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A stuA study of non-monetary rewards as a motivation tooldy of monetary rewards as a motivation tool

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  1. 1. A study of non-monetary rewards as a motivation tool 1 A study of non-monetary rewards as a motivation tool By Irfan Iftekhar Abstract The study examines the role of reward system in motivating employees for effective
  2. 2. A study of non-monetary rewards as a motivation tool 2 performance and higher productivity in First Bank of Nigeria Plc. It employed a case study approach to study how rewards management system motivates the employees of First Bank of Nigeria Plc. The researcher identified incentives, commendation, prize awards, promotion, compensation, salary increase, bonus, share value safe working conditions, fair treatment, medical system and involvement in decision making process, are some of the rewards system used by First Bank of Nigeria Plc. This paper recognized motivation (intrinsic or extrinsic to workers) as an instrument for efficient and effective execution of a project. The paper examined if workers are highly motivated, the motivational factors that mostly affect workers performance, CHAPTER-1 Introduction In todays competitive business environment companies are facing many challenges and among those challenges acquiring right workforce and retaining it, is of utmost importance. In order to get the efficient and effective result from human resource, employee motivation is necessary. Employee will give their maximum when they have a feeling or trust that their efforts will be rewarded by the management. There are many factors that affect employee performance like working conditions, worker and employer relationship, training and development opportunities, job security, and companys overall policies and procedures for rewarding employees, etc. The First Bank of Nigeria Plc. (FBN) was incorporate 31st March 1894, as the Bank of British West Africa in Liverpool, United Kingdom (Fry, 1976), by Alfred Lewis Jones in the office of Elder Dempster & Company in Lagos (FBN UK, 2007), to serve his shipping and trading agencies in Nigeria. The bank was incorporated as a Limited Liability Company, with a head office in Liverpool and began operations with an initial paid-up capital of 12,000, after it
  3. 3. A study of non-monetary rewards as a motivation tool 3 acquired African Banking Corporation (FBN UK, 2007). In 1957, the Bank of British West Africa was change to Bank of West Africa (Fry 1978). In 1965, Standard Bank acquired Bank of West Africa and reincorporated it as Standard Bank of West Africa. 1.1 Background to the Research The Nigerian banking industry has witnessed some revolutionary policy initiative right from 2004 up to now when the Central Bank of Nigeria began some restructuring programs directed towards resolving the existing problems of the industry. Adegbaju and Olokoyo (2000) observed that the banking sector reforms, especially the recapitalization policy was a deliberate policy response designed to correct perceived or impending banking sector crises that might trigger banking industry failures, which may result directly from insolvency and weak corporate governance, and others (Ernest, 2012). Ernest added that the asset size of an average bank which was N42.172billion (US$0.3174 billion) in 2004 has grown geometrically to N267.482billion (US$2.0856billion) within one year after the consolidation exercise, which indicates a growth rate of 534.27 per cent. All over the world especially in developing countries like Nigeria, workers are becoming more and more displeased due to unsatisfactory working conditions occasioned by economic downturn. The intense competition demands not just high quality products, but best quality workforce who must be highly trained, rewarded and required to work within a cooperative environment. To obtain workers cooperation requires a lot of motivation and motivating workers can be very challenging because workers are animate. To execute a project which consist of interrelated and interdependent activities that need to be planned, coordinated, monitored, and controlled for the projects goal to be efficiently and effectively attained, involves a lot of herculean task, perseverance, motivation and cooperation of the project
  4. 4. A study of non-monetary rewards as a motivation tool 4 team who must work in harmony to attain the projects goal within the scheduled time, budget and to meet up to a specified standard According to Okafor (2009) the period of banking recapitalization in Nigeria from July 2004 till the last month of 2005, was the harbinger of various types of concerns for employees in the banking industry. Ernest (2012) observes some banks that raised funds from the Stock Exchange concentrated huge funds on media advertising, focused attention on acquisition of weaker banks, and struggling to garner available funds they could muster to meet the recapitalization target and the December 2005 deadline, while relegating the welfare of their employees (Okafor, 2009). However, some of the new banks, especially First Bank of Nigeria Plc. redesigned their reward and compensation management systems by increasing employees salaries including promoting employees, and awarding prizes and giving bonuses to them. The post-consolidation reward management system of the First Bank of Nigeria Plc. informed the desire of the researcher to investigate how the reward management system of the bank has motivated its employees to enhance their performance effectiveness, achieve their performance outcomes and increase their productivity. What motivate workers cannot be generalized because, what motivate workers differs from one worker to another. In fact what motivates an individual? worker today, may seize to motivate him tomorrow because human needs are insatiable asserted that monetary incentives would make workers carryout their assigned tasks correctly and meet a defined target rate of output. His expectancy theory is of the opinion that workers expectation of reward for the efforts they put in a job has turned out to be part of motivation for employees in every place of works Hawthornes study established that workers productivity was not reliant only on monetary reward but on social needs (need for safety, recognition, belonging to informal
  5. 5. A study of non-monetary rewards as a motivation tool 5 group, etc.) achieved by mingling with co-workers, and supervisors at the place of work also supported Mayos study. Reward systems are vital strategic tools that management of an organisation uses to direct behaviors, attitudes and motivate their employees in desired ways to enhance corporate performance. Am organizations reward system may include incentives, processes, and decision making about the allocation of compensation and benefits to employees, in order to drive a positive urge in them to voluntarily and enthusiastically contribute their skills and experiences to the attainment of an organizations goals. A good reward system enables an organization to attract the best talents to join its workforce, motivate them to promote productivity and encourage them to stay for as long as possible. For a business organization to address employees expectations effectively, it must understand those things that stimulate employee motivation. 1.2 Research questions Research question is always central to the completion of a successful research study, hence the following research questions will be explored by the researcher: 1) How do non-monetary rewards act as a motivation tool for improving employee's performance? 2) How do reward systems encourage employees and reduce staff turnover? 1.3 Research aims and objectives Deeprose (1994) argued that the motivation of employees and their productivity can be enhanced through providing them effective recognition which ultimately results in improved
  6. 6. A study of non-monetary rewards as a motivation tool 6 performance of organizations. In view of the above, the aims and objectives of this study are: 1) To discuss the role of the reward systems in motivating employees for higher productivity in the banking industry. 2) To identify how the reward systems stimulate employees commitment at work. 3) To determine how the reward systems enhance employees job satisfaction in the bank. 4) To analyze how the reward systems reduce employee turnover in the banking industry. 1.5 Statement of the problem Recapitalization exercise in Nigerian banking industry during 2004-5 has tailored the banking structure. In view of this, the researcher decided to investigate the role of reward management systems of First Bank of Nigeria Plc. in motivating its employees for higher productivity. 1.6 Significance of the study This study is important to bank policy makers, RH professionals, scholars, management of banking and other organizations, including line managers involved in the supervision of other employees, because it will reveal: 1) Whether reward systems enhance employee performance. 2) How management can best use reward systems to motivate employees to accomplish their performance outcomes. 3) How organization can spur employees to attain higher productivity and organizational performance targets. Researcher decided to investigate the role of reward management systems of First Bank of Nigeria Plc. in motivating its employees for higher productivity. 1.7 Justification of Research
  7. 7. A study of non-monetary rewards as a motivation tool 7 Companies and organizations everywhere need employees to work with. However, while getting employees can easily be done by means of recruiting practices, there is the more difficult task of keeping them motivated to work hard to achieve improved performance and to attain both organizational and personal goals. 1.8 Research methodology Research methodology is the systematic process adopted by a researcher to solve a research problem. In this study the researcher used interpretive approach and qualitative research methodology. Unstructured persona

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