Staff Performance and Extraneous Motivation at Microfinance Institutions (MFIs): A Case of Microfinance Institutions in Arusha -Tanzania

Abstract

The objective of this study was to determine how extraneous motivators influence the performance of staff in Tanzanian microfinance institutions. 98 non-deposit-taking microfinance institutions in Arusha completed questionnaires to provide the information. The Data was analyzed using descriptive statistics and Pearson Coefficient Correlation to determine the significance of the impact of incentives, rewards, and salary packages on employees’ performance in the MFIs. According to the results, the majority of respondents thought that employee incentives had a significant impact on how well MFI employees performed. Further, the majority of participants had the view that prizes have a positive influence on performance. Likewise, the majority of respondents were of the view that employees’ performance is highly influenced by the salary packages offered by the MFIs. Employee performance and bonuses, rewards, and compensation plans also had statistically significant and positively correlated relationships. According to the study, MFI management should enhance their extrinsic incentives, such as salary packages, allowances, bonuses, commissions, prizes, and non-cash rewards, as a means of encouraging workers to perform.