The success of every organization whether private or public, small or large, depends on the optimal functionality of its managerial potentials, availability of human and natural resources and efficient utilization of the resources (John, 1976; Flibbo, 1982; Higgins, 1994). The setting up of a business undertaking, provision of capital, labor, materials and operation of the machines are all made possible by the available human resources (employees). The human labor, both skilled and unskilled in turn needs to be compensated by means of motivation (Herzberg, Mausner & Snyderman, 1959; Vroom, 1964; Perry, Mesch & Paarlberg, 2006).
The methods used by different organization for motivating their employees differ depending on the nature of the undertaking, category of the organization and the system of operation (Victor, 1980; Kovach, 1987). The state of the system as well as the environment of the system exerts some measurable degree of impact on the nature and operation of employee motivation schemes. As a consequence, management in general lost some rights of the motivational instruments which can be employed to enhance banking performance.
Patten (1977) equally states that incentives are intimately related to motivation and are inducements place along the course of ongoing relatives that keeps the activities directed towards one goal rather than another. He added that people work because they expect to get something, usually monetary payment. As the success of banks’ performance hinged on the kind of employees they possessed, employee motivation produces a well-motivated workforce for higher performance of the banks. Through the maintenance of well-motivated workforce, there will be provision of efficient services, high profit and expansion of the banking industry in Nigeria.
Efficient and high developed financial systems are essential to a healthy economy. This includes the banking sector as one of the main integral of financial system in Nigeria. For the past few years, some of the banks have been growing. This could be attributed to how their employees are being remunerated today.
Management of banks has had to rise up to see that they planned adequately to meet the needs of their different group. Apart from the needs of their various stakeholders, Nigerian banks like every other profit-making organization, most especially in this period of banking reforms, maintain a well motivated workforce. A well motivated workforce or employees facilitate the achievement of organizational goals and objectives (Vroom, 1964; Terpstra, 1979; Victor, 1980; Perry et al, 2006). Moreover, with the limited human resources present in these banks would have to be managed adequately using appropriate labor incentives. Financially packaged incentives and other monetary rewards are frequently used by Nigerian banks as motivations for better performance.
The performance of Nigerian banks could be linked to the kind of employees’ monetary motivation systems implemented in the banks. This is because in Nigeria today, salaries and allowances are used as motivational instrument for increasing performance, productivity, and achievements of goals and objectives in both private and public organizations. Are monetary incentives, rewards and motivators having a significant impact on the profitability of banks in Nigeria? This study, therefore, assesses and evaluates the impact of employees’ monetary motivation on the profitability of banks in Nigeria.