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Oromia State University
The Effect of Leaders’ Motivational Incentives on Employees Job
Performance: The Case of Federal Public Sectors in Addis Ababa
MA Thesis
BY
Moges Temesgen
A Thesis Presented to the School of Graduate Studies of Oromia State
University in Partial Fulfillment of the Requirement for Degree of Masters
of Arts in Leadership and Change Management
June, 2018
Bishoftu, Ethiopia
THE EFFECT OF LEADERS’ MOTIVATIONAL INCENTIVES ON EMPLOYEES JOB
PERFORMANCE: THE CASE OF FEDERAL PUBLIC SECTORS IN ADDIS ABABA
A THESIS PRESENTED TO THE SCHOOL OF GRADUATE STUDIES
OF OROMIA STATE UNIVERSITY IN PARTIAL FULFILLMENT OF
THE REQUIREMENT FOR DEGREE OF MASTERS OF ARTS IN
LEADERSHIP AND CHANGE MANAGEMENT
BY
MOGES TEMESGEN
ADVISOR
FIRDISA JEBESSA (PHD)
JUNE, 2018
BISHOFTU, ETHIOPIA
THE EFFECT OF LEADERS’ MOTIVATIONAL INCENTIVES ON EMPLOYEES JOB
PERFORMANCE: THE CASE OF FEDERAL PUBLIC SECTORS IN ADDIS ABABA
Submitted by: MogesTemesgen __________ __________ Signature Date
Approved for submittal to thesis assessment committee
Firdisa Jebessa (PhD) __________ __________
Signature Date
Oromia State University
School of Leadership and Governance
Department of Human Resource Management and Leadership
As the members of the Examining Board of the final Master of Art (MA) open defense, we
certify that we have read and evaluated the thesis prepared by Moges Temesgen. The effect
of Leaders’ Motivational Incentives on Employees Job Performance: The Case of
Federal Public Sectors in Addis Ababa and recommended that it be accepted as fulfilling
the thesis requirement for the degree of: Master of Art (MA) in Leadership and Change
Management
_______________ _______________ _______________
Chairman Signature Date
_______________ _______________ _______________
Internal Examiner Signature Date
_______________ _______________ _______________
External Examiner
Signature Date
STATEMENT OF THE AUTHOR
First, I declare that this thesis is my bonafide work and that all sources of material used for
this thesis have been duly acknowledged. This thesis has been submitted in partial fulfillment
of the requirements for an advanced (MA) degree at Oromia State University, School of
Leadership and Governance, Department of Human Resource Management and Leadership
and is deposited at the University/College library to be made available to borrowers under
rules of the Library. I solemnly declare that this thesis is not submitted to any other institution
anywhere for the award of any academic degree, diploma, or certificate. Brief quotations from
this thesis are allowable without special permission provided that accurate acknowledgement
of source is made.
Name: Moges Temesgen Signature: ______________
Oromia State University, School of Leadership and Governance
Department of Human Resource Management and Leadership
Date of Submission: ________________________
ACKNOWLEDGEMENTS
Had it not been with the assistance of several people, this study would have not been possible.
First and for most, the author would like to express his sincere gratitude to his research
advisor, Dr. Firdisa Jebessa, for his invaluable comment, professional guidance and
dedication in this study ever since the write up of the proposal.
The author would like to thank the Ethiopian Meat and Dairy Industry Development Institute
(EMDIDI) for allowing him to participate in this study program and for the financial support
to this study.
He would like to express his sincere gratitude to Mr. Assaminew Shewangizaw, Animal Feed
Product, Research and Processing Industry Development Directorate Director at EMDIDI, for
his guidance during the proposal preparation. He also thanks him for the support in data
handling and analysis, and unforgettable brotherly approach, which allowed him to
successfully complete his postgraduate program.
He thanks Mr. Addisu Teferi Lecturer of Hawasa University support to him throughout this
study.
He recognizes and appreciates the encouragement of the Oromia State University lecturers.
The support and love of my wife, Mrs. Meserete Feleke and all my sons and I love all my
concerning families.
ACRONYMS AND ABBREVIATIONS
ANOVA Analysis of variance EMDIDI Ethiopian Meat and Dairy Industry Development Institute
FPS Federal Public Sectors of Ethiopia
MOFED Ministry of Finance and Economy Development
MOI Ministry of Industry
MOLFRD Ministry of Livestock and Fishery Resource Development
PCA Principal components analysis
SPSS
Statistical Packages of the Social Science
ii
TABLE OF CONTENTS
ACKNOWLEDGEMENTS I
ACRONYMS AND ABBREVIATIONS II
LIST OF TABLES V
ABSTRACT VI
CHAPTER ONE: INTRODUCTION 1
1.1. Background of the Study 1
1.2. Statement of the Problem 3
1.3. Objectives of the Study 5
1.4. Research Questions 6
1.5. Significance of the Study 6
1.6. Scope of the Study 7
1.7. Limitation of the Study 7
1.8. Operational Definitions 8
1.9. Organization of the Paper 9
CHAPTER TWO: LITERATURE REVIEW 10
2.1. Theories and Concepts of Incentives 10
2.2. Leaders’ Motivational Incentives 11
2.3. The Effect of Leaders’ Motivational Incentives on Employees Job Performance 13
2.4. Linkages and Extents of Incentives and Employees Performance 14
2.5. Reducing Absenteeism as Employees’ Job Performance Indicator 16
2.6. Job Satisfaction as Employees’ Job Performance Indicator 16
2.7. Conceptual Framework 17
CHAPTER THREE: RESEARCH DESIGN AND METHODOLOGY 18
3.1. Description of the Study Area 18
3.2. Study Approaches 18
3.3. Research Design 18
3.4. Sample Size and Sampling Techniques 19
3.5. Data Collection Tool 20
iii
3.6. Data Analysis 21
3.7. Validity Test 21
3.8. Reliability Test 22
3.9. Ethical Issues 22
CHAPTER FOUR: RESULTS AND DISCUSSIONS 22
4.1. Profile of the Respondents 23
4.2. Principal Components Loadings of Items 24
4.2.1. Principal components loadings motivational incentives items 24
4.2.2. Principal components loadings of employees job performance items 27
4.3. Reliability Analysis 28
4.4. Relationship of Motivational Incentives and Performance Dimensions 29
4.5. The Relationship between Appreciation on Performance Indicators 32
4.6. The Effect of Motivational Incentives on Job Performance Dimensions 35
4.6.1. Linkages of leaders’ motivational incentives to employees’ job satisfaction 35
4.6.2. Linkages of leaders’ motivational incentives to employees’ reducing absenteeism 38
4.7. Linkages and Extents of Motivational Incentives and Performance Dimensions 41
4.8. Motivational Incentive Preferred to High Employees' Job Performance 44
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS 44
5.1. Summary 45
5.2. Conclusions
5.3. Recommendations
43
44 REFERENCES 45
APPENDIX: QUESTIONNAIRE 53
LIST OF TABLES
Table 1: Profile of the Respondent 23
iv
Table 2: Principal components loadings motivational incentives items 25
Table 3: Principal component loadings of employees’ job performance items 26
Table 4: Reliability of measurement instrument 27
Table 5: Correlations of independent variables and job performance dimensions 28
Table 6: Coefficients of correlations between variables 31 Table 7: Model summary for multiple regression of analysis on job satisfaction dimension 33
Table 8: ANOVA for job satisfaction dimension 33
Table 9: Coefficients of predictor variables on job satisfaction dimension 34
Table 10: Model Summary multiple regression of analysis on reducing absenteeism 35
Table 11: ANOVA for reducing absenteeism 36
Table 12: Coefficients for the relationship between predictors and reducing absenteeism 36
Table 13: Model summary for stepwise method for job satisfaction 38
Table 14: Model summary for stepwise method for reducing absenteeism 39 ABSTRACT
The purpose of the study was to investigate the effects of leaders’ motivational incentives on
employees’ job performance at Federal Public Sectors in Addis Ababa. Case study design
was employed at Finance, Livestock, Industry and Public Service and Ministries in Addis
Ababa following a mixed approach. The research instrument was a structured questionnaire
and interview questions. A total of 250 employees of these ministries constituted the sample.
Pearson’s correlation analysis and linear regression were employed to examine the
relationship between dependent variable and the independent variables. Trust, honest,
collaborative work environment, appreciation with positive recognition and ”difference” to
society were found to be leaders’ intrinsic motivational incentives. Promotion, participation,
recognition and freedom collectively were found to be leaders; extrinsic motivational
incentives. Appreciation, freedom and recognition were the most important significant
predictors of job performance in terms of job satisfaction and reducing absenteeism.
Appreciation and freedom contributed 37.5% and identified to be significant predictors of job
satisfaction job performances. Recognizes the extra effort was identified to be a significant
predictor of employees’ job performances explained by reduced absenteeism. An interesting
finding of the research is that appreciation contributed 30.7% and is considered more
v
important that significantly predict and linked to job satisfaction dimension of employees’
job performance. Fair evaluation, protection, and payment were found to be positive
insignificant predictors of employees’ job performances in the studied Federal Public Sectors
in Addis Ababa. Thus the current provision of motivational incentives through fair evaluation
(fairness), protection and payment are somewhat weak and hardly contribute for better
employees’ job performance. Employees who work harder and perform well and meet their
targets should be motivated by their respective organizations by giving them a special
treatment in terms of incentives like promotion with fair evaluation, protection and better
payment to induce others to follow their footsteps.
Keywords: appreciation, incentives, leaders’ motivation, performance,
vi
CHAPTER ONE: INTRODUCTION
1.1. Background of the Study
Leaders’ motivational incentives and employees’ job performance are important topics of
study because it matters that the public sector can attract, retain and motivate employees who
are capable of delivering on the complex objectives of the public sectors. Public sector is a
term used to describe those outfits owned and managed by the government, federal, state or
local. Thus, the existence of public sector can be attributed to the prevalence of political and
social ideologies, which depart from the premises of consumer choice and decentralization of
decision making (Chukwuemeka et al., 2014). Public sector means those areas of societal
activity directly owned, funded and managed by the State as opposed to private sectors which
are organized and owned by individuals and groups (Nwali and Nkwede, 2011).
Motivational incentives are the important elements used to encourage employees for
contributing their best effort to generate innovation ideas that lead to better services
functionality and furthermore, improve public sector performance both financially and
nonfinancially. Bandiera et al. (2017) state that offering motivational incentives is one
potential strategy to address both the aims of attracting stronger candidates and motivating
better job performance in the public sector. These motivational incentives are broadly two
types, namely extrinsic and intrinsic. Recently, Makki and Abid (2017) define intrinsic
motivation as the self-desire to find new things and new challenges, to assess one's potential,
to observe and to gain knowledge. It is influenced by an interest or enjoyment in the task
itself, and exists within the individual rather than depending on external pressures or a desire
for reward. Intrinsic motivational incentives are that behavior which an individual produces
because of the pleasant experiences associated with the behavior itself (Mosley et al., 2012).
Examples are receiving positive recognition, appreciation, and a sense of achievement and
meeting the challenge.
Extrinsic motivation refers to the performance of an activity in order to gain a desired
outcome and it is the opposite of intrinsic motivation (Makki and Abid, 2017). Extrinsic
motivation comes from influences outside of the individuals. According to Ndungu (2017),
extrinsic motivation incentives which provide extrinsic motivation which in turn encourage
better performance and intrinsic motivational incentives which likewise promote intrinsic
motivation which lead to better performance. Makki and Abid (2017) indicate that there is a
positive correlation between intrinsic and extrinsic motivation and employees’ job
performance. Mosley et al. (2012) describe extrinsic motivation as the behavior performed,
not for its own sake, but for the consequences associated with it. Examples include salary,
benefits and working conditions. Extrinsic motivational incentives come from the
organization as money, perquisites or promotions from supervisors and co- workers as
recognition (Beer and Walton, 2014).
As job performance of employees is significant for public service, the management should
consider improving performance of workers in their companies by encouraging them to do
their tasks and duties as efficiently and effectively as possible. Ndungu (2017) indicates that
staff individual performance is shaped by the nature of the incentives or rewards, attitude of
the staff and knowledge of reward schemes. Employees who are motivated and excited about
their jobs carry out their responsibilities to the best of their ability and production numbers
increase as a result. Unmotivated employees are likely to spend little or no effort in their
jobs, avoid the workplace as much as possible, exit the organization if given the opportunity
and produce low quality work. On the other hand, employees who feel motivated to work are
likely to be persistent, creative and productive, turning out high quality work that they
willingly undertake (Ganta, 2014).
Leaders could motivate their employees through motivational incentives for a job well done.
Leadership may be seen in effect in all kinds of social situations, and it is especially
apparent, where the situation demands that people work together toward common goals
(Babatunde and Emem, 2015). Leadership is a function of management; leadership styles
have their effect on group or individual within an organization. Leadership is the process of
initiating group activities toward goal setting and goal attainment (Sougui, 2015). An
organization is called as an efficient if it optimally can convert its resource input into output
(Ali & Ahmad, 2009). However, organizational performance solely depends upon, how much
talented and motivated are its personnel and its talent management team. The leader and their 2
workforces underneath are bridged by the level of performance (Bass et al., 2003). In the
same line, the success of public sectors only rests upon the performance of the employees
and the leadership. On the part of the employees their undaunted efforts, diligence and
efficiency leading to the desired objectives are the replica of various motivational incentives
(Iqbal et al., 2015).
The outcome from a motivated employee will produce high level of productivity since they
are enjoying their work. Therefore, they feel satisfied in the workplace which resulted in
lower absenteeism and reducing turnover rate. It is not an easy task especially for the
managers to retain highly motivated employees within the organization as they are the
valuable assets of the organization to achieve success in the future (Kreisman, 2002).
Employees are the human capital to the organizations, and performance of them within an
organization which can lead to organizational prosperity or failure (Salleh et al., 2011).
According to the report of MPSHRD (2016), the total numbers of permanent civil servants
under public sector of the country were 1,509,491. Out of these 132,812 were employed
under Federal Public Sector Ethiopia (MPSHRD, 2016).The public sectors are the main
instrument of the state and play important roles in the Ethiopian economies and their
employees are the best sources of delivering good services to their customers. In case of
using human beings to provide services, it is not enough to merely rely on the number of
people engaged, their qualification and experience or their ability but remunerating them
appropriately is also of paramount importance. Age old technique of carrot and stick does not
work in today’s environment and managers need to revolutionize the way they motivate
people and get the desired output and reward employee (Forson, 2012).
1.2. Statement of the Problem
Public sector means those areas of societal activity directly owned, funded and managed by
the State as opposed to private sectors which are organized and owned by individuals and
groups (Nwali and Nkwede, 2011). The notion that people are motivated to work in the
public service as a result of altruism, a desire to serve, or a wish to have an impact on society 3
is a long-standing one (O’Riordan, 2013). It is closely associated with the idea of public
service ethos, which is rooted in an understanding that the public service is different from the
private sector, both because of the tasks it performs and the behaviors it expects of its
employees (O’Riordan, 2013). The benefit of human resource is measured to be one of the
most important advantages of any organization; and in order to acquire the results with the
highest efficiency and effectiveness from human resource, motivation of employee is very
essential (Priya and Eshwar, 2014).
To administer motivational incentive programs which will encourage employees to improve
their work performance and productivity are challenges for leaders. Besides, different people
are motivated by different factors. Understanding what motivates employees is a complex
process, and to inspire and guide them to perform in alignment with the interest of the
organization, managers/leaders should pay great attention to examine how and which
motivational incentives that perceives as motivating and improving employees job
performance (Olubusayo et al., 2014).
The public sectors of Ethiopia have a worsening problem of in providing appropriate public
services to customers and being problems of good governance. Despite the Government of
have been undertaken salary increments to employees, subsequent price raise many
Government sectors are losing a number of workers. Intermittent motivational incentives
programs for employees and demotivated employees are the challenges for public sector
leaders’ in Ethiopia. Employee motivation has always been a central problem for leaders and
managers (Ganta, 2014). The main problem that most organizations face is whether the
organization staffs are motivated to perform at their jobs and whether employees find their
work interesting and meaningful (Ritz et al., 2016). Against a backdrop of global recession,
many governments are increasingly seeking to reform their public service, reducing cost and
increasing efficiency and effectiveness in the delivery of services (O’Riordan, 2013). With
that in mind, it inspires to carry out research in public sector, into the effect of motivational
incentives on employee job performance. It is the human resource amongst other factors of
production in the organization which really makes a distinction.
4
Few studies have been conducted on employee motivation by different researchers, like
Asfaw et al. (2015) conducted research on the impact of training and development on
employee performance and effectiveness. Tizazu (2015) conducted research on employee
motivation and its effect on employee retention in Ambo Mineral Water Factory. However,
these studies were conducted on private sectors. The problem is there is lack of research on
leaders’ motivational incentives effect on the employees’ job performance in public sectors
of Ethiopia. These actual problems of the sectors aroused the researcher interest to assess the
leaders’ motivational incentives affecting the employees’ job performances. Thus, the study
can allow policy makers, firstly, to consider and revise the current motivational incentives in
general and secondly, to focus on employees’ retention so that the sectors can improve the
quality of the public service by maintaining experienced public service workers. This study is
however also necessary because it will help with identifying the incentive current provided
and what kind of motivational incentives are lacking and required, as the case may be, needs
to put in place to earn employees commitment and productivity. Therefore, this study is an
invaluable resource in helping organizations identify and maximize on ways to motivate
employees whilst mitigating employee job satisfaction and reducing absenteeism.
1.3. Objectives of the Study
The general objective of the study is to investigate the effects of leaders’ motivational
incentives on employees’ job performance at Federal Public Sectors (FPS) in Addis Ababa.
The specific objectives are:
1. To investigate the relationship between leaders intrinsic motivational incentives and
employees job performance FPS in Addis Ababa,
2. To investigate relationship between leaders extrinsic motivational incentives and
employees job performance FPS in Addis Ababa,
3. To assess the extents leaders’ motivational incentives are linked to employees on job
performance FPS in Addis Ababa ,
4. To identify the kind of leaders’ motivational incentive that results in high employees’ job
performance.
5
1.4. Research Questions
The research questions that were addressed in this study include the following.
1. How do leaders’ intrinsic motivational incentives affect employees’ job performance FPS
in Addis Ababa?
2. How do leaders’ extrinsic motivational incentives affect employees’ job performance
FPS in Addis Ababa?
3. To what extents leaders’ motivational incentives are linked to employees on job
performance FPS in Addis Ababa?
4. Which type of motivational incentive is preferred for getting high employees' job
performance?
1.5. Significance of the Study
Motivational incentives lead to the success of the performance of an organization. The study
is an invaluable resource in helping organizations identify and maximize on ways to motivate
employees whilst mitigating employees’ job satisfaction and under-performance at FPS. The
study also recommended a motivational incentive framework that could suite to achieve a
better employees' performance in the FPS, and which leaders’ motivational incentives are
more effective and relevant with their organization
This study finding could contribute to the existing knowledge on factors that can enhance job
performance in public sectors. The results might have practical importance as leaders’ of
service organizations may use it to motivate their employees to improve job performance.
The study recommended a motivational incentive framework for the public sector that how
these leaders’ motivational incentives had more effective in job satisfaction, enhancing job
satisfaction and valued outcomes of employee in the FPS. The findings of this study might
important to various leaders especially in FPS and may help them to understand employee
behavior better. The findings of the study therefore provide vital information to policy
makers and human resource leaders of the public sector to either consolidate or re-think ways
6
of motivating employees. The findings assist the leaders in any other organization at large
that face the dilemma of understanding how to motivate their employees.
1.6. Scope of the Study
For the relevance of the intended research, in this study the various intrinsic and extrinsic
leaderships’ motivational incentives were used as the independent variables. Employee job
performance dimensions; job satisfaction, reducing absenteeism and achievement were used
as dependent variables. Factors such as the demographic variables were included in the
study. Most theories of motivational incentives and employee performance concepts were
considered. Due to limitation of time available to complete the study and the vast nature of
public sector, the scope of this study was limited to select FPS in Addis Ababa. Thus, the
geographical scope was selected Federal Ministries and their respected branches and
divisions operating in Addis Ababa.
Organizationally, the scope of the study was limited to four Ministries of Federal Public
Sectors in Addis Ababa; Ministry of Industry (MOI), Ministry of Finance and Economy
Development (MOFED), Ministry of Livestock and Fishery Resource Development
(MOLFRD) and Ministry of Public Service and Human Resource Development
(MOPSHRD). Besides, in terms of time scope, this study is a cross-sectional study that
focused on the status of motivational incentives and employees’ job performance.
1.7. Limitation of the Study
Limited resources and time constraints affect to incorporate all Federal Public Sectors (FPS)
of in Addis Ababa, Regional Public Sectors and those geographically located branches out of
Addis Ababa under the selected Ministries. The present study the data are limited to leaders’
motivational incentives and employees’ job performance in selected public sectors located in
Addis Ababa city. The study also had its share of limitation in the sampling frame which
only considered federal level public sector and therefore the results might not be generalized
or extrapolated to the whole public sector or to other types of organizations of the country.
7
There was less participation from respondents due to the busy schedule during working
hours.
There was limited time to have face to face meeting to explain any confusion with the
questionnaires. There were also some difficulties in getting the employees’ responses to the
questions because of their workload and the responsibility they have.
1.8. Operational Definitions
Leader: A leader is an individual, while leadership is the function that the individual
performs. Besides, an individual within an organization who have authority are often referred
to as a leader, regardless of how they act in their job.
Extrinsic motivation: It is motivation that comes from things or factors that are outside the
individual. For example being motivated to work hard at the office because you are looking
for a promotion is a type of extrinsic motivation. Social recognition, money, fame,
competition or material achievements are all examples of extrinsic motivation.
Intrinsic motivation: It is motivation that comes from within. It comes from the personal
enjoyment and educational achievement that derived from doing that particular thing. For
example for people who love music, their motivation to practice the instrument, attend
classes, is intrinsic motivation. Intrinsic motivation is crucial in today's work environment.
Research shows that it is a key factor in performance and innovation. At a personal level,
intrinsic motivation makes employees work fulfilling. It's a major reason for deciding to stay
on a job. It helps to keep employees stress level down.
Employee job performance: It is the attainment of performance is the result of efforts that
have been done and can be measured by certain indicators such as job satisfaction, reducing
absenteeism, achievement …etc.
Job satisfaction: The term job satisfaction reflects a person’s attitude towards their job and
the organization and can be defined as an employees’ emotional reaction towards their work
environment based on the evaluation of the actual results against their expectations
8
Absenteeism: The term absenteeism refers to failure to report to work. The definition itself
tells the failure of the organization process, if the employee fails to follow the set of rules and
standards of the organization. Absenteeism is a type of spontaneous action which threatens
the organization to fall in danger as it leads to the disruption of the daily processes.
1.9. Organization of the Paper
The study is presented in four chapters. The first chapter which is the introduction covers the
background of the study, problem statement, objectives of the study, research questions,
significance of the study, as well as the scope and limitations of the study. This is followed
by chapter two which reviewed extensive related empirical literature on the subject matter.
Among the various topics to be covered include, motivational incentives and employees’
performance. Chapter three looked at the research design and methodology which comprises
the research design, the research population, sample and sampling technique. It also
considered the data collection and data analysis. Chapter four is dedicated to the result and
discussion which includes the findings of the effects motivational incentives, linkages and
extents to job performance dimensions. The paper also contained conclusion,
recommendations and references lists.
9
CHAPTER TWO: LITERATURE REVIEW
2.1. Theories and Concepts of Incentives
Individual employee is motivated by different incentives or benefits and it is important to
know how they are motivated and what can satisfy them in order to encourage them to have
right attitudes to work which will invariably enhances employee performance and
organizational productivity. The incentive theory is one of the major theories of motivation
and suggests that employees are motivated to do things out of a desire for incentives
(Bernstein, 2011).
The public sector structure is comprised of different departments in which the employees
work as the basic units with different capacities. In this regard, the basic responsibility of a
leader is to raise the moral values, working capacity and ultimately the output graph of the
sector (Avolio and Bass, 2004). Leadership is the process of influencing and supporting
others to work enthusiastically towards achieving objectives (Elqadri et al., 2015).According
to Sundi (2013) leadership has two dimensions which include: (a) Active, leaders supervise
and look for deviations of various rules and standards, and taking corrective action, (b)
Passive, leader intervenes only if standards are not achieved.
The employees, in the presence of a leadership may not feel isolated from the central
authority which keeps them intact and resultantly they work with integrity and utmost
commitment. At macroscopic level, leadership is both a research area and a practical skill
(King et al., 2009). On the part of the researchers, the ongoing research highlights different
leadership styles in the different circumstances in diverse spheres of life. On the part of
individual level, it encompasses the abilities, leading capacity, skills and experience of a
person or group of persons (Tahir et al., 2014). While exercising the authority, the leadership
seeks the participation of the employees with all their dedication and sense of ownership
through the power of mobilization, motivation and communication in the organization
(Chandra &Priyono, 2016).
10
Globalization of the economies has increased human resource mobility and organizations are
looking for ways to retain talent, improve employee performance, improve their corporate
image and also achieve corporate goals. The right conditions for motivational management to
work include fair pay and conditions, comfortable and safe working environment;
opportunities for employees to socialize and make friends, clearly defined work
responsibilities and goals, education and training opportunities, as well as career
opportunities. Public sector is a term used to describe those outfits owned and managed by
the government, federal, state or local. Thus, the existence of public sector can be attributed
to the prevalence of political and social ideologies, which depart from the premises of
consumer choice and decentralization of decision making. Public sector means those areas of
societal activity directly owned, funded and managed by the State as opposed to private
sectors which are organized and owned by individuals and groups (Nwali and Nkwede,
2011). Incentive compensation is a form of material provided by the organization for its
employees who have worked loyally. Therefore, many employees tend to try even harder if
the remuneration received by giving satisfaction to what was expected
2.2. Leaders’ Motivational Incentives
Incentives are designed to get the maximum performance from the employees and help retain
the most productive among them. Organization can consider a variety of ways to reward the
employees for their work performance, but an organization need to consider using the best
employee incentives to get the desired results (Olubusayoa et al., 2014). Appreciation can be
defined as “acknowledge the value and meaning of something an event, a person, a behavior,
an object and feeling a positive connection to it” (Fagley & Adler, 2012). Appreciation may
help employees feel appreciated and an aspiration to help peers, clients and leaders. When
employees are appreciated, feel good about themselves and they have many things give to
others, on the other hand when they are exhausted, less able to perform their job functions
properly and performance level become worse (Fagley & Adler, 2012). Study Griffin (2012)
affirms that motivation exists merely when individual appreciates an optimistic correlation
that endeavor direct to work performance and work performance directs to incentives.
11
Job related and social incentives such as opportunity to use one's ability, interesting work,
recognition of a good performance, development opportunities, a sense of challenge and
achievement, participation in decision making, and being treated in a caring and thoughtful
manner (Olubusayoa et al., 2014). On the other hand, extrinsic motivation exists when
behaviour is performed to attain externally administered incentives.
Study of Makki and Abdi (2017) showed that intrinsic and extrinsic motivation has positive
correlation with employee’s task performance and intrinsic and extrinsic motivation has
impact on employees’ task performance. The extrinsic motivational incentives are tangible
and classified as basic needs since it refers to doing something for external rewards such as
money, fame, or status. It is opposite to intrinsic motivational incentives which influence
aperson’s behavior by his or her inner desire and motivation. Also, unlike motivator factors,
the presence of hygiene factors will not motivate, but could avoid dissatisfaction, however
the absence will surely lead to demotivation (Lipman, 2014). Definitely, there is a need to
improve the employees’ performance to bring a positive change by the acceptance of
mechanisms to develop the performance of the institutions (Salman et al., 2011). Perry and
Hondegem (2008) point out that ‘the meaning of public service motivation varies across
disciplines and fields, but its definition has a common focus on motives and action in the
public domain that are intended to do good for others and shape the wellbeing of society.
Motivation results from the interaction of both conscious and unconscious factors such as the
intensity of desire or need, incentive or reward value of the goal, and expectations of the
individual and of his or her peers (Ganta, 2014).
According to the literature incentives encourage the employees and hence productivity
enhances by affecting the performance, efficiency, satisfaction, responsibility, effectiveness
and commitment of employees (Mamdani and Minhaj, 2016). Higher the level of incentives;
better will be employees' performance. Ali and Ahmad (2009) established that there is a
substantial affiliation between rewards and recognition and similarly in employee motivation
and job satisfaction. The success of an organization based on how an organization keeps its
employees motivated and in what way they evaluate the performance of employees for job
12
compensation. Employees who feel motivated to work are likely to be persistent, creative and
productive, turning out high quality work that they willingly undertake (Ganta, 2014).
To motivate is to create desire, willingness to performance in a manner in which managers
want to get work done (Ackah, 2014). Incentives are often considered as forms of extrinsic
motivation. Employees tend to perform their jobs well when incentives such as performance
pay and bonuses are in place (Kaiser, 2014). Incentives are tools used to encourage changes
in behaviour. They are used to attract and retain qualified staff and motivate employees to
perform better (Weller, 2008). Incentives can be classified as financial and non-financial;
both motivate employees to join, stay and perform well at their work.
2.3. The Effect of Leaders’ Motivational Incentives on Employees Job Performance
To enhance the performance of an employee, his/her dependence upon the leadership, which
is operative, has a definite status. In the same phenomenon, the central role of the leadership
along with his credibility becomes most prominent (Bass et al., 2003). Actually, the
transformational leader is a psychoanalyst, as he/she learns, comprehend and analyze the
minds, thoughts, attitudes and desires of the followers/employees to reach the final decision
which help in augmenting the employees level of performance (Qaisar and Sara, 2009). The
leader of this category always pursues democratically and believes to solve every issue in the
organization according to the popular will of the employees. The diagnostic skills of the
leadership, either they are intrinsic or gained are valuable for the resolving the issues related
with the individuals and with the organization as a whole (Durga and Prabhu, 2011). The
employees’ performance is directly proportional to the effectiveness of the leadership.
Through the powers of comprehension, analysis, planning and motivation, the
transformational leaders augments the mercury level of the employees output (Iqbal et al.,
2015). Adequate incentives have been found to be one of the means through which
organization can adopt to motivate and increase their workers’ performance (Olubusayoa et
al. 2014).
13
According to Umaru et al. (2014) there is significant relationship between leaders’ technique
and performance of employees in organizations in order to achieve organizational goals. For
high employee performance (maximum), need a leader who is able to manage own human
resources (Elqadri et al., 2015).This is supported by statements Alberto et al., in Wati (2010)
that leadership style has a strong positive effect on performance. A leader has a way to
influence others or subordinates such a way that the person is willing to do the will of the
leadership to achieve company goals. In recent years, both academicians and practitioners
have highly recognized the significance of effective employees and good leaders in the
organization performance (Kehoe and Wright, 2013). Furthermore, organizational
performance depends on the performance of the people in that organization.
The performance of the individuals solely depends upon the policies of the concerned
institution about their pay package, rewards, bonuses, yearly increments and other perks and
privileges (Bodla and Nawaz, 2010). Still, the academic profile of the employees has the
highest standing among all other factors. On the whole, the productivity/output can be
enhanced and sustained by the effectiveness of the leadership and an agile response of the
employees (Rizwan et al., 2016). On one hand, the leaders’ induces emotional strength,
motivation, commitment and the working relationship while on the other side, the employees
performs with their utmost ability and diligence. The main attributes extracted from the
relevant literature are the efficiency, effectiveness, innovativeness, responsiveness. There are
some other attributes related with the employees’ performance like the work ethics,
communication, creativity, development, professionalism and the commitment. All of them
contribute to the effective performance on the part of employees.
2.4. Linkages and Extents of Incentives and Employees Performance
Hameed et al. (2013) developed a model explaining the association between incentive
motivators, organization-based self-esteem and employee performance in private banking
sector of Pakistan. The outcomes revealed positive and significant effect of incentive
motivators and organization based self-esteem on employees’ performance. Khan et al.
14
(2013) investigated different factors determining intrinsic and extrinsic rewards in the light
of
Herzberg’s two factor theories and their impact on banking employee’s job satisfaction and
job performance and endeavors to influence overall performance of the commercial banks of
Pakistan. The study revealed that both intrinsic and extrinsic rewards had significant linked
with employees’ job performance. Hameed et al. (2014) studied the impact of compensation
on employee performance in private banking sector of Pakistan. It was revealed in the
study’s results that compensation had progressive extents and effect on employee
performance. It was proved from correlation analysis that indirect compensations
(nonmonetary) had weak relationship or linkages to performance whereas monetary
compensations had significant and positive impact on employee performance. Gichuru
(2015) paper showed relationship between motivational incentives and employee
performance. The study highlighted that motivation improved level of efficiency of
employees where the level of a subordinate or an employee did not only depend upon his
qualifications and abilities. The findings further suggested that motivational incentives
affected employee performance in an organization in various ways as increased output,
boosting employee morale, improved participation and improved employee relations.
Financial and non-financial incentives have a positive relationship with the efficiency and
effectiveness of staffs (Wei and Yazdanifard, 2014). Money has the dominancy to magnetize,
retain and motivate individuals towards higher performance (Stanley, 2012). People do not
work for free; employees want to be compensated for the work that they do. Employees must
be motivated through adequate incentives plans and reward systems and this will invariably
encourage them to be proactive and have right attitude to work, thereby promote
organizational productivity. Research provided evidences that monetary incentives offered a
higher motivation to employees in comparison with non-monetary incentives (Zani et al.,
2011). However, an-other study suggested that financial incentives will only provide a short
term positive behavior. Staffs do look for more incentives which are non-monetary in order
to sustain a long term positive performance in organizations (Zani et al., 2011).When
employees are rewarded for their performances, they will most likely to increase the behavior
and perform better. Therefore, monetary or extrinsic rewards reinforced employees’ work 15
behavior positively (Rudge et al., 2011). When employees obtain acknowledgement from
managers or supervisors as a result of their job well done, they will feel appreciated and have
a sense of belonging to the company (Shiraz et al., 2011). This is highly valued by staffs and
it is very likely that they will strive to perform better (Gohari et al., 2013).
2.5. Reducing Absenteeism as Employees’ Job Performance Indicator
Ngima & Kyongo (2013) reported that reduced absenteeism was as the employees’ job
performance indicator. Frequent absence by employees from the work place prevents team
and group from continuity of being productive. Absenteeism of employee at his/her station
will add extra work to the rest of the staff to adjust the missing part which may end up
omitting the original flair of the absent employee. Attendance is very important to ensure
sustainable performance to complete the required tasks and avoid management conflict and
diminished performance (Root, 2016). If motivational incentives are being ignored by
employers, employees might show annoyance through poor performance, demotivation,
noncommitment, turnover and absenteeism (Kalhoro et al., 2017).
2.6. Job Satisfaction as Employees’ Job Performance Indicator
Ngima & Kyongo (2013) reported that job satisfaction was as the employees’ performance
indicators. Kiviniemi et al. (2002) described that job satisfaction of the employees’ increase
by the rewards they receive from the organizations. According to Balzar et al. (1997) job
satisfaction is a sensation that employees have about their work environment and their
expectations towards work. Thus, job satisfaction can be recognized as what one wants or
values from a job (Brief and Weiss 2002). Different kinds of satisfaction lead to diverse
objectives and behaviours that ascend from different types of motivation in getting different
types of rewards (Luthans et al. 2005). There is a significant relationship between reward and
recognition, and between motivation and job satisfaction (Ali and Ahmed, 2009). Rewards
have a direct link with the motivation and job satisfaction of the employees. Variations in
rewards and recognition can bring a positive change in work motivation and job satisfaction
16
of the employee (Ali and Ahmed, 2009). Employee attitudes such as satisfaction contribute
to (or discourage) absenteeism, reduction in the wastages, industrial accidents and they help
establish the culture of the organization (Edward, 2009).
2.7. Conceptual Framework
The conceptual framework of the study was developed from reviewed literature and relevant
research objectives. The frame work shows that a relationship exists between the independent
variables (extrinsic and intrinsic motivational incentives) factors trust, honest, collaborative
work environment, appreciation, promotion, participation, freedom, recognition and
”difference to society and dependent variable (employee job performance) which can be
measured using the following employee performance indicators: job satisfaction and
reducing absenteeism (Aarabi et al., 2013; Rehman et al., 2016; Kalhoro et al., 2017).
Source: Developed for this research
17
Job performance
Reducing absenteeism ▪
Job satisfaction ▪
society “Difference” to • Work environment •
Honest, • Trust •
Appreciation •
Participation • Freedom •
Recognition • Promotion •
Extrinsic motivational incentives
motivational incentivesIntrinsic
1.3.
CHAPTER THREE: RESEARCH DESIGN AND METHODOLOGY
3.1. Description of the Study Area
The target population of this study included both employees and leaders at Federal Public
Sectors in Addis Ababa; Ministry of Industry (MOI), Ministry of Finance and Economy
Development (MOFED), Ministry of Livestock and Fishery Resource Development
(MOLFRD) and Ministry of Public Service and Human Resource Development
(MOPSHRD). Their respected branches of them in Addis Ababa were considered subjects.
Data collection was conducted across the aforementioned from March and April, 2018.
3.2. Study Approaches
In this study, both quantitative and qualitative approaches were employed and operated. This
is because of the researcher believed that combined both approaches can provide broader and
deeper understanding of the issue. The quantitative approaches dealt with descriptive
analysis by collecting data from the respondents and understand the behavior of the
population of interest. It was used a quantitative approach to measure and analyzes the effect
of leaders’ motivational incentives on employees’ job performance. It established that the
leaders’ motivational incentives dimensions were tested for relationship on job performance
of employees dimensions.
3.3. Research Design
Case study was employed with detail related analysis of limited number of events or people
and their relationship. According to Yin (2009) case study research is an empirical
investigation that investigates contemporary phenomena with in real life context, when
boundaries between phenomena and context are not clearly evident and in which multiple
sources of evidence are used. Correlation and regression research design that applies
quantitative approach and uses the case study method to collect data. The focus of this
research is on employees to collect data from the target population of Federal Public Sectors
18
in Addis Ababa viz. MOI, MOFED, MOLFRD and MOPSHRD in Addis Ababa. The
correlation and regression research design was employed in the study to analyze and describe
the effect of intrinsic and extrinsic motivational incentive on individual employee job
performances dimensions. The research involved gathering data, describes phenomenon and
then organizes, tabulates, depicts and describes data collection, in the form of tables, in order
to help the reader understand the distribution of data. This study focuses on the leaders
motivation incentives consisting of trust, honest, collaborative work environment,
appreciation, promotion, participation, freedom, recognition, and ” difference” to society as
independent variable and their effect on job performance dimensions (job satisfaction,
reducing absenteeism and achievement) as dependent variable.
3.4. Sample Size and Sampling Techniques
The total sample was consisted of all of employees’ strata; professional (professional
science) and supporting staff (administrators and finance chair persons, secretaries, drivers,
cleaners, messengers, plumbers, gardeners, security officers, cashiers, and others). Individual
of aforementioned Ministries office were considered. The appropriate sample size was
determined if the population along with the required level of precision is known. According
to Kothari (2004, pp. 179) the following formula was used to calculate the minimum sample
size from known population.
Where
N = size of population n = size of sample e = acceptable error (the
precision) p = sample proportion belonging to the specified
category, q = 1 – p; sample proportion not belonging to the
specified category z = standard variants at a given confidence level.
Therefore, the minimum required sample size was calculated by first knowing the values of
both p and q; where p is the proportion belonging to the specified category and q is the
19
proportion not belonging to the specified category (Saunders et al., 2009 pp. 581-582).
According to the recent information obtained from MOPSHRD (2016) total number of
employees’ in the selected Ministries and under their respective branches was 14,
946.Twenty percent of the professional stuffs were selected, belonging to the specified
category staff, p. Therefore, 80% is the proportion not belonging to the specified category
staff; q. The minimum sample size was calculated to increase precision, confidence and
variability. The calculation worked at a 95% confidence level, corresponds to Z-score of
1.96, and a margin error (e) of 5%.
According to (Kothari, 2004), formula minimum sample size (n):
The minimum sample size (n) calculated only was 242 respondents. During data collection a
total of 250 questionnaires were returned out of the 304 questionnaires distributed to
respondents.
3.5. Data Collection Tool
A questionnaire used to collect the data giving a set of questions or a written statement to the
respondents (employees) to be answered; the form of the question consists of motivational
incentives and employee job performance. The instruments utilized to collect data from the
sample were questionnaire and interview. The questionnaires used to collect data were Likert
scale that should be made up of four or six points (Nemoto and Beglar, 2014). Thus, a
sixpoint Likert scale was employed in this study as they permit the possibility of increased
measurement precision scale (Nemoto and Beglar, 2014). A six-point Likert scales (Strongly
disagree, Disagree, Slightly disagree, Slightly agree, Agree and Strongly agree), which
moves from a weaker endorsement of the item (i.e., Strongly disagree) to a stronger
endorsement of the item (i.e., Strongly agree).
20
The data were collected from a sample of employees of FPS through closed questionnaires.
Self-complete research questionnaire which were distributed to the target population and
collected after a few days. Primary data were collected from the subject of study. The
questionnaire that used in this study was divided into three sections. Section One:
demographic characteristics of the respondents, Section Two: Statements to capture
perception of employees on the Leaders’ motivational incentives and Section Three: used to
capture employees’ job performances.
A key informant interview in Section Four: is an open-ended questionnaire interview guide
was another tool which applied for purposively selected expert. This is one ways of
collecting qualitative data so as to collect data which was not be able to collect via
selfcomplete research questionnaire of the quantitative data collection method. The collected
data through this key informant interview of an open-ended questionnaire method was used
to enhance and crosscheck the quantitative data and analysis.
3.6. Data Analysis
Descriptive and inferential statistical techniques were used for data analysis. In inferential
statistics, Pearson’s correlation and regression analysis were employed by using Statistical
Packages of the Social Science (SPSS) version 23. Pearson’s correlation was used to
investigate strength of relationship of predictor variables with response variables. Multiple
regression analysis using enter method was used to determine the effect of independent
variables and the dependent variable. Stepwise regression analysis was used to determine
which among the predictor variables contributed most to job performance of employees.
3.7. Validity Test Validity refers to research study that is based on accuracy of findings and explains whether
the factors that are included in study are properly evaluate and explain in a way that it is
supposed to measure (Saunders et al., 2009). In this study best tried to focus on variables and
show a relationship between motivational incentives and employee job performance
21
dimensions. Different motivational incentives and relate it with empirical part that led to
know the relationship between employee motivational incentives and employee job
performance dimensions. The correlation analysis is used that shows the relationship
between variables that are used further regression analysis. The analysis measurement done
by behaves the way as it should be due to motivation (intrinsic and extrinsic) and employee
job performance dimensions relationship with each other’s. The correlation is use for the
relationship of variables that how strongly variables are connected with each other and it is
what the purpose of the study. The analysis result depends on the relation of variables with
each other. Validity shows there was correlation between variables that shows great
understanding of the research data.
3.8. Reliability Test Reliability refers to the notion that a measuring instrument sufficiently reliable to be used as
a data collection tool, as a tool is already good measure. Calculation of reliability point in
this study using the facilities provided by SPSS version 23 for measuring reliability with
Cronbach Alpha statistical test (α), which is a construct or variable said to be reliable if the
Cronbach’s alpha value ≥ 0.60. For this study Cronbach’s alpha was used to assess the
internal consistency of variables in the research instrument. Cronbach’s alpha is a coefficient
of reliability used to measure the internal consistency of the scale; it represented as a number
between 0 and 1. Thus, in this study, a Cronbach’s alpha score of 0.70 or higher was
considered adequate to determine reliability
3.9. Ethical Issues The researcher was ensured that introducing him and seeks permission to collect a research
data from FPS respondents and good luck permission was given. Also in a copies of
questionnaires distributed, privacy and confidentiality were observed because the
respondents were told not to write their names, however the respondents were told that this
study is for academic purpose only and not otherwise, also the study did not entertain
discrimination thus why randomly selection were used.
22
CHAPTER FOUR: RESULTS AND DISCUSSIONS
4.1. Profile of the Respondents
Personal and demographic information of the respondents is presented in Table1 below. Table 1: Profile of the Respondent
Variables Category Frequency(N=250) Percentage
Sex Female 93 37.20%
Male 157 62.80%
Age
20 to 25
26 to 35
36 to 45
32
133
53
12.80%
53.20%
21.20%
46 to 55 28 11.20%
56 and above 3 1.60%
Educational qualification
High School Complete
Technical and Vocational
Bachelor’s Degree
12
5
198
4.80%
2.00%
79.20%
Master’s Degree 31 12.40%
PhD Degree 4 1.60%
Work experience
Less than 3 years
3 to 6 years
7 to 10 years
59
39
67
23.60%
15.60%
26.80%
11 to 15 years 33 13.20%
16 to 20 years 18 7.20%
More than 20 years 34 13.60%
The distribution of the respondents by gender is clear that the majority of the respondents,
157 (62.80%), were male as opposed to females who were 93 (37.2%). It is clear that from
the total 250 respondents the majority of respondents, 133(50.0%) were in the age range of
26-35 years, this was followed by 53 (21.20%) in the age range of 36-45, followed by
32(12.80%) in the age range of 20-25, then 28(11.20%) in the age range of 46-55 years while
23
the least age range was 56+year which was represented by only 4(1.6%). This meant that the
majority of respondents (who took part in the study) were aged 25-30years. The result shows
that a relatively high percentage of the workforce is in their active productive years. It further
explains that the recruitment policy the public sector is consistent with contemporary
requirements, which emphasizes recruitment of relatively younger and mature people.
Results show that the majority of respondents 189 (79.20%) were bachelor’s degree holders
while Masters and PhD holders tied at 35(14%), and the diploma/certificates holders were
the least represented with only 17 (6.80%). This implies that most respondents were in a
position to give a very fair assessment of their performance as well as that of the
motivational incentives of the immediate supervisor. The large proportion of respondent
(50.4%) do have an experience of less than three years and 7-10 years in their current
working organization, again the remaining proportion (49.6%) of sample respondent shared
other experience categories.
4.2. Principal Components Loadings of Items
4.2.1. Principal components loadings motivational incentives items
Principal components analysis (PCA) is the standard extraction method, which was used to
extract correlated linear combinations of the variables Table 2 below. The
convergentdiscriminant validity in which all the highlighted diagonal values illustrates that
items are strongly converged onto its own construct than the other and correlated values
show the positive results. It was adopted to undertake more analysis through principal
components analysis application. In component loading which is also known as cross loading
was an attempt to measure how closely factors relate with each other (Kothari, 2004). The
cut off value was all highlighted diagonal values show that items are strongly loaded onto its
own constructs than the others construct (Kalhoro et al., 2017). Those items in Table 2
related to trust, honest, work environment, appreciation, promotion, participation, freedom,
recognition, and ” difference” to society were loaded together.
24
25
Table 2: Principal components loadings motivational incentives items
Items Appreciation Fairness Protection Payment Build relationships of trust and mutual understanding 0.86 0.04 0.15 0.11 Makes to rely on open and honest communication 0.84 0.04 0.24 0.10 Create a collaborative work environment 0.83 0.13 0.11 0.08 Encourages the participation of employees in workshops 0.68 0.14 0.27 -0.04 Appreciation and positive recognition 0.64 0.49 0.05 -0.04 Facilitate possibility of promotion and growth 0.64 0.49 0.10 0.17 Recognizes for extra effort 0.62 0.53 0.16 -0.09 Provides freedom in deciding how to carry out work 0.53 0.42 0.23 0.15 Provides opportunity to “make a difference” to society 0.51 0.36 0.32 0.01 Fair and constructive evaluation 0.17 0.68 0.20 0.23 Explicit performance criteria 0.23 0.68 0.27 0.12 Career advancement and/or pay raise 0.05 0.66 0.12 -0.17 Evaluation forms include the roles and responsibilities 0.20 0.66 0.33 0.10 Variety of training programs 0.26 0.57 0.22 0.18 Leaders’ specialized skills and obtain feedback 0.37 0.46 0.41 0.11 Protected due to enshrined in law 0.19 0.16 0.74 -0.06 Protected based on standard practice 0.16 0.29 0.68 0.29 Set clear criteria for promotions 0.21 0.17 0.65 0.35 Cares about the health and safety 0.00 0.24 0.65 0.33 Up to date IT support and infrastructure 0.14 0.33 0.58 0.28 Creative and produces meaningful job 0.37 0.23 0.56 -0.27 Financial incentives 0.12 0.03 0.52 0.01 Respects the individual characteristics 0.29 0.36 0.47 0.15 Enough paid a salary to cater basic needs 0.03 0.12 0.14 0.73 Prompt and on time payment 0.25 -0.13 0.15 0.63 Performance related pay schemes -0.13 0.39 0.07 0.54
25
Those items related to fairness, protection and payment were loaded in second and third
component respectively. All constructs in the present study fulfill the criterion for internally
consistent established factors because they all have Cronbach’s alpha values of greater than
0.70 in Table 4 below, indicating the highest reliability (Hair et al., 2010). To check for the
discriminant validity of the constructs, the entered all of the items (26) into a principal
component analysis using rotation, then extracted four non-overlapping factors: appreciation
(9 items), fairness (6 items) protection (8 items) and payment (3 items).
4.2.2. Principal components loadings of employees job performance items Employees’ job performance items were loaded in three factor loadings are presented in
Table 3. Those items related to retention, valued outcome, and job satisfaction was loaded
together (Job satisfaction).
Table 3: Principal component loadings of employees’ job performance items
Items Job satisfaction
Reducing absenteeism
Achievement
Attracting and retaining the right kind of people 0.84 0.01 0.18 Motivational incentives provides valued outcomes 0.80 0.28 0.08
Satisfied with performance 0.70 0.01 0.44
Continuous attending and reducing absenteeism -0.05 0.79 0.24
Continuous quality improvement -0.04 0.70 0.43
success and job satisfaction at work 0.47 0.70 0.03
Motivational incentives motivate to perform well 0.50 0.64 -0.13
Better performance than similar qualifications 0.40 0.42 0.32
Proud to work for the public sector 0.17 0.16 0.78
Achieving a balance between work and private life 0.15 0.13 0.77
Feel motivated after performance review 0.38 0.37 0.41
Those items related to reducing absenteeism, quality improvement, success, motivated and
better than colleagues with similar qualifications were loaded in second component or
27
dimension (reducing absenteeism). Proud to work for the public sector, achieving a balance
between work and private life, and motivated feeling were loaded under the third
component/dimension (achievement). Briefly, all constructs in the present study fulfill the
criterion for internally consistent established factors because they all have Cronbach’s alpha
values of greater than 0.70 in Table 4 below, indicating the highest reliability (Hair et al.,
2010). To check for the discriminant validity of the constructs, the entered all of the items
(11) into a principal component analysis using rotation, then extracted three non-overlapping
factors: job satisfaction (3 items) reducing absenteeism (5 items) and achievement (3 items).
4.3. Reliability Analysis
Cronbach’s Alpha for reliability and internal consistency was measured and presented in
Table 4. Cronbach’s alpha of questionnaire items have to be greater than 0.7, and shows that
all the items are reliable and valid to measure the opinions of respondents. For the result of
the reliability test, it is found that the variable and common factors, a Cronbach's Alpha of
ranged 0.726 to 0.904 was obtained, thus all questions related to motivational incentives and
employees job performance are reliable.
Table 4: Reliability of measurement instrument
Factors Reliability Statistics Cronbach's Alpha N
Appreciation 0.904 9 Fairness 0.902 6
Protection 0.896 8
Payment 0.730 3
Job satisfaction 0.790 3
Reducing absenteeism 0.776 5
Achievement 0.726 3
28
In table above, the level of reliability is determined by the coefficient alpha ranges where
alpha range from 0.80 to 0.95 shows very good reliability, ranges from 0.70 to 0.80 shows
good reliability; ranges from 0.60 to 0.70 shows fair reliability and coefficient alpha less than
0.60 shows poor reliability(Saunders et al., 2009). 4.4. Relationship of Motivational Incentives and Performance Dimensions
Appreciation with positive recognition factor was significantly and positively associated with
job satisfaction and reducing absenteeism. Table 5 shows that relationship between fairness,
protection and payment related incentives and all performance dimensions (job satisfaction,
reducing absenteeism and achievement) is not significantly positive.
Table 5: Correlations of independent variables and job performance dimensions
Dimensions 1 2 3 4 5 6 7
Appreciation 1.00 Fairness 0.00 1.00
Protection 0.00 0.00 1.00
Payment 0.00 0.00 0.00 1.00
Job satisfaction 0.675** 0.04 -0.124* -0.05 1.00
Reducing absenteeism 0.223** -0.140* -0.155* -0.02 0.00 1.00
Achievement 0.11 -.155* 0.05 -0.168** 0.00 0.00 1.00
** Correlation is significant at the 0.01 level (2-tailed).
As presented in Table 5 the highest correlation was found between appreciation and job
satisfaction (r=0.675; p<0.01).The high correlation strongly suggests that the two tests are
measuring the same thing and doing so with great consistency. The high correlation reflects
two windows of the same attribute. Appreciation with positive recognition factor variables
included trust, honest, work environment, appreciation, promotion, participation, freedom,
recognition, and” difference” to society. Job satisfaction factor included attracting and
29
retaining right kind of people, valued outcomes, and satisfaction. Reducing absenteeism
included variables related absent, quality improvement, motivated feeling, and increased
success and better performance.
Fairness, protection and payment were not positively correlated with all performance
dimensions (job satisfaction, reducing absenteeism and achievement). The selected
participants for interview expressed different motivational incentives toward the
nonavailability of certain incentives, which significantly affected their overall work
performance. The majority of the interviewees reported that the more dissatisfied they are
with respect to the limitation and/or absence of certain incentives for performance, the less
productive they would be at work. In general, the results showed that providing additional
monetary and nonmonetary incentives to public employees could improve their work
performance and increase productivity. A study by Ivancevich (2004) shows that, the
fairness in performance evaluation and the feedback given to the employee plays a great role
in increasing employee’s productivity. Therefore, the Government of Ethiopia give attention
and revise the evaluation systems of employees, provision of protection (health and safety)
and payment related to salary and performance based payment. Armstrong (2006) extrinsic
motivations are defined as tangible benefits such as salaries/incentives, fringe benefits,
security, and are required to motivate their employees. Dessler et al. (2002) found out that,
the fundamental premise of variable pay and other reward scheme is top performers must get
top pay and rewarded in order to secure their commitment to the organization. They also
argue that accurate performance appraisal or measurable outcome is a precondition of
effective pay for performance plan. According to Perry and Hondeghem (2008), the public
sector has traditionally offered some strong extrinsic motivators that might attract people,
such as security of tenure, career and development opportunities and the pension system.
Appreciation, trust, honest, collaborative work environment and” difference” to society were
leaders’ intrinsic motivational incentives. Intrinsic motivational incentives promote intrinsic
motivations which lead to better performance. Intrinsic motivational incentives come from
verbal rewards such as positive feedback and praise which lead to job satisfaction.
30
Intrinsically motivated employees participate eagerly in their jobs for internal reasons.
Promotion, participation, freedom, participation and recognition are leaders’ extrinsic
motivational incentives. The extrinsic motivational incentives bring about extrinsic
motivation. Extrinsically motivated employees tend to focus on performance outcomes.
The present study reveals intrinsic and extrinsic motivational incentives are significantly and
positively associated with employees’ job performance. The results of the study confirmed
that intrinsic and extrinsic motivational incentives were directly related to employee job
performances. Similarly, Khan et al. (2013) found out that both extrinsic and intrinsic have
equal importance for employee motivation. Tahir et al. (2014) identified that extrinsic factors
are fundamental factors whereas intrinsic factors are essential to provide inner motivation,
and have positive relationship with employee performance.
Intrinsic motivation incentives are positively correlated with job performance is in line with
Zafar et al. (2012), there is a significant relationship between motivation and employees'
performance (“When the intrinsic motivation level of employees increases the work
performance of employees will also increase”). According to Zhang, (2010) intrinsic
motivation is one of the most appropriate and strong influence on workers creativity.
Employees get intrinsic reward directly from job they perform. Job satisfaction, interesting
work, job appreciation or the sense they help a client. Intrinsic motivated workers employ in
a job because of their own interest in it and enjoy the job due to search for new solutions for
business challenges and are more likely to burn up energy to identify problems and find
innovative solutions (Cooper & Jayatilaka, 2010). Intrinsic motivation begins from a positive
response to qualities of a job role. According to where a person has the ability to choose and
high intrinsic motivation, higher achievement is likely (Vadell and Ewing, 2011). Because of
all the different opinions that individuals have, it takes a strong leader to be able to influence
individuals to see things their way of organizations (Sougui, 2015).Therefore, if leaders’
intrinsic motivational incentives increase, employee performance will increase. Previous
researchers have also come out with similar findings (Tahir et al., 2014; Asfaw et al., 2015).
31
4.5. The Relationship between Appreciation on Performance Indicators
The first research question examined leaders’ intrinsic motivational incentives affect
employees’ job performance. The findings show the existence of a significant relationship
between intrinsic motivational incentives and employee performance.
32
The components examined under intrinsic motivational incentives including trust, honest, collaborative work environment, appreciation and
”difference” to society were collectively found to be significant predictors of employees’ job performance at Federal Public Sectors in Addis
Ababa.
Table 6: Coefficients of correlations between variables Variables 1 2 3 4 5 6 7 8 9 10 11
Collaborative work environment 1 Trust .781** 1
Honest .695** .763** 1
"Difference” to society .477** .471** .476** 1
Participation .490** .512** .568** .475** 1
Freedom .424** .437** .504** .357** .579** 1
Promotion .548** .531** .569** .419** .567** .665** 1
Appreciation .566** .509** .481** .530** .448** .506** .633** 1
Recognition .539** .519** .543** .547** .520** .579** .596** .710** 1
Job satisfaction .409** .416** .404** .405** .468** .501** .494** .556** .547** 1
Reducing absenteeism .030 .095 .140* .186** .140* .088 .125* .132* .216** .000 1
**. Correlation is significant at the 0.01 level (2-tailed).
31
The second research question examined leaders’ extrinsic motivational incentives affect
employees’ job performance. The components examined under extrinsic motivational
incentives including promotion, participation, freedom and recognition were collectively
found to be significant predictors of employees’ job performance at Federal Public Sectors of
Addis Ababa.
The result of Pearson correlation coefficients showed significant values at leaders'
motivational incentives variables (appreciation) with job performance dimensions (job
satisfaction and reducing absenteeism) are presented in Table 6 above. The highest
correlation value was observed between leaders’ intrinsic motivational incentive variables
and employees’ job performance dimensions (job satisfaction and reducing absenteeism); the
high correlation strongly suggests that the two tests are measuring the same thing and doing
so with great consistency. The high correlation reflects two windows reflected those
identified in this study such as recognition, collaborative work environment, appreciation,
trust, honest, promotion, participation, freedom, “difference” to society were found to have
significantly positive linkage with employees’ job performance dimensions. These
motivational incentives were animated by personal enjoyment, interest, or pleasure. Hence
motivation energizes and sustains activities through the spontaneous satisfactions inherent in
effective volitional action (Nyambegera and Gicheru, 2016).
4.6. The Effect of Motivational Incentives on Job Performance Dimensions
4.6.1. Linkages of leaders’ motivational incentives to employees’ job satisfaction
Computing the coefficient of determination present how much variance the independent
variables share with the dependent variable job satisfaction. Independent variables (trust,
honest, work environment, appreciation, promotion, participation, freedom, recognition and
”difference” to society) have the highest correlation (r = 0.641,p < 0.01) which when squared
indicates 0.411 shared variance. Therefore, intrinsic rewards help to explain nearly 41% of
the variance in respondents’ scores on the employee job performance scale (Table 7). In other
words, the R-squared value from model summary is 0.411 which means 41.10% of variation
35
in job performance is accounted by variation in the motivational incentives variable namely,
recognizes, trust, "difference” to society, freedom, appreciation, promotion, honest,
collaborative work environment.
Table 7: Model summary for multiple regression of analysis on job satisfaction dimension Model R R Square Adjusted R Square Std. Error of the Estimate
1 .641a .411 .389 .78298
a. Predictors: (Constant), Recognizes, Trust, "Difference” to society, Freedom, Appreciation,
Promotion, Honest, Collaborative work environment b. Dependent Variable: Job satisfaction
Although the table of regression shows the value of R about 0.641 which identifies the strong
relationship among independent variable (recognizes, trust, "difference” to society, freedom,
appreciation, promotion, honest, collaborative work environment) and dependent variable job
satisfaction. Whereas, R square shows co-efficient of simple determination which 41.10%
variance is in recognizes, trust, "difference” to society, freedom, appreciation, promotion,
honest, collaborative work environment explained by job satisfaction.
. The results of ANOVA are presented in Table 8. F= 18.64 and p < 0.000. That means that
least one of the 9 independent variables can be used to explain job performance in the FPS.
Table 8: ANOVA for job satisfaction dimension
Model Sum of Squares df Mean Square F Sig.
1 Regression
Residual Total
102.868 9 11.430 18.644 .000b
147.132 240 .613
250.000 249
a. Dependent Variable: Job satisfaction
b. Predictors: (Constant), Recognizes, Trust, "Difference” to society, Freedom, Appreciation,
Promotion, Honest, Collaborative work environment
The results indicate that the model has power to predict employees’ performance significantly
from the predictors’ variables.
36
Table 9 presents the correlation between motivational incentives variables and job
performance (job satisfaction).
Table 9: Coefficients of predictor variables on job satisfaction dimension
Unstandardized Standardized
Model Coefficients Coefficients t Sig.
B Std. Error Beta
(Constant)
Collaborative work
-2.010 .186 -10.802 .000
environment -.026 .064 -.036 -.399 .690
Trust .076 .075 .102 1.014 .312
Honest -.048 .069 -.061 -.686 .493
"Difference” to society .034 .047 .046 .721 .472
Participation .100 .051 .136 1.966 .050
Freedom .123 .054 .167 2.296 .023
Promotion .025 .056 .035 .450 .653
Appreciation .175 .055 .252 3.186 .002
Recognition .105 .054 .153 1.925 .055
a. Dependent Variable: Job satisfaction
Regression equation
Job satisfaction = -2.01-0.026W+0.076T -0.048+0.038D+0.100P -0.123F+0.025Pr -
0.175A+0.105R.
Where; W=Work environment T=Trust, H=Honest, D="Difference” to society,
P=Participation, F=Freedom, Pr=Promotion, A=Appreciation and R=Recognition
The results show that appreciation and freedom had significant relationship with job
satisfaction (B = 0.175, p < 0.05) and (B = 0.123, p < 0.05) respectively. However the rest
37
variables were found to be not significant. Johnson et al. (2010) suggests the aims of
incentives to include; attract, retain and motivate employee, to support the attainment of the
organizations’ strategic and short term objectives by helping to ensure that it has the skilled,
competent, committed and well-motivated workforce it needs to meet the expectations of
employees, believing for equitably, fairly and consistently to their contributions. However,
Neckermann and Kosfeld (2008), highlighted two distinctive motivational incentives to
include; intrinsic motivational incentives which are often referred to as non-financial reward.
It includes recognition, praising for a job well-done etc. while the extrinsic reward is
concerned with motivation such as money, compensation, salary, bonus, retirement benefit
etc.
Employees’ question in this research is “what does the general concept of incentive mean to
employees in the public organization?” This question was developed in an attempt to capture
the general picture of motivational incentives in the mindset of employees, particularly public
employees. To some extent, respondents can express their thought or opinion about
incentives through examples or other means. Among those responses, the three most
frequently repeated by respondents were: promotion, money or encourage employees to work
harder. The other categories were: appreciation, recognition, collaborative working
environment. These categories generally matched the characteristics of intrinsic and extrinsic
motivational incentive categories.
4.6.2. Linkages of leaders’ motivational incentives to employees’ reducing absenteeism In Table 10, the R-squared value from model summary is 0.084 which means 8.5% of
variation in job performance is accounted by variation in the motivational incentives variable
namely, recognition, trust, "difference” to society, freedom, appreciation, promotion, honest,
collaborative work environment.
Table 10: Model Summary multiple regression of analysis on reducing absenteeism
Model R R Square Adjusted R Square Std. Error of the Estimate
1 .289a .084 .049 .97703
38
a. Predictors: (Constant), Recognition, Trust, "Difference” to society, Freedom, Appreciation,
Promotion, Honest, Collaborative work environment b. Dependent Variable: Reducing
absenteeism
The results of ANOVA are presented in Table 11, F= 2.64 and p < 0.05. That means that least
one of the 9 independent variables can be used to explain job performance in the FPS.
Table 11: ANOVA for reducing absenteeism
Model Sum of Squares df Mean Square F Sig.
1 Regression
Residual
Total
20.898 9 2.322 2.433 .012b
229.102 240 .955
250.000 249
a. Dependent Variable: Reducing absenteeism,
b. Predictors: (Constant), recognizes, trust, "difference” to society, freedom, appreciation,
promotion, honest, collaborative work environment
Table 12 presents the correlation between motivational incentives variables and job
performance (reducing absenteeism, quality improvement, motivated, satisfaction and better
performance).
Table 12: Coefficients for the relationship between predictors and reducing absenteeism
Model
Unstandardized
Coefficients
Standardized
Coefficients
t Sig. B Std. Error Beta
1 (Constant)
Work environment
Trust
Honest
"Difference” to society
Participation
-.541 .232 -2.329 .021
-.185 .080 -.257 -2.299 .022
.038 .094 .050 .402 .688
.084 .087 .107 .970 .333
.083 .059
.064
.114 1.422 .156
.035 .047 .546 .585
39
Freedom
Promotion
Appreciation
Recognition
-.074 .067 -.100 -1.099 .273
.035 .070 .049 .496 .620
-.017 .069 -.025 -.250 .803
.157 .068 .230 2.313 .022
a. Dependent Variable: Reducing absenteeism Regression equation
Reducing absenteeism = -0.541-0.185W+0.038T +0.084H+0.083D+0.035P -0.074F+0.035Pr
-0.017A+0.157R
Where;
W=Work environment T=Trust, H=Honest, D="Difference” to society, P=Participation,
F=Freedom, Pr=Promotion, A=Appreciation and R=Recognition
The results show that appreciation and freedom had significant relationship with job
satisfaction and job satisfaction (B = -0.185, p < 0.05) and (B = 0.157, p < 0.05) respectively.
However the rest of variables were found to be insignificant.
According to the findings of this study, it can be easily observed that extrinsic as well as
intrinsic motivation are important and employers need to design incentive schemes matching
the magnitude of the task and hard work of employees put in place. From the results it is also
observed that extrinsic and intrinsic factors have their own value and by providing employees
with extrinsic motivational incentives (promotion, recognition, freedom, participation) as
well as intrinsic motivational incentives (appreciations, trust, honest, work environment,
“difference” to society) employers can motivate their employees for higher performance and
drive organizational commitment which might reduce expenditures on unnecessary attrition.
Findings of this study suggest that well-motivated employees are more committed, efficient
and effective for organization.
Consequently if motivational incentives are being ignored by leaders’, employees might show
annoyance through increased job satisfaction and reducing absenteeism, dissatisfaction and
demotivated. It is therefore crucial for FPS to keep employees happy by extrinsic and
intrinsic motivational incentives. Trust, honest, work environment, appreciation, promotion,
participation, freedom, and recognition) had a statistically significant, direct and positive
40
effect on employees’ job performances. Hence, if such motivational incentives offered to
employees were to be altered, then there would be a corresponding change in job
performances.
4.7. Linkages and Extents of Motivational Incentives and Performance Dimensions
Table 13 (model summary), displays the results of the multiple regression analysis between
leaders motivational incentives and job performance (job satisfaction) using the Stepwise
Method. The results indicate that appreciation is the most significant predictor of job
satisfaction and job satisfaction contributing to 30.9% of performance, and followed by
freedom, which contributes a further 6.7% to performances, together, appreciation and
freedom contributes a total of 37.5% to job performance.
Table 13: Model summary for stepwise method for job satisfaction
Model R R Square Adjusted R Square
Std. Error of the
Estimate
1 .556a .309 .307 .83432
.79566 2 .612b .375 .369
a. Predictors: (Constant), Appreciation
b. Predictors: (Constant), Appreciation, Freedom
The third research question investigate extents of leaders’ motivational incentives are linked
to employees on job performance. Appreciation, freedom and recognition were the most
important significant predictors of job performance. Appreciation and freedom were
contributed 37.5% and identified to be significant predictors of job satisfaction. Recognizes
the extra effort was found to be significant predictors of employees’ job performances
explained by reducing absenteeism.
Therefore, it can be concluded that the two leaders’ motivational incentives variables,
appreciation and freedom were found to be the significant predictors of job satisfaction and
job satisfaction of the employees in the FPS that were studied. As the result of the study
41
considered appreciation with positive recognition for well-done job and freedom in decision
making, intrinsically and extrinsically, respectively were strong predictors of job satisfaction
dimension.
Table 14 (model summary), displays the results of the multiple regression analysis between
leaders motivational incentives and job performance dimension (reducing absenteeism) using
the Stepwise Method. The results indicate that recognition is the most significant predictor of
reducing absenteeism contributing to 4.7% R Square value. As the result of the study
considered recognizes the extra effort was a predictor of reducing absenteeism dimension
(reducing absent, quality improvement, motivated, satisfaction and better performance),
therefore more consideration should be given to its factor as compared to intrinsic
motivational incentive factors.
Table 14: Model summary for stepwise method for reducing absenteeism
Model R R Square Adjusted R Square Std. Error of the Estimate
1 .216a .047 .043 .98024
a. Predictors: (Constant), Recognition
A positive and significant effect of intrinsic motivational incentives through appreciation on
job satisfaction was observed. This indicates a significant linkage was existed between
appreciation and reducing absenteeism. Findings reveal extrinsic and intrinsic motivational
incentives are positively and significantly and positively associated with employees’
performance. Findings also suggest that extrinsic and intrinsic motivation shows positive
linkage with employee job performance dimension (job satisfaction and reducing
absenteeism). Similar findings were reported by Kalhoro et al. (2017) that extrinsic and
intrinsic motivation shows positive linkage with employee job performance.
Appreciation of employees with positive recognitions of employees at Federal Public Sectors
of Ethiopia found that members were most likely to perceive appreciation and positive
recognition and that is one of the causes of enhances valued outcome, employee job
satisfaction and retention. As expected, the results of this study shows that the relationship
between employee appreciation with positive recognition (leaders’ intrinsic motivational
42
incentive) and job performance dimensions such as valued outcome, job satisfaction and
retention is significant (ρ<0.05). The result further indicates that the direction of the
associations is positive in which it implies that the more appreciation is given to the
employees, the possibility of them to enhance valued outcome, job satisfaction and retention
will be higher. This study finding is in line with Kalhoro et al. (2017) who stated that
intrinsic motivational incentive (appreciations) of employers can motivate their employees
for higher performance and drive organizational commitment which might reduce
expenditures on unnecessary attrition. Rehman et al. (2016), intrinsic motivation is one of the
majority appropriate and consistent influences on the creative-ability and innovativeness. Job
related and social incentives such as opportunity to use one's ability, interesting work,
recognition of a good performance, development opportunities, a sense of challenge and
achievement, participation in decision making, and being treated in a caring and thoughtful
manner (Olubusayoa et al., 2014). Intrinsically motivated workforce renders more attachment
to the job duty for their own attention, as well as to look for substitute technique of resolving
dissimilar complication happening in business (Rehman et al., 2016). Most employees would
actually like to be recognized by their levels of skills and competencies within the
organizations because they tend to feel relevant and the sense of belonging to the
organization (Nyambegera and Gicheru, 2016). This further enhances their attachment to the
organization. Findings of Kalhoro et al. (2017) reveal extrinsic and intrinsic motivations are
positively and significantly and positively associated with employees’ performance. Findings
also suggest that extrinsic and intrinsic motivation shows positive linkage with organization
commitment.
Enhancing job satisfaction are more important than other human resource functions because
talented and intellectual capitals never fall in shortage and if not satisfied of current situations
they are easily switch over to another of many choices. Different reasons why peoples are
either staying or leaving organizations; one of these reasons is employee satisfaction, other
theoreticians call it job satisfaction, if an employee is satisfied with his/her job then they tend
to perform well while opposite is correct, and individuals are eager to leave the organization
due to opportunities in other places (Al-Qeed et al., 2016). In other words, high performing
employees will leave the organizations if they don’t feel valued, while employees who feel
valued and trusted tends to be more productive than their counterparts(Al-Qeed et al., 2016).
43
The role of good leader is to know how to attract and retain those intellectuals for the sake of
organization because hiring new intellectuals and talented employees is more expensive than
sustaining old one (Al-Qeed et al., 2016). In order to overcome challenges, organizations
should create a strong and positive relationship with its employees, direct them towards task
fulfillment and ensure they have job satisfaction (Fisher, 2012).
4.8. Motivational Incentive Preferred to High Employees' Job Performance The fourth research question the type of motivational incentive is preferred to getting high
employees' job performance. The interviewed showed that proposed and preferred payment
related motivational incentives their morale can be boosted since the ability of the leaders’ to
attract and retain employees depend on how much monetary incentives, it is prepared to
offer. Poor wages and salaries as well as poor protection and fairness are a constant source of
frustration to employees and when they engage management in constant strife, the result is
decrease productivity. However, the public sectors attract and retain employees depend on
how much employees receive appreciation and positive recognition from leaders’ for
welldone job and provision freedom in deciding how to carry out work and encourages to
take initiatives. Promotion, better pay fringe benefit and other social incentives are essential
factor that motivate the employees to increase productivity (Olubusayo et al., 2014). It is
therefore recommend that public sectors should strive to improve on monetary and
nonmonetary incentives systems giving to their employees in order to get the best output.
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
5.1. Summary The purpose of the study was to investigate the effects of leaders’ motivational incentives on
employees’ job performance at selected Federal Public Sectors (FPS) in Addis Ababa. The
research instrument was a structured questionnaire and interview questions. A convenience
sampling technique was used to select the respondents for this study at four selected
Ministries in Addis Ababa. A total of 250 employees of these Ministries constituted the
44
sample. Pearson’s correlation analysis and linear regression were employed to examine the
relationship between dependent variable and the independent variables. The first research
question examined leaders’ intrinsic motivational incentives affect employees’ job
performance. The findings show the existence of a significant relationship between intrinsic
motivational incentives and employee performance. The components examined under
intrinsic motivational incentives including trust, honest, collaborative work environment,
appreciation and ”difference” to society were collectively found to be significant predictors
of employees’ job performance at FPS in Addis Ababa. The second research question
examined leaders’ extrinsic motivational incentives affect employees’ job performance. The
components examined under extrinsic motivational incentives including promotion,
participation, freedom and recognition were collectively found to be significant predictors of
employees’ job performance at FPS in Addis Ababa. The third research question investigate
extents of leaders’ motivational incentives are linked to employees on job performance.
Appreciation, freedom and recognition were the most important significant predictors of job
performance. Appreciation and freedom were contributed 37.5% and identified to be
significant predictors of job satisfaction. Recognizes the extra effort was found to be
significant predictors of employees’ job performances explained by reducing absenteeism.
The fourth research question the type of motivational incentive is preferred to getting high
employees' job performance. Payment related motivational incentives were proposed and
preferred since employees morale can be boosted; even though the present public sector
leaders’ motivational incentives are used appreciation and freedom to attract and retain
employees.
5.2. Conclusions
On the basis of the results obtained indicating, all the dimensions leaders’ motivational
incentives instrument were assessed using correlation and multiple regression analysis to
ascertain the extent to which they explain the variance in employees’ job performance
dimensions. The finding indicates appreciation, fairness; protection and payment were
leaders’ motivational incentives dimensions. Whereas job satisfaction, reducing absenteeism
and achievement were employees job performance dimensions. Appreciation with positive
recognition factor was found to be significant predictors of employees’ job performance (job
satisfaction and reducing absenteeism).
45
Fairness, protection, and payment were found to be insignificant positive predictors of
employees’ job performance (job satisfaction and reducing absenteeism). The provision of
motivational incentives through fair and constructive performance evaluation, protection and
payment are somewhat weak and hardly contribute for better employees’ job performance.
From the findings it is concluded that provision of both intrinsic and extrinsic motivational
incentives have strong positive effect on employees’ job performance. Appreciation and
positive recognition for the extra effort that put at workplace, and freedom in deciding how to
carry out work and encourages employees to take initiatives were linked and reflect
positively on the performance of employees.
Appreciation and positive recognition for the extra effort that put at workplace is highly
linked that the public sectors leaders’ are used to attract and retain employees (job
satisfaction). When employee is appreciated, freed and recognized for the work carry out,
improves his/her motivation and results in delivering more than the required amount of
output and result in higher degree of efficiency. Poor wages and salaries as well as poor
protection and fairness are a constant source of frustration to employees and when they
engage management in constant strife, the result is decrease productivity. Promotion, better
pay fringe benefit and other social incentives are essential factor that motivate the employees
to increase productivity.
5.3. Recommendations
Current provision of motivational incentives through fairness, protection and payment are
somewhat weak and hardly contribute for employees’ job performance at public sector. The
Government should give attention and revise the performance evaluation systems, protection
(health and safety provision) and salary payment.
Employees who work harder and perform well and meet their targets should be motivated by
their respective organizations by giving them a special treatment in terms of incentives like
46
promotion with fair evaluation, protection and better payment to induce others to follow their
footsteps.
Public sectors should strive to improve fairness, protection and payment motivational
incentives systems giving to their employees in order to get the best performance.
Motivating employees’ by providing motivational incentives help the public sector to retain
experienced workers longer. Thus, the government should develop proper policies which
motivate employees’ to retain longer and for ultimate performance.
Public sectors leaders should acknowledge the effect of their motivational incentives on such
organizational aspects as employee reducing absenteeism levels and employee job
satisfaction rates.
Public sectors organizations should improve its performance evaluation system by setting
clear criteria for evaluation. In addition the results (feedback) of performance evaluation
should be communicated timely to the staff.
Further studies in this area should increase the sample size; attention should also be giving to
the role of leaders’ motivational incentive on employees’ job performance in regional and
cities level.
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APPENDIX: QUESTIONNAIRE
OROMIA STATE UNIVERSITY
DEPARTMENT OF HUMAN RESOURCE MANAGEMENT AND LEADERSHIP
RESEARCH QUESTIONNAIRE
I am Moges Temesgen, a student of Master of Art (MA) Program Leadership and Change
Management at Oromia State University. I am conducting a research on The Effect of
Leaders Motivational Incentives on Employee Job Performance: The Case of Federal Public
Sectors in Ethiopia under supervisor of Firdisa Jebessa (PhD).
You are requested to help us by filling this questionnaire. Your response will be highly
appreciated. As per ethics the data will be kept confidential.
Section One: Demographic Information Please fill out the following information:
1. Sex: Female Male
2. Age:
20 to 25 46 to 55
26 to 35 56 to 65 36 to 45 66 and above
3. Educational Qualification:
High School/TVET Master’s Degree
Bachelor’s Degree PhD Degree
4. Work Experience:
Less than 3 years More than 20 years 3 to 6 years
7 to 10 years
11 to 15 years
16 to 20 years 5. Position/ Job Title:___________________________________
56
Section Two: Motivational Incentives The number 1 to 6 represents a continuum with 1 being strong disagreement and 6 being strong agreement, where Strongly disagree (1), Disagree (2), Slightly disagree (3), Slightly agree (4) Agree (5) and Strongly agree (6). Based on your experience as an employee, please tick (√) the number that best reflects your opinion about the statement.
Items 1 2 3 4 5 6 1. My salary payments are prompt and on time 2. I am paid a salary that is enough to cater for my basic needs 3. Our organization has introduced performance related pay schemes 4. I believe financial incentives (salary, bonus and other perks) could
increase motivation at work place.
5. My leader makes any possible effort to create a collaborative work environment
6. My leader makes to build relationships of trust and mutual understanding among employees.
7. My leader makes to rely on open and honest communication and to share knowledge and information in all directions
8. The organization has set clear criteria for promotions, based on meritocracy and transparent procedures
9. In our organization is that employment is protected due to enshrined in law
10.
In our organization is that employment is protected based on standard practice
11.
The management cares about the health and safety of employees.
12.
It provides adequate and up to date IT support and infrastructure.
13.
It respects the individual characteristics of employees’ personality and encourages their development
14.
Your leader requires different specialized skills and you obtain ongoing feedback indicating success in their accomplishment
15.
My job is creative and produces something meaningful
16.
Your leader provides you the opportunity to “make a difference” to society
17.
Work evaluation is based on explicit performance criteria
18.
Performance evaluation forms include the roles and responsibilities of employees, the extent of achievement to pre-determined targets and the quality of final deliverables
19 Evaluations are fair and constructive
57
. Items 1 2 3 4 5 6 20.
Good evaluation has a positive impact on career advancement and/or pay raise of employees
21.
My leader encourages the participation of employees in seminars, workshops and conferences
22.
My leader provides employees the freedom in deciding how to carry out their work and encourages them to take initiatives
23.
My leader facilitate possibility of promotion and growth within an organization
24.
I receive appreciation and positive recognition from my leader for well-done job
25.
My leader recognizes the extra effort that I put at workplace
26.
My organization has variety of training programs to improve employee’s ability
Section Three: Job Performance The number 1 to 6 represents a continuum with 1 being strong disagreement and 6 being strong agreement, where Strongly disagree (1), Disagree (2), Slightly disagree (3), Slightly agree (4) Agree (5) and Strongly agree (6). Based on your experience as an employee, please tick (√) the number that best reflects your opinion about the statement.
Items 1 2 3 4 5 6 1. I feel motivated after my performance review 2. I am proud to work for the public sector organization 3. I have no problems in achieving a balance between my work and
my private life
4. My performance is better than that of my colleagues with similar qualifications
5. I am satisfied with my performance at my work place 6. My leader’s motivational incentives facilitate the implementation of
strategy by attracting and retaining the right kind of people
7. I am committed to have continuous quality improvement in my work
8. I am committed to have continuous attending and reduce reducing absenteeism in my work
9. My leader, motivational incentives are viewed as goals that employees generally strive for, and an instrument that provides valued outcomes
Items 1 2 3 4 5 6
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10. Being appreciated and being praised by my leader increases my success and job satisfaction at work
11. The leaderships’ motivational incentives motivate me to perform well in my job.
Interview (Section Four): Motivational incentives opinion
1. What type of leaders’ motivational incentive do you have in your organization?
2. What types of non-monetary incentives are available in your organization?
3. Which incentive is more important for employee to motivate?
4. What are the positive financial consequences of performance are utilized effectively
5. How do you overcome problems in achieving a balance between public service needs and
your job performance
6. What are the negative financial consequences of performance are utilized effectively
Thank You for Your Cooperation!!!
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