Implementation of performance-based incentives at Umoja Microfinance (SMC) Ltd. Uganda

Abstract

The study focused on exploring implementation of performance-based incentives at Umoja microfinance (SMC) Ltd, Uganda. The study objectives included assessing employee perceptions of performance-based incentive programs at Umoja Microfinance, exploring the relevant approaches to implementing a performance-based incentive programs at Umoja microfinance Uganda., identifying challenges associated with the design of performance-based incentives program at Umoja Microfinance, and examining the solutions to the challenges associated with the design of performance-based incentives program at Umoja Microfinance. The research used a cross sectional research design to collect qualitative and quantitative data within the framework of mixed methods research approach, following the set specific objectives and research questions. A sample of 181 respondents was selected using simple random sampling technique, together with purposive sampling which helped the researcher to collect information from the specific respondents. The data were collected using interviews and survey questionnaires for qualitative and quantitative data respectively. The data were analyzed for frequencies and percentages using the Statistical Package for Social Scientists (SPSS) version 23. The findings of the study revealed that performance-based incentives are positively perceived by the employees Umoja microfinance, performance-based incentive schemes are perceived to motivate staff to achieve high performance levels, they are a way of improving performance of employees, while an incentive-based bonus links the amount of the payment to the level of performance. Furthermore, performance-based incentives result in employee commitment to the organization and their work, and they improve employee retention to an organization. The study concluded that there should be clear communication between the supervisors and employees regarding performance and incentives and the institution should motivate even low-performing employees to enable them improve their work output. The study recommends that there should be clear communication between the supervisors and employees regarding performance and incentives.