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Impact Of Management Incentive Policies On Worker’s Productivity

(A Case Study Of Dangote Cement Factory, Obajana, Kogi State)

5 Chapters
|
82 Pages
|
1,377 Words

Management incentive policies play a crucial role in shaping worker productivity within organizations, exerting significant influence on employee motivation, performance, and overall operational effectiveness. By implementing well-designed incentive structures, such as performance-based bonuses, profit-sharing schemes, and career advancement opportunities, management can effectively align individual and organizational goals, thereby fostering a culture of accountability and diligence among workers. These policies not only incentivize employees to enhance their performance but also encourage collaboration, innovation, and continuous improvement efforts within teams. Moreover, tailored incentive programs catered to specific job roles or departments can address diverse motivational factors, leading to heightened engagement levels and job satisfaction among workers. Conversely, poorly designed or inadequately implemented incentive policies may result in unintended consequences, such as heightened stress, inequitable treatment, or disengagement among employees. Therefore, management must carefully evaluate and adjust incentive structures to optimize their impact on worker productivity while considering factors such as industry norms, organizational culture, and individual preferences.

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.

TABLE OF CONTENT

Title page
Certification
Dedication
Acknowledgement
Abstract

CHAPTER ONE
1.1 Introduction 1
1.2 Statement of problem 3
1.3 Objectives of the study 5
1.4 Research questions 5
1.5 Significance of the study 6
1.6 Scope of the study 7
1.7 Limitation 7
REFERENCE 9

CHAPTER TWO
2.0 Review of Related Literature 10
2.1 Theoretical Frame Work the Study 11
2.2 Historical back ground of Dangote Cement
factory, Obajana, kogi State. 25
2.3 Current literature on theories postulated 28
REFERENCE 41

CHAPTER THREE
3.0 Research Design and Methodology 42
3.1 Research Design 42
3.2 Source Of Data 42
3.2.1 Primary Source of Data 42
3.2.2 Secondary Source of Data 42
3.3 Postulation of The Study 43
3.4 Sample Design and Determination Of Design Size 43
3.5 Method Of Data Collection 45
3.5.1 Questionnaire Design, Distribution
and Collection Of Response 45
3.6 Methods Of Data Presentation And Analysis 46
REFERENCE 47

CHAPTER FOUR
4.0 Data Presentation and Analysis 48
4.1 Demographic Characteristics 48
4.2 Presentations According To the Key
Research Questions 49

CHAPTER FIVE
5.0 Summary of findings, conclusion
and recommendation 61
5.1 Summary of findings 51
5.2 Conclusion 63
5.3 Recommendation 64
BIBLIOGRAPHY 66
APPENDIX 68
QUESTIONNAIRE

CHAPTER ONE

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 cement 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

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Management incentive policies can have a significant impact on worker productivity, both positive and negative, depending on how they are designed and implemented. Here are some key factors to consider:

1. Motivation and Engagement: Well-designed incentive policies can motivate workers to perform at their best. For example, performance-based bonuses, profit-sharing plans, or stock options can incentivize employees to work harder and smarter, knowing that their efforts will be directly tied to financial rewards. When employees are motivated and engaged, their productivity tends to increase.

2. Alignment of Goals: Incentive policies can align the goals of workers with those of the organization. When employees see a direct link between their efforts and the success of the company, they are more likely to work towards common objectives, which can lead to higher productivity. This alignment can also foster a sense of ownership and responsibility among employees.

3. Healthy Competition: Some incentive policies, like performance-based promotions or recognition programs, can introduce healthy competition among workers. When employees strive to outperform their peers to earn rewards or recognition, it can drive productivity improvements.

4. Innovation and Problem Solving: Incentive policies that reward employees for innovative ideas or problem-solving can stimulate creativity and productivity. When employees are encouraged to think outside the box and come up with solutions to challenges, it can lead to process improvements and increased efficiency.

5. Retention and Talent Acquisition: Attractive incentive packages can help retain existing talent and attract new skilled workers. Skilled and experienced employees tend to be more productive, and by retaining them or attracting new talent, organizations can maintain or increase productivity levels.

6. Potential Downsides: However, poorly designed or misaligned incentive policies can have detrimental effects. For example, if incentive structures are based solely on individual performance and don’t consider team dynamics, it can foster unhealthy competition and hinder collaboration. Also, if the criteria for earning incentives are unrealistic or too focused on short-term gains, it may lead to burnout and a decline in overall productivity.

7. Ethical Concerns: Management incentive policies should also be carefully designed to avoid encouraging unethical behavior. If incentives are tied solely to financial outcomes without considering ethical considerations, employees may engage in unethical practices to achieve their targets, which can harm the organization’s long-term reputation and productivity.

8. Measurement and Evaluation: To ensure that management incentive policies have a positive impact on productivity, organizations need to establish clear and fair methods for measuring and evaluating performance. Transparent and consistent performance evaluations are essential to maintaining the credibility and effectiveness of incentive programs.

In conclusion, management incentive policies can have a significant impact on worker productivity, but their design, alignment with organizational goals, and ethical considerations are crucial factors in determining whether that impact is positive or negative. When implemented thoughtfully, these policies can motivate employees, align their efforts with company objectives, and drive productivity improvements. However, when implemented poorly, they can lead to unintended consequences and even harm productivity and organizational culture.