RESEARCH TITLE 1

INTRODUCTION 2
PROBLEM STATEMENT 3
RESEARCH OBJECTIVES 4
RESEARCH QUESTIONS 5
VARIABLES 6
HYPOTHESIS 7
The main aim of giving out financial incentives is to increase the productivity and
performance of the employees. This is proved by Lazear (2000), Lemieux et al. (2009)
and Murali-dharan & Sundararaman (2009), on their research regarding relationship
between salary increases and quality of job performance.
Financial incentives can be categorized to 2 groups. One which are paid to the
operational workers whereby the other one are for the management workers. Piece-
rate plan, standard hour plan, team or group variable pay incentives plan are among
the types of financial incentives given out to the operational workers. Meanwhile the
management workers are offered incentives in a form of annual bonus and shares.
Their studies conclude that salary increases and quality of job performance has establish
a strong relationship. Research further indicates that providing financial incentives for
job performance results in increased productivity, faster organizational growth and
enhanced employee job matching.
However this studies only focuses on operational workers. In addition, the research that
has been conducted by Lamieux has sidelined greater wage inequality due to the
employees behavior. The gap identified in their studies has triggered the importance of
carrying out a research to test the relationship of financial incentives and quality of job
performance in Malaysia among the management workers.
This has indicate that the civil servants are still unproductive even though the
Government has granted financial incentives to them. Studies conducted by Lemieux et
al. (2009) too has proven that bonus pay, commission or piece rate contracts has lead
to greater wage inequality and perhaps employees behavior seems to become
influential towards job performance.
Logically these financial incentives given out are able to boost the quality of job
performance among the civil servants. However, their performance are still being doubt
and questioned by the public. Statistics from Biro Pengaduan Awam has showed that
for the past 14 years the number of complaints being made by the public regarding the
Governments administration are more than 2,000 each year.
Almost every year the Governement of Malaysia has paid bonus to its 1.4 million civil
servants. Besides bonus, wang saguhati and also better remuneration package has
been introduced in order to reward the civil servants due to their contributions.
Therefore, the effectiveness of financial incentives in increasing quality of job
performance among the civil servants need to be identified.
Work Performances and Productivities in Public sector are
decreasing and being questioned by public.
What Is The Problem
No. of complaints made by publics are more than 2,000 each year
for past 14 years.
A total of 15,400, or about 1.1% of the total civil servant had low
work performances.
Magnitude Of The Problem
Public Sector In Malaysia
Where Is The Problem
To help Government in increasing work Performance and
Productivity of civil servants.
Achieving People First, Performance Now Slogan
Why Is It Importance
Identify the effectiveness of financial incentives
towards job performance and productivity.
To identify the relationship between financial
incentives towards job performance and
productivity.
GENERAL
SPECIFIC
What effects do financial incentives have
on job performance and productivity?
Are there any effect of different types of
financial incentives on job performance
and productivity?
What is the relationship between financial
incentives on job performance and
productivity?
1
3
2
INDEPENDENT
VARIABLES
DEPENDENT
VARIABLES
Job Performance And
Productivity
Financial Incentives
There is no positive relationship between
incentives payment towards increase in job
productivity and performance.
There is positive relationship between
incentives payment towards increase in job
productivity and performance.