Accounting

The Impact of Financial Motivation on Workers Performance in Selected Manufacturing Firms

The Impact of Financial Motivation on Workers Performance in Selected Manufacturing Firms

Abstract

This study is intended to examine the impact of financial motivation on workers’ performance. The study at hand is based on the relationship between financial incentives and workers’ performance. The employees made it clear that they will increase their productivity if adequate incentives are given to them. The main objective of this research is to determine if there is a relationship between financial motivation and workers’ performance bearing in mind the conditions, external and internal that affect our local firms. Again, to find out to what extent money act as a behavior modification. There has not been a cordial relationship between the workers and employers. In most organizations, their auditors have been denied of misunderstanding, conflicts, confusion frustration, and disputes among employees and employers, most organizations complained of ill-treatment. In this research work, the sample size is 70 and the sampling technique is the random sample used as probability proportionate i.e. 85, and the method of data collecting is questionnaire. The researchers also went into seeking their views and dissatisfaction in the given establishments. The worker complained about the attitude of the management towards them, their peers earn more, some better-paid workers workless, they are paid and other factors. To increase organization output, the management has an assignment to accomplish, that is setting up an attainable standard of performance and behavior for all workers to meet, all incentives should be fashioned in a way that will make it dependent on the final output and then right kind of behavior. The following recommendations were made amongst others, (i) employees should be given financial incentives after the occurrence of the desired behavior, or when the established goals are reached. Also, it is recommended that this equity must be perceived by management as comparisons made not only within the organization but outside the labor market also.

CHAPTER ONE

INTRODUCTION

This chapter comprises the background of the study, statement of the problem, the purpose of the study, the significance of the study, research question, the scope of the study, limitations of the study, and definition of terms.

1.1 Background of the Study

There is a general belief that the productivity of our manufacturing firms is generally low as compared to those of other countries. This no doubt is one of the causes of the low Gross National product experienced in Nigeria today. The above coupled with the ever-increasing population results of the low capital income stop pervading the nation.

The foregoing when matched with the soaring inflationary rate leads to a high cost of living and consequently a low standard of living.

Whether management practitioners blame the low productivity on workers or management. It is a fact that the efficiency of workers constitutes the efficiency of the organization. Consequently, the efficiency of the organization enhances organizational performance. Based on this analysis, all forms of organizations, ranging from small-scale to large-scale industries need an effective plan to motivate their workers to higher performance to enable them to face the competition and challenges of this economic downturn in the country.

Considering the different views on what motivates an individual towards high performance, there has been an increased search by behavioral scientists into this problem. An examination of their work reveals that people in an industrial setting are not so different from people in other works of life. To the extent that this is true, the introduction of financial motivation will influence their behavior. In the words of Gupta and Jenkins 1982. “Research in this area unequivocally demonstrates that money can be used to motivate the employers. The question then becomes what is a company motivational system, some motivational systems reward seniority while others still reward effective performance”.

Based on the need hierarchy, there are two basic types of needs. The higher and lower order needs. A critical look at these two types of needs that workers in less developed countries are still occupied with the lower order needs. A critical look at these two types of needs that workers in less developed countries are still occupied with the lower order needs. Employers administering motivational plans for employees in Nigeria work setting should address their minds to the satisfaction of these lower-order needs which are likely to motivate them.

According to Nwosu 1985 “it is important that the application of the management (Motivation) theories in Nigeria should acknowledge some basic problems of survival, viz, shelter, food, and clothing.

Organization psychologists seem to believe that the motivation of employees has become Ode of them must critical task facing organizations today especially as it concerns the use of financial motivation as a management tool. This is because all the efforts to influence performance through this technique have not consistently yielded good results. This has kept the management, experts still searching for a more effective way of motivating workers thus the researcher’s interest in the topic under study.

1.2 Statement of the Problem

There has been the definition of financial motivation as there are writers. According to Idowu 1987.

Financial motivations refer to all monetary (outcomes) provided by organizationally functional ways. In this study financial motivation would be defined in terms of monetary compensation, either in form of wages individual bonuses allowances, or other types of financial remunerations workers performances been defined in terms of profit level of output and goals attained by the worker within a particular time say two years.

Studies on this topic have gained general acceptance across cultures and nations. But there is still the need for an empirical study of this sort which will evaluate the effect of financial motivation and performance based on a systematic analysis of the situations in workplaces in the country.

There has been a low rate of labor turnover during the last few years. This low rate of turn-over is still witnessed despite the excess workload that is being experienced in some of our manufacturing firms could this be associated with the financial incentive they receive or because of lack of job opportunities elsewhere?. Another consideration about the uncertain effect of incentive plans on performance is the funding that although many firms believe they have tied pay to performance. Their pay policies tie more closely to such factors as age, seniority, job placement, sex, and race. Thus, it is often difficult to assure that pay is tied to performance even when this management is intention.

Given the foregoing, what readily comes to mind is whether adequate pay tends to satisfaction in all ramifications on this premise, the researchers want to examine the impact of financial motivation on workers’ performance in selected manufacturing firms in Enugu urban.

1.3 Purpose of the Study

i. To know the impact of financial motivation on workers’ performance in a selected manufacturing firm in Enugu urban.

ii. To determine if there is a relationship between financial motivation and workers’ performance bearing in mind the conditions, external and internal that affect our local firms.

iii. To find out to what extent money acts as a behavior modificatory.

iv. The study will determine the major factors to be considered when relating financial motivation to workers’ performance.

1.4 Significance of the Study

This study will bring to light to all employers of labor and people who wish to improve on their knowledge in motivational techniques. This is so because people go into business to make a profit. Profit could be made when employees produce goods in large quantities and good quality such aims could be achieved when employees are induced to work harder.

Let’s consider the following: Policymakers, employers, employees, and the researcher.

The policymakers: It initiates policies that guide the employers of labor in the economy. AN agreement collectively reached in a collective bargaining process forms the basis for the formulation of the law on the issue in question. The negotiation involving the retirement age of the workers guided the formulation of the law on the 65years of retirement. It is seen as the most rational process of determining and reviewing the terms and conditions of employment. This process manifests the power relationship between the employees and employers. It goes beyond the process of negotiation between the employees and employer on issues directly affecting conditions of employment. Employers: the employer in an organization has a lot to do to make the labor put in their best at all times. An organization employs the services of the labor to achieve a set of predetermined targets. The organization supports the progressive career development of the laborers by continually adding to their skills, abilities, and knowledge. The knowledge of the plan of an organization helps the employees to plan on improving themselves to share the future expectation.

Employers are interested in the level of improvement in the work-life of the workers. This calls for the efforts of the organization to ensure that the workers are improved through in-service training, workshops, and seminars.

Employees: the employee is referred to as the worker who has a contract of employment to protect. In protecting the contract, the employee has some responsibilities to fulfill. They should effectively manage their career to contribute to the achievement of the organizational goals. In a modern world of ours the employees ought to be successful in their career by building and maintaining up to date skill and knowledge, the employees should keep improving on their skills of performing their functions. This can be achieved through in-service training workshops and seminars. That is to say, that the workers have to stay current within their technical specialty there is every need that the employees are allowed to be creative by initiating ideas that can be used to solve problems.

The researcher: the researcher believed that the study will help clear the controversy on whether there is a relationship between financial motivation and employers’ performance. The researcher reviewed that employees in any organization should have the opportunity to get new, interesting, and professionally challenging work experiences. When workers are challenged in their daily work experiences they are bound to research on how to solve those challenging problems, thereby increasing their intellectual capacity.

1.5 Research Questions

The following research questions were formulated for this study:

i. What is the impact of financial motivation on workers’ performance in selected manufacturing firms in Enugu urban?

ii. What is the relationship between financial motivation and workers’ performance?

iii. What are major factors to be considered when relating financial motivation to workers’ performance?

iv. To what extent can money act as behavior modification?

1.6 Scope of the Study

This study covers the impact of financial motivation on workers’ performance. It also focuses on their effects on the operations of selected manufacturing firms in Enugu state.

1.7 Limitations of the Study

In every human endeavor, there are bound to be some limitations, the researcher carrying out this study had some limitations.

i. Attitude of respondent: it is certainly clear that not all the respondents will submit the questionnaire at the appropriate time and so the researchers’ time was seriously affected.

ii. Financial problems had a militating effect during this project. The population of the study was not completely covered because of funds.

iii. Lack of relevant research materials as a limiting factor not some of the instruments needed for effective research.

iv. Time: the period that was mapped out for the study was not enough for one to run around and collect the materials for the study. Because of this time factor, most of the work has to be done in a hurry to meet the time of submission.