Employee Motivation And Firm Production And Performance A Case Study Of Megastar Construction Company Ltd Nigeria

Employee Motivation And Firm Production And Performance A Case Study Of Megastar Construction Company Ltd Nigeria

Employee Motivation And Firm Production And Performance: A Case Study Of Megastar Construction Company Ltd Nigeria


TOC o “1-3” h z u HYPERLINK l “_Toc376612568” EXECUTIVE SUMMARY PAGEREF _Toc376612568 h 1

HYPERLINK l “_Toc376612569” TABLE OF CONTENTS PAGEREF _Toc376612569 h 2

HYPERLINK l “_Toc376612570” 1.0 CHAPTER ONE: INTRODUCTION PAGEREF _Toc376612570 h 2

HYPERLINK l “_Toc376612571” 1.1 Strategic Overview of the Study PAGEREF _Toc376612571 h 2

HYPERLINK l “_Toc376612572” 1.2 Problem Statement PAGEREF _Toc376612572 h 3

HYPERLINK l “_Toc376612573” 1.3 Research Objectives PAGEREF _Toc376612573 h 3

HYPERLINK l “_Toc376612574” 1.4 Research Questions PAGEREF _Toc376612574 h 3

HYPERLINK l “_Toc376612575” 2.0 CHAPTER TWO: LITERATURE REVIEW PAGEREF _Toc376612575 h 3

HYPERLINK l “_Toc376612576” 2.1 Firm Performance PAGEREF _Toc376612576 h 3

HYPERLINK l “_Toc376612577” 2.2 Employee Motivation PAGEREF _Toc376612577 h 5

HYPERLINK l “_Toc376612578” 2.2.1 How to Motivate Employees: Maslow’s Theory of Motivation PAGEREF _Toc376612578 h 7

HYPERLINK l “_Toc376612579” 2.3 Other Factors that Influence a Firm Performance PAGEREF _Toc376612579 h 10

HYPERLINK l “_Toc376612580” 2.3.1 Training PAGEREF _Toc376612580 h 10

HYPERLINK l “_Toc376612581” 2.3.2 Rewards PAGEREF _Toc376612581 h 10

HYPERLINK l “_Toc376612582” 2.3.3 Teamwork PAGEREF _Toc376612582 h 11

HYPERLINK l “_Toc376612583” 2.3.4 Performance Appraisal and Innovation PAGEREF _Toc376612583 h 12

HYPERLINK l “_Toc376612584” 2.3.5 Employee Participation in Decision-Making Teams PAGEREF _Toc376612584 h 13

HYPERLINK l “_Toc376612585” 2.3.6 HR Planning PAGEREF _Toc376612585 h 13

HYPERLINK l “_Toc376612586” 2.3.7 Recruitment and Selection PAGEREF _Toc376612586 h 14

HYPERLINK l “_Toc376612587” 2.3.8 Unionisation PAGEREF _Toc376612587 h 15

HYPERLINK l “_Toc376612588” 2.4 Summary PAGEREF _Toc376612588 h 16

HYPERLINK l “_Toc376612589” 3.0 CHAPTER 3: METHODOLOGY PAGEREF _Toc376612589 h 16

HYPERLINK l “_Toc376612590” 3.1 Introduction PAGEREF _Toc376612590 h 16

HYPERLINK l “_Toc376612591” 3.2 Research Philosophy PAGEREF _Toc376612591 h 17

HYPERLINK l “_Toc376612592” 3.3 Research Approach PAGEREF _Toc376612592 h 17

HYPERLINK l “_Toc376612593” 3.4 Research Strategy PAGEREF _Toc376612593 h 19

HYPERLINK l “_Toc376612594” 3.4.1 Questionnaire survey PAGEREF _Toc376612594 h 19

HYPERLINK l “_Toc376612595” 3.5 Sample and Sampling Techniques PAGEREF _Toc376612595 h 20

HYPERLINK l “_Toc376612596” 3.6 Data Collection PAGEREF _Toc376612596 h 20

HYPERLINK l “_Toc376612597” 3.7 Data Analysis PAGEREF _Toc376612597 h 22

HYPERLINK l “_Toc376612598” 3.8 Validity and Reliability PAGEREF _Toc376612598 h 22

HYPERLINK l “_Toc376612599” 3.9 Research Ethics PAGEREF _Toc376612599 h 23


HYPERLINK l “_Toc376612601” 4.1 Overview of the Case Study Company PAGEREF _Toc376612601 h 23

HYPERLINK l “_Toc376612602” 4.2 Overview of the Study Results PAGEREF _Toc376612602 h 24

HYPERLINK l “_Toc376612603” Megastar Employee Motivation System PAGEREF _Toc376612603 h 27

HYPERLINK l “_Toc376612604” Effectiveness of Megastar’s Employee Motivation System PAGEREF _Toc376612604 h 29

HYPERLINK l “_Toc376612605” 4.4 How Megastar can improve its Employee Motivation System PAGEREF _Toc376612605 h 30

HYPERLINK l “_Toc376612606” 5.0 CHAPTER FIVE: CONCLUSION PAGEREF _Toc376612606 h 32

HYPERLINK l “_Toc376612607” 6.0 CHAPTER SIX: RECOMMENDATIONS PAGEREF _Toc376612607 h 35

HYPERLINK l “_Toc376612608” 7.0 PERSONAL DEVELOPMENT PAGEREF _Toc376612608 h 40

EXECUTIVE SUMMARYThe objectives of this study were threefold. To investigate and enumerate the employee motivation system used by Megastar Construction Company, to analyse the impact of employee motivation system on Megastar Construction Company overall production, and to recommend best practices of improving Megastar Construction Company employee motivation system in order to enhance productivity. These objectives were tailored around the overarching aim to investigate and document the link between employee motivation and firm performance as they relate to the case of Megastar.

Data gathered using desk research, questionnaires, and interviews has provided a deeper insight to the effect that Megastar has a formal employee motivation system that is based on several indicators sensitive to employees needs, interests, and aspirations. These pillars include regular employee performance exercises, performance based salary schemes, internal promotions, safe workplace, teamwork and workplace interpersonal collaborations, regular training and career development drills, inclusive decision-making, futuristic human resource planning, and free and fair recruitment and selection drives. Arguably, this employee motivation system can be referred to as receptive and as the analysed data shows, it has impacted positively to Megastar’s operations and performance. In essence, the study has established that this employee motivation system has increased Megastar’s employees’ job engagement levels, low employee turnover, reduced workplace conflicts, increased employee collaboration, enhanced employees’ career development prospects, and enhanced employee-management collaboration.

Overall, the study finds that Megastar’s employees feel that the company is doing relatively well in terms of addressing their needs, interests and aspirations. This is because the offers them competitive salary packages and encourages them to work hard so as to earn promotions and other rewards. Nevertheless, the study finds that Megastar has done very little to encourage its employees to fulfil their collective bargaining rights as well as access competitive medical schemes. To this end, the study recommends that Megastar should allow its employees to join trade unions, take part in collective bargaining, and improve employee medical benefits cover.


1.1 Strategic Overview of the StudyFirm performance is described by Laitinen (2002) as the ability of a firm to achieve excellent results in a defined situation. On their part, Drucker (1977), Torrington and Hall (1995) believe firm performance to be the ability of an organisation to effectively out-perform their competitors in terms of realising profits as per their set organisational objectives vis-à-vis industry metrics. From these positions it can be generally deduced that organizational performance is in most instances characterised by effectiveness and efficiency in the execution of a firm’s mandate. This notion is consistent with Becker and Gerhart (1997) and Torrington and Hall (1995) position that a company’s profit is in most instances viewed as a major output that denotes firm performance because it indicates that an organisation can continue with its daily business.

Firm performance is function of a number of organisational indicators including employee motivation. According to Noe et al. (2000), firm performance is realised when the utility of all factors of production including labour, capital, and entrepreneurship is maximised. For instance, in order to realise product differentiation goals, firms must employ talented employees, reward them with hefty remuneration packages, invest in research and development and acquire modern technology. This position is consistent with Pfeffer (1998, p. 96) postulation that organisational performance is a function of at least seven factors which include employment security, hiring of employees, teamwork, compensation based on performance, training, reduction of distinction barriers, and sharing information within the organisation.

Organisations pursue firm performance in a number of ways. Based on expert analysis by Pfeffer (1998), it is arguable that one of the most rewarding methods of achieving organisational performance is through employee motivation. This is because it gives employees the self-initiative, desire, willpower, capability, competence, and instruments to perform their organisational tasks (Torrington and Hall, 1995). Nevertheless, it is wise to assert that there are no single employee motivation techniques – a motivation technique that works for one employee may not work for another employee. To this end, managers should not be rigid; they should explore multiple motivation techniques. As Maslow theory of needs show, the bottom-line of employee motivation is fulfilling employees’ physiological needs, security needs, social needs, self-esteem needs, and self-actualisation needs.

1.2 Problem StatementMany studies have been performed regarding the influence of employee motivation and firm performance (see for example, Becker and Gerhart, 1997; Laitinen, 2002; Drucker, 1977; Torrington and Hall, 1995; Noe et al., 2000; Pfeffer, 1998). Together, these studies agree that highly motivated employees tend to be highly productive and that firms should fulfil their employees’ needs in order to encourage them to work hard towards the achievement of the set organisational performance goals.

Nevertheless, there are no existing studies tackling how the case study company (Megastar) undertakes employee motivation as a method of enhancing organisational performance. To this end, this study is very important because it will fill a knowledge gap and also create a path that future studies can follow in studying how SMEs in developing countries such as Nigeria can realise high performance through employee motivation. Further, the study will help the case study company to realise its long-term performance goals by maximising the utility of its employees through motivation.

1.3 Research ObjectivesTo investigate and enumerate the employee motivation system used by Megastar Construction Company.

To analyse the impact of employee motivation system on Megastar Construction Company overall production.

To recommend best practices of improving Megastar employee motivation system in order to enhance productivity.

1.4 Research QuestionsWhat employee motivation system does Megastar utilise?

How effective is Megastar’s employee motivation system?

How Megastar can improve its employee motivation system?

2.0 CHAPTER TWO: LITERATURE REVIEW2.1 Firm PerformanceFirm performance is described in various ways. It is described by Laitinen (2002) as the ability of an object to produce results in a defined situation. According to Torrington and Hall (1995), an organisations’ performance is shown by its overall effectiveness in out-performing competitors in terms of profits and overall achievement of the set organisational objectives. In his analysis, Drucker (1977) finds that an organisations’ performance is characterised by both its effectiveness and efficiency. Torrington and Hall (1995) affirm this notion when they posit that company profit is viewed as a major output of an organisation that measures its success. It is also an indicator of the amount of returns of money invested. Profit is also an indication that the organisation can continue with its daily business.

HRM plays a crucial role in enhancing firm performance. According to Noe et al. (2000), HRM enforces policies and structures that concern employees’ behaviour and attitudes. There is a lot of interest by researchers and practitioners on the relationship between HRM and firm performance (see for example, Wright et al 1994; McDuffie, 1995; Huselid et al, 1996; Fey et al. 2000). Fey et al. (2000), for example, view firm performance as entirely influenced by human resources. Further, Huselid (1996) reasons that firm performance entail maximising the utility of the skills of its human resources. On their part, Wright et al. (1994) reason that firm performance can be measured by the level of employee engagement and satisfaction. Further, McDuffie (1995) argues that firm performance can greatly be enhanced if a firm links its HRM policies with its operational strategies.

For organizations to achieve profit they have to sell their products or services in a very competitive global arena. Organizations currently survive in constantly changing environments gripped with global economic change and market competition (McDuffie (1995). The global competition, a fierce evolution that emerged in the 1970s, heightened in the 1980s and became engrained in everyday life in the 1990s (Dyer and Reeves (1995), require that firms improve their performance relative to that of its rivals in order to deliver value to their shareholders. Raw materials can be easily sought and quality of the products is easily achieved by majority of organizations worldwide. In addition, advancement in technology is available at reasonable prices thus enabling companies and organizations with similar products and services to have similar characteristics. An organization needs to have a competitive advantage over others and this is achieved through how they run their internal system (Barney, 1991). As Becker and Huselid (1998) posits, firms can have a competitive advantage over others because of an effective HR system.

Various scholars have different views on factors that influence firm performance. According to Pfeffer (1998, p. 96), for example, there are seven practices that will guarantee organizational performance. These include (a) employment security, (b) hiring of employees, (c) teamwork, (d) compensation based on performance, (e) training, (f) reduction of distinction barriers, and (g) sharing information within the organization. The seven practices all contribute to organizational performance and are discussed in great detail in section 2.2 below. Further, Becker and Gerhart (1997, p. 780) report that human resources should aim to improve two main aspects that are related to organizational performance, that is, generate revenue and improve efficiency.

2.2 Employee Motivation

Employee motivation has been the interest of many scientists (Meyer, 2004). It is described by Rudolp and Kleiner (1989) as “motivation is the development of a desire within an employee to perform a task to his or her greatest ability based on that individual’s own initiative.” Motivation is a phenomenon that is translated in a diverse manner among different individuals. Every individual is unique with their own needs, attitudes, wants, beliefs and expectations. There is no single motivational technique that works for every employee (Kressler, 2003). A supervisor therefore should not think that factors that motivate him individually are the same as those that motivate junior employees. In turn, things that motivate one employee are not the same as those for another employee (Robbins, 2005, p. 170). In addition, the level of motivation between individuals is differs depending on the situation.

For a long time it has been thought that a good salary is a motivational factor for employees regardless of the industry or type of work they perform (Tsang and Wong, 1997). This misconception has misguided supervisors and managers of industrial workers for many decades (Kovach, 1987). This has also led to a discord between employees and managers with both groups having different motivational factors in mind.

Motivation is a very important aspect in the management of human resources. The continuance of an organization relies on the motivation of its employees (Smith, 1994). As Amabile (1993) posits, senior management in an organization need to understand and realise the importance of motivating its employees. Many managers do not realize the effect that motivation can have on their businesses (Frey and Osterloh, 2002). It is important for managers to learn determinants of motivation in a company. Employees who are not motivated will conduct their work with little or no effort, which results to low output. In worst case scenarios, unmotivated employees have been known to exit the company. This in turn will not make the organization achieve its’ goals and objectives. In work places that have constant changing environments, motivated employees help organizations to endure and survive through hardships (Lindner, 1998). She also adds that the most complex role of a manager is to motivate employees. Bowen and Radhakrishna (1991) argue that factors that motivate employees change constantly and therefore managers should always change accordingly.

Employees perform crucial duties and tasks that enable the organisation achieve its goals and objectives. Employee motivation is the desire by an employee to conduct tasks to the best of his or her ability (Rudolp and Kleiner, 1989). According to Jones and George (2003), there are two types of motivation namely intrinsic and extrinsic motivation. Extrinsic motivation involves incentives that are rewarded by the organization, for instance, friendly and secure work conditions, job security and good salaries and wages (Mullins, 2005). It is generally accepted that incentives given to employees, for instance, bonuses and additional responsibilities, increase employee productivity (Armstrong, 2001). Further, and according to Greenberg and Baron (2003), examples of intrinsic motivators include challenging tasks at the work place, recognition at work, personal growth and development, quality of work, achievement, and responsibility.

Motivated employees have been reported to have increased productivity at the workplace (see for example, Greenberg and Baron, 2003). Organizational leaders should ensure that they find out factors that motivate their employees (Jurkiewicz et al. 1998), and put in place company policies and structures that oversee these factors into reality. This is advantageous to the organization as employees will be motivated to work harder for them to achieve their objectives, which are linked to organizational objectives. The outcome is an increase in productivity. A firms’ performance is deeply related to the role played by human resources (Gerhart & Milkovich, 1990) because it’s the human resource management that creates the environment in which they can enforce new policies and structures.

It is imperative that managers do not only focus on extrinsic factors that motivate employees but also intrinsic factors. However, motivating employees is not as easy as it sounds. Currently, many employers focus on monetary incentives as a motivation factor. This however will not motivate an employee for a long period of time. Extrinsic motivators do not drive employees to conduct their work as they primarily satisfy indirect needs. On the other hand, intrinsic motivators on the other hand satisfy a persons’ direct needs thus to a larger extent provides more satisfaction and pleasure. Frey and Osterloh (2002) indicate that an important role of an organization and those who run it is to ensure that the correct form of motivation is instilled in its employees. Organizations should take advantage of factors that motivate its employees to propel the company’s existence (Osteraker, 1999). This will in turn help the company in using and sharing its resources as effectively as it can to ensure achievement of its goals.

2.2.1 How to Motivate Employees: Maslow’s Theory of MotivationMaslow’s motivational theory is also called the needs hierarchy theory. He came up with a theory that tries to explain the internal drive that pushes people towards self-fulfilment (Kini and Hobson, 2002). According to Maslow (1943, 1954), there are five levels of needs that people need to attain to reach self-actualization. In his theory, he describes five needs namely physiological, safety, social needs, esteem and self-actualization (Maslow, 1943, 1954). The theory is portrayed in a pyramid with its base hosting the physiological needs. The base is the largest part of the pyramid signifying that the needs at that level are those attained by everyone. As one goes to higher levels in the hierarchy, the size of the level becomes smaller signifying that fewer people attain the needs as one goes higher.

These needs are fulfilled in a hierarchy or pre-potency meaning that the basic needs first have to be fulfilled before an individual can fulfil the needs at the next stage or upper level (Maslow, 1943; Robbins and Judge, 2008). In essence, and as Kini and Hobson (2002) reason, once needs at a hierarchical level have been satisfied, it is assumed that the motivation for those needs ceases or reduces. Nevertheless, people will always have needs that require fulfilment. As a matter of fact, Nel et al. (2004) opine that whenever one need is satisfied, another need immediately takes its place.

For an individual to be motivated, he or she has to know the current level they are in the hierarchy (Latham and Ernest, 2006). The needs at that level need to be satisfied in order for the individual to move to the next level (Maslow, 1943, 1954). The five levels in the hierarchy are divided into two orders. The two orders are lower order needs and higher order needs. The lower order needs include physiological and safety needs while the higher order needs include social fulfilment, esteem and self-actualization. The lower order needs are achieved externally while the higher ones are achieved internally.

Maslow bases his theory on a couple of assumptions, one being that human beings are beings of perpetual want (Maslow, 1943). Humans want more needs satisfied even when some needs have already been satisfied. People are insatiable in nature and will always want more than they have. Another assumption is that all needs are not at an equal level (Maslow, 1954). Some needs are higher than others, while some are more universal than others. He also assumes that motivation for a need ceases once the need has been fulfilled. The last assumption is that when one need is fully satisfied, another need will replace it.

The first level of needs is physiological needs (Maslow, 1943, 1954). These needs are universal basic human needs that individuals need for daily survival. They include shelter, food, air, water, clothing, warmth, sex and sleep (Lathan and Ernest, 2006). People are motivated to fulfil these basic needs in order to guarantee survival. The drive to have these basic needs influences human behaviour. These needs cannot go unattended for long. Employees need to have these fulfilled before they are motivated to conduct any work. For instance, a hungry employee will not be able to focus on his work well. However, if he’s satisfied and can relieve his hunger his output is much greater. The only way that employee’s meet these needs is through the wages they are paid and the breaks that are scheduled at work for instance lunch breaks, end of shifts among others. Fair wages guarantees that a person’s basic needs will be met (Maslow, 1954). Once people have satisfied these basic needs they then move to satisfy those at the next level.

Safety needs are at the second level in Maslow’s hierarchy (Maslow, 1943, 1954). Once physiological needs are satisfied then individuals are motivated to fulfil safety needs (Stephens, 2000). People need to feel safe and live in an environment without danger. Everyone wishes for a secure environment in both physical and emotional terms. Employees need to feel safe at the workplace (Forsyth 2006). For an employee, safety needs are linked to fear of loss of employment. A worker will seek job security to be able to satisfy this need. At the work place, employees need to feel that they work in a safe environment free from hazards. They also need to have pensions, medical cover, consistent salary and insurance cover that assure them of security. Employers also need to ensure that they minimize employee lay-offs as this causes a rift in their workers safety needs.

The third level of needs is social needs (Maslow, 1943, 1954) which refer to love, friendships and intimacy (Stephens, 2000). Human beings are social animals that have a desire to fit into groups. People want to feel the need of belonging and associate themselves with others. Individuals yearn for to be accepted by others and to have affection shown towards them. At the work place, employees need to relate to others and build good friendships. There is a tendency of people at work to form and join groups and show their affiliation to these groups. Managers should also build and foster good relationships with their junior employees (Greenberg and Baron, 2003). Junior employees usually seek a sense of belonging from their senior managers (Kreitner, 2007). Motivation for social needs only come in play when safety needs are fulfilled. Employees should be encouraged to work in teams as this generates team spirit. Social activities like departmental outings foster good working relationships.

Once social needs are satisfied, individuals are motivated to fulfil the fourth level of needs namely esteem needs (Maslow, 1943, 1954). These needs include opportunities to use skills, recognition by others, appreciation by others, respect and power (Stephens, 2000). Esteem needs are grouped into two, those related to ones’ self and those related to status. A person needs to have self-respect and self-confidence. Once an individual is able to attain that then they will seek to be recognized by others. The feeling of recognition by others is more valuable to an individual in terms of motivation than money (Mullins, 2005). An employees’ reputation is an esteem need that can be satisfied through a promotion at work. It is important for employers to create events at work where people are awarded for their hard work. The individual will then be recognized and appreciated by others. To fulfil their employees’ esteem needs the management should design jobs that are challenging, allocate more responsibilities to employees and encourage them to work hard for the collective good.

Self-actualization is the last and highest level in Maslow’s hierarchy of needs (Stephens, 2000). It is the hardest level of the hierarchy and is achieved by few people (Fincham and Rhodes, 2005). This is the level whereby an individual has attained and achieved what they desired to achieve (Maslow, 1943, 1954). In this level, a person is motivated to accomplish something he or she holds important in their life. An employee at this level is motivated to for instance be exceptionally good in his area of specialization. It is very rare for people to satisfy this need, however, those who have satisfied these needs tend to be wise, truthful and reiterate that their lives have meaning. Employers can enable workers to fulfil these needs by creating opportunities for people to fully grow in their careers and encourage creativity.

A major role of a manager is motivation of employees (Jurkiewicz et al., 1998). It is important for a manager to know the levels on Maslow’s hierarchy. It is crucial for them to know the specific level that their employees are on the hierarchy. Employees are different and unique individuals with the same needs, but they could be at different levels of the hierarchy (Osteraker, 1999). Managers therefore should use these needs as motivators in the work place.

2.3 Other Factors that Influence a Firm Performance2.3.1 TrainingTraining is a key function of HRM. According to Buckle and Caple (2004), training is an endeavour to improve the skills and knowledge of employees through a planned and systematic format. Specific skills for specific tasks are imparted to employees during trainings. Trainings are an attempt to improve the employees’ ability to gain a skill through learning. Employees’ attitudes and competencies are also enhanced through trainings. The underlying aim of trainings is to help employees to perform better in their daily tasks which translate to an improvement in firm performance (Paul and Anantharaman, 2003; Rothwell et al., 1995). Training has been reported to be linked to organizational performance (Rothwell et al., 1995). Drucker (1995) is of the opinion that training in an organization can be extremely costly for an activity that aims to improve human productivity.

Trainings help employees to grow within an organization. The skills and knowledge imparted on employees’ increases their capacity to conduct organizational tasks (Rothwell et al., 1995). This enables the organization to source for individuals with improved skills for higher jobs from within the organization. Trainings can lead to promotion of deserving employees. A study has shown that employees who are in organizations with promising opportunities for trainings, growth and development retain their jobs (Ghebregiosgis and Karsten, 2007). Effective training also helps the organization to cut on costs of time spent in recruiting newly appointed individuals in jobs. Employees who are transferred or promoted also undergo trainings (Nankervis et al., 1999). Overall, trainings enable employees to not only achieve organizational objectives and contribute to their job satisfaction.

2.3.2 RewardsRewards are also known as compensation and it involves the payment of employees for work performed. Organizations use rewards to either retain or motivate its workers. Motivated employees in turn put in more effort in their daily tasks leading to achievement of organizational goals (Risher, 2000). Employees are unique individuals and as such have different motivational factors. An organizations’ reward system is important as employees gauge their value to the organization from the compensation they receive (Applebaum and McKenzie, 1996). Rewards can be broadly grouped into two categories namely tangible and non-tangible rewards. Tangible rewards are those that can be touched, for instance, monetary rewards (Paul and Anantharaman, 2003). Non-tangible rewards are those that one cannot touch and feel, for instance, a promotion, or a positive acknowledgement at work.

Rewards can also be classified into two groups namely merit pay and incentives (Kanungo and Mendonca, 1992; Applebaum and McKenzie, 1996). Employees receive merit pays after they’ve accomplished organizational objectives. An example of a merit pay is a bonus. Bonuses are usually used to reward employees after they have achieved the organizations’ defined targets (Ghebregiosgis and Karsten, 2007). They are one-off incentives usually in the form of hard cash. Incentives are used to compensate workers for future accomplishments (Kanungo and Mendonca, 1992). The accomplishments are viewed to positively influence an organizations’ performance which translates to achievement of its goals and objectives. Workers have been compensated through various incentives such as stock purchase and to a certain extent, profit sharing. Rewards can also be given to employees who work in teams and this has proven to have a positive impact on productivity.

2.3.3 TeamworkIngram (1996) describes teamwork as “two or more people who co-operate together with a common goal”. According to Robbins et al (2004, p. 280) a team is “a group whose individual efforts result in a performance that is greater than the sum of the individuals’ contribution”. The productivity from the group of people working in concert is much greater than the productivity achieved by a single individual. Using this ideology, employees who actively participate in teams greatly influence the output of activities. In addition, team members are unique individuals who have different skills and knowledge. This compensates for the lack of abi