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THE IMPACT OF MONETARY INCENTIVE ON ORGANIZATION PERFORMANCE A CASE STUDY OF FIRST BANK PLC
Financial in the workplace no one works for free, nor should they. While pursuing money based on negative motives can lead to a poorer psychological well being, this is not the same as pursuing to provide security and comfort for oneself and family. Obviously employees want to earn fair wages to feel is what they are getting. To that end it is logical that employees and employer alike view money as the fundamental for satisfactory job performance the use of monetary or other financial incentive in the classic work performance paradigm” is based primarily on reinforcement theory. Reinforcement theory 15 focuses on the relationship between a target behaviour (e. work performance) and its consequences money and employee motivation.
Honewell, Johnson J.A and Dickinson, A.M (1999) (e.g. pay), and techniques of organization behavior modification 9 organization behaviour modification is a framework within which employee behaviours are identified measured and analyzed in terms of their functional (i.e existing reinforcement) and where an intervention is developed using principles of reinforcement.
In a much publicized study, Gupta and her colleagues (1998) analyzed thirty-nine studies conducted over four decades and found that cold hard cash motivates workers whether their job are exciting or mundane, in labs and read-world setting alike. But the research team acknowledges that money is not the only thing that concerns employees noting that beyond a certain point higher salaries will make employees happier, but it will not “buy” better performance. Still, Gupta warns that employees who dole out small. Marital raises – less than 7% of base pay-may more harm than good. According to her small raises can actually be dysfunctional in terms of motivation because employers become irritated that their hard work yielded so little. Because of this she advises employers who must give small raises to be careful about linking them to results and to be scrupulous about being fair.
Still, the research Guptas team is just one study from a wealth of findings that can appear inconsistent. These apparent inconsistencies reflect, in part, important nuances about the relationship between monetary incentives and job performance. For example, the broad literature on job performance encompasses financial incentive that address both individual and group performance and productivity. Furthermore, monetary incentives can extend beyond the more raises discussed by Gupta’s team to include individual and small – group rewards, merit pay. Pay-for-performance variable pay plans, or group bonus plans as well as profit shaming and gain – sharing incentive plans. Perry and his colleagues (2006) analyzed this diverse mature in an outstanding review and culled two general.
Financial incentive moderately to significantly improve tasks performance but their effectiveness is dependent upon organizational conditions.
Differences in institutional arrangement contribute to the feasibility and effectiveness of various monetary incentives, as do differences in employees preferences for specific incentives. Therefore, companies are wise to study these issues before implementing changes to existing incentive plans. This s especially pertinent for service organization, where financial reinforcement tend to produce a stronger effect on task performance the non-financial rewards used alone. Even stronger results are seen with a composite approach. For example, one meta-analysis of 72 field studies found that monetary incentives improved task performance by 23% social recognition improved task performance by 17% and feedback elicited a 10% improvement. Simultaneously combining all three types of reinforcement improved performance by 45%
Group incentive systems are consistently effective in private sector settings.
Team-based or small- group incentives are defined as rewards whereby a portion money and employee motivation of individual pay is contingent on measurable group performance. In general, its effectiveness is dependent on the characteristics of the reward systems the organization, the team and the individual team members. Here again, studying this issues vra employee surreys or impervious can be useful. But generally speaking, research suggests that equally small-group incentives sustains high level of productivity and satisfaction for group member, and that small-group. Incentive are at least as effective as individual incentives with groups of two to twelve people. Qualitative and survey research studies of alternative pay systems such as profit-sharing or gain-sharing plans are even more consistent in their findings. There incentives programs include various pay for performance approaches that link financial reward for employee to improvements in the performance of the work unit. Research reveals that these types of incentive systems are associated in practice and in employer and employee minds with both higher productivity and improvement in organization performance.
1.2 STATEMENT OF PROBLEM
Incentive measures such as salaries secondary benefits and intangible rewards recognition or sanctions have traditionally been used to motivate employees to increase performance. Thus incentives can be financial which come form of payment or cash transfers some of the financial incentive are direct such as salary person insurance, bonuses, e.t.c. other are indirect such as subsidized meals cloths housing it is importance to make distinction between a proper level of pay and special incentive. Pay to reward performance in the private sector financial incentives are generally associated with better performance perverse impacts can also be observed cash awards are shown to have a higher value where remuneration low conditions in the public sector differ significantly form those in the private sector.
A fundamental problem with the whole development cooperation industry is that so few of the goods and services it provide have a visible price that which tells the user how much money the services requires from the provider, or what the use as to sacrifice to gat it. Even if both sides know all the sums the recipient is very seldom aware of the possible alternative uses of the money. Eliminating perverse incentives is to a large extent a question of introducing more price consciousnesses among user as well as among provides and intermediaries. Many of these fundamental dilemmas have been acknowledged.
1.3 SIGNIFICANCE THE STUDY
The researcher has a strong belief that this research work be of immense contribution to potential researcher and academicians/scholars.
The research work with be of great significant because of the following reasons
i. Provide remedy to the problem of not remunerating workers in work places because the information will enlighten managers on the benefits of giving work incentives.
ii. Serve as guide to students who will like to embark on a topic of this nature.
iii. Provide information mended to an extent to educate the general public.
1.4 OBJECTIVE OF THE STUDY
This research work aims of bringing to limelight hoe monetary incentives can enhance job performance in work place.
The specific objective of the study are stated below.
1. To assess how often workers are given monetary incentives in work place.
ii. To identify factors that encourages monetary incentives from the management of a firm(s) or organization(s).
iii. To ascertain how these incentives given to workers affect the management.
iv. To assess the responses of workers to monetary incentives given to them.
v. To evaluate the rate these incentives given to workers are measured since workers are nor ravels in term of hierarchy.
1.5 RESEARCH HYPOTHESES
Ho: monetary incentives are directory proportion to effort of workers demonstrated at work place.
Ha: monetary incentives are not erectly proportion to effort of workers demonstrated at work place.
Ho: Worker do derive satisfaction from monetary incentives given to them.
Ha: Worker do not derive satisfaction from monetary incentives given to them.
Ho: management do run at lost when monetary incentive are given to workers.
Ha: management do not run at lost when monetary incentive are given to workers.
1.6 SCOPE OF THE STUDY
The scope of this study is financial institution inNigeria, precisely first bank plc, Ughelli Branch.
1.7 LIMITATION OF THE STUDY
The study is limited due to challenges that are encountered as the research advances in his work. this short coming are obstacles the reduced the scope and length of the research work. The following are some of the limitation;
i. Sufficient literatures and materials despite volumes of work done on work, one finds it difficult to lay hands on materials that will match and improve ones understanding of the subject matter.
ii. Insufficient finance: The research has to be financial buoyant to extent his work, so money made the work to the limited to this volume.
iii Ease of traveling: The research would have like to broaden the cope of the study but due time factor that is not always sufficient for traveling out of the research immediate environment, hence a limitation.
iv. Non-cooperation of respondents: Some respondents tend to be difficult and tend to hide some sensitive question hence incomplete questionnaires.