Abstract
This study examines impact of financial incentive on employee performance in Airtel Nigeria Jigawa state. The objectives were to explore the benefits, and advantage of financial incentive among workers in Airtel Nigeria Jigawa State. and to assess the roles played by the organisations, sector and agency. Social Learning theory and social bond theory provided the theoretical framework, emphasizing the impact of financial incentive. The study adopted a utilizing questionnaires and in-depth interviews to collect both quantitative and qualitative data. Data analysis was conducted using SPSS for quantitative data, while qualitative data were transcribed verbatim for deeper insights. The findings revealed that workers are benefits with financial rewards in Airtel Nigeria companies.
Table of Contents
DECLARATION i
CERTIFICATION iii
APPROVAL PAGE iv
DEDICATION v
ACKNOWLEDGEMENTS vi
Abstract x
CHAPTER ONE 1
1.0 INTRODUCTION 1
1.1 BACKGROUND OF THE STUDY 1
1.2 Statement of the Problem 2
1.3 Research Question 3
1.4 Objective of Study 3
1.5 Research Hypotheses 3
1.6 SIGNIFICANCE OF THE STUDY 3
1.6 SCOPE AND LIMITATION OF THE STUDY 4
CHAPTER TWO 5
LITERATURE REVIEW 5
2.0 Introduction 5
2.1 Definition of Key Concepts 8
2.1.1 Financial Incentives 8
2.2 Review of Related Studies 9
2.2.1 Global Perspectives on Financial Incentives 9
2.2.2 Financial Incentives in Nigeria: Case Studies 9
2.2.3 Financial Incentives and Employee Performance in the Telecommunications Sector 9
2.2.4 Link Between Financial Incentives and Employee Performance 10
2.3 Theoretical Framework 10
2.3.1 Overview of Previous Studies on Financial Incentives and Performance 11
2.3.2 Effect of Financial Incentives on Short-Term vs. Long-Term Performance 11
2.3.3 Employee Perception of Financial Incentives 12
2.4 Types of Financial Incentives and Their Impacts 12
2.4.1 Performance-Based Pay 12
2.4.2 Profit-Sharing and Stock Options 12
2.4.3 Bonuses and Commissions 13
2.5 Factors Influencing the Effectiveness of Financial Incentives 13
2.5.1 Organizational Culture 13
2.5.2 Job Characteristics and Role Specificity 13
2.5.3 Employee Demographics and Individual Differences 14
2.6 Research Gaps and Future Directions 14
2.7 Summary of Key Findings 14
CHAPTER THREE 16
RESEARCH METHODOLOGY 16
3.0 Introduction 16
3.1 Research Design 16
3.2 Area of the Study 16
3.3 Sampling Techniques and Sample Size 17
3.4 Sample Size Determination 18
3.5 Sampling Technique 18
3.6 Data Collection Instrument 18
3.7 Method of Data Collection 20
3.8 Method of Data Analysis 20
CHAPTER FOUR 22
DATA ANALYSIS AND INTERPRETATION 22
4.0 Introduction 22
4.1 Section A: Socio-Demographic Characteristic of the Respondents 22
4.7 Regression Analysis 25
4.2 Discussion of Findings 26
CHAPTER FIVE 32
SUMMARY, CONCLUSION AND RECOMMENDATION 32
5.0 Summary 32
5.1 Conclusion 32
5.2 Recommendations 32
REFERENCES 34
CHAPTER ONE
1.0 INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Financial incentives have been widely used by organizations to motivate employees and improve performance. The underlying assumption is that financial rewards can stimulate employees to work harder, be more productive, and achieve better outcomes. However, the effectiveness of financial incentives in driving employee performance and motivation is still a topic of debate among researchers and practitioners.
In today's competitive business environment, organizations are constantly seeking ways to improve employee performance, increase productivity, and gain a competitive edge. Financial incentives are often seen as a key strategy for achieving these goals. However, the use of financial incentives also raises important questions about their impact on employee motivation, job satisfaction, and overall well-being.
Employee performance is a critical determinant of organizational success, and businesses often seek ways to enhance it through strategic initiatives. One such strategy is the implementation of financial incentive schemes, which are designed to motivate employees by linking compensation to performance. Financial incentives such as bonuses, profit-sharing, and performance-based pay have been widely recognized for their potential to drive productivity, reduce absenteeism, and foster employee retention (Armstrong, 2013).
In the telecommunications sector, including Airtel Nigeria, employee performance is pivotal to meeting organizational objectives and maintaining competitive advantage. In Jigawa State, as in other parts of Nigeria, the telecommunications sector plays a vital role in driving economic development by providing essential communication services. However, challenges such as low employee morale, high turnover, and inconsistent performance hinder the sector’s growth. Addressing these challenges requires a systematic approach to motivating employees, making financial incentives a crucial focus area.
Despite the acknowledged benefits, the implementation of financial incentive schemes in Nigeria is often fraught with challenges, including resource constraints, lack of transparency, and misalignment between incentives and employee expectations. This study focuses on understanding how financial incentives impact employee performance at Airtel Nigeria in Jigawa State, providing insights into effective incentive practices and potential improvements.
Employees play a strategic role in converting inputs into outputs, making them central to productivity. Therefore, they should be effectively managed and adequately compensated for their labor. Given that “wages” are the reward for labor, it is logical to ensure fair compensation to motivate employees to increase productivity in both the private and public sectors. Organizations often capture this emphasis on employee welfare in their mission statements and goals. Two major components of compensation are available to management: financial (material) and non-financial (non-material) incentives.
1.2 Statement of the Problem
Employees are central to the success of an organization, and their motivation plays a key role in driving productivity. One of the primary ways to motivate employees is through incentive schemes. In many Nigerian organizations, including Airtel Nigeria in Jigawa State, the challenge lies in providing effective incentives to boost employee performance. Financial incentives, such as salary increases, bonuses, and performance-related pay, are often considered effective tools for enhancing employee motivation. However, organizations struggle to establish a clear and sustainable financial incentive system that aligns with both employee expectations and organizational goals.
Poorly structured or insufficient financial incentives can lead to low employee morale, absenteeism, and high turnover rates, which ultimately affect organizational efficiency and service delivery (Mullins, 2016). Despite the known importance of financial rewards, many organizations in Jigawa State face challenges in implementing these schemes effectively. Therefore, it is crucial to examine the impact of financial incentives on employee productivity within Airtel Nigeria, specifically in the context of Jigawa State. This study will investigate how financial incentives can enhance employee motivation, reduce turnover, and improve service delivery.
1.3 Research Question
1. Is the significant relationship between of performance-base pay and employee performance
2. Is there significant relationship between bonus or commission and employee performance
3. Is there significant relationship between profit sharing or stock option and employee performance
1.4 Objective of Study
1. To examine the impact of performance base- pay on employee performance in Airtel company
2. To determine the impact of bonus and commissions on employee performance in airtel company
3. To examine the impact of profit sharing and stock options on employee performance in airtel
1.5 Research Hypotheses
H1: Performance base pay has a significant effect on employee performance in Airtel Nigeria, Jigawa State.
H2: bonus and commission have a significant effect on employee performance in Airtel Nigeria
H3: Profit sharing and stock options have a significant effect on employee performance
1.6 SIGNIFICANCE OF THE STUDY
The findings of this study are expected to create awareness regarding the role of incentives in employee performance, particularly in government organizations, and to inform policymakers about the impact of incentives. The findings will also assist organizations in understanding factors related to employee performance. Additionally, the study aims to enlighten the public about the factors that enhance worker motivation. For young scholars, the study provides a valuable resource and reference for further research in this field.
1.6 SCOPE AND LIMITATION OF THE STUDY
This study will focus on Airtel Nigeria, Jigawa State, examining incentive schemes and their effect on employee performance. Due to time and financial constraints, the study will be limited to this single institution in Jigawa State.
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