EFFECT OF NON-MONETARY INCENTIVES ON EMPLOYEES PERFORMANCE

CHAPTER ONE

INTRODUCTION

1. 1. Background to the Study

All organizations are concerned with what should be done to achieve high level of productivity through staff motivation using the right kind of incentive. Most organizations in the past have been using financial incentives but their workers are still agitating for increment in salaries. Consequently the effect of non financial incentive becomes a burning issue in human resource management(Okoh,2008).

The issue of adequate motivation and consequently workers productivity is aproduct of a person’s set up of needs, goals, drive and experience. Byimplication, this means that factors which govern motivation, job satisfaction,workers productivity and attitude to work differ from one society to another.

However, the entire issue of the implication of adequate motivation on workersproductivity is embedded in the various theories of motivation.

People are motivated by various factors at different times, according to

Wilkinson et al, the first factor is the combination of the individual perceptionsof the expectations other people have of them, and their own expectations ofthemselves. This happens because people come into work situations withvarious expectations.

People work together in large organisations like bank, factory where they are expectedto follow orders, which they may not approve of. In addition, they may have to obeyinstruction from supervisors they had no hand in selecting. This is the type of situationwhere the worker might have no opportunity for self-expression. The basic question thatnow arises, relates to how to create a situation in which workers can satisfy theirindividual needs while working towards organisational goals. How can workers incorporateorganisation in Nigeriawho’s workers feel that their salaries are lowwhen compared with their contemporaries in other organisation?

As such a lot of theoretical concept, principles and techniques of management have evolved in response to these challenges/ but most scholars suggest that more conceptual and empirical work is required to show the link between financial and non financial incentive and staff productivity is still vague but some studies have documented in their work that financial incentive is readily perceived as having a high instrumental value that makes putting forth extra effort worthwhile and its has a long term effect in terms of labour turnover rate because of comparative value for alternative employment while non financial incentive has less initial impact as the pragmatics of financial gain, they seem to have a steady, sustainable impact(Egbe,2008).

Despite the growing body of literature and empirical study on the effect of non financial incentive on workers productivity, the subject matter still remains complex. Hence, the need to undertake a survey on the effect of   non monetary incentives on staff productivity in Niyya food and drinks company Ltd Kaduna.

1. 1. Statement of the Problem

Most organizations in Nigeria are constraint with the problem of using non performance based element like salaries to compensate it staff as against performance-related pay structure which has hamper productivity because it does not make worker put in extra effort in their work. This is so because their compensation is not based on incentive schemes that elicit additional effort of workers sequel to unfriendly government legislation on wages clause and bureaucratic inefficiency. Hence the need for the research to examine the effect of non monetary incentive on employee productivity in Niyya Food and drinks Ltd Kaduna.

1.3     Objectives of the Study

The main objective of this study is to examine the effect of non monetaryincentive on staff of Niyya food and drinksKaduna. Other Specificobjectives are to:

1. Assess whether staff remuneration is based on incentive schemes that motivate them.
2. Examine all financial incentives given to staff and their effect on worker productivity.
3. Identify non financial incentives used in boosting staff productivity.
4. Evaluate out the constraints militating against incentive schemeNiyya Food and drinks and make recommendations to the identified problems.

1.4     Significance of the Study

This study brings to light the effect of non monetary incentives on staff performance in organization. The study may therefore be beneficial to the organization understudy in area of policy formulations as regard staff incentive schemes and remuneration.

To education, the study may contribute to already existing knowledge on the effect of financial and non financial incentives on workers’ performance.

Finally, to those in academics and human resource researches, the study may serve as a springboard for further investigations.

1.5     Research Questions

This study  provide answers to the following research questions:

1. Is Niyya Food and drinks limited’s remuneration based on incentive scheme that motivate staff performance?
2. What kind of financial incentive do Niyya food and drinks give to its workers and what are their effect on workers productivity?
3. What kind of non financial incentive do Niyya food and drinks use to boost workers productivity?
4. What are the constraints militating against Niyya Food and drinks incentive scheme and how can these constraints be overcome?

1.6     Scope of the Study

The study covers an empirical investigation of the effect of  non monetary motivation on staff productivity in Niyya Food and drinks. The main scope and time frame for this investigation covers Niyya Food and drinks incentive schemes from 2006-2011.

1.7     Definition of key Term

The key terms below were used in this study

Financial Incentives: Monetary reward or compensation use to motivate workers.    

Non Financial Incentives: Other incentives apart from monetary rewards.

Performance Incentive: Rewards that motivates worker to put in more efforts.

Productivity: The rate at which employee work and their yield in their organization.

Adequate Motivation: These are factors (familiarity, concern and driving

force), which exist or are provided in a work situation either physically or

psychologically which determine the input and productivity level of the worker.

Implication of Motivation: The term could be defined as the work dispositionof an employee, which affects the mode of doing his work.

Intimacy: Intimacy or Familiarity could be described as the feeling of warmthand friendliness based on interpersonal relationship among people.

Consideration: Consideration or Concern refers to a situation where both theircolleagues and managers treat staffs with understanding. In this case, there isboth a personal and human touch in dealing with workers,

Thrust: Thrust or driving force deals with leadership by example as a meansof motivating subordinates. Leadership in this context takes personal interest instaff while also displaying a high degree of professional competence anddynamic leadership qualities.

Morale: Moral refers to staff emotional and mental level of zeal.

Productivity: Productivity is the relationship between the amount of one ormore inputs and the amount of outputs from a clearly identified process.

Permanent Staff: Permanent staff refers to those experienced member of staffwho irrespective of their ages have been working for a minimum period of five years

Contract Staff: Members of staff who irrespective of their academic

accomplishments and status are  regarded as adhoc staff.

Management Staff: Management staff refers to those member of staff who

irrespective of their ages have attain grade level 6 and above.

Training: The process of increasing knowledge and skills of staffs in doing their job.

Development: The process of adding to the skills of workers, improving their general knowledge and altering their attitudes.

Productivity: A rate at which workers produce goods or services.

Human capital: Workers’ skills and abilities considered as resources to business.

H. R. M: An acronym for human resource management.