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There has been considerable interest in the study of how to improve employees' performance in organizations. Gomez (2001) proclaimed that incentive was a significant determinant of a worker's performance in which maximum utilization of individual is a cornerstone. According to him, incentive is anything that attracts a worker and stimulates him to work. This includes the financial and non-financial incentives. He said further that financial incentives are considered to be more valued under the work conditions where wages are at low levels. On the contrary, non-financial incentives are more preferable where wage levels are high and the rate of tax is progressive.
According to Maslow (1954), the basic physiological needs must be satisfied first, before other corresponding needs and to satisfy these needs, the intended payment should be relatively large enough when related to the workers' salaries and wages. Maslow separated his five needs into higher and lower needs. Physiological, safety and security, and love were described as lower order needs while the higher order needs are self-esteem and self-actualization. Here, Maslow believed that financial incentive is more preferable by the junior cadre workers whose needs include food to satisfy hunger, clothing and shelter to satisfy sleep. People must satisfy these needs just to remain exuberant. These needs are strongest in man's life and must be satisfied before other needs.
According to the National Commission on Labour (1979), wage incentives are extra financial motivation. They are designed to stimulate human effort by rewarding the person, over and above the time rated remuneration, for improvements in the present or targeted results. Porter and Lawler (1986) observed that when workers perceived a high likelihood of reward based on their performance towards organizational goals, they are likely to perform better in their organizational role. Lenng (2009) supported this view when he said that goal setting and monetary incentives were related independently to effort, direction of behaviour and performance.
Realizing the impact of incentive on workers' attitude and morale; Anderson (2005) described incentive as plan or programme to motivate individual for good performance. According to them, an incentive is most frequently built on monetary rewards like incentive pay or a monetary bonus, though it may also include a variety of non-monetary rewards or prizes.
Hertzberg (1976) conducted a study on 'what people want from their job? His research subjects were engineers and accountants who were asked to describe in details, situations in their job when they felt exceptionally good or bad. Their responses were tabulated and categorized and from their responses, he found that the responses people give when they feel good about their jobs are significantly different from the responses given when they feel bad and this is not unconnected with the incentive or motivation received from their organization. He therefore concluded that money is a maintenance factor and can never be over looked. Whether in the form of wages, piece work (getting paid for units produced at a certain quality level) or any other incentive pay, bonuses, stock options, company paid insurance, or any of the other things that may be given to people for performance, money is important. He further opined that, if money is to act as a motivator to employees, it is necessary to assume a relationship between performance and rewards. This is because those who seek money link higher performance to the reward of more money. He concluded that when behaviour is rewarded with more money such behaviour tends to be repeated.
Clark, 1986; Osondu, 1994 and Lenng; 2001 used the concept of incentive to forecast compensating wage differentials. Clark (1986) said that incentives have significant effects on workers' performance, this includes comparative income, salary, wages, tenure, friendly working condition and so on. Lenng (2001) found that wage level is a significant determinant in the positive direction of improving workers' performance. Osondu (1994) provided evidence that comparative income is a more important determinant of improving employees' performance than absolute wage and this was supported by Lenng in 2001. This implies that a person's wage in comparison to other people's wage is a stronger determinant of improving employee's performance than the absolute level of that person's wage. Although, researchers like Thomas (2003); Locke, Bryan, and Kendal, 1997 have emphasized the importance of connecting goals to incentive to enhance performance, but warned that tying monetary incentives alone to goal attainment encourages individual to perform poorly and to set lower goals.
Management theorists like Fredrick Taylor, Henry Gantt and the Gliberts looked at the way of improving employees' performance from every angle they could think of and concluded that you can't get quality services in an environment where workers are stressed out, underpaid, and forced to compete for bonuses and fringe benefits. This was supported by Anderson (2005) who said that an environment which is more conducive can have a positive effect on workers' performance than uncondusive environment; Lenng (2001) identified some factors as factors contributing to improving employees' performance one of the factors is connected with workers getting all their benefits and entitlement at the right time.
A great deal of researcher have been undertaken on improving employees' performance through motivational tools, and an overview of these works showed that performance is a product of a person's set of needs, goals, drives, experiences, value aspiration and expectations. This implies that what makes a worker to perform better in his work varies from one society to another.
Statement of the problem :
People became worried and get disturbed to know that there is a persistent poor performance of workers in organizations especially in the private secondary schools in Lagos state, Nigeria, despite various policies and theories on human relations. Thus, this study examined the extent to which incentive was used as a motivational tool for improving employees' performance and productivity in private secondary schools.
Purpose of the study:
The purpose of this study was to examine the existing ways by which workers are motivated in private secondary schools in Lagos state, Nigeria and to assess whether incentives can be used to improve employees' performance.
The study answered the following questions that agitate the mind.
Is there any significant effect of incentives on employees' performance?
Can employees' efficiency be motivated through incentives?
Do the lower level workers appreciate financial incentives more than the higher level workers?
Is there any significant relationship between incentives and performance?
The design used for this study was descriptive survey design. The population for the study consisted of all the staff of private secondary schools in Lagos State. The research sample comprised of 100 hundred staff randomly selected from ten private secondary schools in Lagos State. The instrument titled "Improving Employees' Performance Using Incentives" (IEPUI) with 25-items was developed by the researchers to collect data for the study. The questionnaire was validated by experts in tests and measurement who matched each item with the research questions to determine whether the instrument actually measured what it was supposed to measure or not. Using Cronbach Alpha, a reliability coefficient of the instrument was obtained as 0.73. The sampled staff was made up of 10 principals, 50 teaching staff and 40 non-teaching staff. A total number of 100 copies of the questionnaire were administered to the respondents and the administration was conducted by the researchers themselves with the assistance of two other personnel. All the questionnaires administered were collected back from the respondents immediately after the exercise. The data generated from the responses of the staff were subjected to the appropriate statistical test for analysis so as to provide answers to the research questions. The Pearson's Moment Correlation Coefficient and t-test statistical methods were adopted. Based on these, tests decisions were taken as regards the questions raised under the research questions. The level of significance was determined at 0.05.
Question 1: Is there any significant effect of incentives on employees' performance?
Table 1: Effect of Incentives on Performance
Employees' with incentives
Employees without incentives
Table 1 shows that the t(98) observed showing the effects of incentives on performance of employees' with and without incentives is 0.041; P< 0.05. Since P value is less than 0.05 alpha levels, then there exist a significant effect of incentives on employees' performance.
Question 2: Can employees' efficiency be motivated through incentives?
Table 2: Correlation between Employees' Efficiency and Incentives
Table 2 shows that there is significant relationship between employees' efficiency and incentives (R = 0.029; 0.05). In fact, a very low positive correlation exists between the two variables.
Question 3: Do the lower level workers appreciate financial incentives more than the higher level workers?
Table 3: Analysis of appreciation of financial incentives between the lower level workers and higher level workers.
Lower level workers
Higher level workers
From table 3, the calculated r-value of 0.286 is greater than the critical r-value of 0.195 required for significance of 0.05 level with 98 degrees of freedom. This means that there is significant positive appreciation of financial incentives between the lower level workers and higher level workers.
Question 4: Is there any significant relationship between incentives and performance?
Table 4: Analysis of the Relationship between incentives and performance
From table 4 above, the calculated r-value of 0.308 is far greater than the critical r-value of 0.196 at 98 degrees of freedom and at 0.05 alpha level of significance. This shows that there exist a significant relationship between incentives and worker's performance.
The first question states that; is there any significant effect of incentives on employees' performance? The analysis shows that there is a positive effect of incentives on employees' performance. This supports the findings of Richard, (2001); Horris, (1996); Osondu, (1994) which provides that incentive was a significant determinant of workers' performance. Also, Porter and Lawler (1980) observed that when workers perceived a high likelihood of rewards based on their performance towards organizational goals, they are likely to perform better in their organizational role.
Can employees' efficiency be motivated through incentives? The second question shows a very low but positive correlation between the two variables. Researchers like Herzberg (1976); Venkata and Strivasta (1982); Miller & Bromiley (1990); Jensen and Murphy (1998); Lehn (2004); Kerr (1999) and Thomas (2003) supported the above findings, when they concurred that employees' efficiency might be motivated through incentives pay for achieving organizational objectives. Although, Herzberg and Maslow concluded that incentive such as money will always be of the utmost importance to some people (those raising family) while to other it may never be (they can only be influenced by group norms). The low correlation recorded may not be unconnected with the perceptive of the respondents who interpreted incentives to be only monetary. Gomez-Mejia (2001) analyzed the employees' efficacy through incentive and found that greater use of incentive pay is positively related to workers' performance and efficiency. Also Thomas (2003) and Lehn (2004) found a positive relationship between the use of incentive pay and performance.
Do the lower level workers appreciate financial incentives more than the higher level worker? From the analysis of research question three, it could be seen that there is a significant positive appreciation of financial incentives between the lower level workers and higher level workers. This finding supports the Maslow's hierarchy of needs theory which states that money belongs to the lower order needs while in Herzberg (1976), money is a maintenance factor. In another study Lawler (1971), said to some people (such as the lower level workers) money is important, they see money as energizing force that motivate them to perform assigned tasks in order to meet pre-determined standard; while to some people (higher level workers) money is not important, they are continually driven by the desire such as a self-esteem and self actualization.
Is there any significant relationship between incentives and performance? The analysis in table four shows that there exists a relationship between incentive and performance. According to equity theory by Adams (1963), an individual compares the ratio of his input and output to the ratio of someone else's input and output. If people perceive the rewards as equitable, they probably will continue at the same level of output but if they think that the rewards are greater than what is considered equitable, they may work harder and if otherwise, they may reduce their input which inturn will affect their output.
It is pertinent to note that the following conclusions were drawn from the findings of this study. A significant relationship was found to exist between incentives and performance; incentives and employees' efficiency and between financial incentives among the lower level workers and higher level workers. Some researches indicate that money belongs to the lower order needs, thus, the expectancy model recognizes that there is no universal method for motivating people. Those who seek money will be motivated to higher performance only if they can clearly link higher performance to the reward of more money. Thus, the behaviour that is rewarded with more money will tend to be repeated.
Considering the findings of this study, it was recommended that employees should be primarily motivated by economic rewards while other organizational rewards are subsidiary. Again, for employees to continue increasing their outputs and holding their inputs constant, the employer should provide basis for motivation and equity or expectancy theory must be obeyed. The strength of a person's motivation to perform depends on how strongly he is adequately rewarded. If he is rewarded by the organization, the reward will satisfy his individual goal leading him to put in higher effort.