THE IMPACT OF INCENTIVES ON THE PERFORMANCE OF FEDERAL AGENCIES IN NIGERIA (A CASE STUDY OF NIGERIA POSTAL SERVICE AND NIGERIA IMMIGRATION SERVICE).

ABSTRACT

This research work investigated the impact of incentives on the performance of Federal agencies in Nigeria.  It will help to appraise how  far  the  level of  incentives given by  these Federal agencies to their staff has helped in the attainment of organization’s goals and objectives.   It will also help to ascertain the basis used by the establishments for the distribution of the incentives to their staff.  Also, this research work will help to ascertain government commitment towards implementing the incentive programmes, and whether the decrease in businesses of their enterprise affects the implementation of the incentive scheme. Using a descriptive survey method, a total of 348 respondents were sampled by stratified and simple random sampling methods. Meanwhile, the main instruments used for data collection were questionnaires and personal interviews. While materials from libraries and other research units provided the researcher with the secondary data. The study reveals that Government have failed to provide adequate incentives for the employees of these agencies such as: housing, social amenities and free medical services etc. Based on these findings, conclusion was drawn and some recommendations made.

CHAPTER ONE

1.0  INTRODUCTION

1.1  BACKGROUND OF THE STUDY

“Every organization needs the services of men to achieve its set goals.  For these employees to put in their best towards the achievement of organizational goals and objectives they must be adequately motivated”, (Ugbaja, 1992:24).

Motivation is that energizing force that compels or stimulates workers to willingly contribute their best towards

goal attainment.   From the organizational point of view, motivation deals with everything a manager can use to influence the direction of individuals behavior towards goal achievement.   However, despite several models of motivation propounded for work, on-the-job motivation has remained a complex issue.    Hence, management consistent attempt to device effective incentives to enhance motivation of different categories of work personnel with a view to achieving staff commitment has failed.

Incentive is a form of variable reward targeted at a particular performance outcome.  It is designed to reward and thus, encourage positive employee’s action within a clearly defined parameters which is however, meant to achieve certain business outcome.  As an addition to basic pay, they are used to spur employees in an organization to greater productivity. They are also; strategies put in place to effectively combine both human and material resources so as to enhance and improve the performance of the organization by enabling it achieve its overall goals.

Incentive payment schemes are sometimes based on the simplistic assumption that employees are indifferent to corporate  needs  and  require  the  carrot  to  bring  forward positive and  contributive behavior. Such  payments can  be made  for  extra  effort  in  the  shop  floor,  shouldering extra responsibility in the office, getting more quotas in the sales division, or achieving increased profit in the boardroom.  As a motivational  tool,  incentives  can  be  subdivided  into  two groups.   They are the financial and non-financial incentives. Financial incentives could be in form of extra money added to the worker’s salary/wage, while the non-financial incentives could be in form of promotion.  “It is worthy to note that these incentives are applied to all categories of workers, since each group varies in extent to which they motivate workers individually”. (Arnold, 1994:212).  However, it is obvious that Nigerian workers respond to financial incentives.  This is due to the prevailing socio-economic conditions inherent in the country.

According to Ejiofor, quoted in Akpala (1993:114), “there is  a  cheap  labor  in  Nigeria,  low  level  of  education,  and

satisfaction of basic needs of the Nigerian workers, hence, managers could influence labor productivity by applying MC Gregors’ Theory X”.  In some industries, incentives represent a considerable proportion of the task of managing remuneration. “For the individual on incentives, the payment can represent a significant element of earning.  For the trade union, incentives are subject for negotiation.  For management, the incentives scheme is designed to offer some hope of reduction in unit cost of production, or in more general terms, an improvement in corporate well being”, (Poole and Warner, 1998:23).  More so some  organizations have  in  place  fringe  benefits  such  as: accident insurance Policy, transport allowance, rent and meal subsidy among others.

This  supplementary  compensation  is  often  provided partly to attract and keep good employees, which is partly required by law.  However, “despite the fact that employees do not  expect direct  tangible productive job,  they  hope  to  be rewarded in terms of higher turnover, high morale and some other advantages”, (Zolhitsh and Langer, 1970:112-131). “Majority of employees sees these benefits as their first line of

defense against unemployment, illness, and at old age etc”, (Stranss and sayles, 1972:60).   Meanwhile, Herzberg (1964) opines that, “these could be termed hygiene factors, but if tied to performance it may serve as an incentive to perform”.  In analyzing this, the researcher is very curious to ascertain the impact of incentives in an organization, and in doing this he used the two Federal Government agencies in Nigeria as his case study, the type of incentives used, and criteria for dispensation.  He also wants to find out whether workers are favorably  responding  to  the  existing  incentives  used  to motivate  them  towards  improved  performance and  in  goal achievement.

1.2  STATEMENT OF THE PROBLEM:

The motivation of workers is supposed to be a planned program for the benefit of all workers and the achievement of higher productivity.   Each employee needs one form of motivation or the other at each point in time to sustain the momentum.   Lack of motivation is therefore a hindrance to efficient and effective performance.  In most organizations, it behaves on the management to create organizations conditions

to induce employees’ who will help them in the attainment of organizational goals and objectives.  They should not allow the workers to complain for incentives before it is provided.  And they should not victimize the workers for asking for incentives. Hence, they will resort to poor performance for the fear of victimization will in turn, leads to poor accomplishment of set objectives.

Considering the Nigerian work environment in addition to the prevailing harsh economic conditions where inflation has eroded the purchasing power of earned income, it will be very interesting to study how the employers of labor in the government sector will try to improve the workers’ productivity using a well planned incentive schemes.  Therefore, the main problem of this study is to investigate the overall incentives scheme of the agencies under the study so as to determine their effect on organizational performance. It will also help to:

i.      Determine   the   effect   of   provision   of   adequate incentives on worker’s performance and organizational productivity.

ii.     Investigate whether the incentive scheme cut across all staff so as to determine its effect on organizational performance.

iii.    Determine if  proportional incentives is  given to top level managers and its effect on organizational productivity.

iv.    Assess the level of commitment of government with respect to the implementation of incentive schemes.

1.3  OBJECTIVES OF THE STUDY

The primary objectives of this study are to ascertain the usefulness and efficiency in the use of incentives as a motivational tool to enhance workers’ productivity in organizations.  The study is also designed to accomplish the following objectives:

1.     To  find  out  the  types  and  contents  of  the  incentive scheme applied in government agencies.

2.     To find out categories of recipients of the incentives.

3.     To find out whether there is a link between the incentive scheme and motivation.

4.     To determine the particular type of incentive that mostly motivates workers in an organization.

5.     To determine the factors that influences the provision of incentives to the workers.

1.4  THE SIGNIFICANCE OF THE STUDY

This study will be useful to managers of business outfits, the  government, and  individuals.   It  will  enable them, re- appraise their incentive schemes and structure them towards effectiveness.    It  will  also  expose  weaknesses, lapses,  and loopholes in the existing incentive schemes with an organization under the study and thus, enable corrective measures to be taken.

To show that good incentive scheme enhances organizational performance, it  will help to  identify the two forms of motivation and their impact on organizational performance. That is, it will help to highlight the financial and non-financial needs of the employee.

1.5  SCOPE AND LIMITATION OF THE STUDY

The aim of any research work is problem solving which helps to plan for the future.  Therefore, this work will examine

and appraise the existing incentive schemes used in the agencies under the study with a view to rectifying the cases of weaknesses.  Also, the performance appraisal system will be examined to enable us relate the existing incentive system with the performance of the organization.   However, several models of motivation which are relevant to the study and also on related research works will be used to form a framework on which the study will be based and comprises made, shall be reviewed, while the detailed analysis of the types of incentives will be carried out.

The monetary incentives such  as  wages and salaries, fringe benefits, bonuses and allowance, and the non-monetary incentives such as transport and communication, promotion, training and development, housing social amenities, etc shall be adopted for the sake of this research work.

The methodology to be used for this work is the use of standard questionnaire to establish the existence of a particular type of incentives and non-participant observation used for the appraisal of such incentives where they exist.

Personal interviews of both the managerial staff and junior workers are also carried out.

This study was not carried out without some obstacles. Many factors handicapped and hindered the researcher from attaining the Zenith of this research proposal.  Among these factors are lack of finance, attitude of respondents, and time etc.

1.6    FORMULATION OF HYPOTHESIS

Based on the problems and objectives of this study, the following hypotheses were formulated and will be tested.

1.     Ho:     The  provision  of  adequate  incentives  by  the organization to staff does not lead to greater productivity.

H1:       The    provision    of    adequate    incentives    by organization to staff leads to greater productivity.

2.     Ho:      The effects of proportional incentives on staff do not improve the performance of the organization.

H1:      The  effects  of  proportional  incentives  on  staff improve the performance of the organization.

3.	Ho:	Management is not sufficiently committed to	the
		payment of incentives.
	H1:	Management  is  sufficiently  committed  to	the

payment of incentives.

4.       Ho:    The   method   of   incentive   scheme   and   its implementation in the organization does not lead to    the      achievement      of      organizational goals/objectives.

H1:     The   method   of   incentives   scheme   and   its implementation leads to the achievement of organizational goals/objectives.

1.7  DEFINITION OF TERMS:

i.      Motivation:     This  means  the  force  that  energizes behaviors and gives direction to behavior with the tendency to persist.

Ii.     Incentive:  This is a form of reward which encourages a particular contribution made by the workforce which is added to the basic pay.

iii.    Remuneration:  This is a payment made to a person for the work he or she has done.

iv.    Salary:  A payment for regular services of an employee which is normally determined on an annual rate which is paid on a monthly basis.

v.     Wage:  A payment made or received for work done but it is determined on the basis of the amount of work done or time spent.

vi.    Inflation:   It is an increase in the quantity of money which is growing faster than real national output.

vii.   Monetary Policy: It is a discretionary action undertaken by the authorities to influence the supply of money, cost of money.  That is, the rate of interest and the availability of money.

viii.  Organization:  This entails a group of people who have come together to achieve a common purpose.

ix.    Efficiency:  This    related to having maximum returns from the resources that have been committed.

x.     Effective:  This means, having an effect or being able to bring about the result intended.

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