The impact of incentive schemes on employee productivity in the South African workplace

Gerhardus Van Zyl

doi:10.4102/jef.v8i2.113

Abstract

The aim of this article is to determine the impact that various incentive schemes have on employee productivity in the South African workplace. A firm-based model is used to estimate the dimensional relationships (different skill levels, gender-mix, firm size, firm-sponsored training incentives) of the incentive scheme-employee productivity link. The main conclusions of the study are, firstly, that finance-based incentive schemes (especially performance-linked bonus schemes) have a greater positive impact on employee productivity for the higher-skilled segment, secondly, that non-financial incentives (especially consultative committee incentive schemes) have a greater positive impact on employee productivity for the lower-skilled segment, and, finally, that greater female participation in the workplace and the awarding of incentive schemes is important if general employee productivity is to be enhanced.

Highlights

The aim of the article is to determine the impact that various incentive schemes have on employee productivity in the South African workplace
The parameter estimates for the various finance-based incentive schemes indicate a positive impact on employee productivity
The aim of the article was to determine the impact that various incentive schemes have on employee productivity in the South African workplace

Summary

Introduction

The aim of the article is to determine the impact that various incentive schemes have on employee productivity in the South African workplace. The research forms part of a broader individual research project in which the impact of various aspects of employee dynamics on employee productivity is estimated, quantified and explained In this regard the impact of HIV/AIDS on employee productivity (van Zyl & Lubisi, 2009), the impact of employee remuneration dispersion on employee productivity (van Zyl, 2010), the productivity effect of part-time employees (van Zyl, 2011), the geographical and industry differences on remuneration gap-enhanced employee productivity levels (van Zyl, 2012), relative employee productivity contribution of different age-skill categories (van Zyl, 2013), the impact of employee training externalities on employee productivity (van Zyl, 2013) and the impact of employee diversity on productivity (van Zyl, 2014) have been researched and published. Limited economic-focus research has been published for developing economies (such as the South African workplace) on the relationship between incentive schemes and employee productivity

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Results

Conclusion