EFFECTS OF NON -MONETARY REWARD ON EMPLOYEE PERFORMANCE IN POLYTECHNICS IN SOUTH EAST ZONE OF NIGERIA

CHAPTER ONE

INTRODUCTION

1.1       Background of the Study

        Globally, an enabling environment is required for the better performance of individuals working in organizations in order to accomplish the organizational goal. Employees who are motivated to work energetically and creatively towards the accomplishment of organisational goals are one of the most important inputs to organizational success. When dealing with the issue of how to increase employees’ performance, one of the first things that come to mind is the concept of incentives, which refers to any means that make an employee desire to do better, try hard and expand more energy. It is quite challenging for Polytechnics in South East Zone of Nigeria to provide monetary rewards such as cash rewards, bonuses and commission in adequate levels to their employees. As a result, it is important to look for any possible alternative means that can be used to enhance employees’ performance (Ryan and Deci, 2005). They accept that there are other means to reward employees that do not just focus on financial compensation. Some of these include the praise that employees are able to acquire from their superior officers, the opportunity to take important project and even leadership attention. The latter refers to the treatment of the employee by their superior officers in such a manner that employees are also considered to be as leaders as well. These show that non-monetary rewards are excellent means to encourage the employees to work hard and produce better performance results. In any organization manpower is one of the most important assets of an organization because things are getting done through employees. This means that the success of an organization in realizing its objectives heavily depends on the performance of its employees. Therefore, it is necessary to focus on the factors affecting the performance of the employees. Performance is considered to be related with the concepts of ability, opportunity and motivation (Ivancevich and Matteson 2008) In Polytechnics employees’ efforts are directed towards organisational goal and employees performances are assessed and successful performance are rewarded and reinforced (Torington, Hall and Taylor, 2008).  Rewarding employee is today more complex than it used to be some four decades ago. This is because the economic situation in the country has changed drastically such that cost of living has shut up drastically, cost of operation has increased and competition has become more intense. Workers also are now more sensitive to the value they create and the reward they get in return. 

            Bem, (1967) argues that as the important of human capital is on the increase so the important of attracting and retaining the employees are considered because of competitive advantage which organization gets due to its employee. To retain the employees, the organization strategically make reward policies for employee betterment such that employee would be satisfied and stay with the organization for long time.  Invancevich and Matteson (2008) posit that it is not just retention of employees but also retention of valued skills. To accomplish these, organization uses a mixture of three types of rewards: base pay (salary), benefits and non-monetary rewards to compensate its employees. In doing that, organization’s aim might be to offer salaries that are competitive in the market, or it might be to favour pay that is structured to attract employees over and above existing pay package; but few organizations can afford to attract, motivate and retain employees through generous monetary rewards. The challenge is to create a reward that can achieve these, without exhausting organizational resources.  This makes non-monetary rewards to continue to be accorded necessary attention. Adeoti and Isiaka (2006) acknowledge that non-monetary reward has positive impact on employee performance. Amabile (1996) acknowledges  that the real success of any organization originate from employees’ willingness to use their creativity, abilities and know-how in favour of the organization they are working for, and it is the organization task to encourage and nourish these positive employees inputs by putting effective reward practices in place in the organization. This is largely due to the fact that the well rewarded employees feel that they are valued by the organization that they are working for. When employees surpass their target or exceed their standard they should be rewarded immediately as a way of motivating them. By doing this, employees directly connect the rewards with behaviour and higher performance they have attained.  Employees are the engine of any organization while rewards are the fuel. Effective reward in Polytechnics should always focus on the positive reinforcement. Positive reinforcement encourages the desired behaviour in organization. This encourages employees to take positive actions leading to rewards. 

        Polytechnics management have developed and adopted various rewards techniques in order to achieve the objectives of the organization. Polytechnic manual contains several rewards techniques that the institutions have been using in rewarding their employees productivity. These are salary, bonus, contributory pension, national health insurance scheme, sponsorship to conference, workshops, paid study leave and unpaid study leave;  other allowances are housing, acting,  transport, Students industrial work experience scheme (SIWES), excess work load,  and also responsibility allowance for principal  officers.  Apart from this is the Annual Appraisal Form (Aperform) that contains basic requirements expected of an employee before he can be promoted.

  However, the extent to which non-monetary reward influence employee performance in Polytechnics is not established. This indicates that there is the need to explore more on the effect of non-monetary rewards on employee performance. This study therefore aimed at examining the effect of non-monetary reward on employee performance in Polytechnics South East Zone of Nigeria.

1.2       Statement of the Problem

            The management dilemma in Polytechnics in South East Zone of Nigeria is how employees’ performance can be increased through implementation of rewards while ensuring that the objectives of the institutions are achieved. It is not always possible to give continual monetary rewards to employees and constantly increasing their salaries disproportionally. Monetary incentives used inappropriately can change the expectations of what people consider moral behaviour. When monetary rewards replace moral incentives this can lead to people changing the standards of that they perceive to be right or wrong. Excessive monetary rewards can lead to people cheating, especially if controls are lax and the chances of being caught are small.

Non monetary rewards to employees for their performance and contribution are one of the best methods of motivating them. One feature of many tangible non-monetary rewards is that they are things the recipients see as luxuries; things that employees could not normally justify buying for themselves, even if they had sufficient funds. If an item is something that an employee values highly but would never purchase on his or her own,  then the opportunity to earn it as reward for hard work provides a way to obtain the desired object without violating one’s standards of justification. Hard work thus becomes an attractive means to acquire otherwise unobtainable goods causing the earning of tangible non-monetary reward to carry more value than earning the market value of the reward in cash.  The use of task related and social non-monetary rewards are to reward employees for excellent job performance through opportunities. Non monetary rewards can take the form of improving working conditions, simple thank you, friendly greeting, recognizing good work through promotion, training, letters of appreciation, assigning challenging duties, encouraging the employees by providing them with autonomy in their jobs. The use of non monetary rewards require a high level of integrity and ethical behaviour from leaders; however if the processes are not transparent it may be de-motivating. The use of non-monetary reward in organization if not properly administered could also result in unhealthy competition amongst the employees.

In a developing economy like Nigeria, high performing employees that value money and other monetary perks might find that non monetary rewards lack the incentives needed to boost motivation and increase their productivity. Not all employees value letter of appreciation or walls that display the best employee of the month.  In the organisations that use non-monetary reward to enhance employee productivity, some of the employees might feel that their organization is not willing to pay for their hard work. More so, if the management fails to reciprocate the efforts of their employees (despite the high efforts provided, non-monetary rewards such as office tie, pin or brooches are given) performance of workers may be at its low level and this may lead to labour turnover. Additionally, if a competing business offers monetary rewards to its employees, the organization that offers non-monetary rewards risks losing employees to the competition. Most importantly, if employees view non-monetary rewards as unattainable, they might lose motivation toward their job and refuse to participate.

      To this end, an investigation into the extent to which non-monetary rewards can affect employee performance in Polytechnics in South East Zone of Nigeria is pertinent.

1.3       Objectives of the Study

The objective of this study is to examine the effect of non-monetary rewards on employee performance. This study is undertaken with the aim of accomplishing the following specific objectives: