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SA Journal of Human Resource Management
ISSN: (Online) 2071-078X, (Print) 1683-7584
Page 1 of 11 Original Research
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Authors:
Vincent L. Mbukwana1
Ayansola O. Ayandibu1
Aliaons:
1Department of Business
Management, University of
Zululand, KwaDlangezwa,
South Africa
Corresponding author:
Ayansola Ayandibu,
ayandibua@unizulu.ac.za
Dates:
Received: 13 Sept. 2022
Accepted: 02 Aug. 2023
Published: 21 Nov. 2023
How to cite this arcle:
Mbukwana, V.L., & Ayandibu,
A.O. (2023). Impact of
performance incenves on
employees’ performance in a
university in KwaZulu-Natal.
SA Journal of Human Resource
Management/SA Tydskrif vir
Menslikehulpbronbestuur,
21(0), a2114. hps://doi.
org/10.4102/sajhrm.
v21i0.2114
Copyright:
© 2023. The Authors.
Licensee: AOSIS. This work
is licensed under the
Creave Commons
Aribuon License. Introducon
It is argued by Thibault Landry et al. (2017) that monetary and non-monetary rewards are
omnipresent and essential in today’s workforce. The authors go on to say that if incentives are
chosen and delivered in a meaningful way and are structured to express respect and gratitude,
they are not adequate to inspire workers who are constantly seeking flexibility, mastery, and
connection at work. Therefore, knowing how to better inspire workers in today’s competitive
business environment requires initiatives that go beyond cash and cash-like incentives.
Organisations would benefit from shifting towards a well-designed approach (Thibault Landry
et al., 2017).
Companies employ different types of incentives to inspire their employees to accomplish targeted
performance in order to meet corporate goals. Internal and external incentives, monetary and
non-monetary incentives, performance-based rewards, and member-based recognitions are
examples of these sorts of rewards (Okeke et al., 2020).
Methods for rewarding and recognising employees are critical elements of human
resource (HR) strategy. The monetary and psychological rewards offered to a worker for
doing well at work are referred to as rewards. Organisations cannot simply imitate the
incentives and recognition methods of many other companies. Furthermore, an incentive and
recognition programme should be established to complement a company’s distinct culture
(Madhani, 2020).
Orientation: Rewarding employees for meeting the organisation’s targets is crucial in order to
motivate staff members to improve their performance.
Research purpose: The aim of the study was to investigate if the incentive plans given to the
employees at a comprehensive university in KwaZulu-Natal province have a positive impact
on employee performance.
Motivation for the study: Studies linking the role of performance incentives in driving
performance in higher education, specifically academics, are limited, and this study aims to fill
this gap of knowledge in the literature.
Research approach/design and method: The study followed a qualitative approach where
data were collected through interviews. An investigation was conducted with academics in
the Faculty of Commerce, Law and Administration on the role of performance incentives in
driving performance at a faculty from a comprehensive university in KwaZulu-Natal. The
collected data were analysed using NVIVO.
Main findings: The overall findings of the study showed a strong link between performance
incentives and employees’ performance. It was found that financial incentives in the form of
performance bonuses influenced the employees to work harder to meet the performance
targets.
Practical/managerial implications: The results of this study will assist human resource
managers in higher education institutions to identify financial and non-financial incentives
that seek to drive performance.
Contribution/value-add: The results of the study revealed a strong link between performance
incentives and employee performance. For this reason, it will add value to the reward strategies
employed by universities in improving performance.
Keywords: performance incentives; employee performance; motivation; performance based
pay; Job satisfaction.
Impact of performance incenves on employees’
performance in a university in KwaZulu-Natal
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Literature review
Rewards and appreciation systems are intended to recognise
workers who have excelled in their jobs and to express
genuine ‘thank you’ for a particular job well performed.
Organisations remunerate workers for their good work,
which serves to improve morale and inspire them.
Organisations are budgeting a remuneration scheme on the
basis of the prior year’s sales and spending. But many of the
organisations have been following the same strategy for a
certain amount of time as described in their HR policy
(Kumari, 2019).
The incentives and appreciation will turn out to be
wonderfully beneficial to keep the workers encouraged to
work tremendously and meet the goals, and to stick to the
organisation. The importance of employee appreciation
cannot be reduced, specifically if they have tonnes of enticing
open doors in front of them (Kumari, 2019).
The incentive scheme is critical for the success of employees.
As for employee efficiency, a higher incentive scheme would
be more efficient. Job success too is function of human
resource management (HRM). System is crucial for succession
and achievement of the objectives of the company (Ibrar &
Khan, 2015).
Incentives have a strong positive relationship with job
satisfaction. Furthermore, the results also indicated that
both financial incentives including salary, share options,
allowances and fringe benefits and indirect payments other
than salary (bonuses and overtime) and non-financial
incentives including working conditions, recognition,
promotions and training facilities have a strong positive
relationship with job satisfaction (Kumarapeli, 2019).
As Ali et al. (2016) argue, an organisation’s performance is
dependent on employees’ dedication, inventiveness, and
motivation incentives, whether physical or intangible.
These are the key factors that can help in the growth of
productivity, dedication, and motivation for employees
work, all of which are connected with a high degree of job
satisfaction. As a result, companies pay attention to the
use of incentives in a balanced manner, both physical
and intangible, as it contributes to work satisfaction or
organisational performance.
It is argued by Thibault Landry et al. (2017) that monetary
and non-monetary rewards are omnipresent and essential in
today’s workforce. The authors go on to say that if incentives
are chosen and delivered in a meaningful way and are
structured to express respect and gratitude, they are not
adequate to inspire workers who are constantly seeking
flexibility, mastery, and connection at work. Therefore,
knowing how to better inspire workers in today’s competitive
business environment requires initiatives that go beyond
cash and cash-like incentives. Organisations would benefit
from shifting towards a well-designed approach (Thibault
Landry et al., 2017).
Performance-based pay
A study conducted by Seng and Arumugam (2017) revealed
that monetary incentives and job motivation are essential
qualities for improving employee performance. Financial
rewards and job satisfaction are also seen to be crucial not
only for improving employees’ performance, but also for
companies to improve efficiency and get more inspired
to work.
Seyama and Smith (2015) found that monetary incentives are
an indication of a company’s gratitude for the contributions
of its employees. Furthermore, given the opinion that
academics are usually underpaid, they feel that monetary
incentives might encourage employees.
The findings of the research conducted by Al-Belushi and
Khan (2017) suggest that monetary incentives have a direct
influence on employee motivation. An appealing financial
incentive would increase the motivation of the majority of
workers to work hard. As a result, it may be assumed that
employees prefer and anticipate financial rewards.
According to Aguinis et al. (2013) performance-based
pay means that individuals, teams or organisations are
rewarded based on how well they perform on the job.
Therefore, employees receive rises in pay based exclusively
or partly on job functioning. These increases can either be
added to an employee’s base salary or be once off bonuses.
Initially, in many organisations within South Africa,
contingent pay plans were used only for top management
(Armstrong, 2012).
Personal skill will not allow individuals to function at a high
level of efficiency until there is a reward system set up that
encourages internal rewards and thus pushes individuals to
work extremely hard (Chandrawaty & Widodo, 2020).
Aguinis et al. (2013) further point out that when a
‘performance management system has a direct relationship
with a reward system, performance measurement and
performance improvement are taken more seriously’.
Seyama and Smith (2015) state that workers are sceptical of
the performance management system because they see it as
a company approach that is incompatible only with nature
and aims of higher education institutions (HEIs). The authors
believe that the incentive method not only has a limited
impact on driving excellent performance behaviour, but it is
also a source of dissatisfaction owing to implementation
errors, vague award criteria, a lack of openness regarding
ratings, and the reward’s small monetary worth.
According to Khan and Baloch (2017), employees operate
inside a company who deserve something for every effort in
exchange from the company. To meet the expectations of the
employee, a pre-defined pay structure is developed, which
the worker knows before receiving the reward.
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Most companies compete to thrive in this unpredictable and
ferocious business climate. Motivation and efficiency of
workers are important resources for the survival of any
company in the long term. On the one hand, success
evaluation is important to the administration of the company,
as it demonstrates the evolution and accomplishment of the
enterprise. On the other hand, there is a favourable association
between employee morale and operational performance
(Dobre, 2013).
A performance bonus is a payment that is made to employees
for achieving a specific set target. It is agreed to pay it to one,
a team, or all staff, based on criteria determined by
leadership to incentivise previous accomplishments,
including achieving the target profit or some key tasks for
the institution, or in a completely voluntary fashion, but
outlined as rewards as a forward-looking plan. The
incentive scheme is not voluntary: the payment or reward
is provided if the prior, agreed-upon requirements are
achieved (Bardot, 2014).
Njanja et al. (2013) propose that staff should be informed
of the link between their performance and the incentives
they earn. Organisations should adopt a performance
management system that aids in employee performance
planning and monitoring via the use of appropriate
measurement instruments.
Job sasfacon
Human resource management is becoming increasingly
essential for modern-day organisations since employees
and their expertise are by far the most significant factors
influencing an institution’s production. Employee happiness
is among the most important components of HRM.
Organisations need to ensure that employee happiness is
high among their workforce, since this is a prerequisite
for enhancing productivity, responsiveness, efficiency and
service recognition (Ali & Anwar, 2021).
Workers are significant players in every business since they
decide the growth of the sector. It is imperative that
organisations must aim to foster work fulfilment for their
workers since contented people perform better (Nayoan
et al., 2021).
Job satisfaction is a complicated phenomenon since it is
affected by a variety of elements, including psychological,
social, cultural, environmental and financial considerations.
The type of work satisfaction is an essential element in
determining employee job satisfaction. The set of sentiments
and attitudes that personnel have about their occupations is
referred to as job satisfaction. In reality, an employee’s overall
mentality towards his or her employment may be considered
job satisfaction (Stankovska et al., 2017).
The world is experiencing rapid global development.
Organisations are required to engage in any kind of growth.
Organisations must be backed by high performance of
employees in order to realise the institution’s vision and
mission. Performance may be influenced by two factors:
rewards and job satisfaction. Internal and external rewards
are both possible (Pramono, 2021).
De Simone et al. (2018) state that job satisfaction is the most
important aspect that organisations should be working on
to reduce the turn over intentions among employees within
the organisation. The results of the study suggest the
development of self-efficiency, work engagement and agency
capacities to increase job satisfaction for workers. The results
further recognised the value of implementing actions which
entail feedforward approach and aim setting methodology
to develop self-efficacy, skills in self-regulation, participation
in work, and satisfaction at work to reduce the purpose of
nurses to produce a turnover.
A study conducted by González-Gancedo et al. (2019) states
that career-related characteristics affect employee satisfaction,
overall health and work participation. To improve employee
satisfaction and work engagement levels, the company will
make interventions on these features.
Job satisfaction evaluates intrinsic and external motivation,
which results in productivity. Commitment to employment
internalises the mission of an organisation. Job participation
focuses the efforts of a person to produce positive results. In
philosophical terms, job engagement should develop the
connection among employees as well as organisational
performance, and must offer considerably more than jobs
currently provided by job satisfaction (Daley, 2017).
Darma and Supriyanto (2017) argue that job satisfaction
moderates the impact of pay on employees’ performance.
When an employee is happy with the remuneration
offered by an organisation, the individual’s performance
improves. Remuneration and work happiness are important
factors in increasing performance of employees. To promote
organisational effectiveness, managers must sustain job
satisfaction.
Stankovska et al. (2017) suggest that job happiness is one of the
most important elements influencing employee performance
and increasing their level of activity and attendance at work.
Academic staff satisfaction results in long employment at the
same institution and higher productivity at work.
Employee movaon
Rewards and recognition are critical corporate tools that
drive individuals to achieve company objectives (Aktar &
Pangil, 2018).
In a study conducted by Delaney and Royal (2017), it was
found that the degree to which employees themselves feel
inspired to do much more than is appropriate is the highest
indicator of overall commitment, preceded by the degree
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to which employees are encouraged to do more than is
expected of them. This suggests that motivational investments
optimise utility by generating the maximum return on overall
commitment.
Rewards are incentives obtained as a result of doing a job,
delivering a service, or executing a task. One of the most
essential strategies for motivating members of staff is
rewards. The purpose of the incentive system is to produce
successful outcomes (Jeni et al., 2020).
Okoli et al. (2020) argue that employee recognition and work
fulfilment all point in the same direction. That is, the more
individuals are recognised for superior performance, the
happier they will always be with respective work and, by
default, the company.
In today’s workplace, there are several methods for employee
motivation. Organisations around the world have used
various techniques and approaches to boost staff motivation.
Nonetheless, it appears that the strongest motivation for
workers is something which is truly meaningful to them.
Furthermore, various people may have different beliefs and
approaches; hence, understanding employees’ requirements
and adopting suitable motivating tactics may assist in
boosting the level of motivation (Gleeson, 2016).
In a study conducted by Saraih et al. (2021), the results
revealed that motivation exhibited a substantial and
unfavourable association with employee performance.
According to the study’s findings, motivation did not have
a significant influence on employee performance.
Stachowska (2016) states that the successful encouragement
that contributes to a high level of employee commitment
should have a positive impact on the quality of the activity of
the company and the enhancement of the productivity of
work. However, it is not an easy job to form the successful
motivational solutions. Employees, like everyone else, require
incentives to execute their jobs. Staff needs inspiration in the
job in order to maintain excellent performance.
Every successful firm is supported by a dedicated workforce,
and dedication is the result of motivation and job satisfaction.
It is the energy that drives people to work towards the
company’s success. Without dedication, the company would
be unable to achieve performance. To get a competitive edge,
organisations must have competitive personnel policies
and procedures. Motivation is a powerful stimulant that
influences human behaviour. Because no two people have
the same attitude or conduct, organisations must develop
methods that will please the group as a whole rather than
simply an individual (Varma, 2017).
Delaney and Royal (2017) believe that motivation gap
constitutes a genuine opportunity for workers to be involved
in a way that aligns effectively and increases shareholder
returns.
Ferinia et al. (2016) state that workers who are driven to work
will contribute to the success of the company and perform
well. It is imperative that each supervisor ensures that all
employees are extremely motivated. Highly motivated
employees will have a strong sense of belonging to the
company, improved quality of work, improved efficiency
and increased output of employees.
Each company is trying to get its workers engaged in order to
attain organisational objectives. Sustaining the motivational
level of employees is one of the problems facing the HR
specialist. They need to figure out ongoing new ways to
inspire the workers. Motivation is often associated with
employee satisfaction (Jaiswal et al., 2017).
A need to inspire employees in these conditions, as well as
the realisation that if the economy gets better, best talent may
quit for other possibilities, has resulted in a renewed focus as
well as a white-hot spotlight on employee engagement (Scott
et al., 2010).
Darma and Supriyanto (2017) companies are able to detect
and assess intrinsic motivation that an employee receives
through job satisfaction, and supplement it with external
incentive as needed, for which companies should consider
motivational factors.
According to Dicko (2020), personal development and tough
assignments are the most powerful motivators for personnel.
Nonetheless, the study found that the characteristics that
inspire employees and those that keep them at work are not
the same. While there may be other ways to improve
employee motivation, the approach of integrating monetary
and non-monetary incentives has been shown to be much
more successful.
The primary goal of cash rewards for successful execution is
to stimulate and encourage individuals to thrive in their job
performances. As a result, cash rewards play a vital part
in any business environment, either public or private
(Al-Belushi & Khan, 2017).
Abdi Mohamud et al. (2017) indicate that monetary rewards
and job enrichment have significant and positive effects on
employee performance, while there is positive and
insignificant effect of training on employee performance.
Results also indicate good relationship between motivation
and employee performance and that employee motivation
influences employee performance.
Sitopu et al. (2021) aver that employee performance can
produce either positive or negative outcomes. Worker
motivation is related to the employee’s motive for working,
the employee’s satisfaction, and the worker’s attitude in the
workplace. Motivation of employees will influence work
discipline in absenteeism and tardiness.
Some authors (Aktar et al., 2012; Hamukwaya & Yazdanifard,
2014) articulate that rewards are often used to enhance
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motivation or performance attraction and retention of human
capital. As noted, rewards increase work engagement
(Bussin & Toerien, 2015) while heightening job satisfaction
(Ram & Prabhaker, 2011).
According to Thomas’s (2009), model of intrinsic rewards,
represents the sense of seriousness of the roles, duties or the
task that an employee performs, that formulate part of a
greater drive and portrays job worth. It has been disclosed
by researchers (Aktar et al., 2012; Jacobs et al., 2014; Rafiq
et al., 2012; Ram & Prabhaker, 2011) that intrinsic rewards
have a noteworthy impact on organisation’s job satisfaction,
motivation, work engagement and work performance.
Furthermore, a total reward system is rewarding workers
exclusively through pay and financial benefits.
A study conducted by Asaari et al. (2019) reveals that
employees believe that other benefits such as income and
recognition are significant in increasing employee motivation
and happiness. Such incentives motivate employees to
perform better. As a result, organisations need to devise
plausible reward systems to inspire employees; otherwise,
the consequences will be dire, including absenteeism.
Methodology
In order to investigate if the incentive plans and recognition
plans given to the employees at this comprehensive
university drive performance amid the coronavirus disease
2019 (COVID-19) pandemic, this study followed an inquiry
approach in which the researcher interacted with the
participants to understand their views and relied primarily
on interviews (Denzin & Lincoln, 2018; Li et al., 2018; Nardi,
2018) as a method and as a measurement tool (Salkind, 2019).
Due to the COVID-19 pandemic where there were restrictions
in terms of meeting face-to-face or through physical contact,
telephonic interviews were conducted. The researcher made
use of telephone interviews and Microsoft Teams to conduct
interviews with 18 academic staff members in the Faculty of
Commerce, Administration and Law. This was informed by
the fact that starting from the 10th participant, the responses
were consistent as a result a law of saturation was used
where after the 18th participant, the data collection process
was stopped. The sample was broken down into two
different categories of academics namely, two Deputy
Deans, two Heads of Departments, four Senior Lecturers,
and 10 Lecturers. For the purpose of one-on-one interviews,
the questions were modified in order to enhance the open-
ended discussion.
The richness of the material generated by qualitative interviews
was, without doubt, the main reason they were used (Gaudet
& Robert, 2018). For the complex situation presented in this
study, interviews were deemed appropriate for collecting in-
depth information, for having a wider application (Kumar,
2020) and for understanding the different views of the
participants (Hennink et al., 2020). Interviews not only
provided the advantage of the ability to ask questions and to
listen (Torre et al., 2018), they also allowed room for probes
(Bougie & Sekaran, 2020; Leedy & Ormrod, 2021; Nieuwenhuis,
2021) and for questions to be explained (Kumar, 2020). Probes
were detail-oriented probes, elaboration probes and
clarification probes (Nieuwenhuis, 2021).
Interview guide
The interview protocol (also known as an interview schedule
or interview guide) used in this study comprised a
questionnaire written to guide interviews (Fouché &
Schurink, 2018). The guide was used during telephonic
interviews containing open-ended items (Du Plooy, 2017)
to ensure a high response rate (Du Plooy-Cilliers, 2018).
According to Johnson and Christensen (2020), an interview
protocol is a data collection instrument that includes items,
response categories, instructions, and so forth. It is a script
prepared by the researcher and the interviewer reads it and
also interprets it if necessary to the interviewees. It (the
interview protocol) provided the researcher with a set of
predetermined questions that were used as an appropriate
instrument to engage the participant and designate the
narrative terrain (Monette et al., 2014). This led to what was
covered being transferred into a transcript. Bertram and
Christiansen (2021) define a transcript as a written document
that reflects what was said during an interview and it
sometimes includes comments on gestures. Eventually, rich
descriptive data from the interviews helped the researcher to
understand the respondent’s construction of knowledge and
reality (Nieuwenhuis, 2021).
The researcher prepared list of topics ensured that the
interviews had some degree of substantive homogeneity
(Gaudet & Robert, 2018). This study’s interview guide used
an eight-stage process advanced by Pallant (2016).
Populaon
A population is a group of elements or cases, whether
individuals, objects, or events, that possess the characteristics
the researcher aims to investigate and who conform to
specific criteria (Casteel & Bridier, 2021; Nwaigwe, 2022;
Rudansky-Kloppers, 2021). This study’s population was 56
academic staff in the Faculty of Commerce and Law.
Sampling
Sampling is divided into probability and non-probability
methods. Certain types of non-probability sampling usually
rely on available subjects (Brink et al., 2017). Purposive
sampling, as a non-probability sampling technique, was used
in this study. While collecting data, the saturation principle
was also employed. The researcher had to stop when the
responses from the respondents are similar and no new
information aroused from these interviewees.
Sampling encompasses selection of people and the research
site (Conlon et al., 2020; Durrheim & Painter, 2021). This
study’s sample consisted of employees at the various levels
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of academics in the Faculty of Commerce and Law who were
selected because they conformed to specific criteria (Johnson
& Christensen, 2020) and possessed characteristics that the
researcher aimed to investigate (Morgan & Sklar, 2018;
Nardi, 2018). Participants were selected on the basis that they
were ‘information rich’ (Cash et al., 2022; Rudansky-
Kloppers, 2021) and illuminative; that is, they were able to
offer useful manifestations of the phenomenon of evaluation
(Cohen et al., 2018). This way, they were able to answer this
study’s research questions.
Inquiry approach involves situations in which researcher
uses inductive approach to discover more information on the
subject matter. This was done through an in-depth interview
in order to get more information from the respondents.
Social constructionist was used in this study. Interpretivist
approach was also used as the research paradigm. The above
is basically aligned to qualitative approach in order to get
deep understanding of the subject matter.
Findings
This study examined the role of performance incentives in
driving performance at a faculty from a comprehensive
University in South Africa. This study intends to recommend
practical incentive and recognition plans that can be used to
drive performance in HEIs. To achieve the objective of this
study, interviews were conducted with 18 participants in the
Faculty of Commerce, Administration and Law. The selected
participants were academics ranging from the Dean, Deputy
Dans, Professors, Associate Professors, Senior Lecturers, and
Lecturers. The interview with each participant lasted for
approximately 15 min. The interviews were transcribed and
analysed using NVivo, version 13.0 (Lumivero Community,
Denver, Colorado, USA). The NVivo, on the other hand, was
used to analyse the data that pertains to the views expressed
by the participants.
The coding involves identifying and categorising key themes
and patterns within the data. Here are the steps that were
used in coding and analysing qualitative data:
1. Data preparation.
2. Initial coding.
3. Codebook development.
4. Redesign codes.
5. Themes development.
6. Analysis and interpretation.
7. Discussion, and also adding literatures to support the
discussion.
8. Description of the participant information.
Table 1 shows the information on the participants
demographics, including gender, race, age, education and
tenure.
Information from Table 1 suggests that in terms of gender,
55.6% of the participants were males, whereas 44.4% were
females. The findings showed that 83.3% were Africans,
11.1% were Indians, while 5.6% constituted white people.
Concerning age, 33.3% of the participants fall within 30–39
years, 40–49 years and 50–59 years, respectively. Furthermore,
the findings indicated that 61.1% of the participants hold a
doctorate, whereas 38.9% hold masters. Besides, the results
suggested that 33.3% of the participants have worked for
more than 10 years in the institution, 27.8% have worked
between 0 and 2 years, 22.2% have worked between 7 and
9 years, and 16.7% have worked between 3 and 6 years.
The overall findings showed a strong link between
performance incentives and employees’ performance. The
participants expressed that financial incentives in the form
of performance bonuses made them work harder to meet
the performance targets set by the university. Moreover, the
participants indicated that the possibility of promotion has
made them work harder because it leads to an increase in
salary. Therefore, based on the findings, it can be argued
that three performance incentives influenced employee
performance in the university, namely: financial incentives,
performance bonuses and the possibility of promotion.
Moreover, the findings indicated that financial incentives
led to increased employee job satisfaction and employee
motivation in the university. The themes that support the
research findings are shown in Figure 1.
The findings showed that incentives such as financial
rewards, bonuses and promotions were the key predictors
of employee performance in the university. These findings
underscore the importance of the incentive theory, which
states that workers are motivated by a need for rewards
and reinforcement. According to the motivation principle,
individuals will behave in ways that they think will result
in a reward while avoiding acts that could result in penalties.
The following discusses the findings on the various incentives
that impacted employee performance within the university.
TABLE 1: Descripon of the parcipant informaon.
Biographical
variables
Category of biographical
variable
Frequency %
Gender Male 10 55.6
Female 844.4
Total 18 100.0
Racial group African 15 83.3
White 1 5.6
Indian 2 11.1
Total 18 100.0
Age 30–39 years 6 33.33
40–49 years 6 33.33
50–59 years 6 33.33
Total 18 99.99
Level of educaon Masters 738.9
PhD/Doctorate 11 61.1
Total 18 100.0
Tenure 0–2 years 5 27.8
3–6 years 3 16.7
7–9 years 4 22.2
10 years and above 6 33.3
Total 18 100.0
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Theme 1: Financial incenves
The findings revealed that financial incentives increased
employee performance in the university. All the participants
(N = 18) have agreed that financial incentives are the primary
predictors of employee performance in the university. For
instance, most of the participants have expressed that the
financial incentives offered by the university had motivated
them to work harder to their target. Others have also
expressed similar opinions that financial incentives, when
applied consistently and transparently, will increase
employee performance. Below are some of the iterative
voices of the participants that support the research findings.
Participant 1 said that:
‘Financial incentives in the form of performance bonuses have
made other staff and I work much harder.’ (P1 Prof, Male,
Doctorate)
Participant 2 also indicated that:
‘Financial incentives definitely increase employee performance
and productivity.’ (P2 Mr, Male, Masters)
Participant 4 expressed that:
‘Money is not the only motivating factor, but it impacts
performance if you apply it well and adequately for the intended
purposes. Most employees are more concerned about what they
receive in exchange for their effort. Therefore, financial
incentives, to a large extent, influence employee performance.’
(P4 Dr, Female, Doctorate)
Participant 6 said that:
‘Not directly, but one gets motivated. Finance is what we need.
Improve the standard of living.’ (P6 Ms, Female, Masters)
From the study, it is evident that financial rewards or
incentives served as the predictors of employee performance
in the university. These findings also reaffirmed the results
of previous empirical research which established a strong
positive association between financial rewards and employee
performance. Osa (2014) points out that that financial rewards
to employees are the tangible rewards that usually come in
form of financial and money-driven incentives, used to
‘reward employee performance’. In a similar study, Seng and
Arumugam (2017) concur that monetary incentive and job
motivation are the essential qualities for improving employee
performance. Financial rewards and job satisfaction are
also seen to be crucial not only for improving employees’
performance, but also for companies to improve efficiency
and get more inspired to work.
Okeke et al. (2020) argue that several organisations establish
financial incentives to inspire their employees to accomplish
targeted performance to meet corporate goals. The findings
underscore the importance of the incentive theory of
motivation that proposes that workers are motivated by a
need for rewards and reinforcement. Mabaso and Dlamini
(2018) reveal that financial incentives such as payment,
promotion and bonuses positively impacted employee
performance.
Furthermore, the study probed the participants on whether
financial incentives influence job satisfaction and motivation.
Most of the participants have confirmed that financial
incentives played an essential role in employee job satisfaction
and motivation in the university. The participants argued
that financial assistance might contribute towards feeling
valued as an employee. Others have also expressed that
financial incentives significantly impact job satisfaction.
When high salaries or bonuses are given to employees,
they become satisfied with their jobs, positively affecting
job performance. The following are some of the quotes that
support the findings concerning the impact of financial
incentives on job satisfaction in the university.
FIGURE 1: Impact of performance incenves on employees’ performance.
Performance
incenves
Financial
incenves
Performance
bonuses
Performance
Performance
Performance
Performance
Job
sasfacon
Employee
movaon
Promoon
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Participant 2 said that:
‘All financial incentives do is that it compels one to tolerate one’s
job and to deliver on one’s commitments because the stakes are
high. I think that financial incentives are merely one dimension
of job satisfaction. Other important dimensions have nothing to
do with financial incentives, e.g., working flexible hours,
pleasant work environment, supportive colleagues, being in a
senior position, contribution to the development of the economy
and society at large.’ (P2 Mr, Male, Masters)
Participant 5 indicated that:
‘The more you get money, the more you are satisfied. We are
more satisfied when we get it.’ (P5 Dr, Male, Doctorate)
Besides, the participants indicated that financial incentives
have a strong motivation because the losses will be enormous
if one does not deliver, given that line managers monitor staff
performance. Here are some few quotes from the interviews
that support the impact of the financial incentives on
employee motivation.
Participant 3 expressed that:
‘It has a strong motivation because the losses will be enormous if
one does not deliver, given that line managers are monitoring
staff performance.’ (P3 Prof, Female, Doctorate)
Participant 7 mentioned that:
‘Financial incentives motivate employees to excel in the
workplace. After implementing the financial incentives,
employees are more motivated to achieve the key performance
areas and are more inclined to document their evidence as they
achieve their goals.’ (P7 Dr, Male, Doctorate)
The findings obtained from this study are also consistent
with previous research (Al-Belushi & Khan, 2017), which
states that monetary incentives have a direct influence on
employee motivation. Besides, Wei and Yazdanifard (2014)
confirmed that ‘monetary and financial rewards lead to
satisfaction over the short-term’. Mabaso and Dlamini (2018)
believed that in terms of short-term benefits, ‘tangible
extrinsic rewards’ may be advantageous to heighten
employee’s level effort and reduce discontent.
Moreover, it has been found that the scale of the monetary
incentives of these schemes tends to be a strong motivating
factor amongst other features of the financial incentive
structures. In turn, this effect is influenced by the rise in the
allocation and substantive fairness experienced by staff when
their employer has a successful pay scheme that allows
workers to earn significant cash incentives in addition to
their regular salary (Uieşi, 2016). Thus, an appealing financial
incentive would increase the motivation of the majority of
workers to work hard.
In their study, Seng and Arumugam (2017) discovered that
monetary incentive and job motivation are the essential
qualities for improving employee performance. Financial
rewards and job satisfaction are also seen to be crucial not
only for improving employees’ performance, but also for
companies to improve efficiency and get more inspired
to work.
Theme 2: Performance bonuses
Apart from the financial incentives, the study discovered that
performance bonuses also influenced employee performance
in the university. The majority (N = 12) of the participants
argue that performance management acted as an incentive
towards improving their performance. Moreover, they
opined that performance bonuses were strong motivational
tools because the losses will be significant if one does not
deliver, given that line managers are monitoring staff
performance. The following are some quotes from the
interviews that give credence to the findings.
Participant 3 said that:
‘It has a strong motivation because the losses will be significant
if one does not deliver, given that line managers are monitoring
staff performance.’ (P3 Prof, Female, Doctorate)
Participant 6 indicated that:
‘Financial incentives in the form of performance bonuses have
made my staff and I work much harder.’ (P6 Ms, Female,
Masters)
The results of this study agreed with previous empirical
research.
Theme 3: Promoon
The study further found promotion to be one of the financial
incentives that influenced employee performance within the
university. A substantial number of participants (N = 10)
have indicated they were motivated by the promotion
opportunities available within the university. Below are some
of the interviews’ quotes that support the above findings.
Participant 1 expressed that:
‘The possibility of promotions has also made many of us work
hard because being promoted is on a higher salary bracket.’ (P1
Prof, Male, Doctorate)
Participant 4 said that:
‘Some of us are more concerned about future promotion in the
University. One of the ways a person can excel in his/her work is
when being promoted to a higher position. Of course, staff
promotion is a very vital issue in academic institutions. This
incentive may have positive or negative implications on staff
performance.’ (P4 Dr, Female, Doctorate)
Participant 11 noted that:
‘For me, the most important concern will be the possibility of
promotion. Promotion comes with an increase in salary and
other benefits. I know that most of our colleagues are more
concerned about the opportunity for promotion to positions
such as senior lecturer, associate professor, or full professor.
There is this belief that when people are promoted, they are
Page 9 of 11 Original Research
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inspired to work harder to meet the organization’s expectations.
This can translate into increased employee and organizational
performance.’ (P11 Ms, Female, Masters)
In addition to the above findings, the study discovered that the
size of the incentive reward matters in the university. The
participants expressed that higher performance management
scores lead to increased performance bonuses. The participants
further argued that the expectations of an increase in
performance bonuses would translate to an increase in
employee performance. Below are some of the interview
quotes that give credence to the research findings.
Participant 6 expressed that:
‘If one scores highly on the performance management
submission, the performance incentive paid out is high, which in
turn motivates one to work harder for future incentive bonuses.’
(P6 Ms, Female, Masters)
Participant 9 indicated that:
‘I think it does, but there should be uniformity; the larger, the
more.’ (P9 Dr, Male, Doctorate)
Contrary to the above views, one of the participants argued
that the size of the incentive does not matter at all. The
following are the view expressed by the participant in
support of the findings.
Participant 2 said that:
‘It doesn’t matter at all, and I am saying so because the more
incentive employees get, the more they want. In essence,
employees would never be enough of what they are getting;
hence, size doesn’t matter.’ (P2 Mr, Male, Masters)
The above findings are supported by a study conducted by
Anwar and Abdullah (2021) that employee performance
and the use of rewards and promotion systems are strongly
correlated.
Recommendaons
This study makes the following recommendations:
• The university should consider both financial rewards in
order to improve performance.
• The university should look at its promotion policy and
include other aspects as requirements for promotion.
• The university should consider other forms of recognition
starting at a departmental level up until the university
level.
• The management team of the university needs to also
look into the size of the performance bonus to differentiate
top performers to non-performers.
Suggestions for further studies:
• This study focused on one Faculty at the University.
A further study can be conducted to include
other faculties or also include Professional Services
staff.
• A similar study can be conducted at other Universities in
a different province in order to compare between
institutions, provinces and for valid conclusions to be
made nation-wide.
• A study can be conducted to review HR policies around
the issues of performance incentives.
Scope and limitations of the study:
• This study focused on staff at the Faculty of Commerce,
Administration and Law at the University which is
situated in the KwaZulu-Natal province. Sampled
participants were deputy deans, head of departments
and academics. These categories of staff represent the
population of the Faculty of Commerce, Administration
and Law at the University.
• This study made use of a purposive sampling technique
and, in this case, some key informants were not willing to
participate in the study. The research was conducted only
in one out of the 26 HEIs in South Africa. The major
limitation in this study is that Professors and Associate
Professors within the Faculty also serve as the deputy
deans and heads of departments, which resulted to a
limit in terms of the number of participants at those
two levels.
Conclusion
This study aimed at examining the impact of performance
incentives of employee performance. The overall findings
showed a strong link between performance incentives and
employees’ performance. The participants expressed that
financial incentives in the form of performance bonuses
made them work harder to meet the performance targets set
by the university.
From the foregoing it is evident that the management needs
to pay attention to the manner in which the incentives are
paid to differentiate between the best performer and the
non-performer.
Acknowledgements
Compeng interests
The authors declared that they have no financial or personal
relationship(s) that may have inappropriately influenced
them in writing this article.
Authors’ contribuons
V.L.M. hereby certifies that this article is the result of their
own work and effort, which was overseen by A.O.A.
Ethical consideraons
Ethical clearance to conduct this study was obtained from
the University Research Ethics Committee. (No. UZREC
171110-030 PGM 2021/140.).
Page 10 of 11 Original Research
hp://www.sajhrm.co.za Open Access
Funding informaon
The authors received no financial support for the research,
authorship, and/or publication of this article.
Data availability
Data sharing is not applicable to this article as no new data
were created or analysed in this study.
Disclaimer
The views and opinions expressed in this article are those of
the authors and are the product of professional research. It
does not necessarily reflect the official policy or position of
any affiliated institution, funder, agency, or that of the
publisher. The authors are responsible for this article’s
results, findings, and content.
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