The Contribution of Incentive and Benefit Packaging To Improve Job Performance
The Contribution of Incentive and Benefit Packaging To Improve Job Performance
ADVISOR; GIRMA.B
DILLA UNIVERSITY
COLLEGUE OF BUSINESS AND ECONOMICS
PROGRAM OF MANAGEMENT
JUNE, 2013
DILLA, ETHIOPIA
ACKNOWLEDGMENT
Behind our every success and achievement is the almighty “creator “whose charity mercy. Findings and
help are invaluable for our
Secondly we would like to express our sin care and heart to our advisor Girma Balech(MBA) who
devote much of his time and energy to read the paper and make valuable professional advice and
constructive comment
Thidly we would like to offer our special thanks to Girma balech (MBR) who gave to our valuable advice
information preparing this research
Lastly our deepest and heart felt gratitude goes to our family(father, mother and brother. Sister and
friends) for their moral and financial support from the beginning until now.
ABSTACT
The study aimed to see the contribution of incentive and benefit packaging to improve job performance
The general objective the study is to examine and evaluate the contribution of incentive and benefit
package to improve job performance the definition concept purpose and factor s that affect the
practice of incentive and benefit program would be included in the course of this study primary and
secondary of data were collect ed though questionnaires and interview with the head department the
analysis of the collected data was performed using perc entage and tabula method the basic finding of
the research categorized under the topic of final recommendation fro warded based on the conclusion.
CHAPTER ONE
Ethio Tele com service was established in Ethiopia by emperor menilk in 1894 when the
constriction of telephone line Havarti to the capitals city Addis Ababa was commenced then
urban network were continued to expandssatesfactory in another directions from the capital city
available records of the time have, shown that by early 1930 a total route distance of 7:000 pm
of the interurban and village were inter connected.
During the imperial regime, in 1945 Dilla telecommunication was established as ethio tele com
service by the time, the service was limited to only city area through, process in denguerégime
the change, in technology from
outomatic to digital technology Dilla was affected by the change through successivtele
communication, currently Dilla telecommunication is established as corporation the service also
increased internet services mobile service digital data networkservice smart callingsservice bond
multimedia service, and form those the rapid development. Is shown in mobile, phone service
which was established by ETC in 1999 In Dilla Town the telecommunication is expanding its
networkstructure to the rural areas to deliver full andsatisfactory service to improve the quality of
service the corporation is giving trainingprogrammers to the employee, the mission vision value
and proposes of establishment ofthe corporation area.
1. Introduction
1.1. Back ground of the study
Human resource management examines what can or will be done to make people both productive
and more satiated with their working life to understand critical important people in the operation
and cooperative position of the company is inseparable there for two performance of the
organization and proper human resourcedevelopment are the two side of the same coin the
significant that the efficient unfilled in put to the organization lead to success that is the company
and its progress from of human activity.
As it is examines in the above the core management objective, is getting effective result
peoplehence, achieving such forgetrequired good in contrive and benefit package it is satisfy
employees.
Interest through wage reward incentive and different benefit incentive are monitors benefit paid
to workmen in recognition of their outstanding performances incentive pay is form of pay limed
to an employee performances as individual group members or organization member it is a
paymentin addition to the wage and salaries in centime pay also known as “payment for
performance” is the generally given for specific performance result rather than simply for the
time worked variable reward s gruntedaccordingconversions in the achievement specific result
the international labeler office refers to incentive as payment by result but it is appropriate to call
them incentive system.(2006-487 Cary desire). Financial incentive are paid to specific
employees whose work is above standard employees benefit on the other hand are available to all
employees and includesuch things as health and life insurance valuations and child care facilities,
administering benefit to day represent on increasingly specialized expertise because workers are
thebe coming more. Sophisticated in financial matters and are therefore demanding new types of
benefits, payment emphasizing the point of motivation that is the imparting of incentive to
workers for higher production of productivity.
Benefits are compensation “form other form cash it helps employs to attractretail and proved a
source of motivation for employ the variety types of possible benefit and services help employs
failure this offering to attract the right types of employees expect at last a minimum help on
organization compete in the labor market benefit andservice are also significant expense but
employee value them and money are required by low.
Benefit is indirect financial and non-financial payment employee receive for continuing
theiremployment with the company are an impotant parity of just aboutevery employ
compensationthey include things little health and life insurance pensions time of with pay and
child care facilitiesbenefit are majors expanse for most impellers.
Employee benefit account for about one third of wage and salaries core about 28% of total pay
roles with legally required benefit health insures the most expensive singlebenefit cost (carry
desser 2006-776).
K aswathappa 2005, 321 in Maslow need structure benefit may affect various aspect of security
(e.g.) individual needs to cover hospital costs retirement support when unemployed. Or life
insurance money for the familyprotection in case of death but little else in fact if one view the
major dimension of job satisfaction such as scarification with the supervisor coworkers the job
itself pay and work environmentthe benefit is seen as entering into little of this and there for may
have little effect on the employee benefit may in their motivational effect as they are not field to
employee performance but to organization membership.
No day there are different organization in Ethiopia form these organization research selected
service providing organization rather than that manufacturing and merchandising among
different service providing organization current study will focusing on the (Ethio tele com Dilla
Branch).
The study would be given the assumption that poor incentiveactive package benefit practices
have on adverse effect on job performance as waves the achievement of the goals of the
organization.
The company personal tried to assess the problem by asking those who are leaving the company
those who have un satisfied employee how every this is not consistently employed to reduce the
problem to its minimum level besides of the problem persists to flourish in the organization
through time experienced worker are leaving that affects the producing of the organization entire
the new employed acquires the required skill.
Hence study is conducting on theincentive and benefit package and its impact on job satisfaction
and productivity of employees.
General objective
Specific objective
To identify the type of incentive and benefit that motivates employees.
To investigate the effecting less of the organization incentive benefit package.
To assess the contribution of incentive benefit package to job performance.
To recommend the most suitable incentive and benefit that improve job
performances.
To identify areas of problem and strengthen incentive and benefit package in the
organization.
To create awareness on the costly consequence of less incentive of benefit package of the
organization.
The study will help the company to asses’ bottleneck onproductivity of the employees.
To recommend ways that con improves the satisfaction of motivation of the existing
employee of organization.
1.7. Scope of the Study.
If would have been better if the study include more organization but due to time
transport. Material and other constraints the researcher builtconfused to undertake only in
one organization that is ethio tele com in Dilla branch the study would be also delimited
to the incentive and benefit package and their impact on job performance and
productivity of the employee in Ethio telecom Dilla Branch
In the study both primary and secondary type of data would be used regarding the source first
hand data gamed form employee and top level managers of the company secondary data would
captured form different books, research out puts on similar topic, periodic and annual report of
the company,
1.7.4. Research Design
The research would deals about incentive activates and case study in ethio tete com Dilla branch
for sake of appropriate data or information regarding the incentive activates the research
would(consider employee and top level managers .
1.7.5 Sampling design and Techniques
The sampling respondent would be selected form regular, employers, of the company totally
three are 56 worker in the organization the sample size for this study was 25 of the total the
limitation of the size is due to shortage of finance and time,
While selecting respondent simple random technique used, the reason for the usage of this
techniques is employee in the company have similar back grand and education status and to give
than equal chance in order to collect reliable data by reducing personal bias.
The researcher planed or collects the data using questionnaires and structured interview the
quaternaries would distributed to sample respondents and asker reasonable time the distributed in
Stormont be conducted with the department hands-on the others hand secondary data would be
extraditing form different books results output and records of the company.
1.7.7 Data Analysis; afterunderstanding and collecting the required data if would analyzed by
descriptive methodtype of approach like table and percentage.
Chapter Two
Review related Literature
2.1. Concepts of incentive and benefit package.
Human research management is the proper utilization of human in proper position work placeso
that organization and department objective are achieved human resources management is the
function perfumed in the organization that faculties the most effective use of phone (employee)
to achieve individual and organizational goals.
Incentive are monetary benefit paid to workmen in recognition of their outstanding performance
incentive pay is form of pay linked to on employee performance as in dui dual group members or
organization members it is payments in addition on the wage and salaries in centime pay also
known as payment performances thegenerally given for specific performance result rather than
simply for the time worked carry Dessler 2006,
Exploring incentive pay.
Incentive pay or variable pay rewards employee forpoetically or completely affiancing
predetermined work objective incentive or variable pay is as compensation other them base
wages or salaries.
Effective incentive pay system are based on three assumption
- In dividable employee and work team differ in how machthe contribute to the company.
- The company over all performance depends to large degree on the performance of
individual group with in company
- To attract retain and motivate high performance and to be fair to all employee.
Contrasting in contrive pay with tradition pay
In traditional pay plan employee receive compensation has on fixed hurly pay rate or annual
salary annual raise are linked to such factors as seniority and post-performance some company
use incisive pay program that replace all or operation of has pay in order to control neural
expenditures and to link pay to performance.
Traditional cover compensation generally include an annual salary or hourly wage that is
increased periodically on seniority or merit basis company usually based pay rate on the
importance they place on each job within their corporate structure and on the going rate that
each job commands in similar companies.
Individual incentive plans can promote the relationship b/n pay and performance.
Individual incentive plan promote on equitable destruction of compensation within
companies,
Individual incentive plans is their compatibility with individualistic cultures.
Although individual incentive plans contrive effective in certain setting these program
also hove serous limitation
Team based are similar to individual incentive with one expectation each group member
incentive financial reward for the attainment of group goal.
May receive inactive pay based on criteria such as customer satisfaction safety records quality
and production records.
Human resource managers must devise methods for allocating incentive to team members.
The table 3.1. Describes the distribution if respondents by age sex educational level year of
experience and their corresponding salary accordingly 64% the respondents are male and the
reaming 36 are females. With regard to their age above 85.5% of the respondents are young
where the age of the workers below 35 years out this 71.87% of the respondents are below 30
years of age besides their educational level indicated 2.5% are 12th complete and below 40
diploma graduates and the remaining 52 are degree enough so as to handle their tasks
properly. With record to their work experience 20% of the respondent have two and
belowyears of experience with the range 1---to 4 years finally 20% of the respondents have
experience greater than40 years. Even though there are workers with two years of experience
majority of the respondents have worked long ion the company.
3.2. Respondents Feedback regarding.
The existence of incentive program in the company there are many ways of incentive
program it is also differently applied. To the potential workers. The practices of incentive in
Telecom Company for its workers are presented below as table 3.2 reveals.
No 20 80
total 25
Source compiled from questionnaires
The majority of the respondent 80% agreed that there in any practice of incentive program in
the company. The remaining 20% of the respondents believed that is on incentive program in
the company.
Incentive system provides the clearest link between pay and performance or productivity
incentive pay is direct linked to onemployee’s performance or productivity.
No No of respondent percentage
1
19 76
6 24
25 100
What is (are) the bases for
incentive payment?
Performance 10 41.67
Productivity 7 19.17
Accomplishment of assigned 7 29.16
total 24 100
Source compiled from questionnaires.
The purpose of the table 3.4 (item) is to analyze the understanding of the employee about the
has of the incentive payment. As it is indicated in the table 3.4 (item) 76% of the respondent
said yes i.e. we know the base of incentive payment and 24% “No” as is clearly shown in the
table (item).
41.67% of the respondent chooses performance” while 29.6% of the respondent said
“productivity” and 29.17% said accomplishment of assigned task.
3.5. Benefit package program
Employee benefit are indirect form of compensation that are intended to maintain or improve
the gurney of the for employees. Employee benefit are aimed at providing a level of
projection and financial security to workers and to their dependents in the event they die
become ill or otherwise unable to work with regard to this respondent were asked and their
response is presented below.
Vocational benefit
Holy day above
All of the above
total 10
Sources of complied from questionnaires.
Item table describes whether on incentive program is present or not the majority of 68% of
the respondents replied that there is no on incentive program in the company. The remaining
32% of the respondent replied that there is n incentive program in the company.
Item 2 tables we have to understand that out of 10 employee 100% of the respondent who
side there is sick pay benefit program in the company.
3.6 Employee percentage about benefit package of Tele.com Company
Unfortunately money benefit package are thrown together piecemeal and poorly balanced.
There are money reasons for this. This major problem is that combines often add or delete
new benefit without examining their impact on the total package. The key to any successful
benefit package is to plan the package and integrate all of the different components. Thus the
employee were asked whether benefit package is satisfactory or not and their response is
presented in the following table.
Incentive and benefit package of the company sometimes is not well designed and satisfied an
employee in some manner the respondents were asked whether the motive and benefit package
of the company is fair enough or not table has the summary.
Table Employees perception regarding the incentive and benefit package in general
As it is indicated in the above 60% of the respondents suggested that the incentive and benefit
package of the company is not fair enough the remaining 40% of the respondent suggested that
the incentive and benefit package of the company is fair coming every employees. This show
that the incentive and benefit package of the company is not fair enough among the employees.
Respondents were requested to specify their suggestion about the UN fairness of the programs if
their response to the unfairness of the program if their response to the above question is”No”
their justification is organized below.
- The service or benefit they get is not equally treated between the employee
- Lack of paper management in contrive and benefit package
- The incentive and benefit package of the company is mostly deals about the employee
that have high status in the company.
2. 9. Summary of the structured in review with
The department head ofethio tele. Com Company
1What is the existing policy of incentive and benefit package? At present the existing
policy of incentive and benefit package are sick payment holey day payment. Vocational
payment profit sharing payment and pay for performance when all employee show
productive work above the normal work standard employee receive some amount of
money
1. It there any factor that effects on incentive and benefit package in your company?
Yes there are several factors that influence the incentive and benefit program. Some of this is pay
plan legal union. Company policy and the low require minimum wage and working condition for
any government for confect amounts corporate policy.
Chapter Four
Employee in theethio tele com company perception of word. The existing incentive
and benefit package is not good because of unsatisfactory nature of the program and on
fairness of the system and it is not mountain or improve the quality of their life.
The company did not properly design on incentive and benefit package because even
the existing incentive and benefit program.
Is not based on the preference of the employee and the payment also is not galley treated
among the employee when the employee become aware of inequality in the payment system
disappointment and often conflict co result and also in equality on trigger oblige response with
moral down. The package also is not incorporation other essential programs. Generally this
situation adversely affects in the productivity of employee as well as the organization as who ce.
The incentive and benefit paid to employee compare to the work load as well as the work
condition is not enough workers particularity in the production on it are very hussy. They have
no free time and recreation place. Due to this and other condition employee have negative
attitude to word the company and management. Generally employees are not satisfied with their
job.
In the organization there are money factors to implement effectively the incentive and benefit
package. Some of these are pay plan company policy. Low require to minimum wage and
working.
Condition and also employee by itselfdoes not understand the incentive and benefit program
even they receive some amount of reward and service. The company also is not examining the
impact of incentive and benefit package on the total productivity of the organization.
Majority of employee in tele come company is not effective with their work because in
the organization.
There is little job security however some workers are paid very well. Both is has salary as
well as flipsneedless to say employee incentive and benefit programs are very meager.
3.3. Recommendation
Man power Mays agate role in any business organization proper utilization of resource can he
achieved in the existent effective and efficient human resource.
Thereforethe organization including ethio tele com. ComeCompany synovia take care to satisfied
employee withincentive and benefit payment so as to maximize productivity. With this in mind
the researcher triedto recommend the following.
The practice of employee benefit plan in .ethio Tele Com Company should be based on
their member ship of employee within the organization and the incentive payment also
should be based on the performanceemployee a hove the standard work. In addition to
this the design to benefit should be based on the preference of benefit.
The employee age marital status and sex clearly influence the choice of benefit.
Tele.com company is a large diversified company which has long-range strategy of
production high quality of product for the market so as to be commutative advantage the
company should obtain the maximum effort its personnel in support of this the company
should adapt the policy of incentive and benefit pack gage.
In determining payment the organization should assess ruble guardable with rated on
other organization and the organization should find hard to affect and good employee.
APPENDIX I
DILLA UNIVERAITY
SCHOOL OF BUSINES AND ECONOMICS
PROGRAM OF MANAGEMENT
TO RESPONDENTS
Dear respondents this questionnaire is together information about “the contribution of incentive and
benefit packaging to improve job performance, in the case of ethio tele com” so you are politely
requested to answer all questions with maximum care since, your respond will be kept confidence for
the researcher and use purely for academic exercise
GENERAL INSRTRUCTION;
Personal information
Yes no
2. if your answer For question “1” is yes what kind of incentive delivered in the company?
…………………………………………………………………………………………………………………………………………………………………
………… ……………
Yes no
4.if your answer for question “3” is yes what is the bases for incentive payments?
Yes no
Vocational benefits
Yes no
8.does the benefit package of the company improved the job performance of employee?
Yes no
Yes no
INTREVIEW