Motivation Impact on Productivity

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International Journal of Business and Management

Vol. 6, No. 12; December 2011

Performance-Based Pay as a Motivational Tool for Achieving Organisational Performance: An Exploratory Case Study

Francis Boachie-Mensah (Corresponding author) School of Business, University of Cape Coast Cape Coast, Ghana Tel: 233-332-137-870 E-mail: fbmens2002@yahoo.co.uk

Ophelia Delali Dogbe Mount Zion School, Accra, Ghana Tel: 233-242-965-648 Received: June 3, 2011 doi:10.5539/ijbm.v6n12p270

Abstract

E-mail: eloloid@yahoo.com Published: December 1, 2011

Accepted: August 5, 2011

URL: http://dx.doi.org/10.5539/ijbm.v6n12p270

The issue of employees’ performance in furtherance of organisational objectives has occupied management attention for long. Differences in levels of performance have been attributed to differences in skills and abilities on the one hand, and to different theories of money on the other. This study examined the issue of performance-based pay as a motivational tool for achieving organisational performance, using the situation in a manufacturing company in Ghana as a case study. The main objective of the study was to assess the impact of performance-related pay on the motivation of employees and, subsequently, on the achievement of organisational goals. In all, one hundred and fifty respondents took part in the survey. The sample comprised 20 managerial staff and 60 non-managerial staff. The main research instrument was the questionnaire. A two-way ANOVA table was used to test the main hypotheses. The result of the study revealed that the effect of performance-based pay on employee performance is minimal; and the motivational effect of merit pay is often blunted by biased performance appraisal. The main limitation of the study is that it could not cover all manufacturing companies within the target population, due to time and financial constraints. In this respect, the interpretation of the results of the study should not...