance.

Table : Training and Development


Cumulative

frequency

Per (%)


Agree 18 36 42.9

Disagreed 2 38 4.8


Total 42 100

0

10

20

30

40

50


Total

Frequencies

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.

42


Q4- Training in an organization may reduce cost and as well increase productivity.

Table : Increases productivity


Cumulative

frequency

Per (%)

Strongly agree

Agree

Disagreed

Strongly disagree

18

17

4

3

-

35

39

42

42.9

40.5

9.5

7.1

Total 42 100

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.

43


Q5- Good working conditions in an organization may improve employee

performances.

Table 4.10: Good working conditions


Cumulative

frequency

Per (%)

Strongly agree

Agree

Disagreed

Strongly disagree

15

19

4

4

-

34

38

42

35.7

45.2

9.2

9.5

Total 42 100

0

10

20

30

40

50


Total

Frequencies

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.

44


Q6- Any employee/worker who expects promotion and dully promoted is bound to

increase his/her efforts and performances.

Table : Employee Promotion


Cumulative

frequency

Per (%)

Strongly agree

Agree

Disagreed

Strongly disagree

21

15

3

3

-

36

39

42

50.0

35.7

7.1

7.1

0

10

20

30

40

50


Total

Frequencies

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.

45


Q7- Employees performance appraisal may influence employee performances.

Table : Performance Appraisal


Cumulative

frequency

Per (%)

Strongly agree

Agree

Disagreed

Strongly disagree

16

19

3

4

-

35

38

42

38.1

45.2

7.1

9.5

Total 42 100

0

10

20

30

40

50


Total

Frequencies

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.

46


Q8- Employees, welfare, pension, medical facilities etc may facilitate effective

performances.

Table : Employees welfare

Responses Frequencies

Cumulative

frequency

Per (%)

Monetary

Non-monetary

27

15

-

42

64.3

35.7

Total 42 100


Cumulative

frequency

Per (%)

Strongly agree

Agree

Disagreed

Strongly disagree

17

17

5

3

-

34

39

42

40.5

40.5

11.9

7.1

Total 42 100

0

10

20

30

40

50


Total

Frequencies

Frequencies

47


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.

48


SUMMARY OF FINDINGS, CONCLUSION AND

INTRODUCTION This chapter consists of the summary from the data analyzed, the conclusion from the

data analyzed and recommendation.

49


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.

50


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.

51


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 employee’s 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.

52

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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

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Pitfield, R. R. (1950) Business Organization. London, Macdonald and Evans.

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Alexander D. and Fred L. “Differential Effects of Incentive Motivators on work

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William, M. B “Incentives System Fine Tunes Pay/Bonus Plans” The Wall Street

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and Motivation: A review of the Evidence and a Criticism” Personnel Psychology.

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