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An Analytical Approach Towards The Impact Of Financial Incentives Among
Employees During Covid 2019
1Dr. V. Chitra,2Dr. V. Mary Diana,3Ms. D. Pratibha
1 Assistant Professor & Head, Department of Commerce, (Honours), Shri. Shankarlal Sundarbai Shasun Jain
College for Women
1 Assistant Professor, Department of Commerce (Honours), Shri. Shankarlal Sundarbai Shasun Jain College
for Women
1 Assistant Professor, Department of Commerce (Honours), Shri. Shankarlal Sundarbai Shasun Jain College
for Women
Article History: Received: 11 January 2021; Revised: 12 February 2021; Accepted: 27 March 2021; Published
online: 10 May 2021 Abstract
Money plays a significant role in satisfying physiological security and social needs. Incentive means an inducement which roused one to action in desired direction. The main purpose of such applications is to establish a fair management structure within the premise to contribute to the motivations of employees as a social being and therefore to increase their productivity and efficacy by enhancing their job satisfaction levels. The main objective of the study is to (i) to analyze perception of employee on financial incentives during Covid 19 (ii) to examine the problems related to decreased job performance due to the absence of financial incentive during covid 19 (iii) To analyze the issues faced by the employees due to the absence of incentive during covid 19. The present study involves both primary data and secondary data. Study is based on random sampling. In this study, the researcher has adopted various statistical tools like Regression, Independent t test, Kruskal Wallis to test the hypotheses and to fulfill objectives.
Keywords: Financial Incentives, Employee performance, Motivation of employees.
1.1 INTRODUCTION
Rewards and recognition activities that are transparent work to build trust with employees. Incentives can help the employees to reinforce with employees the kinds of actions and contributions that will help the organization succeed. Used effectively, incentives help build employee motivation and engagement. Employers need to use more incentives to build employee morale and to ensure that employees feel appreciated for their contributions. Distributed appropriately, in a transparent manner that employees understand. Incentives can be tricky for employers.
1.2 SIGNIFICANCE OF THE STUDY
Monetary incentives greatly influence the performance of the employees in the organization and it is also directed towards examining different dimensions. The end goal of every organization is to enhance productivity to boost the profit. To remain competitive the organization must have comparable incentives plans and benefits.
1.3 STATEMENT OF PROBLEM
All organizations are concerned with implementation of work to achieve a high level of productivity through staff motivation using the right kind of incentive. Consequently the effect of financial incentive becomes a burning issue in human resource management. During Covid 19 the absence of financial incentives seems to be a major problem for the employees.
1.4 OBJECTIVES OF THE STUDY
(i) To analyze perception of employee on financial incentives during Covid 19
(ii) To analyze the decreased job performance and absence of financial incentive during covid 19 (iii) To analyze the issues faced by the employees due to the absence of incentive during covid 19
1.5 HYPOTHESES OF THE STUDY
(i) Opinion regarding Statements on Employees Perceptions on Financial incentives is not equal to Average Level
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(ii)There is no significant difference between mean ranks among the respondents with respect to theirexpectation of financial incentives from the Organization.
(iii)There is no Strong influence of financial incentive on Job Performance
(iv)There is no significant difference among mean rank towards the problem faced by the employees due to absence of Financial Incentives provided by the Organizations
1.6 METHODOLOGY OF THE STUDY
The study involves both Primary and Secondary Data. Source material for Secondary Data was collected from Books, Journals, Magazines and internet. Primary Data was collected by distributing well structured Questionnaires to the employees working in various organizations. Study is based on Random Sampling. Sample size was restricted to 100. Statistical tools like Multiple Regression, Independent t test, Mann Whitney U test and Kruskal Wallis to test the hypotheses and to fulfill objectives.
2. REVIEW OF LITERATURE
2.1 Lazear (2000)described that introduction of monetary rewards could gain extra efforts of the employee to that extent where the marginal value added is equal to the marginal cost paid for that additional work and showed a positive relation between employee engagement and rewards and firm performance.
2.2 Simon Burgess (2003)reviewed the incentive pay to improve public-sector efficiency and the evidence on its effects. The researchers concluded how optimal incentives of public sector differ from private sector and the types of incentives were the most appropriate for public sector. Moreover, the researchers commented on the design of new policies being introduced in the UK public sector in the light of the theoretical arguments and the evidence.
3.1 FINANCIAL INCENTIVES
Monetary Incentives are financial incentives used mostly by employers to motivate employees towards meeting their targets. Money, being a symbol of power, status and respect plays a big role in satisfying the social–security and physiological needs of a person. Employees like to be recognized and rewarded for improved performances. Monetary rewards not only boost morale for high performance but also improve productivity. This is because employees will always work hard to surpass their employers’ expectations so as to earn an incentive. Various types of financial incentives are:
1. Salary - pay and allowances 2. Bonus
3. Profit sharing
4. Co-partnership / stock option 5. Perquisites
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4. ANALYSIS AND DATA INTERPRETATION4.1 CHART REPRESENTING THE FACTORS INFLUENCING EMPLOYEES PERFORMANCE DURING COVID 19
Source: Primary Data
From the above chart 4.1 it is understood that the major factor that influences the employee’s performance during covid is financial incentive given in the form of bonus, increment, pay and allowance. Increase in salary via promotion, overtime allowance and other motivational tools must be used. Financial incentives are an effective method in improving adherence.
4.2.2 TABLE REPRESENTING THE EXPECTED FINANCIAL INCENTIVE BY THE EMPLOYEE DURING COVID 19
From the above table 4.3 it is opined that majority of the respondents expect Increment from the organization during covid 2019. Higher level of productivity as each employee strives to improve their performance will help to motivate them to work harder.
4.2.3 TABLE REPRESENTING THE LEVEL OF SATISFACTION ON WORK AMONG EMPLOYEES DURING COVID 19
From the table 4.3 it is clear that majority of the respondents were dissatisfied towards their work in terms of Workload and Financial Incentives received from the organization during covid 2019
4.2 TESTING OF HYPOTHESES
4.2.1 t test for Specified Value (Average =3) of Statements on Employees Perceptions on Financial incentives
Null Hypothesis: Opinion regarding Statements on Employees Perceptions on Financial incentives are not equal to Average Level
Financial Incentive expected from the Organization Frequency Bonus 20 Increment 45 Allowances 15 Cash awards 20 Total 100 Level of Satisfaction on
Work among employees Frequency
Highly Satisfied 20
Satisfied 6
Neutral 20
Highly Dissatisfied 54
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Statement on Environmental Perception Mean SD t Value P Value
Did your incentive impact work force 4.23 1.11 31.908 0.001** Bonus and other perquisite improve the employee’s
performance
3.29 1.23 24.111 0.001**
Fair and equitable reward to encourage for a job well done is necessary
3.13 1.56 7.654 0.001**
Financial Incentive increases employee loyalty towards the organization
3.63 1.675 20.003 0.001**
Salary is commensurate with the job performed 4.61 .334 54.10 0.001**
Source: Computed Data
NOTE: ** denotes significant at 1 % Level
Since P Value is less than 0.01, the null hypothesis is rejected at 1% level of significance with regard to all the statements on Employees Perceptions on Financial incentives of respondents. Hence the opinion regard to all the statements on of respondents is not equal to average level.
4.2.2 Kruskal – Wallis test for significance mean difference among the respondents with respect to their expectation of financial incentives from the Organizations
Null Hypothesis: There is no significant difference between mean ranks among the respondents with respect to
their expectation of financial incentives from the Organization.
Expected Financial Incentives
Mean Rank Chi- Square
Value P Value Male Female Bonus 26.61 40.21 19.12 0.001** Increment 27.82 35.69 .234 0.001** Allowances 38.52 45.88 .653 0.013* Cash awards 21.32 34.79 .431 0.001**
Source: Computed Data
NOTE: ** denotes significance at 1 % level * denotes significance at 5% level
The test results indicate that there is a statistically significant difference at 1 % level of significance towards the expectation of financial incentives level score between Gender of the respondents regarding Financial Incentives.
4.2.3 The Results of the regression model between Financial Incentive and Job Performance.
Null Hypothesis: There is no Strong influence of financial incentive on Job Performance
Source Unstandardized Coefficients Standardized Coefficients T Sig B Std. Error β (Constant) 28.09 .716 41.23 0.001** Financial Incentives -0.021 .145 .635 5.400 0.001**
F=18.337 (p<); R2=0.719 Dependent Variable: Job Performance
The predictor is significant at ∝ =1 per cent levels, hence model is significant at 1% , the β value of 0.021 was greater than the table value. The results indicated that financial incentives have strong influence on Job Performance at 1 per cent significance level. It is proved that when there is a reduction in the financial incentive there seems to be a decrease in the Job Performance of the employee.
5.2.4 Friedmen test for significant difference among mean rank towards the problem faced by the employees due to absence of Financial Incentives provided by the Organizations
Null Hypothesis: There is no significant difference among mean rank towards the problem faced by the employees due to absence of Financial Incentives provided by the Organizations
Problems faced by the employees due to absence of Financial incentives
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Increase in Stress Level 5.5416.342 0.001**
Difficulties in repayment of Loan 4.32 Children Education 4.12 Reduction in Standard of Living 3.67
Source: Computed Data
NOTE: denotes significant at 1 % level
Since P Value is less than 0.01, the null hypothesis is rejected at 1% level of significance. Hence concluded that there is significant difference among mean ranks towards the problem faced by the employees due to absence of Financial Incentives provided by the Organizations in the study area. Based on mean rank, Increase in the stress level (5.54) was the first factor that the respondents are mostly affected Difficulties in repayment of rent (4.32) were the second factors that respondents were affected followed by Children education (4.12) and finally reduction in standard of Living (3.67) . Health of the individual is vital under all circumstances. Reduction in financial incentives drives the employees towards stressful situation.
5. 1 CONCLUSION OF THE STUDY
Monetary Incentive is a positive motivation which removes this psychological barrier and combines the will to work with the working capacity. Positive motivation is achieved by satisfying the varied needs of individuals and the group. The effect of positive motivation is that it brings about integrity to the object; inculcate in the individual and the group a sense of belongingness and a strong affiliation for which the organization stands. In order to meet up with the current dynamic rate of business trends, the management must adopt various positive motivational techniques to increase the moral values and employee retention and stability. Information availability and communication must be made at the right time and to the right person so that the task can be completed on time and it will quickly create trust among employees, resulting in productivity, performance and overall morale which will induce the organization to provide financial incentives during covid 2019
5.2 SUGGESTIONS FOR THE STUDY
Employees should be motivated largely by fair and transparent management system.
The performance must be appraised very fairly because it is source of recognizing the individual contribution towards the organizational performance.
Financial incentives at a minimum rate can be provided by the organization during covid 2019
Employee should increase the productivity of the organization to maximize profit in turn expected financial incentive will be provided by the organization.
Organizations can defer the financial incentive to the employees rather than to cut the same when the situation gets normal.
REFERENCES
1.
Lazear, E.P. (2000). “Performance Pay and Productivity”, The American Economic Review, Volume90, page no.1346-1361.
2.
Simon burgess (2003), “The role of incentives in public sector: issues and evidence”. Volume 19, Issue2, May 2003.
3.
Arnolds (2007).” The strategic importance of motivational rewards for lower-level employees in themanufacturing and retailing industries”. SA Journal of Industrial Psychology, Volume 33, Issue 3, page no.15-23.
