Employee’s Perception of Performance Based Incentive Schemes and Its Influence on Employee Productivity: The Case of Africa Village Financial Services S.C.
No Thumbnail Available
Date
2016-06
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Addis Ababa University
Abstract
The general objective of the study was to investigate and assess the relationship between employee’s perception of performance based bonus and merit pay incentive scheme practices of Africa Village Financial Services and its influence on employee productivity. To undertake this general objective, four specific objectives with their underling hypothesis were designed and assessed by quantitative & qualitative research design. To set background information on the proposed hypothesis the theoretical, conceptual and other related literatures were reviewed and most of the literature finding implies that perception of employees of performance based bonus and merit pay incentive system has a significant and positive influence on employee productivity. The required data for conducting the research was obtained through structured and unstructured questionnaires. The structured questionnaire was adopted from two prior related studies. To check the reliability of the adopted instruments, the Chronbach’s coefficient alpha test was carried out. AVFS has only 98 total numbers of employees and the research was conducted on the entire population. Basically, a total of 98 questionnaires were distributed to the targeted employees, among these 90 were returned, which means 8 responses were remained unreturned. Thus, 90 returned questionnaires (i.e. representing 92% of response rate) were analyzed using statistical package for social science (SPSS version 20). In this analysis, descriptive statistics, correlation and multiple regressions analysis were performed. The descriptive finding of the study showed that AVFS employees have experienced high level of positive perception towards the existing performance based incentive scheme practices leading to a high level of employee productivity. The correlation analysis result also indicates employee’s perception of performance based bonus and merit pay incentive scheme has positive and significant relationship with employee productivity. Moreover, the finding of multiple regression analysis indicated that employee’s perception of performance based incentive practices has positive and significant influence on employee productivity. The overall analysis revealed that the positive perception of incentives schemes are giving satisfactory results in improving employee productivity apart from increasing the incomes of AVFS employees. Therefore, it is commended that, the company has to continue implementing performance based incentive practices in the best possible way and give more emphasis on the magnitude of incentives so that the level of employee productivity can be further enhanced.
Key Words: Incentives, Employee Productivity and Employee Perceptions.
Description
Keywords
Incentives, Employee Productivity, Employee Perceptions