The relationship between financial incentives and employee motivation: a case study of the Swedish cooperative center (scc) project: Kisumu
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Date
2011-04
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Kampala international International, College of Economics and Management
Abstract
The success of any organization depends largely on the motivation of the employees who are essential to the prosperity, productivity and performance of any company. Motivation is the key to creating an environment where optimal performance is possible. There are several approaches to how employees can be motivated. Some are motivated by financial (monetary) incentives whilst others are motivated by non-financial (non-monetary) incentives. The purpose of this study was to determine whether there is a relationship between the financial incentives offered by SCC and employee motivation, specifically, the sh1dy set out to determine the nature of incentives offered by SCC, the preference pattern of the employees on the incentives offered by SCC and the relationship between the incentives offered by SCC and employee motivation as measured by performance. The study was of a case study approach using descriptive survey design. The study area was the SCC project in Kisumu District, Kenya and the study population consisted of all the l22 field officers of the SCC project in the three components that the project specializes in, namely, Agro forestry, farmer enterprise development and rural finance. The response rate was 96 out of the possible 122, which translates to 78% response. The research instruments used were questionnaires, opinion interviews and checklists. The study used primary data that was cleaned, coded and entered into statistical packages. Further, data was subjected to descriptive statistics to obtain means, averages, frequencies and central tendencies. The results were presented in form of pie charts, bar charts and tables. The study found out that SCC does offer a range of incentives. However, the main incentives offered are financial, mainly in the form of salaries, leave allowance, Christmas bonus and transport allowance. But, all in all, the respondents expressed dissatisfaction with the incentives offered currently by SCC. Thai, management was not really interested in motivating employees because some incentives like leave allowance and Christmas bonus had already been scrapped and the salaries had not been revised to match the rising costs of living. The salaries offered were not commensurate to employees' qualifications. The transport allowance offered inform of motorbikes was too minimal since there was a limit on mileage and fuel consumption. The study recommended that management should: look for ways of diversifying the incentives offered and reward employees according to their workload and professional and academic qualifications. The staff would appreciate the reinstatement of Christmas bonus and leave allowance and improving of salaries to match employees' qualifications, workload and what other international NGOs are offering. The results of the study are very important as they could offer a base on which the management of SCC can base their decisions on incentives in future.
Description
A research dissertation submitted to the School of Business and Management of Kampala international University in partial fulfillment for the Award of a Bachelor’s Degree in Business Administration
Keywords
Business administration, Financial incentives, Employee motivation, Swedish cooperative center (scc) project: Kisumu