THE IMPACT OF MANAGEMENT INCENTIVE POLICIES ON WORKER’S PRODUCTIVITY

THE IMPACT OF MANAGEMENT INCENTIVE POLICIES ON WORKER’S PRODUCTIVITY

(A CASE STUDY OF DANGOTE CEMENT FACTORY, OBAJANA, KOGI STATE.)

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. The descriptive research was adopted, while both primary and secondary source of data were explored. The population of the study was 187 and the sample size is 127 by using Yaro Yamane method. The study revealed that good incentive polices motivate workers, motivated workers are happy workers and happy workers are productive workers. The study also revealed that a monetary incentive is essential in getting workers to perform better. However, money is not everything for other factors are equally important.

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CHAPTER ONE

1.0 INTRODUCTION

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.

1.1 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?

1.2 OBJECTIVES 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.

1.3 RESEARCH QUESTION

i. To what extent does money motivate employee?

ii. How do workers respond to different incentive?

iii. How does management incentive policy impaction workers productivity?

iv. How can workers implement or improve incentive system in their work place?

1.4 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.

1.5 SCOPE 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.

1.6 LIMITATION

Some limitations that were identified and encountered in the process of the study include:

i. Financial constraint:- in running around to gather material for this study considering the economic meltdown, money and other resources where involved delayed the completion of this work.

ii. Time: – The researcher was constrained by time in running round for the completion of this project.

iii. Attitude of respondents:– the research found it difficult initially to source required information from the members of staff of obajana cem:ent factory, this also delayed the completion of this work.

iv. Electricity: – the researcher had a hard time in typing, proof reading, printing, and editing of this work due to the incessant seizure and interruption of power supply by the power holding company of Nigeria .

REFERENCE

Anderson, R. (1963). A Dictionary of Management Term. Plymorith: McDonald and Evans Ltd.

Asika, N. (2004). Research Methodology in Behavioural Sciences. Ibadan Nigeria: Longman Nigeria.

Simbo, A.B. (2009). Human Resource Management. Ibadan Nigeria: Oluseyi Plc.

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