NON-MONETARY INCENTIVES ON EMPLOYEE PERFORMANCE IN FIDELITY BANK PLC UYO, AKWA IBOM STATE

NON-MONETARY INCENTIVES ON EMPLOYEE PERFORMANCE IN FIDELITY BANK PLC UYO, AKWA IBOM STATE

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CHAPTER ONE

INTRODUCTION.

1.1  Background to the study.

Employee performance is a fundamental component that facilitates organizational growth and sustainability, specifically being affected by the reward system employed in an organization (Ngulube, 2003). Over the last few decades, the world’s business environment has undergone a radical transformation. The world has become smaller, not physically, but in terms of communications, competition, and economics. This has radically changed the way successful organizations do business and how they treat employees. This transformation has impacted the private sector significantly and is impacting the public sector as well, both in direct and indirect ways.

Nowadays, organizations that are evolving place a greater value on employees than organizations had in the past, and they achieve more by creating a process for employees to share in the results that they help achieve. Thus, today’s successful organizations match their employee reward systems to their strategies, goals, and values (Ballentine, 2007).  An organization’s reward system shapes its culture and defines for the employee what type of behaviors the organization wants to pay for and reinforce. Every organization attempts to control the competencies and capabilities of its people in order to accomplish its goals, the differences being the methodology used. Hence, the need for an organization to develop a reward strategy that attracts motivates and retains the human capital they need to succeed. This strategy should capture both monetary and non-monetary rewards.

Non-monetary incentives act effectively in motivating employees. The essence of incentives is to establish linkage with desired behavior and the outcome that makes the employee feel appreciated (Whetten and Cameron, 2007). Non-monetary rewards play a significant role in the perception of the employee regarding the reward climate in the workplace (Khan. Shahid, Nawab and Wali 2013). When organizations pay attention to non-monetary tools such as opportunity of increasing holiday and family benefits, the employee may perceive the organization as a supporting and caring organization. Rewards are important factors that explain certain job aspects that contribute significantly to the organization such as job satisfaction. Rewards, therefore, involve all economic benefits that are being supplied by the organization-pay, promotion, verbal recognition and responsibilities (Deperi, Tortia, and Capita, 2010). Recognition is the most common and powerful tool that is being used in the organization to drive employee engagement (Sun, 2013). Sun (2013) further identifies three conditions that are necessary for the effective use of recognition tool. First, recognition should be used frequently; recognition needs to be provided every one week to employees so that they can feel valued. Second, recognition should be specific, and identifying what is recognized makes it meaningful and critical. Third, rewards should be timely, that is, it should take place shortly after the employee action that deserves recognition occurs. Deeprose (1994) argues that recognition has a significant impact on employees‟ motivation and productivity. Effective use of recognition results in improved performance of the organizations. Employees take recognition as part of their feelings of value and appreciation and as a result it increases employees‟ morale, which eventually increases efficiency of organizations. It is for that reason, Danish, Rizwan and Usman (2010) affirm that when rewards and recognition are properly implemented, a good working atmosphere is provided that motivates employees to achieve high performance. Deeprose (1994) mentioned “Good managers recognize people by doing things that acknowledge their accomplishments and they reward people by giving them something tangible.”

1.2    Statement of the problem.

The ways in which employee are valued and rewarded can make a considerable impact on the effectiveness of the organization and is at the heart of the employment relationship. Failure to adopt an appropriate reward framework can have a significant negative effect on the motivation, commitment, and morale of employees, hence a decline in organizational performance. Many organizations are suffering from high turnover rates and downfalls because they do not apply non-monetary rewards that may only need little effort. Additionally, though organizations are channeling more resources in boosting organizational performance, there is widespread ignorance on how employee performance could be improved through the use of non-monetary rewards on employees, the relationship existing between the kind of rewards and performance and how effectively they can be utilized in an organization.

Additionally, the high cost of monetary rewards forces employers to give to employees sparingly, out of the failure to realize that offers like recognition and open communication can be given any time, at very little cost, and could boost employee performance to a great extent. Thus the realization of this fact-inspired this research.

1.3  Objectives of the Study.

The general objective of this study is to find out the motivational impact of non-monetary incentives on employee performance in Fidelity bank PLC Uyo, Akwa Ibom State. However, the specific objectives are:

i.                    To assess the influence of recognition on employee performance in Fidelity bank PLC Uyo, Akwa Ibom State.

ii.                  To establish how career development influences employee performance in Fidelity Bank PLC Uyo, Akwa Ibom State.

iii.                To find out the influence that employee independence has on the performance of employees in Fidelity Bank PLC Uyo, Akwa Ibom State.

iv.                To ascertain the influence of flexibility schedule on employee performance in Fidelity Bank PLC Uyo, Akwa Ibom State.

1.4    Research Questions

The following are the research questions raised in the study.

i.                    To what extent does recognition affect the performance of employees of Fidelity Bank PLC Uyo, Akwa Ibom State?

ii.                  What influence does career development have on the performance of employees of Fidelity Bank PLC Uyo, Akwa Ibom State?

iii.                How does employee independence affect the performance of employees of Fidelity Bank PLC Uyo, Akwa Ibom State?

iv.                To what extent does flexibility schedule affect employee performance in Fidelity Bank PLC Uyo, Akwa Ibom State?

1.5  Research Hypothesis

The following hypotheses were formulated in line with the objectives of the study.

Ho:      Recognition does not affect employee’s performance.

Ho1:    Recognition does affect employee’s performance.

Ho:      Career development does not have any influence on employee’s performance.

Ho1:    Career development has an influence on employee’s performance.

Ho:      Employee’s independence does not have any impact on employee’s performance.

Ho1:    Employee’s independence does have an effect on employee’s performance.

Ho:      Flexibility schedule does not affect employee performance

Ho1:    Flexibility schedule does have an affect on employee performance

1.6       Significance of the study

There is a great need for this study in order to find or identify the problems associated with workers performance and how these problems affect the organization’s level of performance. The research work would be beneficial to managers and employers in choosing appropriate incentive schemes in organizations knowing its effects on motivation.

Lastly, this research will be useful to other researchers who intend to carry out further study on this similar or relevant topic.

1.7      Scope and Limitation of the Study.

The study concentrate on the theories and models of motivation; incentive, non-monetary rewards system, and employee’s performance. But make significant emphasis on non-monetary or intrinsic motivational theories. The study is focused on the effect of non-monetary incentives on employee’s performance with reference to Fidelity Bank Plc, Abak Road, Uyo. The investigation shall cut across all departments and units within the organization and shall include both male and female employees. It will help in understanding the importance of reward and how it can be successfully applied across organizations especially those are effectively using non-financial incentives to improve performance.

1.8  Historical Background of Fidelity Bank Plc

Fidelity Bank Plc began its operations in 1988 as Fidelity Merchant Bank Limited. By 1990 it had distinguished itself as the fastest growing merchant bank in the country. However, to leverage the emerging opportunities in the commercial and consumer end of financial services in Nigeria, in 1999, it converted to commercial banking and changed its name to Fidelity Bank Plc. It became a universal bank in February 2001, with a license to offer the entire spectrum of commercial, consumer, corporate and investment banking services.

Fidelity Bank is today ranked amongst the top 10, in the Nigerian banking industry, with a presence in the major cities and commercial centers in Nigeria. Over the years, the bank has been reputed for integrity and professionalism. It is also respected for quality and stability of its management. Fidelity staff is also respected in the Nigerian banking industry for the quality of training they receive on the job, as well as in good business schools both I Nigeria and Overseas.

1.9  Definition of terms

Career developmentis the process that forms a person's work identity. It is a significant part of human development and spans over the individual's entire lifetime, beginning when the individual first becomes aware of how people make a living.

Employee Independenceis a natural person that provides goods or services to another entity under terms specified in a contract or within a verbal agreement.

Employee performance:can be seen as a situation whereby an employee executes their job duties and responsibilities.

Non-monetary Rewards: Non-Monetary rewards are the benefits given to the employees of the organization to increase the employee job performance, employee loyalty towards the organization, employee morale like Promotions, Life insurance policy and Healthcare Benefits.

Recognitionis the acknowledgment of an individual or team's behavior, effort and accomplishments that support the organization's goals and values.


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