THE EFFECT OF FINANCIAL AND NON-FINANCIAL INCENTIVES ON STAFF PRODUCTIVITY

 Abstract

This study is on the effect of financial and non financial incentives on staff productivity. The total population for the study is 200 staff of NIPOST Kaduna state. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made pay roll officers, postal officers, senior staff and junior staff were used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies

 CHAPTER ONE

INTRODUCTION

• Background of the study

All organizations are concerned with what should be done to achieve high level of productivity through staff motivation using the right kind of incentive. Consequently the effect of financial and non financial incentive becomes a burning issue in human resource management. As such a lot of theoretical concept, principles and techniques of management have evolved in response to these challenges/ but most scholars suggest that more conceptual and empirical work is required to show the link between financial and non financial incentive and staff productivity is still vague but some studies have documented in their work that financial incentive is readily perceived as having a high instrumental value that makes putting forth extra effort worthwhile and its has a long term effect in terms of labour turnover rate because of comparative value for alternative employment while non financial incentive has less initial impact as the pragmatics of financial gain, they seem to have a steady, sustainable impact. Despite the growing body of literature and empirical study on the effect of financial and non financial incentive on workers’ productivity, the subject matter still remains complex. Hence, the need to undertake a survey on the effect of financial and non financial incentives on staff productivity in Nigeria Postal Services Kaduna

• STATEMENT OF THE PROBLEM

Nigeria Postal Services (NIPOST) like other public enterprise is constraint with the problem of using non performance based element like salaries to compensate it staff as against performance-related pay structure which has hamper productivity because it does not make worker put in extra effort in their work. This is so because their compensation is not based on incentive schemes that elicit additional effort of workers sequel to unfriendly government legislation on wages clause and bureaucratic inefficiency. Hence the need to examine the effect of financial and non financial incentive on staff productivity in Nigeria Postal Services Kaduna

• OBJECTIVES OF THE STUDY

The central objectives of this study are to examine the effect of financial and non financial incentive on staff productivity in NIPOST Kaduna.  Specifically the study is set out to:

1. Identify whether NIPOST remuneration is based on incentive schemes that motivate staff to perform.
2. Examine all financial incentives NIPOST give to it staff and their effect on worker productivity.
3. Identify non financial incentives used in boosting staff productivity in NIPOST Kaduna.
4. Find out the constraints militating against NIPOST incentive scheme and make recommendations to the identified problems
   • RESEARCH HYPOTHESES

For the successful completion of the study, the following research hypotheses were formulated by the researcher;

H₀:  there is no effect of NIPOST incentive scheme on the productivity of staff

H₁:  there is effect of NIPOST incentive scheme on the productivity of staff

H₀²: non financial incentives are not used in boosting staff productivity in NIPOST Kaduna

H₂: non financial incentives are used in boosting staff productivity in NIPOST Kaduna

• SIGNIFICANCE OF THE STUDY

This study brings to light the effect of financial and non financial incentives on staff performance in organization. The study will therefore be beneficial to the organization understudy (NIPOST) in area of policy formulations as regard staff incentive schemes and remuneration.  To education, the study will contribute to already existing knowledge on the effect of financial and non financial incentives on workers’ performance.  Finally, to those in academics and human resource researches, the study will serve as a springboard for further investigations

• SCOPE AND LIMITATION OF THE STUDY

The study covers an empirical investigation of the effect of financial and non financial incentives on staff productivity in NIPOST Kaduna. The time frame for this investigation covers NIPOST incentive schemes from 2006-2011. The researcher encounters some constrain which limited the scope of the study;

1. a) AVAILABILITY OF RESEARCH MATERIAL: The research material available to the researcher is insufficient, thereby limiting the study
2. b) TIME: The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.
3. c) Organizational privacy: Limited Access to the selected auditing firm makes it difficult to get all the necessary and required information concerning the activities.

 1.7 DEFINITION OF TERMS

 Financial Incentives: Monetary reward or compensation use to motivate workers.

Non Financial Incentives: Other incentives apart from monetary rewards.

Performance Incentive: Rewards that motivates worker to put in more efforts.

Productivity: The rate at which employee work and their yield in their organization.

1.8 ORGANIZATION OF THE STUDY

This research work is organized in five chapters, for easy understanding, as follows

Chapter one is concern with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study. Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature. Chapter three deals on the research design and methodology adopted in the study. Chapter four concentrate on the data collection and analysis and presentation of finding.  Chapter five gives summary, conclusion, and recommendations made of the study

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