...TITLE PAGE INCENTIVE AS A MOTIVATIONAL TOOL IN ENHANCING ORGANIZATIONAL PERFORMANCE (A STUDY OF FIRST BANK NIGERIA PLC AND UNION BANK NIGERIA PLC) BY ONWUCHEKWA CHIDI. PG/MBA /08/53181 BEING A RESEARCH PROJECT SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF MASTER OF BUSINESS ADMINISTRATION IN THE DEPARTMENT OF MANAGEMENT FACULTY OF BUSINESS ADMINISTRATION UNIVERSITY OF NIGERIA ENUGU CAMPUS JUNE 2010 1 DEDICATION This project is dedicated to God Almighty, for his guidance and love. 2 CERTIFICATION I, ONWUCHEKWA CHIDI a Postgraduate student in the Department of Management, Faculty of Business Administration with Registration Number PG/MBA/08/53181 hereby states that I have satisfactorily completed the Project for the award of master of Business Administration (MBA) in Management. I also state that this project report is original and has not been submitted in part or full for this or any other degree of this or any other Institution of higher learning.. ________________________ ONWUCHEKWA CHIDI PG/MBA/08/53181 ______________________ CHIEF J. A. EZEH SUPPERVISOR ____________________ DR. UJF EWURUM HEAD OF DEPARTMENT 3 ACKNOWLEDGEMENT I would wish to express my profound gratitude to all the people who made it possible for me to conclude my second degree academic pursuit successfully. Special thanks goes to Chief J. A. Eze, my project supervisor/Adviser...
Words: 12825 - Pages: 52
...Incentive plans paper Marques King MGT/431 October 18, 2011 University Of Phoenix Tracy Garmer Incentive plans paper In this essay I will discuss how organization’s incentive plans relate to organizational objectives. Second, I will evaluate how the incentive plans do, or do not help the organization to achieve its goals and objectives. Along with wages and salary, many organizations offer incentive pay which is designed to energize, direct, or control employee’s behavior. Incentive pay is effective, because the amount paid is linked to certain behaviors or outcomes (Noe, R. A. Hollenbeck, J. R., Gerhart, B. & Wright, P. M. 2007). The way to integrate employee incentive plans with organizational objectives is to focus on incentives the activities that are relevant to achieve the desired objectives, rather than basing it things such as seniority or organizational politics (Ingram, D. ehow contributor 2011). There are many reasons why an employee incentive plan was created such as, employee recognition, cash or non-cash incentives, eligibility, and performance measures. Some incentive plans only offer positive recognition for employees who can reach their goals under the plan. This type of incentive plan will not motivate most people to want to reach their goals. A study from People Performance Management and Measurement found that most managers use employee recognition as their incentive plan. Managers can also design a special program to achieve...
Words: 624 - Pages: 3
...you should be able to: 1. 2. 3. 4. 5. 6. Define variable pay and identify three elements of successful pay-for-performance plans. Discuss three types of individual incentives. Explain three ways that sales employees are typically compensated. Identify key concerns that must be addressed when designing group/team variable pay plans. Discuss why profit sharing and employee stock ownership are common organizational incentive plans. Identify the components of executive compensation and discuss criticisms of executive compensation levels. Copyright © 2008 by Nelson, a division of Thomson Canada Limited. 11–2 Variable Pay: Incentives for Performance • Variable Pay Compensation linked to individual, group/team, and/or organizational performance. • Basic assumptions: Some jobs contribute more to organizational success than others. Some people perform better and are more productive than others. Employees who perform better should receive more compensation. Some of employees’ total compensation should be tied directly to performance. Copyright © 2008 by Nelson, a division of Thomson Canada Limited. 11–3 Developing Successful Pay-for-Performance Plans • Reasons for Adopting Pay or Incentive Plans: Link more directly strategic business goals and employee performance. Enhance organizational results and reward employees financially for their contributions. Reward employees to recognize different levels of employee performance. Achieve HR objectives...
Words: 1689 - Pages: 7
...ORGANIZATIONAL DIFFERENCES IN MANAGERIAL COMPENSATION AND FINANCIAL PERFORMANCE After doing researches for 14,000 top and middle level managers and 200 organizations, managerial compensation decisions are made regarding base pay, bonus pay, and eligibility for long term incentive. Findings indicate that contingent pay was associated with financial performance, but base pay are not. The study examined both the determinants and consequences of organizational differences in pay level and pay mix among a national group of top and middle level managers. There are three components determine the level of compensation, such as pay mix, or the extent of variable pay, in terms of the relative amounts of short-term bonuses, long-term incentives, and base salary in an individual’s pay. Determinants of Compensation: Employee and Job Characteristics: Consistent with Human capital theory, there is empirical evidence that the number of years of education and labor market experience have explained much of the variance in their pay levels. The higher in an organizational performance hierarchy a job is the greater potential impact on organizational performance its incumbent is likely to have. Level of base pay is positively related to an employee’s human capital investment and level of job responsibility. Pay mix is positively related to an employee’s human capital investment and level of job responsibility. Organizational Variables: More recent examinations of organizational differences...
Words: 755 - Pages: 4
...a great deal of attention focused on how best to compensate employees for their performance in recent years. Moreover, because employee performance and productivity is inextricably related to organizational profitability, these issues have assumed new relevance and importance in the current economic environment. There have been some mixed reviews concerning pay-for-performance approaches to enhancing employee performance, though, that suggest there is more involved than simply throwing money at top performers. Despite these constraints, many authorities suggest that pay-for-performance programs have a lot to offer organizations seeking to identify better ways to improve employee performance. In this regard, Miller, Hildreth and Rabin (2012) note that, “Individual incentives have a central role to play in the success of most conceptual schemes related to performance. Such plans, while very difficult, have large possibilities; seemingly insurmountable obstacles can be overcome if the emphasis moves to the employee's relative needs for power, affiliation, and achievement” (p. 230). These are tall orders for any human resource manager and an organization’s leadership, though, and the fact remains that measuring individual performance is a complicated affair in many types of organizational settings, particularly the nation’s schools where the controversy over pay-for-performance has been especially pronounced. When the need to take into account individual employee’s relative needs...
Words: 3772 - Pages: 16
...the Workplace Introduction Organizational behavior has long been a subject of discussion for both private and public organizations. In addition, the concept of motivation in the workplace has also been the topic of a great deal of debate. The purpose of this discourse is to examine motivation as it applies to organizational behavior. Let us begin our discussion by describing the theory of motivation. Motivation The theory of motivation was first made popular by Maslow, who asserted that human beings have a hierarchy of needs. According to Maslow, this hierarchy of needs is composed of five needs: “physiological needs, safety needs, belonging and love, esteem needs and self-actualization needs. These needs are further categorized as deficit needs and being needs (Kermally, 2005, pg 26).” Maslow’s assertion was that physiological needs such as food and water must be fulfilled before a human being could be concerned with any other need in the hierarchy. With these things being understood Maslow asserted that human beings had the capacity to be motivated and that motivation is actually a primitive function of humanity. Although the theory motivation began in the realm of psychological study, it soon became a theory associated with organizational behavior, and this is the context in which it will be discussed for the purposes of this investigation. Motivation and Organizational Behavior Within the context of organizational behavior, motivation is most often...
Words: 2712 - Pages: 11
...employees for their performance in recent years. Moreover, because employee performance and productivity is inextricably related to organizational profitability, these issues have assumed new relevance and importance in the current economic environment. There have been some mixed reviews concerning pay-for-performance approaches to enhancing employee performance, though, that suggest there is more involved than simply throwing money at top performers. Despite these constraints, many authorities suggest that pay-for-performance programs have a lot to offer organizations seeking to identify better ways to improve employee performance. Pay for performance is not a new idea. Organizations all over the world use this type of system when offering bonuses based on predetermined results or commission. Pay-for-performance programs, also known as incentive pay or merit pay, are a solid approach to rewarding top-quality performance by employees in many types of organizations including healthcare settings. Pay for performance is a motivation concept in human resources, in which employees receive compensation for their work based on the level of reaching certain targets individually or with their team, department or company. The term is often referred to when one is addressing the topic of variable pay based on performances. Unfortunately, the perception of such incentive pay approaches is...
Words: 1704 - Pages: 7
...The Organization of International Business Organizational structure at Procter and Gamble Procter and gamble unique organizational structure offers the global scale benefits of an international company and the local focus to be relevant for customers in roughly 180 countries where their brands are solid. The company corporate structure provides the framework that allows them to tap the benefits of a global operation keep them in touch with local communities, and their strong governance practices ensure that they carry out operations with consistently high standard and integrity. Procter and gamble have made their organization structure an important part of their capability to grow. It combines global scale benefits with a local focus to win with consumers and retail customers in each country where P & G products are sold. Procter and gamble recently grouped its global business units into four industry-based sectors as part of the company’s on-going plan to improve business performance. The businesses in each sector are focused on common consumer’s benefits, share common technologies and face common competitors. Procter and gamble structure has removed many of the traditional overlaps and inefficiencies that exist in many large companies. Four organizational structure Procter and gamble uses: Market development organizations: are charged with knowing consumers and retailers in each market where Procter and gamble competes and integrating the...
Words: 2061 - Pages: 9
...professional capacity of their workforces. Accordingly, companies are faced with the challenge of increasing the level of employee commitment, job satisfaction and motivation (Greene, 2001). In this regard, it is important for companies to take into consideration the impact of employee needs, morale and expectations and to negotiate appropriate work arrangements for motivating employees as part of performance recognition. The following paper presents a discussion on the importance of employee motivation in the workplace. The discussion is mainly based on literature review and points that employee motivation is necessary for improved work performance. The paper has explored the important contributing played by work-life balance and financial incentives in improving employee motivation. The research indicates that the two factors foster loyalty by employees, increased performance and commitment, which are essential indications of motivation. The concept of Employee Motivation and Rewards Most discussions of motivation begin with the concept of individual needs – the unfulfilled physiological or psychological desires of an individual. Content theories of motivation use individual needs to explain the behaviours and attitudes of people at work. The basic logic is straightforward. People have needs. They engage in behaviours to obtain extrinsic and intrinsic regards rewards to satisfy needs (Schermerhorn et al, 2011). According to Jenkins, Mitra, Gupta and Shaw (2001) employee motivation...
Words: 2388 - Pages: 10
...achievement of organizational goals. Establishing compensation programs require both large and small organizations to consider specific goals. Employee retention, compensation distribution and adherence to the budget must be carefully weighed against the overall organizational goals and expectations. Compensation must reward employees for past performance while serving as a motivation tool for future performances. There are many different ways to motivate employees. Employers can motivate their workers as individuals, groups, teams, or the organization as a whole. Motivation takes forms like offering rewards, improving working conditions, or employee recognition. When people get motivated, they will have a reason to put more efforts on what they are doing. Base salary is only one aspect of a retention plan for important employees. Benefits and incentive plans are valuable perks in recruiting and retaining essential employees. Benefits are an established and integral part of the total compensation package. In order to have a sound benefits package there are certain basic considerations. By utilizing a flexible benefits package, employees are able to choose those benefits that are best suited to their individual needs. Incentive pay plans can be advantageous to both the employer as well as the employee. The success of an incentive pay plan depends on the organizational climate in which it must operate employee confidence in it, and its suitability to employee and organizational needs...
Words: 1196 - Pages: 5
...company’s incentive plan, the organization has to have a strategic reason identified. It usually depends on the size of the organization that gives key reasons for establishing incentive plans. The reasons for incentive could include; attracting employees or keeping current ones, reducing absenteeism, or lateness. The organizational objectives should coincide with the incentive to make the company’s better. Citizens has had a problem with employee’s coming in late and have established a disciplinary policy, but also has established a reward incentive for the employees who are always on time. The company gives time off quarterly to one employee per department; they will receive a half day off. The half day off is restricted during the busiest days, but has to be done on other occasions with a supervisor’s approval. The time off incentive is offered to all employee’s part and full time employees and also temporary personnel when permitted. The company also gives one full day off reward incentive to handle the absenteeism that is a reoccurring problem. Giving a day off ensures that employees will come to work and take fewer days off for sick or other various reasons. At the end of the quarter the company throws all the names of employees in a box and one person will have the day off that they want with supervisor’s approval. The employees strive to get that extra day off and get paid for it, this has kept employees from taking too many days off. The incentive plan that is...
Words: 552 - Pages: 3
...Compensation – The sum total of all forms of payments or rewards provided to employees for performing tasks to achieve organizational objectives Rs Compensation- Nature and scope • The complex process includes decisions regarding variable pay and benefits • It suggests an exchange relationship between the employee and the organization • It involves design, development, implementation, communication and the evaluation of reward strategy and process of the organization Compensation Objectives 1. 2. 3. 4. To reward employees’ past performance fairly, in line with efforts, skills and competencies To attract and retain competitive high performing employees To motivate the high performing employees and reinforce desirable employee behaviour To remain competitive in the labor market 5. 6. 7. To align employees’ future performance with organizational goals To communicate the employees their worth to the organization To provide employee social status • Strategic compensation – Using the compensation plan to support the company’s strategic aims. – Focuses employees’ attention on the values of winning, execution, and speed, and on being better, faster, and more competitive.. • IBM Strategic Compensation Planning • Strategic Compensation Planning – Links the compensation of employees to the mission, objectives, philosophies, and culture of the organization. – Serves to identify the net monetary payments made to employees with specific functions of...
Words: 2834 - Pages: 12
...Running Head: Organizational Design Organizational Design Linda Alicea HCS/514 February 1, 2013 Vinnette Batiste, PhD., MBA Organizational Design of Elmhurst General Hospital Introduction Every hospital, large or small, has an organizational design and structure that will facilitate the efficient and smooth daily operations for the efficient management of various departments (Burton, DeSanctis & Obe, 2004). Within a hospital setting, organizational design is a formal, guided process that integrates employees, patients, people, information, and technology, and serves as a key structural element that also allows Elmhurst to maximize value by matching its corporate design to overall strategy (Glickman, Baggett, Krubert, Peterson, & Schulm, 2007). This paper examines the organizational design of Elmhurst General Hospital as well as its internal and external factors that defines its size, organizational structure and process. Background From a strategic perspective, Elmhurst’s organizational design is more of an untapped variable that needs to be addressed in the context of organizational strategy and change. This is critical as attention to clinical quality is top priority to the hospital, and as such is a priority (Burton et al., 2004; Glickman et al., 2007). This is essential for health-care institutions such as Elmhurst to evolve its organizational and management structures that support the design and implementation of quality-improvement initiatives and...
Words: 1550 - Pages: 7
...is whether or not incentive plans help or hinder in their drive to sustain performance (Gomez-Mejia, Balkin, & Cardy, 2012). Case Study 3 looks at this issue from the perspective of a larger organization (500 plus employees), as well as what those challenges would be, and how to meet them when operating within the constraints of a small business. The challenge most business leaders face is determining the balance between what is motivational for employees and still a good return on investment for the organization – basically will performance improve (additional shareholder value) if the financial resources are allocated for the incentives (Ellig, 2011). Extrinsic rewards can sometimes impede innovation and creativity by narrowing the focus to the asset. Extrinsic rewards can also motivate to allow for only temporary compliance if the intrinsic impetus has not been directed and changed to mirror the long-term goal (Barros & Lazzarini, 2012). The balancing act, therefore, becomes can a business develop a corporate culture where the foundation is based on intrinsic motivation while still offering extrinsic assets and compensation. The organization, whether large or small, can achieve that balance if the focus is the total rewards for the employees. Every business will have to effectively align how to achieve that balance if they want to attract top talent, retain that premier talent, and have the performance levels necessary to obtain organizational goals. The organization...
Words: 1203 - Pages: 5
...PAY-FOR-PERFORMANCE: INCENTIVE REWARDS Compensation can be a significant source of motivation if at least part of it is tied directly to the employee's performance. Countless financial incentive systems have been developed over the years to motivate employees who occupy various levels within an organization and who perform different types of duties. Some of these systems have been successful, while others have not. The success of a particular system depends not so much on the formula for determining incentive payments, as on the existence of a favorable climate in which the system can operate. Success also depends on the degree to which the system has been tailored to the needs of the organization where it is to be used. Contributing to this success, furthermore, are the ways in which the system allows for employees to participate, psychologically as well as financially, in the organization. Employee stock ownership plans, can be advantageous to employers and to employees. Successful Incentive Plans: The success of an incentive pay plan depends on the organizational climate in which it must operate, employee confidence in it, and its suitability to employee and organizational needs. Importantly, employees must view their incentive pay as being equitable and related to their performance. Performance measures should be quantifiable, easily understood, and bear a demonstrated relationship to organizational performance. | Individual Incentive Plans Piecework plans...
Words: 402 - Pages: 2
