International Journal of Research and Innovation in Social Science (IJRISS) | Volume V, Issue VI, June 2021 | ISSN 2454–6186

Effect of Employees Motivation on Financial Performance of Insurance Companies in Emerging Economies in Nigeria

Emmanuel Opeyemi Oladunni¹, Chukwuma Benjamin Agbaji ², Umunnakwe Ishmael Agbo^3
1Department of Actuarial Science and Insurance, Ahmadu Bello University, Zaria Nigeria.
² Department of Insurance and Risk Management, Enugu State University of Science and Technology, Enugu Nigeria.
³Department of Insurance and Risk Management, Enugu State University of Science and Technology, Enugu Nigeria.

Abstract: Diminishing financial performance of insurance companies in recent years in Nigeria as a result of improper personnel management has done harm to financial system and provided shortfall in investors expectation in emerging economies. This study examined the effect of employees’ motivation on financial performance of insurance companies in emerging economies in Nigeria. The specific objectives of the study were to determine the extent at which intrinsic and extrinsic motivation strategies affect financial performance of insurance companies. The employed mixed research design using both research survey and ex-post facto. The sample size was 175 which was derived from a targeted population of 313 employees of insurance companies in Kaduna state, Nigeria. Data for the study was collected using structured questionnaire, annual publications of the Nigerian Insurance Digest (NIA) and financial reports of insurance company for 12 years’ period 2008-2019. Regression results revealed that intrinsic motivational strategies significantly affect financial performance of insurance companies while extrinsic motivational strategies have no statistical significant effect on financial performance of insurance companies in emerging economies in Nigeria. The findings supported the prediction of Herzberg two-factor and self-determination theories. The study recommended that decision makers of insurance companies should put effective and efficient strategies in place by using the right ways to motivate both management and non-management staff in order to achieve increased financial performance that significantly justify opportunities in emerging economies.

Keywords: Financial performance, employees, emerging economies, intrinsic motivation and extrinsic motivation.

I.INTRODUCTION

Motivation can be described as a decision making process, through which goal-directed behavior is initiated, energized, directed and maintained. Improving productivity is one big challenge that has engaged the attention of employers whether private or public. Emerging economies unveil the need for insurance companies to prioritize efforts in managing emerging risks which require employees’ motivation towards attaining increased financial performance that would meet shareholders’ expectation (Hallett, 2000). For years, employers are experimenting different strategies in an attempt to effectively relate motivation of employees to their performance.