SIGNIFICANCE OF THE STUDY
Increasingly in the contemporary organization,
human resourcing strategies are based on three premises:
Armstrong (2012) suggested that
people-first focus is a pre-cursor to winning commitment and mobilising the
workforce in executing corporate strategy. Success in a highly competitive,
global marketplace demands high commitment but also high performance, and
organisations are increasingly focusing on developing such a culture as a core
part of their employment practice.
Armstrong believes that people is the fulcrum upon which
One of the most
important, complex and problematic issues in managing human resources in any
organisation is reward management. According to Banjoko (1996) hardly is any
issue more relevant and crucial to an employee than his financial and
non-financial remuneration, and scarcely has any matter led to strained labour
and management relations or lead to strike action much more than wage - related
issues as suggested by Fajana (2006). Considering the trends of great disparity
between one's expenditures and the income accruing into ones pocket due to the
increasing inflation in our economy, it is therefore proper to say that reward
management is a matter that is closest to the heart of every employee and their
employers. It is a common saying that man does not live by bread alone yet he
cannot live without it.In today’s competitive and global workplace, one of the
strategies that successful companies use in having the ability to attract many
qualified candidates, retain top talent, and maintain a highly motivated
workforce is the use of rewards.
Rewards can be used to keep the
organisation and the attractiveness of the job itself and proper reward
management in of an organisation determines how job applicants will romance
with such organisation. The organisation reward policy has an external
influence on the source of labour supply.
Armstrong (2007) defined Reward
management as a system that deals with the strategies, policies and processes
required to ensure that the contribution of people to the organization is
recognised by both financial and non-financial means. It is about the design,
implementation and maintenance of reward systems (reward processes, practices
and procedures), which aim to meet the needs of both the organization and its
The overall objective is to reward
people fairly, equitably and consistently in accordance with their value to the
organization in order to further the achievement of the organization's
Reward management is not just about
pay and employee benefits. It is equally concerned with non-financial rewards
such as recognition, learning and development opportunities and increased job
responsibility is the process of ensuring that people are rewarded fairly for
the work they do and for contributing to the achievement of the organization's
purpose and aims.
Reward management provides answers
to two fundamental questions:
1) What do we value?
2) What are we prepared to pay
All organisations face various
degrees of competition in variety of labour markets. Supply and demand
conditions in these markets require that organisations offer rewards that are
competitive enough to attract a sufficient number of competent job applicants.
In essence, for the organization to
be effective, it must be able to structure a reward policy that will match the
desired reward of the employee.
Consequently, part of the challenges
face by organisations is ensuring that their employees are highly motivated and
committed and in this regard there are techniques and strategies employers put
in place to motivate employees in order to improve job performance and guaranty
their continuous commitment to reward good work Khan et al (2010).
most suitable form of reward and to implement
it in such a way
that the businesses benefit has
also been one of the challenges facing management in modern organisation
Dommeryer et al (2010).
Over the years, the management of reward systems have been
one challenging area of concern to both industry practitioners and scholars.
This is because apart from its potential in motivating employees to spectacular
performances, it has proved to be a veritable tool to ensuring industrial
harmony, job satisfaction Raza et al, (2011) and organizational commitment if
used appropriately Oluseyi & Ayo (2009).
Equally challenging is the identification of the most
suitable reward and to implement it in such a way that benefit all stakeholders
in the organization. Thus, it is important to look at reward systems, view the
alternatives available and understand them. According to Robbins & Coulter
(2003) the focus is on four important components:
Type of rewards
Distribution criteria, and
Therefore this research work will serve as a veritable tool
in enlightening on non-monetary motivation and the focus is on how non-monetary
reward systems are used to motivate public sector employees to improve their
job performance and remain committed to organisational goals. Non-financial rewards
focus on the needs most people have, although to different degrees, such as
achievement, recognition, responsibility, influence and personal growth.
Non-monetary or non-financial rewards do not involve direct
payment of cash and they can be tangible or intangible Adeyinka et al (2007).
Some other examples of this kind of rewards are, encouraging the employees by
providing them with autonomy in their job and participation in decision making,
assigning challenging duties, improving working conditions, recognizing good
work through small gifts, letters of appreciation, plagues, tickets to
restaurant etc., providing some services for the employees, organizing social
activities in the work place, etc. (Robbins and Coulter, 2003)
Non-monetary rewards generally motivate employees because
they recognize the employees’ intrinsic needs. These are the needs that have to
be satisfied on a long-term basis because they come from within the employee
and tend to increase their willingness to be identified with organizational
goals and objectives irrespective of unfavourable conditions.
the other hand, organizational commitment refers to a strong desire to remain a
member of a particular organization, a willingness to exert high levels of
efforts on behalf of the organization and a define belief in and acceptability
of the values and goals of the organization Adeyinka et al (2007).
From the above, it is emphasized that the need
for recognition, self-respect, growth, meaningful work, social activities,
teamwork, participation in decision making are important non-monetary rewards
in boosting the employees’ morale and increasing their commitments to their
1.2 Statement of the Problem
Nigerian Security Printing and Minting Services (NSPMS) like
other public enterprise is constraint with the problem of using non-performance
based element like salaries to compensate its staff as against
performance-related pay structure which has hampered productivity because it
does not make worker put in extra effort in their work. This is so because
their compensation is not based on incentive schemes that elicit additional
effort of workers sequel to unfriendly government legislation on wages clause
and bureaucratic inefficiency. Hence the need to examine the effect non-financial
incentive on staff productivity in Nigeria Nigerian Printing and Minting
In the systematic study of organisation, it is accepted that
manpower is one of the most important assets of an organisation because things
are getting done through employees. In other words, the success of an
organization in realizing its objectives heavily depends on the performance of
its employees. Therefore, it is important to focus on the factors that
militates against the commitment and performance of the employees.
Performance is considered to be related with the concepts of
ability, opportunity and motivation Ivancevich & Matteson (1988)
Moreover, it is apparent that in the absence of willingness
to perform; capacity and opportunity will not generate the desired results. If
the situation is to be explained by a proverb; you can take the horse to the
water but you cannot make it drink.
All organisations, whether public or private, need motivated
employees to be effective and efficient in their functioning, in addition to
the other factors.
Employees who are motivated to work energetically and
creatively toward the accomplishment of organisational goals are one of the
most important inputs to organisational success. Consequently, the challenge for
organisations is to ensure that their employees are highly motivated.
Naturally every employee love to be motivated as they bear
in mind that this will drive extra input to their work but to the employers,
when the issue is motivation, one of the things that comes to their mind is
giving extra Non-Financial Incentives to indulge the employees to perform and
get more commitments which should translate to better performance at workplace.
Motivation refers to any means both financial and non -financial that makes an
employee desire to do better, try harder and expend more energy. With regard to
monetary Non-Financial Incentives, it can be argued that private organizations
have more financial sources to motivate their employees than the public
organizations. It is known that public employees’ payment levels in Nigeria are
generally low compared to private sector employees. Moreover, while many
private organisations have monetary Non-Financial Incentives such as bonuses,
commissions, cash rewards etc, it is quite challenging for the public sector to
provide such Non-Financial Incentives in adequate levels in a weak national
economy. As a result, it is important to look for any possible alternative
means that can be used to motivate employees in the public sector.
In line with this purpose, this research is meant to focus
on the use of non-monetary Non-Financial Incentives as a motivational tool and
their effectiveness in the motivation of public sector employees’. Non-monetary
or non-cash Non-Financial Incentives do not involve direct payment of cash and
they can be tangible or intangible. Some examples of this kind of Non-Financial
Incentives are; encouraging the employees by providing them with autonomy in
their job and participation in decision making, assigning challenging duties,
improving working conditions, recognizing good work through small gifts,
letters of appreciation, plagues, tickets to restaurant etc., providing some
services for the employees, organising social activities in the work place,
Starting with Elton Mayo and Human Relations School, it was
emphasised that the need for recognition, self-respect,
growth, meaningful work, social activities are as important as monetary Non-Financial
Incentives in increasing the employees’ morale and motivation. There are many
contemporary research studies supporting the effectiveness of non-monetary Non-Financial
Incentives as a motivating tool in the private sector organizations. However,
there is hardly any study regarding its use in public sector organisations.
This problem would be faced as this work will shed light on this issue by
exploring the motivating potential of non-monetary Non-Financial Incentives in
the public sector of Nigeria.
However, in a bid to successfully motivate their employees,
public sector managers are often faced with the difficulty of determining the
appropriate and the sufficient level of non-monetary motivating strategies to
use given the dynamic nature of people’s behaviour and their changing needs,
management is bordered by the challenge of not only having to determine the
right kind of non-financial motivational rewards but how to understand the
perception of the employee concerned and what value he or she would likely
attach to the adopted strategy in order to enhance greater level of commitment.
Furthermore, while many researches have shown that rewards
influence and motivate employees commitment to organisations, empirical
literature does not offer guidance on how organisational commitments are
affected by the type of non-monetary reward offered to employees and what
effect has such Non-Financial Incentives on public sector employees who by the
nature of the public service sector do not have much accesses to source of
Given these challenges, this study attempts to empirically
examine the relationship between the use of non-reward monetary rewards and
1.3 Objectives of
The central objectives of this study are to examine the
effect of non-financial incentive on staff productivity in Nigerian Security
Printing and Minting Company
Specifically the study is set out to:
- Examine the non-monetary
rewards used by the organisation in motivating employee towards increased
- Examine the relationship
between the measures of non-financial rewards and dimensions of
- Determine the extent to which
each measure of non-monetary rewards contributes towards predicting
- To determine if there is any
significant difference among employees on their perception of non-monetary
The following question serves as guides to the research
Is there any significant relationship between non-monetary
rewards and dimensions of organizational commitment?
What is the relative contribution of individual measures of
non-monetary rewards towards predicting organizational commitment?
Is there any significant difference among employees on their
perception of non-monetary rewards?
Is there any significant difference among employees on
dimensions oforganizational commitment?
The following tentative statement
will be tested in the course of this study:
There is no significant relationship between non-monetary
rewards and organizational commitment.
The individual measures of non-monetary rewards do not
significantly predict organizational commitment.
There is no significant difference among employees on perception
of non-monetary rewards.
There is no significant difference among employees on
dimensions of organizational commitment.
1.6The significance of study
Latham and Locke
noted that: 'Money is obviously the primary incentivebut they went on to say
thatmoney alone is not enough to motivate high performance Money may be an
important factor in attracting and retaining people (the sorting effect). It
can produce satisfaction, but this may be short-lived. And if the principles of
distributive and procedural justice are not followed, it can cause lasting
It can be said that money will motivate some of the people
all of the time and, perhaps, all of the people some of the time. But it cannot
be relied on to motivate all of the people all of the time. To rely on it as
the sole motivator is misguided. Money has to be reinforced by non-financial
rewards, especially those that provide intrinsic motivation.
It was asserted by Pink (2009) that intrinsic rewards are an
underutilized source for motivating employees, especially those performing complex
or creative tasks. He refers to evidence that intrinsic rewards work and that
financial Non-Financial Incentives limit creativity and can undermine it by
interfering with our natural tendencies to direct our own lives to learn and
create new things. He believes that financial Non-Financial Incentives work
best for people in routine jobs which offer few intrinsic rewards to motivate
When motivation is achieved by intrinsic rewards it can have
a more powerful and longer-lasting effect on people, and financial and
non-financial rewards can be mutually reinforcing.
Reward systems should therefore be designed and managed in
such a way as to provide the best mix of all kinds of motivators according to
the needs of the organization and its members.
According to Armstrong (2010) Reward management is an area
in HRM that deals with the strategies, policies and processes required to
ensure that the value of people and the contribution they make to achieving
organizational, departmental and team goals is recognized and rewarded. It is
about the design, implementation and maintenance of reward systems
(interrelated reward processes, practices and procedures) which aim to satisfy
the needs of both the organization and its stakeholders and to operate fairly,
equitably and consistently.
But it should be emphasized that reward management is not
just about pay and employee benefits. It is equally concerned with
non-financial rewards such as recognition, learning and development
opportunities and increased job responsibility.
Scope of the Study
The study concentrates on the theories and models of
motivation; incentive, non-monetary rewards system and organizational
commitment but makes significant emphasis on non-monetary or intrinsic
motivational theories. In terms of research coverage, this study will be
limited to a particular institution in the public sector of Nigeria. The study
is focused on the effects of non-monetary incentive on organizational
commitments among junior and senior public officers of the Nigerian Security
Printing and Minting Company, Lagos.
Investigation shall cut across all departments and units within the
organization and shall include both male and female employees. It will help in understanding the importance
of reward and how it can be successfully applied across organizations
especially those that are effectively using Non-Financial Incentives to improve
1.8 Definition of Terms
Organisational commitment:This is referred to the extent by
which organizational members identifies with the goals and activities of the
organization and their willingness to make sacrifices for its success even in
the face of difficulties.
Non-Monetary Incentive:This is a means of encouraging
employees in boosting their morale without any form of cash payment to
employees. Examples are periodic promotion, training and development,
recognition of achievement, personal growth and responsibility.
Motivation:This is defined as the process of arousing, directing and
maintaining behaviour towards a goal. It is also the stimulation of people to
action to accomplish desired goals.
Intrinsic Rewards:These are the rewards that are
directly associated with the work itself. They are derived by the work/employee
or individual from other sources in the organisation including co-workers,
informal groups and other formal organisations.