A STUDY ON PERFORMANCE APPRAISAL OF FINANCIAL AND

NON FINANCIAL INCENTIVES IN EDUCATIONAL SECTORS

PROJECT REPORT

submitted by
JANICA MARIA
ROLL NO: 21

DEPARTMENT OF MANAGEMENT STUDIES, PALAYAD

submitted to
DR U.FAISAL

DEPARTMENT OF MANAGEMENT STUDIES, PALAYAD

1.1 INTRODUCTION
Today, the incentives of modern organisations are comprised of two major categories of
incentives: financial and non-financial.Financial incentives means pay for performance. It
includes fixed (i.e.salary and benefits) and variable incentives (i.e. incentives based on
individual,group or organisational performance).Non financial incentives are non-monetary/
non cash and it is social recognition.It also includes tangible incentives provided and controlled
by the firms.However in contrast, these do not benefit employees in a monetary
sense.Examples includes recognition, alternate work arrangments, and training and
development opportunities, job rotations after attaining goals, certificates,genuine
appreciation.Although financial incentives have a long pedigree,increasing pressure on
organisations to control or reduce costs has led to the proliferation and hieightened use of non
financial incentives.

Incentives may be used to incite performance. It is a natural thing that nobody acts without a
purpose behind.Therefore a hope for a reward is a powerful incentive to motivate
employees.Incentives are therefore motivations for work. They could be financial or non
financial.Incentives provide a zeal in the employees for better, there are other stimuli which
includes job satisfaction, job security, job promotions and pride for accomplishment.

As theoritical and empirical research highlights , different rewards possess different

motivational properties, hence they can be used to achieve different performance objectives.By
more precisely identifying and understanding the performance implications of an institution
financial and non financial incentives, organisations can more effectively direct and allign
desired behaviours with strategic performance priorities.

Performance is also multidimensional. Since institutions operate in dynamic , highly

competitive, and often global business environment, in order to differentiate them from their
rivals, they must now look beyond narrowly defined and short term focused economic
performance dimensions to include broader , more strategic,and non financial aspects.Both
financial and non-financial performence dimensions are used to translate a institution strategy
into specific performance requirments for its employees.

In addition to to role-prescribed task activities, employees are also now expected to perform
extra task performance behaviours (e.g. cooperating with co-workers, citizenship
behaviour).Such people oriented performance dimensions (teamwork, inter personal skills) not
only contribute to an institutional social and psychological environment but are similarly
viewed as competitive advantage.Thus understanding the performance implications of
different financial and non-financial incentives is critical to achieving desired performance and
alligning rewards with an institution performance priorities, whether they become economical
, competitive or people oriented.

1.2 TITLE OF THE STUDY

“A STUDY ON PERFORMANCE APPRAISAL OF FINANCIAL AND NON- FINANCIAL INCENTIVES IN
EDUCATIONAL INSTITUTION’S WITH SPECIAL REFERENCE TO PALAKKAD TOWN”

1.4 OBJECTIVES OF THE STUDY

➢ To study the effectiveness and importance of financial and non-financial incentives on
employee performance.
➢ To analyse the incentive system of employees that lead to employee motivation.
➢ To determine the impact of incentives on employee performance.
➢ To know whether effective incentive system have positive effects on employee
productivity.
➢ To determine which incentive best motivates the employees.

1.5 SCOPE OF STUDY

The study would try to throw some insights into the existing financial and non-financial
incentives in educational institution and the gap between employee expectations, perceptions
and the actual state of incentive system.The results of the study would be able to recognise the
unfilled space in the system and thus provide key areas where changes are required for better
employee performance.

1.6 SIGNIFICANCE OF THE STUDY

Financial and non-financial incentives are provided to motivate employee performance at jobs.
The benefits of such incentives encourages the employees to bring out the best in themselves.
It instills a sense of achievement for all the employees in educational institutions. Increased
performance will lead to growth in educational institution and eventually overall economic
developments.

1.8 LIMITATIONS OF THE STUDY

o Period of study was the major limitations.

o Some of the respondents of the survey were unwilling to share the information.
o The information given by the respondents might be biased.
o The organisation rules and regulations also affect the study.
 TABLE NO 1

GENDER WISE CLASSIFICATION OF RESPONDENTS

GENDER NO OF PERCENTAGE
RESPONDENTS

MALE 6 12

FEMALE 44 88
 TABLE NO 2

AGE WISE CLASSIFICATION ON RESPONENTS

AGE NO OF PERCENTAGES
RESPONDENTS

18-25 2 4

25-35 14 28

35-45 26 52

Above 45 8 16

60

40

20

0
18-25 Series1
25-35
35-45
Above 45
 TABLE NO 3

STATUS CLASSIFICATION OF RESPONENTS

STATUS NO OF PERCENTAGE
RESPONDENTS

MARRIED 40 80

UNMARRIED 10 20
 TABLE NO 4

MONTHY SALARY OF THE RESPONENTS

MONTHLY SALARY NO OF PERCENTAGE

RESPONDENTS

UPTO 10000 1 1

10000-20000 4 8.2
20000-50000 19 38.8
Above 50000 26 53.1

MEAN 12.5
MEDIAN 11.5
MODE -

Chart Title

MODE

MEDIAN

MEAN

11 11.2 11.4 11.6 11.8 12 12.2 12.4 12.6

 TABLE NO 5

O E (O-E) (O-E)*2/E
10 9 1 0.11
22 33 121 3.67
40 29 121 4.17
21 23 4 0.17
7 7 0 0.00
8.12

8.12

n-r-1= 5-2-1 = 2

table value = 5.99

level of significance = .05

calculated value is more than the table value.