THE EFFECT OF ORGANIZATIONAL INCENTIVE POLICIES ON WORKER’S PRODUCTIVITY

CHAPTER ONE

INTRODUCTION

BACKGROUND OF THE STUDY: One definition of an incentive is "a sum of money paid in addition to the basic rate that the organization pays to ensure that its most important production aspects are being optimized." Another definition of an incentive is "a form of financial encouragement recognizing a particular contribution made by the work force." In other words, an incentive is "a sum of money paid in recognition of a particular contribution made by the work force" (Agoro,2021). For instance, a corporation that relies heavily on its capital investments can provide an incentive that is tied to the amount of time spent using machines. Employees or groups of employees may get monetary compensation depending on the quantity of production for which they are responsible. It used to date back to the era of the scientific management movement championed by Fedrick Winslow Taylor, who argued vehemently for the use of incentive wage system as a way of getting more output from the workers. The use of performance incentive policies is predicated on the belief that output can be measured and performance by workers. The use of performance incentive policies is premised on the belief that output can be measured and performance by workers (Armstrong, 2021). It was also intended to counteract the practice of "soldering" or "boondoggling," which at the time was an intentional technique of restricting productivity by employees while they were on the job (Arraya, 2022). Taylor was of the opinion that employees could always put in more effort if they were offered a financial incentive based on the amount of units of work they were able to do, and he was of this opinion to this day. He subsequently established the differential rate system, which offers a worker a smaller piece rate (for example, #1.0 per piece) if he generated less than the standard amount of output necessary by doing so; individual employees are driven to produce more production as a result of this system. Human resources, often known as personnel, are always the most important factor in a company's performance, regardless of the size of the business or whether it is a public or private sector (Armstrong,2020). When people join a company, they bring with them their own unique sets of motivations, wants, needs, wishes, and other motivating factors, all of which they hope to fulfill once they are a part of the business. The degree to which these demands are satisfied or not satisfied by the organization has an influence on the behavior or performance of the employee, which in turn has an effect on the organization's overall productivity. It is impossible to place enough emphasis on how important it is to have effective incentive schemes that lead to motivation for workers. Every company, regardless of size or kind, is dependent on motivation, in addition to other elements, in order to achieve its goals (Arnolds,2021). The financial incentives, such as bonuses, pay, salary increments, and so on, that encourage workers to put more effort into their job are one factor that contributes to an increase in productivity in both private and public businesses. Many times, the most concern of employer is to make the employee to contribute to the attainment of organizational objectives. However, employers should be aware that if the employees are not happy with the management of the organization, there will be a very low rate of production in the organization. This is the reason why Adekoya, (2022) page 120 visualize that employees should be seen and valued as assets for the allocation of organizational resources. The Dangote cement plant in Obajana, Kogi State, will serve as the case study for this project, which will investigate the impact that management incentive schemes have on the overall productivity of employees.

1.2 STATEMENT OF PROBLEM

Most incentive plans are designed to assist in increasing efficiency in the organization. However, obtaining employees acceptance of an incentive system may be difficult at the onset. There may be fear that the plan will lead to a speed up layoffs or reduce wage can cause workers resistance. Most employers do different things for instance ranking of people, contest, performance appraisals, production, teams and departments, shifts, commission pay etc. all this are believed to enhance performance. Some researchers think it does the opposite instead of trying to use the external motivation (something outside the work itself such as promised rewards or incentives) to get higher levels of performance from people. Employers will be better served by studying the organization as a system. Employers demand results. Without good result organization will find it difficult to survive. Managing incentive policies is a requirement for higher productivity.

Consequent upon a systematic survey of the constraint inimical to the success of management incentives policies

1. To what extent has incentive policy affected workers productivity?

2. What is the purpose and importance of these incentives?

3. What is the effect of the absence of these incentives?

4. What is the way out?

1.3 OBJECTIVES OF THE STUDY

Good incentive policies, when put in place, motivate workers and make them happy and happy workers are often productive. Good management incentive could be financial or non financial in nature. Financial incentive happens to be the most important of the incentive schemes and it includes wages and salaries, profit sharing scheme, etc.

This researcher shall, by this study therefore beam search light on various aspect of management incentive policies vis-à-vis productivity, with a view to achieve the following objectives among others.

i. To examine the nature and feature of various incentive schemes

ii. To examine the usefulness and purpose of incentive in an organization

iii. To examine problems associated with individual incentive plans

iv. To make relevant recommendations based on findings.

1.4 RESEARCH QUESTION

i. To what extent does money motivate employee?

ii. How do workers respond to different incentive?

iii. How does management incentive policy effection workers productivity?

iv. How can workers implement or improve incentive system in their work place?

1.5 SIGNIFICANCE OF THE STUDY

The significance of this study cannot be over emphasized. It is particularly useful to the organization in question, Dangote cement factory obajana and to other organizations. It will serve as a guide to show the different incentive scheme and packages organizations can adopt as well the need to inculcate the principle of responsibility, motivation and fairness in every organization.

The research work will also be useful for academic purpose in the sense that it is an improvement on past academic work of other researchers on the subject of management incentive policies vis-à-vis employee productivity. It also serves as a reference point for subsequent researchers.

The need for the study therefore becomes stronger and consequently the desire to find out how and to what extent effective incentive policy could help in increasing workers productivity. Above all, this research work is significant to the society at large as it includes the need for efficiency and effectiveness which will encourage growth and development.

1.6 SCOPE OF THE STUDY

This study will cover the effect of management incentive policies on workers‟ productivity in Dangote Cement Factory Obajana located in Kogi State in North central region of Nigeria within the period of the year 2013.

1.7 LIMITATION

Some limitations that were identified and encountered in the process of the study include:

i. Financial constraint:- in running around to gather material for this study considering the economic meltdown, money and other resources where involved delayed the completion of this work.

ii. Time; – The researcher was constrained by time in running round for the completion of this project.

iii. Attitude of respondents;- the research found it difficult initially to source required information from the members of staff of obajana cement factory, this also delayed the completion of this work.

iv. Electricity ;- the researcher had a hard time in typing, proof reading, printing, and editing of this work due to the incessant seizure and interruption of power supply by the power holding company of Nigeria .