Project Materials




Need help with a related project topic or New topic? Send Us Your Topic 



Chapter one

1.1 Background of Study

The personnel department is responsible for developing an organization’s remuneration package, which is a complex and ongoing process. This may explain why all personnel department structures, whether for a small or large organisation, include a portion dedicated to ensuring that individuals are properly and sufficiently compensated.

Compensation therefore refers to the payment of fair and suitable wages to employees.

Direct compensation is money paid to a worker for the performance of his job assignment. Salaries and pay, while.

Indirect compensation encompasses incentives, fringe perks, and other types of rewards provided to employees.

Incentive are non-monetary prizes offered to employees in order to motivate or stimulate them to perform more.

However, salary/wages are used to recruit employees and are money paid for job done (Burack and Smith emphasise that an incentive scheme is a plan or programme to drive individual or group performance.

Incentive programmes typically offer monetary rewards, like as bonuses or incentives, but can also include non-monetary awards or prizes. It covers a variety of incentives presented to employees in order to push their performance beyond acceptable standards and time constraints.

This research focuses on the establishment of incentive schemes, a sub-function of personnel departments. However, it must be noted that when incentives are paid as part of a motivation system, a strong emphasis will be placed on motivation, with the reward serving as a contribution to motivation.

1.2 Statement of Problem

Given the ever-changing nature of the corporate world, the employment of incentives in organisations or industries has grown increasingly important. There are several reasons. The first is economic. Economic theories of benefit and compensation.

Administration, compensation are firmly on the negative side; when the company experiences a downturn, it is difficult or impossible to reduce the compensation of present employees. In this approach, wages become fixed.

Cost. The only method for the company to reduce this cost is to lay off employees; for the previous two decades, this has been the norm for American businesses. Incentive pay can alleviate the need to lay off employees by reducing the wage expense for all workers to some extent.

A second rationale is continued in the “payment for results or performance” concept: if the organisation associates money with the desired goal, the likelihood of achieving that end increases.

This could be accomplished by having the person work smarter, quicker, or for longer. As corporations have cut off employees, they have had to become more adaptable and efficient. Getting more done with fewer workers makes the prospect of incentive pay highly appealing to businesses today.

Third, as union influence has waned and the concept of participatory management has gained traction, there is a strong desire to tie employees to not only doing a better job but also being interested in how well the overall organisation is doing, including contributing to overall company success.

Some incentive pay plans focus primarily on attempting to persuade employees to collaborate with management to build a successful company. As a result, there is a constant need to incentivize employees to boost their productivity and performance in order to achieve overall organisational goals such as profit sharing, holiday premiums, job enrichment, and flexible work hours.

Profit sharing is a popular organizational-wide programme that is sometimes referred to as a gain sharing plan. This type of plan can be significantly simpler than a cost-sharing plan. Management seeks to shift employee attitudes towards them without requiring a revolution in employee-management relationships, as cost-savings initiatives do with profit sharing.

Profit sharing is intended to foster a sense of partnership between employees and the organisation. However, most programmes go beyond this and use profit sharing to retain valuable employees while also encouraging thrift in them.

In any organization-wide incentive structure, the correlation between effort and performance might be fragile. Even if the performance (profit or cost savings) and reward (a percentage of the profit or savings based on salary) are obvious, their relationship to what the employee does every day is unclear. Most organization-wide plans align better with the membership model than the performance incentives model.

This increased membership drive appears to be the most significant benefit of profit sharing. The profit sharing goal of fostering a sense of partnership is realised to the extent that employees wish to renew their membership and make the additional contributions that enhanced membership entails.

1.3 The purpose and objective of the study

The primary goal of this research is to explore the effect of incentive plans on employee performance. This study will also uncover several approaches to implementing incentive plans for increased staff performance. However, the specific aim of the study is to

i. Determine whether providing decent working conditions as an incentive would improve employee performance.

ii. Determine whether providing benefit packages as incentives would result in personal pleasure and a sense of accomplishment, ultimately leading to enhanced employee performance.

iii. Determine whether rewarding exceptional effort as an incentive would boost employee performance.

iii. Determine whether junior workers’ performance would increase if there were procedures in place to motivate them through comments, recommendations, and grievances.

v. Determine the exact types of incentives that workers seek.

vi. Highlight the specific issues that personal departments have encountered while using rewards as a motivational strategy.

vii. Provide remedies to the problems mentioned above.

However, before defining alternative methods of implementing incentive plans for employee motivation, several considerations must be made. Motivation is a key factor in employee performance. A manager’s role is to facilitate work through their staff.

To achieve this, the manager must be able to effectively motivate them. However, that is easier said than done. No employee has ever gotten up in the morning and stated, “I’m going to work really hard today because I have health insurance.”

However, an employee may be willing to go above and beyond for a manager who demonstrates trust, respect, commitment, and support on a daily basis and in a timely, sincere, and specific manner, such as through an incentive programme.

Motivation is also a highly personal trait. People’s motivations differ from one another, and they change throughout time. As a result, the question of how to encourage people is constantly shifting.

Research shows that manager-initiated, performance-based incentive is the most effective, regardless of firm size or kind. Performance is viewed as a product of both talent and motivation.

Ability, which is based on education, experience, and training, may be a showy and time-consuming process. However, motivation can be quickly improved by a variety of influential tactics.

Motivated employees do not happen by accident; an organisation must have a plan in place to promote the desired conduct. It’s crucial to remember that employees are people. And, more often than not, people do what they want to do. Motivated to do so.

Motivated employees inspire coworkers to reach new heights.


To achieve the goal of this study endeavour, an attempt will be made to provide answers to the following research questions:

i) Will employee performance improve if there are excellent

Working circumstances as incentives for personal satisfaction?

ii) Does providing benefit packages as an incentive increase personal happiness and a sense of accomplishment, hence increasing employee performance?

iii) What unique issues does the personnel department face when using incentives as a motivational tool?

iv) Would junior workers’ performance improve if there were methods for feedback, ideas, and grievances to motivate them?

v) What types of incentives workers choose in order to increase performance.

vi) Does rewarding exceptional effort as an incentive result in enhanced employee performance while also providing personal satisfaction?

1.5 Research Hypothesis

In order to evaluate the impact of incentives on employee performance, the following hypotheses were tested:

H1: Good working conditions as an incentive boost employee performance more in male workers than female workers.

H2 Good working conditions as an incentive boost employee performance more in male workers than in female workers.

H3 That providing benefit packages as an incentive will increase personal happiness, hence enhancing employee performance in junior staff more than senior personnel.

1.6 Scope of the Study

Organisations come in many sizes, whether sole proprietorships, partnerships, or public liability companies. This fact demonstrates that attempting to conduct research on every organisation is not only Herculean, but also impossible; so, a field of study must be identified, which will serve as the scope of the study.

The scope of this research work will consequently be a union. Bank Nigeria Plc operates a branch in Lagos, Nigeria. This branch employs at least ten senior staff and at least forty subordinate staff.

1.7 Relevance of the Study

The purpose of this research is to provide a theoretical and practical contribution to organisations about the effects and value of intense programmes on employee performance.

The study will also provide organisations with important insights into how to drive their employees to increase performance for efficiency in today’s dynamic business climate. The emphasis was on identifying employee reactions to specific incentive plans as well as determining the exact incentives that workers want.


For effective communication, it is necessary to operationally define some of the key topics in this study.

INCENTIVES: These are prizes (other than income and wages) offered to employees with the intention of encouraging or stimulating them to work harder.

INTRINSIC INCENTIVES: These are non-monetary incentives, such as job enrichment, participation in decision-making, etc.

EXTRINSIC INCENTIVES: These are monetary incentives that compensate for time spent not working.

SHORT-TERM programmes: These are incentive programmes based on output to increase production.

LONG TERM PLANS: These are incentive plans based on group performance out 011-t.

EMPLOYEE PERFORMANCE: This refers to the amount of work completed by a worker or individual in a company.

Need help with a related project topic or New topic? Send Us Your Topic 


Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.