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EFFECT OF INCENTIVE AS A MOTIVATIONAL TOOL ON ORGANIZATION PERFORMANCE (A STUDY OF NIGERIAN BREWERY PLC)

Abstract

This study examines the effect of incentive as a motivational tool on organization performance. A study of Nigerian Brewery Plc. Other objectives are to examine the impact of salary and bonus on employees’ productivity and to determine the relationship between treats and employee job satisfaction. The study made used of primary source to generated data and the correlation co-efficient techniques was used with aid of SPSS to analyze the stated hypothesis. The study revealed that that salary and bonus have significant impact on employees’ productivity. Based on the findings, the following recommendations have been made knowing fully well that, organizations should ensure adequate and proportional incentive programmes are been introduced in their organization, to all levels of staff. It motivates staff to greater productivity and increase in staff performance which leads to overall achievement of the organizations goals and objectives. Organizations are also advised to avoid selective form of incentive programme i.e giving incentives to some group of staff and leaving others. Findings, shows that where this is applied, it bring about those staffs been left out not to perform, in order words not achieving the organizational goals.

CHAPTER ONE

INTRODUCTION

1.1     Background to the Study

The success and the survival of any organization are determined by the way the workers are remunerated and rewarded (Lawler, 2013). The reward system and motivating incentives will determine the level of employees’ commitment and their attitude to work. As noted by Dixit and Bhati (2014) poor incentives packages have been a major factor affecting employees’ commitment and productivity. However, for any organization for achieve it object in any competitive society, employers of labour must have a thorough understanding of what drives the employees to perform efficiently and reward them accordingly (Mueller, 2014). Besides, employees must be motivated through adequate monetary incentives plans and reward systems and this will invariably encourage them to be proactive and have right attitude to work, thereby promote organizational productivity (Armstrong, 2014). However, in a highly dynamic organization, monetary incentives strategies are deployed by employers of labour to ensure that the best brains are retained in the best interest of the organization (Nelson, 2013). Consequently, productivity can only be enhanced if the employees are well motivated through adequate incentive packages that are proportional to their performance (Diener, 2014). Meanwhile, to avoid wrong perception and controversy by the employees, reward system must be clearly communicated to employees with job measurement which will drive the much needed motivational drive in the employees (Hartman, 2013). Incentives policy propel and influence employees attitudes in work place and as well stimulate understanding between the employer and the employee which will consequently cumulating into unprecedented performance for both the employees and the organization (Barbara 2013).

Employee satisfaction and performance are largely influence by incentives packages or reward system put in place by the organization (Osibanjo, 2014). Incentives policy are used by employers of labours to retain their best brains and as well compensate them for a job well done and excellence of job performance through monetary form. (Nelson, 2013). The incentive can come in many forms: basic salary, compensation, insurance, profit sharing, retirement plans, employee stock, overtime pay, attendance incentives, competition and contests, output-0riented merit increases, performance Bonuses, piecework , safety incentives , suggestion Awards etc (Kepner, 2015). Incentive policy is used to describe incentive-payement plans which ties incentives directly or indirectly to organizational performance (Alaba & Owodunni, 2015).

Hellriegel (2012) viewed motivation as any influence that portray, direct, or maintain people’s goal directed behaviors. It refers to the driving force that makes an individual to act in a specific way. It is an inner drive that causes an individual to behave in a certain manner. The goal of most organizations is to improve productivity therefore factors of motivation play significant roles in improving employee job satisfaction levels. This will in turn aid in improving an organization’s productivity levels.

Employees make up the workforce of any organization as such they are an integral part of the organization. Aluko (2014), stated that an organization is only as good as the workforce that runs the organization. This is to say that when employees are motivated chances are that their morale would be high as such performance and productivity levels would increase thereby to a large extent boosting overall organizational performance level. In order to achieve high levels of productivity as such boost organizational performance, managers therefore need to continually seek ways of ensuring that their employees stay motivated. This is because a lack of employee motivation leads to reduced productivity which is harmful to organizational performance and continuous success.

According  to  Richard (2010),  organizational  performance  encompasses  three specific areas of firm outcomes: financial performance (profits, return on assets, and return on   investment)   product market   performance   (sales,   market   share) and shareholder  return  (total  shareholder  return,  economic  value  added).  Specialists  in many  fields  are  concerned  with  organizational  performance  including  strategic planners,  operations,  finance,  legal,  and  organizational  development.  Improving the productivity of an institution is essential to its survival in the competitive world. The purpose of all productivity related endeavors is to bring about lasting improvements in the performance of  an  institution  (Shrestha,  2015).

The usefulness of good incentive policies which leads to motivation of the employee cannot be over emphasized. Every organization depends on motivation among other factors for the attainment of their objectives. The monetary incentives like bonuses, wages, salary increment, put more effort in their work which help to improve the level of productivity (Alaba & Owodunni, 2015).

Many time, the most concern of employer is to make the employee to contribute to the attainment of organizational objectives, but they should know that if the employees are not happy with the management of the organization, there will be a very low rate of production in the organization, that is why Hekina and Jones (2007) page 120 visualize that employees should be seen and valued as assets for the allocation of

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