THE EFFECT OF NON-FINANCIAL INCENTIVE ON STAFF PRODUCTIVITY IN NIGERIAN SECURITY PRINTING AND MINTING COMPANY

Format: MS WORD |  Chapter: 1-5 |  Pages: 65-80

THE EFFECT OF NON-FINANCIAL INCENTIVE ON STAFF PRODUCTIVITY IN NIGERIAN SECURITY PRINTING AND MINTING COMPANY

CHAPTER ONE

INTRODUCTION

1.1  BACKGROUND OF THE STUDY

Increasingly in the contemporary organization, human resourcing strategies are based on three premises: 1.   People-first;  2.   High-performance; 3.High-commitment. Armstrong (2012) suggested that people-first focus is a pre-cursor to winning commitment and mobilising the workforce in executing corporate strategy. Success in a highly competitive, global marketplace demands high commitment but also high performance, and organisations are increasingly focusing on developing such a culture as a core part of their employment practice.

Armstrong believes that people is the fulcrum upon which organisations rest.

 One of the most important, complex and problematic issues in managing human resources in any organisation is reward management. According to Banjoko (1996) hardly is any issue more relevant and crucial to an employee than his financial and non-financial remuneration, and scarcely has any matter led to strained labour and management relations or lead to strike action much more than wage – related issues as suggested by Fajana (2006). Considering the trends of great disparity between one’s expenditures and the income accruing into ones pocket due to the increasing inflation in our economy, it is therefore proper to say that reward management is a matter that is closest to the heart of every employee and their employers. It is a common saying that man does not live by bread alone yet he cannot live without it.In today’s competitive and global workplace, one of the strategies that successful companies use in having the ability to attract many qualified candidates, retain top talent, and maintain a highly motivated workforce is the use of rewards.

Rewards can be used to keep the organisation and the attractiveness of the job itself and proper reward management in of an organisation determines how job applicants will romance with such organisation. The organisation reward policy has an external influence on the source of labour supply.

Armstrong (2007) defined Reward management as a system that deals with the strategies, policies and processes required to ensure that the contribution of people to the organization is recognised by both financial and non-financial means. It is about the design, implementation and maintenance of reward systems (reward processes, practices and procedures), which aim to meet the needs of both the organization and its stakeholders.

The overall objective is to reward people fairly, equitably and consistently in accordance with their value to the organization in order to further the achievement of the organization’s strategic goals.

Reward management is not just about pay and employee benefits. It is equally concerned with non-financial rewards such as recognition, learning and development opportunities and increased job responsibility is the process of ensuring that people are rewarded fairly for the work they do and for contributing to the achievement of the organization’s purpose and aims.

Reward management provides answers to two fundamental questions:

1) What do we value?

2) What are we prepared to pay for?

All organisations face various degrees of competition in variety of labour markets. Supply and demand conditions in these markets require that organisations offer rewards that are competitive enough to attract a sufficient number of competent job applicants.

In essence, for the organization to be effective, it must be able to structure a reward policy that will match the desired reward of the employee.

Consequently, part of the challenges face by organisations is ensuring that their employees are highly motivated and committed and in this regard there are techniques and strategies employers put in place to motivate employees in order to improve job performance and guaranty their continuous commitment to reward good work Khan et al (2010).

Identifying  the most  suitable  form of reward  and  to  implement  it  in  such a way  that  the businesses benefit has also been one of the challenges facing management in modern organisation Dommeryer et al (2010).

Over the years, the management of reward systems have been one challenging area of concern to both industry practitioners and scholars. This is because apart from its potential in motivating employees to spectacular performances, it has proved to be a veritable tool to ensuring industrial harmony, job satisfaction Raza et al, (2011) and organizational commitment if used appropriately Oluseyi & Ayo (2009).

Equally challenging is the identification of the most suitable reward and to implement it in such a way that benefit all stakeholders in the organization. Thus, it is important to look at reward systems, view the alternatives available and understand them. According to Robbins & Coulter (2003) the focus is on four important components:

1. Type of rewards
2. Reward norms
3. Distribution criteria, and
4. Desired outcomes.

Therefore this research work will serve as a veritable tool in enlightening on non-monetary motivation and the focus is on how non-monetary reward systems are used to motivate public sector employees to improve their job performance and remain committed to organisational goals. Non-financial rewards focus on the needs most people have, although to different degrees, such as achievement, recognition, responsibility, influence and personal growth.

Non-monetary or non-financial rewards do not involve direct payment of cash and they can be tangible or intangible Adeyinka et al (2007). Some other examples of this kind of rewards are, encouraging the employees by providing them with autonomy in their job and participation in decision making, assigning challenging duties, improving working conditions, recognizing good work through small gifts, letters of appreciation, plagues, tickets to restaurant etc., providing some services for the employees, organizing social activities in the work place, etc. (Robbins and Coulter, 2003)

Non-monetary rewards generally motivate employees because they recognize the employees’ intrinsic needs. These are the needs that have to be satisfied on a long-term basis because they come from within the employee and tend to increase their willingness to be identified with organizational goals and objectives irrespective of unfavourable conditions.

On the other hand, organizational commitment refers to a strong desire to remain a member of a particular organization, a willingness to exert high levels of efforts on behalf of the organization and a define belief in and acceptability of the values and goals of the organization Adeyinka et al (2007).

 From the above, it is emphasized that the need for recognition, self-respect, growth, meaningful work, social activities, teamwork, participation in decision making are important non-monetary rewards in boosting the employees’ morale and increasing their commitments to their organisations.

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