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RESEARCH TITLE1

INTRODUCTION2

PROBLEM STATEMENT3

RESEARCH OBJECTIVES4

RESEARCH QUESTIONS5

VARIABLES6

HYPOTHESIS7



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 becomeinfluential 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

Government’s administration are more than 2,000 each year.

Almost every year the Governement of Malaysia has paid bonus to its 1.4 million civilservants. 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 lowwork 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 offinancial incentives on job performance

and productivity?

What is the relationship between financialincentives 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 jobproductivity and performance.

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