IMPACT OF NON-MONETARY INCENTIVES ON EMPLOYEES’ COMMITMENT IN MANUFACTURING ORGANIZATION
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
In a world characterized by increased global competition and a rapidly changing business milieu, companies and organizations are first to continuously re-evaluated how they work. Many times, organizations may drastically change their method of operations, which put great focus on the Human Resource (HR) strategies and operations of an organization. Companies often claim that their employees or human capital are their most important asset (Adelaja, 2018). As such, work motivation and effort towards humanizing the work place has become a subject of serious focus (Landmark, 2017). Incentives had been seen to be a vital instrument in employee performance. A well rewarded employee feels that he/she is being valued by the company that he/she is working for . They are also encouraged to work harder and better if they are aware that their well-being is taken seriously by their employers, and that their career and self-development are also being honed and taken care of by their company. Employees are the engine of organization vehicles while reward is the fuel. No organization can achieve its stated objectives without its employees
However, for any organization to achieve its objective in any competitive environment, employers of labour must have a thorough understanding of what drives the employees to perform efficiently and reward them accordingly (Mueller, 2015). Besides, employees must be motivated through adequate non-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, 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 and Biswas, 2015). Non-monetary 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 2003; Heneman 2015). Employee commitment and performance are largely influence by incentives packages or reward system put in place by the organization
Herscovitch and Meyer (2012) defined employee behaviour as the extent to which workers recognize the goals and objectives of the organization and they are willing to make effort and to work harder to help it prosper. Similarly, Bateman and Strasser (2014) described employee behaviour as a multidimensional aspect relating employees’ devotion and faithfulness to readiness to exert effort on behalf of the organization and the desire to maintain membership.
Non-monetary incentives policy plays a significant role in the perception of the employee regarding the reward climate in the workplace (Khan, 2013). When organizations pay attention to non-monetary tools such as opportunity of increasing holiday and family benefits, the employee may perceive the organization as a supporting and caring organization. Incentives, therefore, involve all economic benefits that are being supplied by the organization-pay, promotion, verbal recognition and responsibilities (Deperi, Tortia and Capita, 2013).
The employers confronted great difficulty to forecast the behavior of an individual because there are different predecessor which have an effect on employees’ commitment for example income, happiness , work values, work rewards, social concern, working conditions, working hours and performance (Long and Kuvaas, 2015). However, some of employers also use special types of non-monetary incentives to upturn the contentment and motivational level of their employees. Some of these non-monetary incentives have their merits in creating an extremely gratified workforce come in the form of job autonomy, participate in decision making, recognition, job involvement, and job significance. So, it is substantial for the employers to comprehend the needs, and desires of their employees and endorse those rewards that will lead to the satisfaction of their employees (Soon, 2013).
Some of non-monetary incentives for example praise and recognition are acknowledged as encouraging tools for increasing employees job performance (Rahim and Daud, 2013). Organizations have documented that facilitating the employees with high salaries is not sufficient to influence and satisfy them (Thompson, 2014). Similarly in another study Whitaker(2009) found that employees’ initial motivation and satisfaction may have enhanced with a pay raise or cash bonus, but the effects were shorter lived than the motivating effects of non-monetary incentives. Non-monetary incentives such as condensed working hours, subsidized meals or services, additional holidays and team events were found to improve employee motivation, foster a positive culture and encourage loyalty and commitment to the organization (Whitaker, 2009).
1.2 Statement of the Problem
James (2014) cited three warning signs of a demotivated workforce these include poor incentive policy, lack of safety incentives, and decreased productivity. He further stated that if any of these factors is observed to be trending downwards then there is a great chance that the organization is dealing with a demotivated workforce and this can make employees not be satisfied with their job. Most businesses and organizations especially manufacturing industries have failed to recognize the importance of motivation as a concept be it intrinsic such as employee well-being, relationship with co-workers, relationship with managers, organizational policies etc. or extrinsic such as training and career development, good working conditions, compensation, promotion amongst other factors that enhance or improve employee commitment as well as organizational productivity levels (Mathis and Jackson, 2015).
Many organizations are suffering from high turnover rates and down falls because they do not apply non-monetary rewards that may only need little effort (Aktar, Sachu and Ali, 2014). Adeyemi (2013) opined that organizations are channeling more resources in boosting organizational performance; there is widespread ignorance on how employee productivity could increase when managers and human resource personnel use monetary rewards on employees, the relationship existing between the kind of rewards and performance and how effective they can be utilized in an organization.
Most importantly, the high cost of monetary rewards forces employers to give to employees sparingly, out of the failure to realize that small offers like salary and bonus can be given any time, at very little cost, and could boost employee productivity to a great extent. This proves the fact that most organizations are far away from realizing the importance of financial rewards; hence they continue offering monetary ones that can never be enough for employees (Jibowo, 2015).
Although everyone needs money to obtain the smallest of essentials to live, employees prefer the benefits of non monetary gifts and incentives for motivation in the workplace. This implies that; regardless of how monetary incentives have been used widely in organizations, sometimes they discourage creativity in the workplace, a concept that can be achieved via the use of non-monetary rewards like career development via free trainings and work orientation which will make employees to be more committed to organization (Nwachukwu, 2014). It is therefore understood that a demoralized workforce would fail to effectively and efficiently discharge their duties leading to low performance and growth. This study therefore focuses on impact of non-monetary incentives on employees’ commitment in manufacturing organization
1.03 Objectives of the Study
The main purpose of the study is to investigate the impact of non-monetary incentives policy on employees’ behavior in financial institution: A study of First City Monument Bank, GTBank and Stanbic IBTC. Other specifics objectives of the study are:
To ascertain the influence of flexible work schedules on workers punctuality.
To assess the impact of recognition on employee intention to take risk.
To examine the relationship between job autonomy and employee’s efficiency.
To evaluate how training and development increase employee productivity.
To investigate whether non-monetary incentives policy propel employees’ attitudes in work place.
1.4 Research Questions
This project intends to answer to the following questions:
To what extent do flexible work schedules influence workers punctuality?
ii. What is impact of recognition on employee intention to take risk?
iii. Is there any relationship between job autonomy and employee’s efficiency?
iv. How does training and development increase employee productivity?
v. To what extent has non-monetary incentives policy propel employees’ attitudes in work place?
1.5 Research Hypotheses
The following hypotheses would be tested.
H1: Flexible work schedules influence workers punctuality?
H2: Recognition does not significantly influence employee intention to take risk
H3: There is no relationship between job autonomy and employee’s efficiency
1.6 Significance of the Study
The study of non-monetary incentives policy and employees’ behavior in financial institution is hoped to be of benefits to students, business men, corporate organization, and First City Monument Bank, GTBank and Stanbic IBTC, Abeokuta Brach. The study also hopes to highlight the problem associated with employee’s beahviour and to make use of the analysis to improve the working situation thereby minimizing the problems of non-monetary incentive in organization and its environment.
This research will bring out so many ways organization can motivate and satisfy their workers for better job performance. This work will also point out how it is necessary to provide the right incentives and environment for the organization to realize its full potential.
The findings in this study will have both theoretical and practical contributions by adding to the existing knowledge on research that has already been done in relation to non-monetary incentive and employee behaviour.
1.7 Scope and limitation of the Study
This research work focuses on the financial institution in Nigeria, but with particular reference to First City Monument Bank, GTBank and Stanbic IBTC. The scope of non-monetary incentive and employee behaviour will be restricted to flexible work schedules, recognition and job autonomy and workers punctuality, employee’s intention to take greater risk and employee efficiency will be fully discussed. The researchers faced some constraints which limited to study area it focused on. Such limitations consist of Time constraints, materials constraint, and financial constraint.
1.8 Definition of Key Terms
Non-monetary incentives – A non-monetary incentive system is a way to reward someone without giving money. It is often used as an incentive or bonus system for employees, whose goal is to motivate, retain, and attract high-quality people to your workplace.
Employee Commitment: this is the bond employees experience with their organisation. Broadly speaking, employees who are committed to their organisation generally feel a connection with their organisation, feel that they fit in and, feel they understand the goals of the organisation
Monetary Incentives – Monetary incentives are money reward that are given for an outstanding performance. They are important tools used by companies and even parents to act as incentives in motivating individuals to continue with their good work.
Employee performance: It is about behavior or what employees do, not about what employees produce or the outcomes of their work”. Perceived employee performance represents the general belief of the employee about his behavior and contributions in the success of organization.
Employee Efficiency: means the output or level of productivity of employee which is a determined by employee development in place by their organisation.
Organization: This entity comprising multiple people, such as an institution or an association that has a collective goal and is linked to an external environment.