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

Business Administration & Management Project Topics

 CHAPTER ONE

 

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.

 

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