Our Blog

List of recently published project topics and materials



Chapter One  


1.1 Background of the Study

Every organization has its goals – the profitable provision of goods and services for which it is established. An organization like a government parastatal is an artificial creation, an abstract entity which relies on its human components for its effectiveness and productivity. This means that the effectiveness, efficiency and profitability of the parastatals towards achieving its goals depend on the effectiveness and efficiency of its human components, that is, its workers or employees.

This being the case, every organization therefore, tries to apply policies and practices that encourage, rouse and spur its workers towards higher performance, greater efficiency and maximum effectiveness as this will in turn, enhance the successful and effective realization of the organization’s goals. This application of principles, policies and practices that will spur the workers to greater productivity is known as motivation.

Incentives are important tools of motivation and they convert individual initiative and ability into increased productivity. The provision of adequate incentives is one of the ways the management of parastatals may positively influence the workers’ performance. According to Blunt (1963), without this active intervention by management, people would be passive, even resistant to organizational goals. They must therefore be persuaded, rewarded, controlled and their activities directed. We often sum it up by saying that management consists of getting things done through people.

The work is focused on how to persuade people to do things by rewarding them with adequate incentives and benefits, and the impact and essence of incentives on workers’ performance in parastatals. The examples of incentives and benefits which organizations may provide to motivate the workers include commission, bonuses, transport and travelling allowances, housing allowances and rent subsidies, retirement benefits and pensions, paid medical and health expenses, utility allowances, meal/lunch subsidies, scholarship schemes, long time service awards and overtime pay. Others include suitable working environment, praise and appreciation, job security and provision of recreational incentives. Details of the above shall be discussed in the next chapter.


1.2 Statement of the Problem

Most parastatals in Nigeria are seen choked with series of problems which render them ineffective in the provision of the goods and services for which they are established to provide. Is the problem with the staff, the management or the government? Again, it is generally believed that the public sector workers (of which parastatals workers form a part) are lazy, unproductive and irresponsible.

Is the generalization true or false? Or could the low performance of workers in Nigeria parastatals be traceable to the absence of adequate motivation through incentives? When workers are not adequately motivated (through incentives), their productivity tends to fall below expectation and the workers will also indulge in certain practices which are inimical to organizational goals. The organization may also be experiencing a lot of strikes, work-to-miles, sit-at-home and other industrial disharmony.

The managers of parastatals therefore need to consider seriously how they can get the best from their workers by the provision of incentives or where incentives already exist, how to effectively implement them. But if the parastatals worker needs incentives to urge him to greater productivity, what sort of incentives does he prefer as individual values differ. While some persons will want financial reward or incentives, others may prefer non-financial reward or incentives. Will the workers stay on at his job in parastatal without looking for another job elsewhere?

1.3   The Purpose of the Study

This work takes up the challenges of probing into the nature of motivation by incentives. It seeks to explore the impact and essence of incentives upon productivity or performance and in this vein,

  1. To assess the motivational policy of both public and private parastatals by the principles of application of incentives.
  2. To determine how poor motivation of workers affect their output or productivity.
  3. To examine the implication of poor provision of incentives on the performance of an organization.
  4. To put forward recommendation that may encourage parastatals to design effective incentive policies in order to enhance workers’ performance.

1.4 The Assumption of the Study

This research assumes that:

  1. A worker is entitled to his salaries and regular promotions according to years of service, experience and education but the study will hold salaries constant in order to examine how incentives affect the performance of the workers.
  2. Incentives make workers more productive and that this increased productivity can be measured.
  3. Everything paid to the worker outside his basic salary constitutes incentives and these also include valuable services provided to create a favourable working environment for him.

1.5 Definition of Terms

  1. INCENTIVES: An Incentive is something given to the worker to motivate him to work harder and achieve greater performance. It may be financial or non-financial. It includes valuable services rendered to the worker by his employer.
  2. PERFORMANCE: Performance is the productivity of the worker. It refers to the ability of the worker to satisfy his employer, that is, the ability of the worker to do his work so well that the objectives or goals of his employers will be achieved.
  3. PARASTATALS: A parastatal can be said to be a company wholly or substantially owned and controlled by the government and set up with a degree of autonomy and commercial aim to provide goods and services to the people.

1.6 Significance of the Study

The incentive scheme should be fair and just to both employer and employee to ensure complete trust on both sides. The work content must be accurately measured. Full confidence in the work measurement must be obtained. The scheme should give the worker a guaranteed minimum wage.

The incentive scheme should be simple in operation so that employees can calculate their wages easily and it should be flexible and intimately connected to other management controls; and it must be so designed as to protect quality.



Was the material helpful? Comment below. Need the material? Call 08060755653.