IMPACT OF MANAGEMENT INCENTIVE POLICIES ON WORKERS PRODUCTIVITY

IMPACT OF MANAGEMENT INCENTIVE POLICIES ON WORKERS PRODUCTIVITY

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Abstract

The impact of management incentive policies on worker’s productivity. The place of good management incentive policies on employee’s productivity cannot be over emphasized. Most incentives plans are designed to help increase efficiency in the organization. However, obtaining employee‟s acceptance of incentive system may be difficult at the onset. This research has been necessitated by the need of raise awareness of practitioners and the employers of labour to the need of high productivity through good incentive policies. The researcher’s search light was beamed on several theories of incentive usefulness and purpose of a good incentive policy in an organization. Problems associated with individual incentive plans were also enumerated with a view to providing solutions to those problems in form of recommendations, which is that the management should concentrate more on individual incentive scheme whereby reward will be based on individual effort. Organizations have divergent policies on incentive, but towards what extent has these packages improve productivity? This research work is significantly useful as a reference point for subsequent researches and more useful to every organization that that desires to achieve high productivity.

CHAPTER ONE

INTRODUCTION

1.1      Background of the study

An incentive is a form of financial encouragement recognizing a particular contribution made by the work force, in other words, it is a sum of money paid in addition to the basic rate which the organization pays to ensure that its most important production aspects are being optimized . For instance, a capital intensive company might have an incentive linked to machine utilization.Performance incentives are payment made to an employee or group of employee based on amount of output. The use of performance incentive policies is premised on the belief that output can be measured and performance by workers, it used dated back to the era of the scientific management movement championed by Fedrick Winslow Taylor who argued passionately for the use of incentive wage system as a way of getting more output from the workers. It was also aimed at combating “soldering” or boondoggling” which was a practice of deliberate restriction of output by workers on the job as at that time. Taylor believe that workers could always exert greater efforts if they were to be paid a financial incentive based upon the number of units of work they were able to produce. He then developed the differential rate system which gives a worker a lesser piece rate e .g #1.0 per piece if he produced less than the standard amount of output required by so doing; individual workers are motivated to produce greater output. In every organization, large or small private or public enterprises, human resources (employees) are always the pillar of the success of the organization. The human elements have their individual drives, desires, needs, wishes and similar forces which they intend to satisfy when they are coming into an organization. The satisfaction or non-satisfaction of these needs by the organization has an impact on the behaviour or performance of the employee and eventually on productivity. The usefulness of good incentive policies which leads to motivation of the employee cannot be over emphasized. Every organization depends on motivation among other factors for the attainment of their objectives. The monetary incentives like bonuses, wages, salary increment, e t c to put more effort in their work which help to improve the level of productivity in both private and public industries. Many a time, the most concern of employer is to make the employee to contribute to the attainment of organizational objectives, but they should know 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, that is why Hekina and Jones (1967) page 120 visualize that employees should be seen and valued as assets for the allocation of organizational resources. This project will be based on the impact of management incentive policies on workers‟ productivity using Dangote cement factory obajana, kogi state as a case study.

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 OBJECTIVE 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 HYPOTHESES

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

H0:  there is no usefulness and purpose of incentive in an organization.

 H1:  there is usefulness and purpose of incentive in an organization

H02:  there are no problems associated with individual incentive plans

H2:   there are problems associated with individual incentive plans

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 AND LIMITATION OF THE STUDY

This study will cover the impact 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.The researcher encounters some constrain which limited the scope of the study;

a) AVAILABILITY OF RESEARCH MATERIAL: The research material available to the researcher is insufficient, thereby limiting the study       

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.

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

MANAGEMENT: Management includes the activities of setting the strategy of an organization and coordinating the efforts of its employees (or of volunteers) to accomplish its objectives through the application of available resources, such as financial, natural, technological, and human resources.

INCENTIVE:An incentive is something that motivates an individual to perform an action. The study of incentive structures is central to the study of all economic activities

WORKERS’ PRODUCTIVITY:Workforce productivity is the amount of goods and services that a worker produces in a given amount of time.Workforce productivity, often referred to as labor productivity, is a measure for an organization or company, a process, an industry, or a country.

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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