Financial Incentive as a Yardstick for Employee Performance: The Case of University of Nairobi

Dorothy Njiraine

doi:10.7176/ejbm/11-8-10

Abstract

The paper examines the extent to which financial incentives contribute to employee performance, the case of University of Nairobi. The study was descriptive in nature and investigated financial incentive as a yardstick to assess employee performance at the University of Nairobi. The target population in this study was the non-teaching staff of Nairobi University, whereby stratified sampling technique was applied. The findings of the study revealed that financial incentive as a human resource management practice enhances performance of employees. It also indicated that other factors such as healthcare for the employees, contribute to employees’ motivation. Major recommendations is the need for harmonization of the financial incentives as a means to long term objectives and the strategies of the organization. Further research should be explored from the perspectives of effects of human resource management practices on employee turnover and organizational life cycles. Keywords : Human resource management practices, human resource management, financial incentives, pay incentives, employee performance. DOI : 10.7176/EJBM/11-8-10 Publication date :March 31st 2019

Highlights

Introduction and background According toUNDP (2006) report, incentives and incentive systems are fundamental to developing capacities and translating developed capacities into better performance in organizations
The United Nations Development Programme (UNDP, 2006) describes incentives as “both the reason for staff to join an organization, and the way an organization rewards and punishes its staff”.Kaiser (2014) argues that incentives are often considered as forms of extrinsic motivation whereby employees tend to perform their jobs well when incentives such as performance pay and bonuses are in place
The respondents agreed with the given performance measures and this interpreted that UON employee performance fairly good, (Mean = 4.09, Std. dev =0.59)

Summary

Employee performance

Respondents were asked to rate the level of their performance in the organization. From the findings, the respondents agreed with the given performance measures and this interpreted that UON employee performance fairly good, (Mean = 4.09, Std. dev =0.59). It was agreed that employees objectives are matched to that of the organization, (Mean = 4.00, Std. dev =0.79). It may be argued the rate of employee performance as afore-indicated, concurs with the motivation hygiene theory. Compensation awarded to employees is fair and competitive according to industry standards This organization contributes a sufficient amount for healthcare costs of employees. It was agreed that bonuses in employees’ salaries based on organizational profitability or efficiency gains enhances employee performance, (Mean = 3.95, Std. dev =0.82). It was agreed that when employees benefit from incentive pay they enhance their output, (Mean = 4.46, Std. dev =0.50). Percentage bonuses in employees’ salaries based on organizational profitability or efficiency gains enhances employee performance

Correlation matrix table

Model summary

Regression

Findings

Hypothesis testing