The Relationsidp Between Financial Incentives And Employee Motivation: A Case Study Of The Swedish Cooperative Center (Scc) Project: Kisumu

ABSTRACT

The success of any organization depends largely on the motivation of the employees who

are essential to the prosperity, productivity and performance of any company. Motivation

is the key to creating an environment where optimal performance is possible. There are

several approaches to how employees can be motivated. Some are motivated by financial

(monetary) incentives whilst others are motivated by non-financial (non-monetary)

incentives.

The purpose of this study was to determine whether there is a relationship between the

financial incentives offered by SCC and employee motivation, Specifically, the sh1dy set

out to determine the nature of incentives offered by SCC, the preference pattern of the

employees on the incentives offered by SCC and the relationship between the incentives

offered by SCC and employee motivation as measured by performance.

The study was of a case study approach using descriptive survey design. The study area

was the SCC project in Kisumu District, Kenya and the study population consisted of all

thel22 field officers of the SCC project in the three components that the project

specializes in, namely, Agro forestry, farmer enterprise development and rural finance.

The response rate was 96 out of the possible 122, which translates to 78% response. The

research instruments used were questionnaires, opinion interviews and checklists. The

study used primary data that was cleaned, coded and entered into statistical packages.

Further, data was subjected to descriptive statistics to obtain means, averages, frequencies

and central tendencies. The results were presented in fonn of pie charts, bar charts and

tables.

The study found out that SCC does offer a range of incentives. However, the main

incentives offered are financial, mainly in the form of salaries, leave allowance,

Christmas bonus and transport allowance. But, all in all, the respondents expressed

dissatisfaction with the incentives offered currently by SCC. Thai, management was not

really interested in motivating employees because some incentives like leave allowance

and Christmas bonus had already been scrapped and the salaries had not been revised to

match the rising costs of living. The salaries offered were not commensurate to

employees' qualifications. The transport allowance offered inform of motorbikes was too

minimal since there was a limit on mileage and fuel consumption.

The study recommended that management should: look for ways of diversifying the

incentives offered and reward employees according to their workload and professional

and academic qualifications. The staff would appreciate the reinstatement of Christmas

bonus and leave allowance and improving of salaries to match employees' qualifications,

workload and what other international NGOs are offering.

The results of the study are very important as they could offer a base on which the management of SCC can base their decisions on incentives in future.