CHAPTER ONE1.0. INTRODUCTION 1.1 Background of The StudyThe first chapter of this study gives a brief introduction on the subject matter,followed by the statement of problem, purpose of the study, as well as researchquestions and research hypothesis. Furthermore, we take a look at thesignificance of the study, then we analyse the scope and limitations of the studybefore concluding the chapter with the definition of terms.Managing reward is largely about managing expectations that employees expectfrom their employers in return for their contribution and what employers expectfrom their employees in return for their pay and the opportunity to work anddevelop their skills. Expectations are built into the employment relationship, thestarting point of which, from the rewards point of view, is an undertaking by anemployee to provide effort and skill to the employer, in return for which theemployer provides the employee with a salary or a wage. The purpose ofmanaging the system of rewards within the organisation is to attract and retainthe human resources the organisation needs to achieve its objectives. To retainthe services of employees and maintain a high level of performance, it isnecessary to increase their motivation and commitment. In effect theorganisation is aiming to bring about an alignment of organizational andindividual objectives when the spotlight is on reward management. The overall
success of an organization in achieving its strategic objectives relies heavily onthe motivational level of employees. All organizations, regardless of sector, sizeor industry require motivated workforce that ensures the efficiency, highorganizational output and prosperity of the organization. De-motivatedemployees are likely to put in little or no effort in their jobs, produce lowquality work, mostly avoid their workplace and even exit the organization ifprovided the opportunity. On the other hand, employees who are motivated towork are likely to be determinant, innovative and competent. Motivatedemployees are contended, dedicated and work enthusiastic, resulting inoptimum level of employee retention, loyalty and harmony. This contributessignificantly to the growth and development of the overall organization. It isworthwhile to take a closer look at the impact of non-financial incentives as amotivational strategy in achieving organizational objectives. People act only when they have a reasonable expectation that their actions willlead to a desired goal. Because of this, employers put in more in motivatingemployees and one of the ways through which this (motivating) can be done, isthrough the means of non-financial incentives so that workers are treated inright manner in order to accomplish the organization’s objectives. Organizationsare being faced with what resources to give out as non-financial incentive,because of the poor state of the economy.
Thus, employees of an organization have motives and inner desires that areexpressed in the form of actions and efforts towards job roles to meet theirneeds. Employee motivation is the level of energy, commitment, and creativitythat a company's workers apply to their job (Ebrurajolo, 2004). In effect, it isthe ability to activate human potentials, influence human efforts and will to do agiven job. Mullins (2005) contends that having the workforce with the righttalents and skills is not enough for realization of maximum results, butindividual effort, motivation and employee retention are keys to maximizingorganisational productivity and performance. Therefore, the performance of anindividual employee or the entire workforce is a major determinant toorganizational success. Organizational members meet their personal needs fromthe rewards given to them in exchange for the services rendered and outstandingperformance on the job. Organisations provide rewards to their personnel inorder to motivate them and enhance the loyalty and retention of the workforce.According to Krietner and Kinicki (2007), reward is the compensation for doingwork well given to a worker in the form of both financial and non-financialincentives. While Torington and Hall (1991) submit that reward suggests aspecial payment for a special act. Reward is a consideration that flows from theperformance of the contract of employment relationship. Rewards are allocatedto organizational members for the performance of task or realization of settargets. Luthans (2008) submits that Organisational rewards take a number ofdifferent forms including money (salary, bonuses, and incentive pay),
recognition and benefits. The view of Luthans confirms that rewards are in bothmonetary and non-monetary forms offered to employees for meeting targets setin organizations. Monetary rewards are financial rewards or direct cashpayments which consist of performance pay, competency pay, gain sharing andprofit sharing to workers for their contributions in an organization while non-monetary rewards are non-cash rewards which consist of all intrinsic motivatorssuch as achievement, responsibility, opportunity for growth and extrinsicmotivators such as recognition, job enrichment and praise. Motivation is one ofthe key elements in employee performance and productivity. Indeed, highperformance will remain elusive to organisations without adequate staffmotivation. The dynamic state of the economy had led the federal governmentto take some measures to stop the downward economic trend which hasadversely affected many organizations. For instance, a good number ofcompanies have cut down their incentives and some have even stopped givingany to their employees. This has prompted me to write on Non-FinancialIncentives as Motivational Strategies in achieving organizational objectives. Non-financial incentives can be defined as the benefits given to workers by theiremployers other than wages and salaries, either in kind or services. However,there is an important group of motivating forces that can be considered underthe broad heading of “Non-Financial Incentives”. The management of acompany cannot afford to overlook these incentives or forces which intangible
though they may be, have much to do with the spirit of an organization and itspower of accomplishment. But the attitude of both employees and the general public towards thisprogramme has changed considerably. The various legislation’s that are beingpassed by the government had led many to believe that the private firm ismorally responsible for the lives of its employees, it is no longer what theemployers need to introduce, but a requirement imposed by government,competitors or the labour unions. As stated earlier that non-financial incentivesis motivational strategies, one would want to ask the meaning of motivation. Motivation can be defined as the psychological process that gives behaviour anddirection. By appealing to this process, managers attempt to get individuals towillingly perform an activity or willingly pursue organizational objectives.When this activity is conditioned by the ability to satisfy an individual’s wants,it can also be referred to as the ways, urges, aspirations, drives and needs ofhuman beings that direct, control or explain their behaviours. It can also belooked at as the conditions, which influences the arousal, direction andmaintenance of behaviours relevant in work settings. Every organization existsto accomplish particular objective and individuals to satisfy some needs. However, since all organizations cannot achieve all its objectives andindividuals cannot fulfil all their needs, the manager has the responsibility ofdirecting individuals so that they can satisfy their needs, the manager has the
The literature review consists of analysis of secondary sources, with the objective of gaining a holistic view of previous research on similar themes. Textbooks and journals were used for the study and are considered as secondary information sources. It is important to note that GUARANTY TRUST BANK PLC is among others, used as example to support the literature review. The purpose of this section is to get an understanding of non-financial incentives and how it can serve as motivational strategies in achieving organization objectives.
