Background of the study
Most organizations are normally concerned with how the company will gain profit or attain a high level of performance by motivating the staff through the right kind of incentives. This is so because the effect or impacts of non-financial incentives are important for the employees and a critical issue in human resource management. The non-financial incentives are also called material rewards CITATION Nec081 \l 1033 (Neckermann, 2008). Due to the increase in global competition and a fast growing and changing business environment, organizations are concerned about how they work, frequent re-evaluation. Literature and studies on human resource management have always and continue to emphasize the importance of motivational programs including rewards and recognition, towards molding a productive workforce, competitiveness, and employee loyalty. There are many factors that affect employee performance like working conditions, worker and employer relationship, training and development opportunities, job security, and company’s overall policies and procedures for rewarding employees. Among all those factors which affect employee performance, motivation that comes with incentives is of utmost importance. Improved performance is achieved through the employees in an organization CITATION Arm092 \l 1033 (Armstrong M. , 2009) and therefore, in the school context, teachers as employees are considered as an important asset for better performance. The effect of non-financial incentives has increased the efficiency level of employees, as some employees work better and feel comfortable when they are recognized by their top managers, it gives them a sense of belongings and it has been a major tool used by managers in retaining employees. Motivated employees work with enthusiastically and creatively towards accomplishment of the organization goals and objectives. The goals of the public sector are different from that of the private sector. In view of this, the public sector employees are to seek to maximize the social welfare of the people in the society. In other words, there should be a public service motivation so as to boost the morale of employees, creates a better relationship with their managers. When employees believe that they have the ability to participate in decisions, research suggests there will be a positive impact on the work environment CITATION Law081 \l 1033 (Lawler, 2008). Employee participation in decision making changes their perceptions and as a result leads to additional interactions with management and provides new opportunities for employees to develop trust in management. This means, the incentives directed towards the private sector employees will not apply to the public servants. However, even a high paying job can be overwhelming or downright awful if non-financial incentives are largely ignored. According to teachers’ low wages is a matter of global concern. Around the world teachers are crying out for the resources they need to meet the needs of their students, their families and their communities. CITATION Mon081 \l 1033 (Mondy, 2008) claims that non-financial incentives can predict employee performance as the more challenging a goal is, the higher the performance level becomes and the higher the perceived satisfaction. CITATION Mon081 \l 1033 (Mondy, 2008) argues that an employee’s performance is determined by the degree to which available non-financial incentives are attractive, so as efforts lead to higher levels of performance (first-level outcomes) which in turn, leads to second level outcomes (praise, friendship, wages). CITATION Arm092 \l 1033 (Armstrong M. , 2009) adds that creating a fun, challenging and empowered work environment in which individuals are able to use their abilities to do meaningful jobs for which they are shown appreciation is likely to be a more certain way to enhance motivation, commitment and performance.
1.1 Statement of the Problem
There appears to be mounting concerns that unacceptably high proportions of teachers working in Ghana are poorly motivated due to combination of low morale and job satisfaction, poor incentives and inadequate controls and other behavioral sanctions. In any strategic study of an organization, work force is agreed to be one of the most important assets of an organization because the employees get every task done or executed. This implies that the success of an organization heavily depends on the performance or output of the employees in the organization. If the workforce is satisfied with their job as well as the organizational environment including its relationship with colleagues, compensation, and leadership they will be more committed to their organization as compared to when they are not satisfied. All organizations, 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 organizational goals are one of the most important inputs to organizational success. Consequently, the challenge for organizations is to ensure that their employees are highly motivated. Performance is said to be related with the concepts of motivation, opportunity and ability. Government or public workers especially teachers who are not given non-financial incentives tend to be de-motivated hence the provision of a lousy work. The Government of Ghana has not really carried out satisfactory surveys among the teachers although they are the most important resource in the organization. This is of great concern to a developing country since even in developed countries employees still work for long hours such as between eight hours to twelve hours a day. If the country is to develop, the employees in the public sector must be motivated to work for longer hours and prevent the high employee absenteeism, which is a product of de-motivation. According to U.S. department of Labour, 64% of Americans who leave their jobs say they do so because they don’t feel appreciated. (Press, 2010) reports that almost 70% of people in the U.S say they receive no praise or recognition in the work place. (Mulwa, 2007) says that, although salary and benefits play a role in recruiting and retaining employees, people are looking for opportunities to learn new things/ the challenges for new responsibilities and the prospect of personal and professional growth through training.
There is hardly any study regarding to the use of non-financial incentives in the public sector organizations as compared to the private sector. For the past five years, minutes of PTA meetings of Dodowa government school at Dodowa, indicated that, employees of the school do not enjoy non-financial incentives, like recognition, training, good working conditions, just to mention but a few. Surprisingly, no event has been put in place for recognition as well as no avenue for training has been allocated for five years for the teachers in the school. This has killed the morale and making them feel unmotivated as other colleagues in different schools earn better. Hence, this study attempts to examine the relationship between non-financial incentives and its effect on organizational performance as teachers of Dodowa government school do not enjoy non-financial incentives as compared to other schools leading to de-motivation and teachers not putting in their maximum best when executing their task as teachers.
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1.2 Objectives of the Research
The objectives are grouped into two. They are the main and specific objectives.
Main Objective
The main objective of the study is to determine the effects of non-financial incentives on staff performance in the public school at the Shai Osudoku District.
Specific Objectives
The specific objectives are:
To determine the current non-financial incentives practiced at the Dodowa government school in the Shai-Osudoku District to encourage higher employee performance.
To determine the extent to which employees are motivated through the non-financial incentives to perform high at the Dodowa government school in the Shai-Osudoku District.
To determine the effectiveness of non-financial incentives in improving employee performance at Dodowa government school in the Shai-Osudoku District.
1.3 Research Questions
The following research questions underpin this study
What are the different forms of non-financial incentives in use at the Dodowa government school in the Shai-Osudoku district?
To what extent are employees motivated through non-financial incentives to perform higher at the Dodowa government school in the Shai-Osudoku district?
How effective is the non-financial incentive in improving employee performance at the Dodowa Government School in the Shai-Osudoku district?
Scope of the Research
The scope is based on geographical, time and content considerations. This study population is drawn from a sample number of a public school in the Shai-Osudoku district in Ghana. The study is restricted to non-financial incentives and teachers’ performance. The study on non-financial incentives is restricted on three indicators of employee recognition, training and working conditions.
1.5 Significance Of The Study
In view of the study objectives, findings of this study will have some practical relevance. The findings of the study will help the planners of Human Resource rewarding system on how to implement appropriate reward strategies within the organization to enhance work performance. Secondly, this study will help commercial teaching management to reflect more on the purpose and benefits of rewarding employees in line with work performance. Also, the findings of this research will add to the body of knowledge in the field of reward systems in the public sector, especially public schools on their suitability and adequacy of reward packages to be introduced to lift employees’ performance. Reward systems should be designed in a way to provide the best ways or kinds of motivators according to the needs of the organization and its employees.
Reward management is known to be an area in Human Resource Management that deals with the strategies, policies and processes required to ensure the value of the employees and the contribution they make to achieve organizational and team goals and hence is recognized and awarded accordingly. Emphasis should be laid on the fact that reward management is not just about paying employees but equally concerned with non-financial incentives such as training, learning and development opportunities, good working conditions recognition and increased job responsibility.
This study is considered beneficial to head teachers by providing information on the factors that affect the performance of teachers in schools and help policy makers in general to assess the performance of head teachers for organizational ability and good management skills. Finally, the findings may be important to education training institutions when training head teachers in areas of educational administration, management and planning.
1.6 Limitations of the study
The study did not consider private schools. However, the findings from the study could
be applied in private schools. Also, the researcher did recommend for further study in that area. Limitations of the research design chosen are that it will be limited by finances and time duration to undertake this research. The study dealt with a small portion of non-financial because non-financial incentives were the most overlooked of all incentives hence worthwhile being explored on or studied.
1.7 Organization of the Study
The study is organized around five chapters. Chapter one is the general introduction to the study sub-divided into background of the study, statement of the problem, objectives of the study, research questions, limitations, scope of the study, significance and the organization of the study. Chapter two presents the literature review on the concepts and terminologies under consideration. It involves the review of the work of other researchers and authors. It deals with both theoretical and empirical literature. The third chapter deals with the method of study. It encompasses the variables of the study, the model specification and data sources. Chapter four discusses the estimation, analysis and interpretation of the results. Finally, chapter five outlines the summary of findings and conclusions of the study. Recommendations are also highlighted in this chapter.
CHAPTER TWO
LITERATURE REVIEW
2.0 Introduction
The objective of this chapter is to review previous research on the impact of non-financial incentives on employee performance. The issues discussed include the theoretical foundations, the conceptual framework and the empirical literature reviewed.
2.1 In this chapter, a collection of interrelated concepts that will look at recent studies that have been carried out by others and other theories that seeks to have a direct relation with non-financial incentives.
2.1.1 The theories under the theory of non-financial incentives includes Maslow’s hierarchy of needs, Hertzberg’s two factor theory, Adams equity theory and Goal setting theory.
2.1.2 Maslow’s Hierarchy of needs
Many scholars have given their explanations and perceptions on how non-financial incentives can enable an organization achieve good staff performance. Prominent amongst these scholars is Maslow theory of Maslow’s Hierarchy of needs. Human beings have an internal need pushing them towards self-actualization and personal superiority as stated by Maslow. Maslow came up with the view that there are five levels of needs, they include the basic needs (food shelter, and clothing), safety needs (health and safety of employees and family), social needs (good friendship, love and intimacy), self-esteem (valued by being recognized by others) and the top most level which is self-actualization (personal superiority). Once a need is satisfied at one stage of the hierarchy it influences the behavior of the individual. At such levels the individual will put forth a more powerful influence on his or her behavior for the need at the next level up the hierarchy. According to Maslow, physiological needs forms the basic needs for the survival of a person and this will include clothing, shelter, food, warmth and clothing. He argued that when people are hungry, do not have shelter or clothing, they are more motivated to fulfill this need because these needs become the major influence on their behavior. The hierarchical order implies that those needs in the higher levels (low prepotency) do not affect behavior towards work unless there is some degree of satisfaction of the lower needs (higher prepotency). This theory seems particularly relevant to teachers in developing countries because meeting the basic survival needs for food and shelter as well as security in conflict situations are major daily challenges for teachers. Maslow puts security needs on the second level and argues that they are the most essential for people at this level. This is expressed in the safety of the employee and family health. The third level of needs for Maslow is the social needs. When feeling secure and safe at work, employee’s place job relations as their focus. Thus, they try to build up a good friendship, love and intimacy. The fourth level is self-esteem needs. At this level, individuals feel satisfied when they are recognized and valued by others. The topmost or last level of Maslow’s hierarchy of needs is self-actualization. Intrinsic reward concerns with psychological development of employees (Williamson, Burnett & Bartol, 2009). This is because most teachers are empowered by certain elements, such as recognition and awarding them for the work they have done, in so doing they it will create a health competition between the teachers.
They say that money makes the world go around. However, this may not be true all the time, especially when you are talking about motivating your employees for a positive performance.
Based on Maslow’s hierarchy of needs, wages are highly important and usually one of the common motivators. They satisfy the immediate necessities of men such as food, clothing, and shelter. But what is really essential are the needs found on the higher levels, and they are not associated with money CITATION Mic10 \l 1033 (Gabriel, 2010).
2.1.3 Adam’s Equity Theory
Satisfaction with a reward was found to be a function of how much is received and how much the individual feels should be received. If individuals receive less than they feel they should, they are dissatisfied. This study is concerned with the perception people have about how they are being treated compared to others. CITATION Arm06 \l 1033 (Armstrong, 2006) to be equitably dealt with is to be fairly treated in comparison with other group of people. The behavioral psychologist John S. Adams states in his theory that employees strive for equity between themselves and other workers. Equity is achieved when the ratio of employee outcomes over inputs is equal to other employee’s outcomes over inputs. Equity involves feelings and participation and is always a comparative process. It is not synonymous with equality which means treating everyone the same since this would be inequitable if they deserve to be treated equitably and demotivated if they treated inequitably. Thus the feeling of satisfaction is influenced by comparisons with what happens to others. People tend to compare the efforts, skills, seniority and job performance with those of others. They then attempt to compare their inputs with the inputs of others relative to the rewards received.
Equity theory is relevant to teachers since employees (teachers) retention depends on levels of motivation in their workplace. Teachers quit teaching to look for other jobs that pay better and so there is need to provide incentives that are attractive to teacher with a view of motivating them to remain in the service. Working environment is a major challenge and teachers working in hardship zones characterized by water shortage, inadequate housing, long distances to and from workplace and inadequate health facilities are largely dissatisfied with their job.
2.1.4 Hertzberg’s two-factor theory
Hertzberg’s theory emphasizes mainly on the factors that satisfy or dissatisfy employees. In his theory which is the motivation-hygiene theory, he mentioned a number of key points that are similar to Maslow’s hierarchy of needs. Hertzberg’s two-factor theory divides motivation into two groups known as motivation factors and hygiene factors and the researcher provided a strong link between motivation and performance. The two-factor theory came about as a result of a five year research program on job attitudes initiated by a grant from the Buhl Foundation. During the first stage of the programme, Hertzberg and his colleagues conducted a comprehensive literature review of over 2000 writings published between 1900 and 1955. The literature yielded contradictory results and the research designs of the studies varied widely in quality and the methodologies based on their review in literature, they made core assumptions on which to base their hypothesis and research design. First, there was enough evidence to assume that there was some relationship between job attitudes and performance. Second, the characteristics of dissatisfied workers had been well-defined in the existing literature. Third the factors related to job attitudes had also been previously well-defined.
Herzberg suggested that certain extrinsic factors or hygiene, (those associated with the environment surrounding a job) only have the power to de-motivate while intrinsic factors (those associated with the job itself) have the power to energize or motivate behavior. According to Hertzberg, the motivating factors are the six job content factors that include; achievement, recognition, works itself, responsibility, advancement and possibility of growth. Hygiene factors are job context factors which include company policy, supervision, relationship with supervision, work conditions, relationship with peers, salary, personal life , relationship with subordinates, status and job security. Hygiene factors (often referred to as maintenance factors) lead to dissatisfaction with a job because of the need to avoid unpleasantness. They are referred to as hygiene factors because they can be avoided or prevented by the use of ‘hygienic’ methods. The important fact to remember is that attention to these hygiene factors prevents dissatisfaction but does not necessarily provide positive motivation.
CITATION kir13 \l 1033 (kiruja and Mukuru, 2013) argues that when institutional hygiene factors do not exist, (e.g. salary, job security etc.), employees are dissatisfied and if these factors exist it still does not mean that employees are motivated or satisfied. Supporting and recognizing employees’ effort will help them to feel more valued within the organization as well as giving a sense of achievement and responsibility. If the employee does not feel some responsibility associated with a certain task or department, he or she will not feel like their efforts are worthwhile. Under Hertzberg’s 1966 theory, workers who are satisfied with both motivational and hygiene factors would be top performers and those who are dissatisfied with both factors would be poor performers. There is a need for clarification on how satisfaction and motivation differ from each other. Job satisfaction is an emotional response accompanying actions or thoughts relating to work, whereas giving incentives is the process that activates behavior. As satisfaction is an attitude, it is possible for a worker to be satisfied with his job but not being motivated through incentives. Hence, motivation in the form of incentives and satisfaction are not synonymous with each other. It is vital to clarify that distinction between the concepts so that is easier to understand that motivation leads to satisfaction which untimely leads to enhanced performance. From philosophical perspective, it is Herzberg’s position that it is the responsibility of society’s dominant institutions to provide for the growth and well-being of people .In our society, one such dominant organization is the educational institutions. Therefore it is the responsibility of business and industry to provide the means for growth and self-actualization. Herzberg’s theory is relevant in educational settings as hygiene factors have a statistical significance in affecting teachers’ satisfaction and performance. The personality of the head teacher is a factor which controls the attitude of teachers and that the organizational climate of schools contributes to teacher satisfaction or dissatisfaction. Achievement and recognition are ranked first and second as factors contributing to good feelings about the job for a teacher.
2.1.5 Goal Setting Theory
The theory bases its proponents on CITATION Loc02 \l 1033 (Locke ; Latham, 2002) who state that performance is higher when individuals set specific goals. When goals are difficult but acceptable and when there is a feedback on performance. They reveal that goals have a pervasive influence on employee behavior and performance in organizations and management practice CITATION Loc02 \l 1033 (Locke ; Latham, 2002). They also argue that every organization seek high performance which can be attained by challenge and reachable goals. On the other hand, if the goal is too easy it will not bring out the desirable performance required by the organization to succeed CITATION Lun11 \l 1033 (Lunenburg, 2011). Goal setting is important because it increases the motivation to work and then increase the organizations performance. This is because employees feel more responsible when they set the goals with their managers. Their theory further suggests that the joint setting of objectives, feedback and involvement which are all part of a managerial approach can improve motivation. The theory places particular emphasis on goal-setting behavior and stipulates that the goals need to be clear, specific and achievable of they are to motivate (Kiruja ; Mukuru, 2013).
2.2 Empirical review
This section reviews have been undertaken in the area of non-financial incentives and its impact on employee performance.
2.2.1 Employee recognition and performance
Recognition refers to the general acknowledgement or confirmation of a given occurrence or performance CITATION APe08 \l 1033 (Petrescu ; Simon, 2008) . CITATION Man12 \l 1033 (Manzoor, 2012), studied the impact of employee motivation on organizational effectiveness in Pakistan. According to CITATION navon \l 1033 (Naveed, 2012), recognition and rewards have a direct impact on motivation of the employees and increase their efficiency. The researcher found out that recognition and empowerment increased employee motivation and hence their performance. Recognition plays an essential part in enhancing employee motivation towards organizational tasks. Appreciating the employees for their work and giving them participation in decision making. They will be internally satisfied with their job and organizational environment. Thus their enthusiasm and motivation towards accomplishment of tasks will definitely increase.
Employee recognition can be said to be seen as a timely, informed or formal acknowledgement of an individual’s behavior and effort that directly supports the achievement and organizational goals and values and usually has been beyond normal expectation levels. It is therefore an employee’s acknowledgement of an employee’s accomplishment and effort towards the organization’s goals. It concludes the act of giving special attention to employee’s actions, efforts behavior or performance which can either physically or psychologically or both.
CITATION Sha11 \l 1033 (Shazia, Tayyaba & Belqees, 2011) investigated the efficacy of recognition based rewards on employees’ motivation for them to be efficient and effective on the job as compared to usual incentives particularly the monetary ones. Their study also aimed to identify the roles of these rewards on employee retention as well as their long-term effectiveness within the organization.in their study they used closed ended questionnaires to show the relationship between recognition and efficiency of the organization. The study findings showed that there exist a positive correlation between recognition and employee motivation and performance. They concluded that such motivation arising out of recognition is not hierarchal. Majority of their respondents also showed a clear linkage between the employee motivation and performance.
CITATION Ala13 \l 1033 (Alam, Saaed, Sahabuddin ; Akter, 2013) conducted a study on the relationship between employee recognition and employee contribution in service industry in China. The researchers aimed at analyzing the impact of employees’ recognition on their contribution to the organization. The study results showed that there is a positive relationship between employee performance and recognition.
CITATION Goh13 \l 1033 (Gohari , Ahmadloo, Bouroujeni & Hosseinipour, 2013), conducted a study on the relationship between rewards and employee performance in Malaysia. Their research focused on the relationship between intrinsic motivation factors such as recognition and extrinsic factors like salaries and bonuses on employees’ performance of Persian Travel firms as the target sample. The findings showed that it is better to have good reward systems in the organization and evaluate it on employee performance.
CITATION Aou14 \l 1033 (Aourzag ; Raja, 2014) did on a study on the contribution of recognition to the motivation of the Moroccan public service managers in Morocco. The researchers aimed at finding if there is a positive relationship between recognition and motivation of public service managers. The researchers used exploratory-oriented methodology in order to test the nature of the relationship between the practices of symbolic recognition and managers’ motivation in the public service. They conducted an empirical study by means of questionnaires. Their findings showed that correlation and regression analysis allowed them to confirm their main research hypothesis that recognition practices at work are positively associated with motivation. They concluded that recognition is a determinant factor for motivating public service managers. Organizations can offer employee recognition in various ways ranging from the provisions of gifts cards, certificates, shopping vouchers, ‘thank you’, praise dinners, trophies, career advancement opportunities, trainings, appreciating ideas and respect where it deserves CITATION SNo12 \l 1033 (Nolan, 2012), Organizations have even devised recognition programmes such as ’employee of the month year schemes and long service awards.’ Studies indicate that failing to include recognition as a component of compensation is a common occurrence in most organizations CITATION Nde07 \l 1033 (Ndetei , Ongecha, Mutiso , Kuria, Khasakhala, & Kokonya., 2007). Recognition is however the least expensive CITATION Cor05 \l 1033 (Corby,White & Stanworth, 2005) and yet it elicits more benefits from employees
2.2.2 Employee training and performance
CITATION Eln13 \l 1033 (Elnaga & Imran, 2013), conducted a study to determine the effects of training on employee performance in Kingdom of Saudi Arabia. They investigated the meaning and importance of training and explored the relationship between training and employee performance with exploratory research. The researchers found out that there exist a positive impact on employee training supports to fill the gap between what performance is required and what performance is happening. They also found out that training programs are the stimulants that workers require to improve their performance and capabilities which consequently increase organizational performance. If employees are offered opportunities for developing their careers by adapting skills, technologies and competencies essential for performance improvement and promotion, they will feel valued and motivated. A study carried out by CITATION Far12 \l 1033 (Farouq & Khan, 2011) sought to investigate the impact of training and feedback on employee performance in Pakistan. The researchers used questionnaires to collect data. Results from the questionnaire were analyzed through SPSS. Correlation of data provided the results of relation of variables with each other. The finding from their study showed that training is a healthy source of influencing employee performance because it is very clear that training should target those ends of employees which are weak and creating hindrances in effectively performing the tasks. The study found that feedback provides a clear picture of what weaknesses are there on the employees and those that need the training. Training has a positive impact on the employee performance. The lack of training will result in ignorance of the manager about the skills, competencies and knowledge that are decisive for the performance improvement and motivation. Organizations conduct training programs due to dynamic changes in the business environment which increases the motivation of employees. Firms who spend more on training of the employee are more developed as the human resource training enhances the performance more than any other resources, CITATION Kha10 \l 1033 (Khattak, M.A., 2010)
In view of this the training and development brings more future opportunities for promotion. An involvement of employees in the training program and determining their training needs gives them ownership of the training process and add value to the performance.
2.2.3 Working conditions and employee performance
In working conditions where employees are not provided with adequate resources, tools, training, software and supplies leads to de-motivation and lesser performance. The inefficient working conditions which include comfort issues like poor ventilation, seating, lightning and noise can cause anxiety and decrease the output, CITATION Hug07 \l 1033 (Huges, 2007). A healthy work place which is made by using ergonomic furniture and accessories, lightning and functional design will diminish distress and improve production. There should be enough supply of good protective clothing, drinking water, rest rooms, toilets, first aids facilities etc. both the management and employers should be safety conscious at all times and the organizations must respect minimum requirement of the factory. A study carried out by CITATION Ali13 \l 1033 (Ali & Adan, 2013), sought to investigate the effects of working conditions especially working hours and workload on employees’ performance and whether there is a relationship between working conditions and employees performance manufacturing industry in Mogadishu, Somalia. The study found out that, in order to get better outcomes and increased performance, there should have been a better workplace environment since they are seen as boosting the employees and ultimately improving their performance. CITATION Ais13 \l 1033 (Aisha, Hardjomidjojo ; Yassierli, 2013) conducted a research on the effects of working ability, working condition, motivation and incentives on employee multi-dimensional performance in Indonesia. The results showed that working conditions, incentives and motivation had statistical significant effect on employee performance. The findings also revealed that workload, facilities and expectancy had a negative effect on employee performance. Meanwhile, working group, salary, job security, achievement, fairness and goals had a positive effect on employee performance. Also, the result showed that there is a significant effect between variables working conditions (workload and facilities) and performance (quality and quantity of work and level of attendance).
