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Abstract
The study examined the relationship between monetary incentives and employee job satisfaction of PHED Moscow road Port Harcourt. The case study research design was adopted. The population is made up of 100 employees from PHED Moscow road, Port Harcourt. The Taro Yemen’s formula was used to determine the sample size of 80. The structured question is so designed by the researcher given various options. The study revealed that bonuses, profit sharing and variable pay associate with employee job satisfaction of PHED Moscow road, Port Harcourt.Based on the findings of this research, it is recommended that job design, better workplace environment, variable pay, participation and/recognition, and profit sharing contribute to better employee performance within the industry, PHED industries conducts more research touching on non-financial incentives to ensure that there is enough information that will enable the industry to utilize aspects of non-financial compensation for better employee performance, equally, PHED should set funds aside that will ease the utilization of these aspects for better employee performance and it is apparent that all these non-financial compensation aspects should therefore be improved, utilized and institutionalized to ease management and decision-making thus, in the end, translate to better employee performance.
Table of Contents
Title page i
Cover Page ii
Declaration iii
Certification iv
Dedication v
Acknowledgements vi
Abstract vii
Table of Contents viii
CHAPTER 1 1
INTRODUCTION 1
1.1 Background of the Study 1
1.2 Statement of the Problem 4
1.3 Objectives of the Study 4
1.4 Research Questions 5
1.5 Significance of study. 5
1.6 Scope of the Study 6
1.7 Limitation of the Study 6
1.8 Definition of Terms 7
CHAPTER 2 8
LITERATURE REVIEW 8
2.1 Conceptual Review 8
Fig.2.1: A conceptual Framework Showing the Relationship between Financial Incentives and Employee Job Satisfaction. 8
2.1.1 Concept of Financial Incentives 8
2.1.2 Dimensions of Financial Incentives 11
2.1.3 Concept of Employee Job Satisfaction 12
2.1.4 Measures of Employee Job Satisfaction 15
2.1.3 Monetary Incentives and Employee Job Satisfaction 16
2.2 Theoretical Framework 19
2.2.1 Incentive Theory 19
2.2.2 The Equity Theory 20
2.3 Empirical Review 21
CHAPTER 3 24
RESEARCH METHODOLOGY 24
3.1 Research Design 24
3.2 Population of the Study 25
3.3 Sample and Sampling Techniques 25
3.4 Source and Method of Data Collection 27
3.5 Data Analytical Method 27
CHAPTER 4 28
DATA PRESENTATION AND ANALYSIS 28
4.1 Questionnaire Administration and Retrieval 28
4.2 Data Analysis 29
4.3 Discussion of Findings 33
CHAPTER 5 36
SUMMARYS, CONCLUSIONS AND RECOMMENDATIONS 36
5.1 Summary 36
5.2 Conclusions 36
From our findings, we concluded as follows; 36
5.3 Recommendations 36
References 38
Appendix I 40
Appendix II 41
CHAPTER 1
INTRODUCTION
1.1 Background of the Study
Job satisfaction has become an integral part of every organization. It is one of the key factors that helps in determining the success of any organization in the long run. Employees of an organization need to be happy and content in order to perform their best and give fruit full results. Their commitment to accomplishing the organizational goals helps the organization grow and prosper. Hence, every firm needs to have an efficient HRM team that could ensure that employees are giving the right kind of rewards for their efforts. Job satisfaction leads to employee enrichment and increases employee engagement levels. Hence, employees tend to get involved with the firm and are willing to work efficiently to bring effective results. It leads to an increase in the financial performance of the firm in the long run and since the employees provide better services, customer satisfaction, and loyalty rate also increases drastically. Therefore, job satisfaction is a very essential requirement for every firm.
Research has shown that while few firms consider financial incentives as the motivating factors for employees, others consider non –financial incentives. There has always been an ambiguity among the people as to whether non –financial or financial incentives are more useful to the firm. Most of the investigations show that the non –financial incentive affects the job satisfaction level among the employees in the long run. According to (Abdullah, 2013) non-monetary incentives tend to create a positive impact on the firm in the eyes of the employees. These incentives allow the employees to work at the full potential level and but the organization goal above their own.
Other investigations showed that employee satisfaction is directly linked to financial incentives. The financial incentive has a strong impact on the firm’s turnover. Pay satisfaction is said to be extremely important. (Pouliakas, 2010) had mentioned in his research that one should pay employees a fair amount. While providing a bonus or a fairincrement in the pay, one should either make a decent and fair increase in the pay or should not increase the pay at all. Employees are never set to be satisfied with a small increase in pay. Pay is considered an extremely essential part for every firm and also at times considered as deciding factor for whether an employee wants to work in the organization at all or not. Hence incentives have to be followed with complete sincerity and it is extremely important to define the critical relationship between both financial and non–financial incentives.
Every person has his own wants and desires, for that purpose he/she works to get fulfill them. It is not enough for an employee to be satisfied materially but non material aspects are as essential as material aspects, an employee need both to be fulfilled. Material means his salary, bonuses, allowances, job security and other facilities. While non-material aspect includes leaves, excellent working environment, good understanding among other fellow workers and top management, all these elements have much to do with motivation of employee.
Employee’s play very important part in the daily operations of any organization especially where the markets are very competitive and have ever-changing environment which is supported by majority of the theorists. The fate of an organization is usually determined by its employee’s so it sounds logical to understand how employees can be motivated. As far as the employee’s motivation is concerned, employee motivational incentive programs have been found to be the most commonly adopted technique among organizations. The purpose of the program is to reward productive employee’s productivity, reinforce positive behaviour and stir interest in employee. Employee’s productivity and how it could it could be enhanced is central to the concern of industries and organizations, therefore many organizational scientists, are very much interested in different schemes and techniques related to employee’s productivity and its growth incentives are one of those techniques used in workplaces to stimulate employee’s in order to get desired employee’s productivity.
Human resource provides basis for an organization to achieve sustainable competitive advantage. Since organizations are operating in a dynamic and competitive business environment, they need to develop strategies to acquire and retain the competent workforce. Human asset is considered to be the most important asset of any organization and in order to get the efficient and effective result from human resource, motivation is necessary (Zaman, 2011). Researchers divide motivation into two categories, intrinsic and extrinsic. Extrinsic motivation comes from external factors such as financial rewards and needs to be refilled at regular intervals not to lose its effect. Intrinsic motivation comes from inside of an individual and is the kind of motivation every organization wishes their employee’s would have (Mundhra, 2010).Armstrong and Taylor (2010), states that “employee’s productivity” is defined as behavior that accomplishes these results. Inlight of today’s business conditions especially in the banking industry where CBK has introduced a regulation on interest capping, motivating people to give their best has become more crucial than ever before. To achieve goals and objectives, organizations irrespective of size, develop strategies to compete in highly competitive markets and to increase employee employee’s productivity. The Human Resources Management has a role to hire and come up with retention strategies for the best employee’s, especially the ones holding key roles that can be difficult to replace because of the technical competencies required. Organizations
1.2 Statement of the Problem
Incentives have created a lot of challenges to employee’s input and output in organization. The negligence of adequate structure in pay incentive, fringe incentive, and bonus and over time benefits has caused a lot of inequitable justice on the administration of incentive scheme. The resultant effect on employee job satisfaction could be negative. The negative attributes can be seen as poor turnover, poor product quality improvement, job dissatisfaction, low morale, low commitment, absenteeism, low turnover intentions to stay with the organization and poor employee’s productivity that affects input and output.
Companies are spending huge amounts of money on their reward programs which aim at motivating, retaining, committing and attracting new employees. Despite the great amount of money used in these incentives and rewards, only few of the Human Resource Managers are able to justify and measure whether they are efficient.
1.3 Objectives of the Study
The main objective of the study is to examine the relationship between monetary incentives and employee job satisfaction of PHED Moscow Road, Port Harcourt. The specific objectives are as follows;
1. To examine the relationship between bonuses and employee job satisfaction of PHED Moscow Road, Port Harcourt.
2. To examine the relationship between profit sharing and employee job satisfaction of PHED Moscow Road, Port Harcourt.
3. To examine the relationship between variable pay and employee job satisfaction of PHED Moscow Road, Port Harcourt.
1.4 Research Questions
The following research questions are posed to guide the study:
1. Does bonuses associate with employee job satisfaction of PHED Moscow Road, Port Harcourt?
2. Does profit sharing associate with employee job satisfaction of PHED Moscow Road, Port Harcourt?
3. Does variable pay associate with employee job satisfaction of PHED Moscow Road, Port Harcourt?
1.5 Significance of study.
The findings of this study will be useful to various stakeholders. First, this research will assist scholars and/academicians as a source of data and literature for broadening of the body of knowledge with respect to this study, hence provide a deeper understanding on the effect of monetary incentives and employee job satisfaction of PHED Moscow Road Port Harcourt.
Secondly, the study will enable the government to come up with good policies that will help in the institutionalization of non- financial incentives. This will result in an improved economy in the areas of social amenities, employment and overall per capita income through improved workers performance which follows proper employee rewards.
1.6 Scope of the Study
The study is delimited under the following heading: content scope, geographical scope and unit of analysis.
Content Scope: The content scope of this study involves an investigation to ascertain the relationship between monetary incentives and employee job satisfaction. The independent variable is monetary incentives measured by Bonuses, Profit Sharing and Variable Pay. While dependent variable is employee job satisfaction, measures by effectiveness, efficiency and goal attainment.
Geographical Scope: This study is delimited in Port Harcourt Metropolis with special reference to PHED Moscow Road, Port Harcourt, Rivers State.
Unit of Analysis: The unit of analysis in this research involves the individuals at the time of carrying out the study. Hence it is a micro level study.
1.7 Limitation of the Study
This study involves an investigation of intellectual capital management in relation to organizational productivity. Hence it is a micro level study.
The major limitation of the study is the short time frame the research lasted, coupled with the tight academic time table, which prevented a very comprehensive study. The fund available to the researcher was also limited and therefore the study was limited to a small portion of the survey population.
Another limitation is the difficulties, encountered by the researcher in obtaining all needed information and materials from the right source and compilation of data for the project.
1.8 Definition of Terms
The following terms are operationally defined as follows:
Bonuses: is the process of systemizing the tasks, duties and responsibilities.
Continuance Commitment: Continuance commitment develops out of the perceived cost and requires that the employee should be aware of these benefits and loses.
Effectiveness: It is the capability of producing a desired result or the ability to produce desired output.
Efficiency: It is the ability to avoid wasting materials, energy, efforts, money, and time in doing something or in producing a desired result.
Goal Achievement: A goal is a desired result or possible outcome that a person or a system envisions, plans and commits to achieve.
Monetary incentives Is aspects rely on bonuses, better workplace environment, profit sharing, and variable pay while non-monetary incentives encompass participation and recognition
Variable pay: Is a positive relationship between variable pay and workers commitment.