FINANCIAL REWARDS AND EMPLOYEE PERFORMANCE (A STUDY OF SELECTED MANUFACTURING FIRMS IN PORT HARCOURT)

CHAPTER ONE

INTRODUCTION

1.1     BACKGROUND OF THE STUDY

In this modern era of rapid change and complexities, employee are the competitive edge in the manufacturing firms. But they face various problems in their work environment due to employee dissatisfaction caused by lack of financial rewards.

A study by verneerenet al, (2009) has proved that work performance could help the public and private organizations to improve service delivery. Income indeed an important motivator for an employee work performance.

A study by Dieleman et al, 2003) showed that work performance is influenced by both financial and non-financial incentives. The main motivating factors for workers were appreciation by managers, colleagues and community as well as a stable job and income and training. The main discouraging factor were related to low salaries and difficult working conditions which normally drives an employee to bed working performance.

Reward systems are arguably at the heart of employee the performance in any organization. This assertion is premised on the understanding that reward systems have the potency of engendering through the stimulation and direction of employees along the path of goal accomplishment (Ejumudo, 2014).

As a matter of facts employee are more critical of all organizational resources and their capacity to function of both their inward potentials and the outward environment in which they operates.

This nature-nature perspective of explaining the inducators of employee performance underscores the indispensability of reward system as an integral part of organizational environments.

In the light of this, iota is instructive to assert that well rewarded employees are much likely to feel valued and cherished by their organizations. Considering the above researches views, we intended to add to knowledge by examining the impact of financial reward on employees performances in manufacturing firms in port Harcourt.

1.2     STATEMENT OF THE PROBLEM

incentive schemes have created a lot of challenges to employee’s input and output in organization. The negligence of adequate structure in pay incentive, bonus and over time benefits has caused as lot of inadequate justice on the administrative of incentive scheme. The resultant effect on employee productivity could be negative. The negative attributes can be as poor turnover, poor product quality improvement, job dissatisfaction, low market, low commitment, absenteesion, turnover intents and low performance that affect organizational productivity.

The major problem encountered by firms is how to integrate the pay incentive, bonus incentive, and overtime benefits scheme such they positively influence the productivity of employees at the work place (Tella, Ageni and popoola, 2007).

1.3     OBJECTIVES OF THE STUDY

The objectives of these research are established as follows;

1.       To examine the relationship between salary and employees performance.

2.       To assess the effect of allowance on employee’s performance.

3.       To evaluate the relationship between Bonus and employee’s performance.

1.4     SIGNIFICANCE OF THE STUDY

This study which seeks to explain the financial rewards and employees performance in port Harcourt, will be of immense benefits to different categories of people.

Policy makers in the three triers of government will find recommendations that will follow in the study very useful because it will give sufficient insight into the issues of reward management and employee performance in Port Harcourt manufacturing firm. The government will see the need to take the issue of reward, both financial and non-financial very serious and improve productivity in an organization.

Employees also could be better enlightened on the issues of reward in services so that they are properly guided on what they should expect from their employers to reduce tendency for conflict between them and their employers.

1.5     RESEARCH QUESTIONS

This study answers the following research questions

1.       Is there any insignificant relationship between salary and employee‘s performance?

2.       Does employees allowance affect their performance?

3.       Is there any relationship between bonus and employees performance

1.6     STATEMENT OF HYPOTHESIS

HO1; there is no significant relationship between salary and employees performance

HO2; Employees job allowance does not affect their performance

HO3; There is no relationship between bonus and employees performance.

1.7     SCOPE OF THE STUDY

Content scope study examine financial reward and employee performances. The independent variable is financial reward with its dimensions as salary, allowances and bonus. The dependent variable in employee performance.

GEOGRPHICAL SCOPE: The research work is on manufacturing firms which include first allowance and manufacturing firms in Port Harcourt.

UNIT OF ANALYSIS: The unit of analysis is on individual level, hence over questionnaire and interview will be centered on the individual employees in the organizations.

1.8. THE LIMITATIONS OF THE STUDY

This study is not without limitations that should be considered when evaluating and generalizing its conclusions. These limitations discussed below can provide a starting point for future research. The study was conducted in Port-Harcourt.

The lack of external validity of this research means that any generalization of the research findings should be taken with caution. Hence time finance and non challent attitudes of the respondents to fill the questionnaires added to the limitations of the study.

1.9.  DEFINITIONS OF RELATED TERMS

1.       Allowance: is the amount of something that is permitted, especially within a set of regulations or for a specified purpose.

2.       Bonus: is the sum of money added to a person’s wages as a reward for good performance.

3.       Employee Performance: is defined as the successful completion of tasks, responsibilities or assignments by a selected employee or group of employees based on set performance objectives and indicators of efficiency and effective utilization of available resources.

4.       Financial Reward: is a monetary incentive that an employee earns as a result of good performance.

5.       Salary: is a fixed regular payment, typically paid on a monthly basis but often expressed as an annual sum, mode by an employer to an employee.