Monetary Incentive on Workers Performances in Nigeria Organizations

Monetary Incentive on Workers Performances in Nigeria Organizations

 Incentive refers to those things (Fringe benefits given to a worker in order to encourage him to put his best in the course of doing his work in the organization.  Productivity referees to the efficiency in the production of goods and services measured by comparing the amount produced with the time taken or resources used to produce it.

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Nickerson (1996:24) a recognized management consultant says “that a good incentives scheme should be a scientific attempt to work out the most advantages relationship between productivity and reward.  The incentives which management provides o the employees depends to some extent on its views of why people work and what they want from their work in the organization.

Alberts (1974:96) was of the opinion that “an organization cannot survive if it fails to satisfy the personal motives of those who contribute resources”. According to Taylor incentive is a motivational tool by extrinsic and financial rewards established through time and motion study.


          The employee’s behaviour like most human behaviours is not programmed, instead it is usually an adaptive response to the circumstances in which employees find themselves upon which their own benefit or beat interest is protected.  The incentive programme should be tailored toward satisfaction of the employees needs and the needs of the organization. Ejiofor (1982:21) emphasized that a fall in the employees pay packet relative to potential pay package.  In other organizations generate dissatisfaction which may lead to resignation. Equally, a perceived imbalance in employee’s pay packet relative to employees in other organizations or the employees productivity generates employers dissatisfaction.

Ubeku (1975:130) observed that in many organization, the cost of Fringe benefits to the employer in respect of each employee is more than 80% of the basic pay.  But the employee sees this cost as extra income, additional security, more desirable working conditions needed in determining what is needed by both parties since productivity gains cannot be without productivity pain one of the rational of having a monetary incentive in the desire to achieve higher performance hence, every organization tries to give employees the necessary incentives that will spar them to channel their efforts towards attainment of organizational objectives.

Incentive management is not just a method of wage payment, it also involves both parties wanting to work together for the usefulness and in the accomplishment of the end, both fulfill their basic desire for organization and pride in their individual abilities and worth.

The two basic assumption of Taylor’s theory are:

Payment of high wages will motivate worker to produce more given the assumption that the worker is motivated by money.  He believed that what the worker need is raising wages.  It can be said that Tyalor’s theory was not adequate and could not serve as a motivating factor to an average Nigerian worker.  This is because it ignored the humanitarian and motivational aspect of the worker and saw man as individual machine like unit.

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(b)     Industrial efficiency can be improved through the application of science.  He advocated the application of scientific methods to operative tasks with a view to develop accurate measurement to determine what constitutes a day’s work for various operations in the industry.  This assumption may have been as a result of his belief that a person will be motivated to work if his output is adequately measured for reward purposes.

The satisfaction of personal motivates through fringe benefits (incentives) enables the human element to make tremendous contribution to the improvement of optimum production of every business organization and therefore, should be adequate motivated to get the best service from them.

Nevertheless, Taylor developed the first wage incentive in 1915 known as differential piece rate plan. Two rates prevail, one for the worker who failed to reach the standard and a higher rate for worker who exceeds it.  A second wage incentive plan is the giant task and bonus system.  Under this plan if an employee exceeds the set standard by completing the work in less time he receives a bonus percentage of the base rate.  A worker who fails to complete the task within the allocated time, will receive only a regular rate the bonus rate usually begins when the worker does three-quarter (3/4) of the set standards. This encourages those who are striving to reach the standards as well as those who have already surpassed.


          Much has been written and discussed on the importance of incentive scheme.  In business organization. Its philosophy is tailored towards satisfying the employees in order to get the best from them.  It is for this study Ogbuta (1991) carried out a research on the impact of monetary incentive scheme on performance of workers.  A case study of NEPA, Enugu.  The researcher made use of cross sectional survey and sampled three hundred (300) workers from your departments of NEPA.

Personnel administration 75, Accounts 50, operation 100 and sales 75. From the survey he found out that the structure of incentive schemes in NEPA, Enugu does not reflect the needs and aspiration of workers.  Management does not allow the junior and middle level workers of NEPA to take part in decision making as it affect their welfare.  Thus the workers of the organization were not receiving their incentives/rewards which are commensurate with the efforts expanded in the respective job responsibilities.

The relationship of this work to my study is the difference in the year of study on one hand and the operation of the how case companies on the other hand.  However, both companies are dealing on workers satisfaction and incentive programmes to enhance their productivity towards achieving the organizational objectives.


          The term incentive represented a tangible gain to employees which may be financial or non financial depending on the particular circumstance is involved.  Even though incentive may been seen as an additional cost of 60% by the management, the extent to which it satisfy workers vary, not only from one organization to another but also from one country to another. Okpuwa (1984:145) noted that the trend in which the incentive scheme are administered in more advanced countries cannot be the same with what is obtainable in less developed countries like Nigeria.

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Rauth (1977:120) opinioned that “a great Varity of policies of incentive are been adopted by different organizations in different countries and at different time”. Experience from some of these countries as regards income policies and incentive scheme administration are stated below.

(a)              Sweden: Collective bargaining is centralized between employers confederation of manual works and white collar unions who agreed on increased economic trends aimed at reducing differentials.

(b)             USA AND GERMANY: General reliance on autonomy for bargaining units with principles or norms recommended by the government or government agencies.

In Nigeria, Ubeku (1973:139) vehemently noted that fringe benefits have groan up in the country as a result of the economic selection while others have grown up either as a result of pressure from the union. Prior to and within the sixties there were serious agitation for general wage increase.

Chibuzor (1989) said that in 1961, the sodonel report had recommended for upward revision of wage which was not implemented.  The agitation persisted and led to the unfortunate and expensive general strike of 1964 during the Nigerian civil war (1967 to 1970) workers suffered not only because of inflation but also because of some rights and privileges being withdrawn on the protest of emergency measures.

The influence from these fluctuation in salaries are fringe benefits is that workers need are dynamic, stressing on this, Anikpo observed during its discussion with some workers on May 1, 1977 that Nigeria workers she concerned for what they will acquire for their future use.  Hence they talk much on observation.  He advised that the Nigerian workers should be conceptualized along different dimension from the existing theories of need which was conceived primarily on state terms.


          There has been no general agreed concept over what constitutes a total incentives or compensation packages among managers and employers. What had been practically in existence has been limitation of what is obtainable – similar organization are adopting the same in their own establishment.

However, Nwachkwu (1988:128-1560) classified an organization’s incentive/remuneration packages as consisting of three (3) major items.

  1. Overtime pay for work done beyond normal working hours.
  2. Slight pay for employees who work on an unusual hours to compensate them for inconveniences and hardship.
  3. Special addition like danger money, dirty or wet money which are paid to the employee.  It is usually expressed in normal terms, implying a relatively permanent employment relationship though normally paid at monthly intervals. Salaries workers are usually termed as staff.

According to him the characteristics of salaries include.

  1. It is progressive in most cases, increasing annually, whereas wages earner reaches the standard rate for the job early in adult life and does not receive annual increase.
  2. Salary is often regarded as personal to the individuals but a wage is the sum paid to all workers at a particular job.
  3. A salary is often confidential, but there is no secret about wage.

FRINGE BENEFITS:  This is a reward to an employee effort from a wage or salary.  It is usually provided at the expense of employer goods and services which the employee would have otherwise pay for themselves. The most important fringe benefits are:

Company pension schemes, sick pay, meal subsidies, company’s car etc.

Nwachukwu identifies the characteristic of fringe benefits to include.

  1. They are not related to merit but they often improve with status and length of service.
  2. Not all employee usually benefit from all incentive.
  3. They are not universal
  4. They increase job satisfaction.
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          Agbo (2000) stated that “motivation is an energy drive which makes an employee to put his best for the attainment of the organizational aims and objectives.  The workers in IMT are not well motivated for them to give their best.  This is the major reasons why some lecturers do not take their job seriously by not entering the lecture room for lectures.

The resultant effect is the geometrical increase of sorting by the students to the lecturers who think that it is the only way to make it up since the salary worked for is not forth coming. There is low productivity from both the lecturers and the students. This is because the value of education is on the constant decline making examination malpractice the order of the day……………………………………


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Monetary Incentive on Workers Performances in Nigeria Organizations

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