Effects of Monetary Incentives on Employee Performance

ABSTRACT
This research titled Effects of Monetary Incentives on Employee Performance. A study of Ebonyi State Ministry of Works, Abakaliki was carried out to determine the extent to which employees of Ebonyi State Ministry of Works receive their allowances regularly and to ascertain whether there is any relationship between distribution of incentive schemes and performance of workers in Ebonyi State Ministry of Works. The research was a survey research, questionnaire

was the major instrument of data collection, and 300 respondents were sampled using simple random sampling. The findings of the research showed that, there is no relationship between the distribution of incentive schemes and the productivity of civil servants in Ebonyi State Ministry of Works and it is to a very low extent that workers in Ebonyi State Ministry of Works receive their allowances regularly. Hence the researcher recommended that, the government should try as much as possible to maintain consistency in the disbursement of monetary incentive packages to staff in order to motivate them to worker harder and Ebonyi state government should try as much as possible to monitor the disbursement of incentive schemes to staff in order to make sure they get to the deserving staff.

CHAPTER ONE

INTRODUCTION

1.1    Background of the study:

The employee's behaviour like most human behaviour is not programmed, instead it is usually an adaptive response to the circumstances in which employees find themselves and upon which their own benefits or best interest is protected. An organization can not survive if it fails to satisfy the personal motives of those who contribute to the realization of the organization's corporate objectives. Nickerson (2009) posits that, a good incentive scheme should be a scientific attempt to work out the most advantageous relationship between productivity and reward.
Thus, Ejiofor (2012) asserts that, incentives refers to those things (fringe benefits) given to a worker in order to encourage him to put his best in the course of doing his work in the organization. According to Udeagha (2011), monetary incentive is a money based reward given when an employee meets or exceed given expectations. Monetary incentives can include cash bonuses, stock options, profit-sharing and other type of rewards that increases an employee's compensation. The use of monetary incentives to stimulate employee performance is premised on the belief that, payment of high wages or salaries will motivate workers to produce more given the assumption that the worker is motivated by money. Hence, Igweobi (2012) opines that, the satisfaction of personal motives through fringe benefits especially monetary incentives enable the human elements in any organization to make tremendous contribution to the improvement of optimum production of every business organization.

It suffices to say from the foregoing that when employees are motivated, they give their best efforts to develop innovative ideas that results in improving business functionality and also improving the employee's performance. Though there are other forms of incentive packages like praise, opportunity to take part in an important task and leadership attention, etc. Monetary incentives as money rewards seem to be more effective as every employee look forward to boosting his economic status and standard of living through the outcome of his labour (Umueogu, 2012).
He further stated that, monetary reward in modern society is the most transferable means of satisfying fundamental requirements. Psychological satisfaction, protection and social requirements may only be attained with money.

A great variety of policies of incentives have been adopted by different organization in Nigeria and at different times, but the extent to which these organizations have used monetary incentives to motivate employees to be more productive seem not to be very significant and adequate. In the Nigerian  civil service system there exist such policies of monetary incentive as leave allowances, consolidated salary scales, end of the year bonuses, regular promotion of staff with commensurate/ accompanying salaries, regular and timely payments of salaries, retirement benefits etc. These monetary incentives have remained very dynamic and unstable as government changes from one administration to another.

Again, some governments in power find it difficult to willfully give employees (Civil Servants) these incentives but have to wait until they agitate for it through industrial actions like strikes and demonstrations. Yet, there are some regimes that use political power to threaten the bargaining power and agitation of civil servants in Nigeria. This situation seems to have greatly affected the regularity of the use of monetary incentive to promote employee performances in the Nigerian Civil Service and in Ebonyi State Ministry of Works precisely.

Thus, Chibuzor (2011) asserts that fringe benefits have been poorly used in Nigeria as a result of economic and political influences. Increases in wages/salaries grow up only as a result of pressure from labour unions. Prior to and within the sixties there were serious agitation for general wage increase. In 1961, the Sodonel report recommended upward revision of wage which was not implemented. The agitation persisted and led to the unfortunate and expensive general strike of 1964. During the Nigerian civil war (1967 to 1970) workers suffered not only because of inflation but also because of some rights and privileges being withdrawn on the protest of emergency measures.
Most governments and other business organizations seem to have loss sight of the effect of monetary incentive on employee performance yet they continue to search in futility, the reasons for the poor performances of civil servants and other employees. Hence, this research was initiated to determine the effects of incentive/welfare scheme on employee performance in Ebonyi State Ministry of Works.

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