Effect of Financial Incentives on Employee Performance in Some Selected Banks (A Case Study of First Banks, and UBA Bank, Mubi)
Chapter One
Objective of the study
- To examine and categorize the various financial incentive structures employed by First Bank and UBA Bank in Mubi, Nigeria.
- To investigate how employees perceive and respond to the financial incentives provided by the selected banks.
- To assess the motivational factors influenced by financial incentives, including increased effort, engagement, and commitment.
- To explore the correlation between financial incentives and overall job satisfaction among employees in First Bank and UBA Bank.
CHAPTER TWO
REVIEWED OF RELATED LITERATURE
Overview of Incentive Schemes
Compensation is integral and utmost part of any organization and the management periodically and annually examines it in detail. The compensation comprises incentives, salary, bonus and other benefits that a firm has to give to their workers. In the 21st century the work scenario has been changed, the employee not only demands monetary rewards but extra benefits also. Satisfied employees with their work and salary are more motivated and they work harder because they know that after completing a certain level of goals they would be rewarded. Dissatisfaction from job and incentives demotivate the employee that lead to increasing in absenteeism, and job turnover rate in the organization (Decenzo & Robbins, 2006).
Incentive schemes as defined by Graffin and Ebert (1993) are special pay programs designed to motivate high performance. Incentive schemes attempt to link at least a portion of pay to job performance to encourage higher productivity. Incentives, as often called, should be aligned with the behaviors that help achieve organizational goals or performance. Incentives are either individual or group (organization wide). In this study, financial and non- financial incentives are designed to motivate employees to improve their performance, to increase effort and output and by producing better results expressed in such terms as objectives for profit, productivity, sales turnover, cost reduction, quality customer service and on time delivery. Incentive schemes relate compensation to productivity. A primary purpose of an incentive scheme is to encourage greater productivity from individuals and work groups. The term incentive refers to something that intends to ignite one and/or calls for greater effort to act in a given manner. According to Hicks & Adams (2003), incentives are mechanisms aimed at achieving a specific change in behavior. Whereas performance refers to how well an employee fulfils assigned task through effort and skill, an incentive refers to an inducement for a desired action. Incentive pay is a form of compensation given to employees upon attainment of some form of job performance (Armstrong, 2009). According to Torrington, Hall & Stephen (2008), Incentive is here described as an element of payment linked to the working performance of an individual or working group, as a result of prior arrangement. This includes most of the payment by results schemes that have been produced by work study, as well as commission payments to sales people, skill-based pay schemes and performance related pay schemes based on the achievement agreed objectives. The distinguishing feature is that the employee knows what has to be done to earn the payment, though he or she may feel very dependent on other people, or on external circumstances, to receive it. Incentives are designed to encourage performance of individual’s regardless of the different type of incentives form used. Incentives play an active role in pushing forward individuals’ capacity and moving abilities, motivating them to develop their skills, and balance between organization requirements and the individual needs which enhance the organization performance efficiently and effectively (Marwan, 2012). Incentives are used by organizations in order to reach certain goals, encourage a certain behavior and team-spirit for collective awards. Incentive systems are not universally applicable, but are likely to play a role in enhancing individual effort or performance where the conditions and the scheme designed are right (Manjunath and Rajesh, 2012). Organizations use different type of incentive schemes to motivate employees. Incentives are designed to get the maximum performance from the employees and help retain the most productive among them. Incentives are divided into financial incentives and non-financial incentives which is also known as monetary or non-monetary incentives (Luthans, 2003). An incentive is something that motivates an individual to perform an action. An incentive program is a formal scheme used to promote or encourage specific actions or behavior by a specific group of people during a defined period of time. Incentive programs are particularly used in business management to motivate employees, and in sales to attract and retain customers. All businesses use pay, promotion, bonuses or other types of rewards to encourage high levels of performance. There would almost certainly be a positive effect on motivation, especially if there is already an incentive scheme in place for employees (Holtmann, 2005).
CHAPTER THREE
RESEARCH METHODOLOGY
INTRODUCTION
In this chapter, we described the research procedure for this study. A research methodology is a research process adopted or employed to systematically and scientifically present the results of a study to the research audience viz. a vis, the study beneficiaries.
RESEARCH DESIGN
Research designs are perceived to be an overall strategy adopted by the researcher whereby different components of the study are integrated in a logical manner to effectively address a research problem. In this study, the researcher employed the survey research design. This is due to the nature of the study whereby the opinion and views of people are sampled. According to Singleton & Straits, (2009), Survey research can use quantitative research strategies (e.g., using questionnaires with numerically rated items), qualitative research strategies (e.g., using open-ended questions), or both strategies (i.e., mixed methods). As it is often used to describe and explore human behaviour, surveys are therefore frequently used in social and psychological research.
POPULATION OF THE STUDY
According to Udoyen (2019), a study population is a group of elements or individuals as the case may be, who share similar characteristics. These similar features can include location, gender, age, sex or specific interest. The emphasis on study population is that it constitutes of individuals or elements that are homogeneous in description.
This study was carried to examine Effect of financial incentives on employee performance in some selected Banks. First Banks , and UBA Bank mubi form the population of the study.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
INTRODUCTION
This chapter presents the analysis of data derived through the questionnaire and key informant interview administered on the respondents in the study area. The analysis and interpretation were derived from the findings of the study. The data analysis depicts the simple frequency and percentage of the respondents as well as interpretation of the information gathered. A total of eighty (80) questionnaires were administered to respondents of which only seventy-seven (77) were returned and validated. This was due to irregular, incomplete and inappropriate responses to some questionnaire. For this study a total of 77 was validated for the analysis.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was to ascertain Effect of financial incentives on employee performance in some selected Banks.(A case study of First Banks , and UBA Bank mubi). In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing Effect of financial incentives on employee performance in some selected Banks.
Summary
This study was on Effect of financial incentives on employee performance in some selected Banks.(A case study of First Banks , and UBA Bank mubi). Three objectives were raised which included: To examine and categorize the various financial incentive structures employed by First Bank and UBA Bank in Mubi, Nigeria, to investigate how employees perceive and respond to the financial incentives provided by the selected banks, to assess the motivational factors influenced by financial incentives, including increased effort, engagement, and commitment and to explore the correlation between financial incentives and overall job satisfaction among employees in First Bank and UBA Bank. A total of 77 responses were received and validated from the enrolled participants where all respondents were drawn from First Bank and UBA Bank in Mubi, Nigeria. Hypothesis was tested using Chi-Square statistical tool (SPSS).
Conclusion
In conclusion, this study has sought to investigate the effect of financial incentives on employee performance within the specific context of First Bank and UBA Bank in Mubi, Nigeria. The findings reveal crucial insights into the relationship between financial incentives and various dimensions of employee performance, shedding light on the complexities and nuances within the banking sector.
The assessment of the types of financial incentives offered by both First Bank and UBA Bank highlighted the diversity in incentive structures, including bonuses, commissions, and performance-based rewards. This diversity reflects the strategic approaches taken by these banks to motivate their workforce and enhance employee performance.
Recommendation
Recognize the diversity in employee preferences and motivations within First Bank and UBA Bank. Consider conducting periodic surveys or assessments to understand individual preferences and tailor financial incentive programs accordingly.
Given the dynamic nature of the banking industry, it is recommended that both banks regularly review and update their incentive structures. This ensures that incentive programs remain aligned with organizational goals, industry trends, and the evolving needs of employees.
Encourage the implementation of team-based incentive programs to foster collaboration and teamwork. This approach can mitigate potential negative impacts associated with individual-focused incentives and promote a collective sense of achievement.
Improve communication regarding the criteria for earning financial incentives, the performance metrics used, and the overall structure of incentive programs. Enhancing transparency can contribute to a better understanding among employees and foster a sense of fairness
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