CHAPTER ONE

INTRODUCTION

Background to the Study

In recent times organizations are drastically changing their method of operations, which put great focus on the Human Resource (HR) strategies and operations of an organization. Companies often claim that their employees or human capital are their most important asset. As such, work motivation and effort towards humanizing the work place has become a subject of serious focus (Oztopioik and Landmark, 2007).

Though there many research on the effect of motivation on employee’s productivity has been a prominent area of interest in human resource management, it has been largely ignored by public sector scholars (Reilly, 2003).  This may have been impinged on the fact that the goods of the public sector is different from those of the private sector and  contemporary scholars of public administration believe that while private sector employees are motivated to maximize their own utilities, public sector employees should seek to maximize the social welfare of the people in the society (Wright, 2000).  

Luthans (2000) highlighted two types of rewards which are monetary or financial (extrinsic) and nonmonetary or non-financial (intrinsic) reward and both can be utilized positively to enhance employees performance. Financial rewards means pay-for-performance such as performance bonus, job promotion, commission, tips, gratuities and gifts etc. Non-financial rewards are non-monetary/non cash and it is a social recognition, praise and genuine appreciation etc.

Lotta (2012) agreed that financial incentives are indeed effective in motivating employees. Also, Ojokuku and Sajuyigbe (2009) found out that financial incentives (pay satisfactions dimensions) have significant effect on employee’s performance. But Perry et al, (2006) discovered that financial reward is not the most motivating factor and financial incentives have a de-motivating effect among employees (Srivastava, 2001).

Nelson (2004) noted that praise and recognition are the most efficient intrinsic reward that motivates an employee and leads to increased or better performance while Jensen et al (2007) see intrinsic reward as a tool that motivates employees to perform as expected.

Reward had been seen to be a vital instrument in employee performance. A well rewarded employee feels that he/she is being valued by the company that he/she is working for. They are also encouraged to work harder and better if they are aware that their well-being is taken seriously by their employers, and that their career and self-development are also being honed and taken care of by their company. Employees are the engine of organization vehicles while reward is the fuel. No organization can achieve its stated objectives without its employees. 

Akerele (1991) blamed the productivity of Nigerian workers on several factors, among them is employer’s failure to provide adequate compensation for hard work and the indiscipline of the privileged class that arrogantly displays their wealth, which is very demoralizing to working class and consequently reduced their productivity.

While research on the impact of incentives on employees’ productivity has been a prominent area of interest in human resource management; it has been largely ignored by public sector scholars (Behn, 1995; Reilly, 2003). This may have been occasioned by the fact that the goals of the public sector is different from those of the private sector; and contemporary scholars of public administration believe that while private sector employees are motivated to maximize their own utilities, public sector employees should seek to maximize the social welfare of the people in society (Wright, 2000). In other words, employees in the public sector should possess a motivational need for public service. This is referred to as public service motivation (March and Olsen, 1989; Perry, 2000; Wright, 2000). This research therefore investigates the effect of non-monetary rewards towards employee motivation in Nigeria.

Statement of the Problem

Ways in which employee are valued and rewarded can make a considerable impact on the effectiveness of the organization, and is at the heart of the employment relationship. Failure of adoption of ample reward frameworks can have a significant negative effect on the motivation, commitment and morale of employees, hence a decline in organizational performance and effectiveness. Many organizations are suffering from high turnover rates and down falls because they do not apply non-monetary rewards that may only need little effort (Aktar, Sachu & Ali, 2012). Additionally, though organizations are channeling more resources in enhancing organizational performance, there is widespread ignorance on how employee performance could increase when managers and human resource personnel use non-monetary rewards on employees, the relationship existing between the kind of rewards and performance and how effective they can be utilized in an organization. Most importantly, the high cost of monetary rewards forces employers to give to employees sparingly, out of the failure to realize that small offers like recognition and open communication can be given any time, at very little cost, and could boost employee performance to a great extent. This proves the fact that most organizations are far away from realizing the importance of non-financial rewards; hence they continue offering monetary ones that can never be enough for employees. Although everyone needs money to obtain the smallest of essentials to live, employees prefer the benefits of non-monetary gifts and incentives for motivation in the workplace. This implies that; regardless of how monetary incentives have been used widely in organizations, sometimes they discourage creativity in the workplace, a concept that can be achieved via the use of non-monetary rewards like career development via free trainings and work orientation, this research therefore investigates the effect of non-monetary reward toward employee motivation in De-United Food Limited (DUFIL)

 Objectives of the Study

The main objective of this study is to find out the effect of non-monetary reward toward employee motivation in De-United Food Limited (DUFIL), specifically the study intends to:

1.     Find out different non-monetary reward an employer can use to motivate their employee

2.     Analyze the effect of non-monetary reward toward employee motivation in DUFIL

3.     Find out the challenges that hinders motivation of an employee in an organization

Research Question

1.     What are the non-monetary reward an employer can use to motivate their employee

2.     Is there any effect of non-monetary reward toward employee motivation in DUFIL

3.     What are the challenges that hinders motivation of an employee in an organization

Research Hypothesis

Ho: there is no significant effect of non-monetary reward toward employee motivation in DUFIL

Hi: there is no significant effect of non-monetary reward toward employee motivation in DUFIL

Significance of the Study

This will be of great importance to the society as it will gives an insight and understanding of non-monetary motivation and hence contributing to knowledge and awareness. It is also of use for students and future researchers through knowledge contribution. Though there be many challenges and misconceptions regarding money as a motivator across all levels of employees as most managers spend time searching for ways to create a motivational environment which may be challenging. The study is significant to employers because it focuses on how to motivate employees in the current weak national economy and where there is no incentive to drive them to perform more 9 than what is expected. This research will be significant to company policy makers in formulating organizational motivation policies by helping them understand and imply non-monetary reward systems in organizations and incorporate it into the company culture. This research will also be useful to the government at different level because it is directly involved in formulating industrial policies & regulations that influence employer-employee relations. It will help other researchers to do m