Effects of Incentives On Employees Productivity
Effects of Incentives On Employees Productivity
Effects of Incentives On Employees Productivity
Abstract – The study investigates the effects of incentives on employee’s productivity. The study had the
following objectives: The relationship between incentive and productivity of employee’s in organisations, to
determine the influence of employee’s productivity incentives on employee productivity in the organization, to
analyze the link between incentive and employee productivity in organizations in Nigeria. To achieve these
goals, a questionnaire was designed based on the objectives. The completed questionnaires were processed and
analyzed using Pearson Product Moment Correlation Coefficient. The findings of this study revealed that there
was a positive relationship between incentives and productivity, alongside monetary incentives, another key
factor in motivating employees is to involve them in the process aimed at attaining organizational effectiveness
because without their co-operation the organization cannot perform. The study recommends the establishment
of a unit to look at issues of incentives that will enhance productivity
Keywords – Incentives, Motivation, Commitment, employee and Productivity
I. INTRODUCTION
Every person has his own wants and desires, for that purpose he/she works to get fulfill them. It is not enough
for an employee to be satisfied materially but non material aspects are as essential as material aspects, an
employee need both to be fulfilled. Material means his salary, bonuses, allowances, job security and other
facilities. While non-material aspect includes leaves, excellent working environment, good understanding
among other fellow workers and top management, all these elements have much to do with motivation of
employee.
Employee’s play very important part in the daily operations of any organization especially where the markets
are very competitive and have ever-changing environment which is supported by majority of the theorists. The
fate of an organization is usually determined by its employee’s so it sounds logical to understand how
employees can be motivated. As far as the employee’s motivation is concerned, employee motivational
incentive programs have been found to be the most commonly adopted technique among organizations. The
purpose of the program is to reward productive employee’s productivity, reinforce positive behaviour and stir
interest in employee. Employee’s productivity and how it could it could be enhanced is central to the concern of
industries and organizations, therefore many organizational scientists, are very much interested in different
schemes and techniques related to employee’s productivity and its growth incentives are one of those techniques
used in workplaces to stimulate employee’s in order to get desired employee’s productivity.
Human resource provides basis for an organization to achieve sustainable competitive advantage. Since
organizations are operating in a dynamic and competitive business environment, they need to develop strategies
to acquire and retain the competent workforce. Human asset is considered to be the most important asset of any
organization and in order to get the efficient and effective result from human resource, motivation is necessary
(Zaman, 2011). Researchers divide motivation into two categories, intrinsic and extrinsic. Extrinsic motivation
comes from external factors such as financial rewards and needs to be refilled at regular intervals not to lose its
effect. Intrinsic motivation comes from inside of an individual and is the kind of motivation every organization
wishes their employee’s would have (Mundhra, 2010).
Armstrong and Taylor (2010), states that “employee’s productivity” is defined as behavior that accomplishes
these results. In light of today’s business conditions especially in the banking industry where CBK has
introduced a regulation on interest capping, motivating people to give their best has become more crucial than
ever before. To achieve goals and objectives, organizations irrespective of size, develop strategies to compete in
highly competitive markets and to increase employee employee’s productivity. The Human Resources
Management has a role to hire and come up with retention strategies for the best employee’s, especially the ones
holding key roles that can be difficult to replace because of the technical competencies required. Organizations
Incentives have created a lot of challenges to employee’s input and output in organization. The negligence of
adequate structure in pay incentive, fringe incentive, and bonus and over time benefits has caused a lot of
inequitable justice on the administration of incentive scheme. The resultant effect on employee productivity
could be negative. The negative attributes can be seen as poorturnover, poor product quality improvement, job
dissatisfaction, low morale, low commitment, absenteeism, low turnover intentions to stay with the organization
and poor employee’s productivity that affects input and output.
These Are the Following Objectives That Lead to Incentives on Employee’s Productivity.
i. To determine the influence of incentives on employee productivity in the organization.
ii. To analyze the link between incentive and employee productivity in organizations in Nigeria.
IX. RECOMMENDATIONS
Researchers and academicians can utilize these study findings to test their hypothesis or to enhance further
research, particularly on finding out cost effectiveness of different incentives and rewards used by organizations
to increase employee productivity. The researcher should consider the current economic crisis with an aim to
reduce costs and to balance between short term and long-term productivity outcomes. The researcher should
come up with recommendations to be used by the management to reassess the combination of financial and non-
financial incentives that can serve their organizations best through economic crisis
It is very important to extent this research and discover new facts because motivational incentives are very basic
element of any job (the desire to receive something beneficial in exchange of one’s effort). This research should
be extended to other manufacturing organizations. Incentives are there, although working hours are also long.
So under the Factories Act, 1934 no adult employee, defined as a worker who has completed his or her 18th
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