EFFECTIVE REWARD SYSTEM AN EMPLOYEE MOTIVATION: A STUDY OF SOME SELECTED FOOD PROCESSING FIRMS IN PORT HARCOURT.
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EFFECTIVE REWARD SYSTEM AN EMPLOYEE MOTIVATION: A
STUDY OF SOME SELECTED FOOD PROCESSING FIRMS IN PORT HARCOURT.
ABSTRACT
The study
examined the relationship between effective reward system and employee
motivation in some selected food processing firms in rivers state. The research
design adopted for this study is the quasi-experimental (cross sectional
survey). The simple random sampling technique was used to determine a sample
size of 150 employees. The data for the study were collected from both primary
and secondary sources. Data analysis, done with the chi-square, revealed that
there is a significant relationship between the type of the incentive offered
and the level of employee motivation. Similarly, it was revealed that there is
a significant difference in the job performance of motivated employee and
non-motivated employee. The study also reveals that employee’ perceptions of
rewards distribution affect their performance in the organization. The study
also revealed that effective reward systems are imperative for attracting and
retaining valued employees. Based on these, it was concluded that the poor
attitudes, demotivation and low performance of employees in the food processing
firms is caused by behaviours. Based on the above conclusion, it was
recommended that managers design a reward system that reflects the employees’
personal values. Reward system should focus on positive reinforcement which is
the most effective tool for retention of valued employees. Design a reward
system that it flexible enough to be changed if there are external challenges
and opportunities that would create a need for changing the system. Reward
systems should align goals of the organization with the goals of the employees.
TABLE OF CONTENTS
Title Page i
Declaration ii
Certification iii
Abstract iv
Dedication v
Acknowledgement vi
Table of Contents vii
List of Tables x
List of Figures xi
CHAPTER
ONE: INTRODUCTION
1.0 Context
of the problem 1
1.1 Statement
of the problem 3
1.2 Purpose
of the study 4
1.3 Research
questions 4
1.4 Statement
of hypothesis 5
1.5 Significance
of the study 5
1.6 Scope
of the study 6
1.7 Definition
of terms 6
1.8 Limitation
of the study 6
1.9 Organization
of the study 7
CHAPTER
TWO: REVIEW OF LITERATURE
2.0 Introduction 8
2.1 The
interpersonal approach to reward system 8
2.2 Why
reward system 9
2.3 The
effective reward system 10
2.4 Type
of rewards 11
2.5 The
type of rewards desired most by employees 12
2.6 Flexibility
in reward system 14
2.7 Introduction
to motivation 14
2.8 Motivation
defined 15
2.9 Motivation
theories 15
2.10 Process
of motivation 18
2.11 Characteristics of a motivation
job 19
2.12 The role of motivation 19
2.13 Motivation methods 20
2.14 Reward
and motivation 23
2.15 Conclusion 24
CHAPTER
THREE: RESEARCH METHODOLOGY
3.0 Introduction 26
3.1 Research
design 26
3.2 Sample/sampling
procedure 28
3.3 Method
of data collection 28
3.4 Validity
of instrument 29
3.5 Operational
measures of the variables 29
3.6 Data
analysis technique 30
CHAPTER
FOUR: PRESENTATION AND ANALYSIS OF DATA
4.1 Determination
of response rate 30
4.2 Data
analysis and research question validation 30
4.3 Hypothesis
testing 36
CHAPTER FIVE: DISCUSSION, CONCLUSION AND
RECOMMENDATION
5.1 Introduction 40
5.2 Discussion
of findings 40
5.3 Conclusion
41
5.4 Recommendation 42
5.5 Suggestion
for further reading 43
Bibliography 44
Questionnaire 46
LIST OF TABLES
4.1 Questionnaire
distribution 30
4.2 Incentive
and motivation 31
4.3 Type
of incentive and level of motivation 32
4.4 Motivation
and performance 33
4.5 Work
effort and equity/inequity 34
4.6 Reward
system and retention of valued employee 35
4.7 Types
of incentives and level of motivation 37
4.8 The
out-put of the chi-square model 37
4.9 Motivation
and performance 39
4.10 The
out-put of the chi-square model 39
LIST OF FIGURES
2.1 Equity
equation 17
2.2 Motivation
process 18
CHAPTER ONE
INTRODUCTION
1.0 CONTEXT OF THE PROBLEM
To
reward desired behaviour is normal and such efforts appear in virtually every
aspect of our lives. It would appear that everything we do is connected with
some kind of reward system, whether that system is formal or informal (Nelson,
1995). Many experts in management believe that reward systems are one of the
key forces that drive organizational and individual performance because they
differentiate between the less productive and the highly productive (Lawler, 2003).
Among their many benefits, it is said that an effective reward system will
contribute to better performance, employee motivation, organizational learning,
increased product, quality and the resolution of organizational problems.
Effective
reward system is the framework that boosts the motivation of the employees.
They are strategic mechanism used by organizations to achieve their goals
(Kotelnikov, 2009).
It
is through the organization’s reward system that good employees are attracted
to the organization, decide to stay within the organization and then
consciously decide to perform well. Employees perform at the level at which the
organization rewards them. (Buhler 1989)
Job
performance (or any desired behaviour) will likely be most effective when the
employee’s temperament, preferences, and expectations are congruent with the
organization’s reward (Dreher & Dougherty, 2001).”
People
continue to do what they have been rewarded for doing. This is a form of
positive reinforcement. Yet managers must know what rewards mean the most to
which employees in order to be the most effective. To give John a bigger office
when he actually responds better to more money does not elicit the desired
performance over the long run. An inappropriate reward has been offered. This
mismatch of reward with the individual may have the same ultimate effect as
giving on reward at all.
Therefore,
the astute manager must know each employee and what rewards will effectively
motivate him/her. In addition, the manager must be constantly aware of the
rewards available in the organization. To compensate for rewards not available,
the manager must be creative and work within the boundaries of the organization
to create a menu of reward for employees.
In
order for a reward system to be effective, the reward must hold some importance
for the employees. If none of the potential rewards hold any importance for an
individual, it is most unlikely that they will provide the motivation to elicit
the desired performance from the worker. (Buhler, 1989). If the reward given is
a new title, but the employee desires more responsibility and greater
visibility, the reward may be labeled unimportant and hence ineffective as a
motivator to this particular employee.
The
reward system should offer flexibility for maximum effectiveness. That is,
rather than being hard and fast, the options of rewards should leave room for
flexibility. Tailoring the reward to the individual goes a long way in
motivating an employee. This could be termed customizing the rewards. This,
then, heightens the importance of the reward to be individual and motivates
better. (Buhler, 1989).
Rewards
demonstrate to employees that their behaviour is appropriate and should be
repeated. If employees don’t feel that their work is valued, their motivation
will decline. To develop motivated employees, a manager must treat people an
individual, empower workers, provide an effective reward system, redesign jobs,
and create a flexible workplace (Berrett-Koehler, 2009).
1.1 STATEMENT OF THE PROBLEM
It’s
one of the thorniest management problems around: dealing with unmotivated,
low-performing employees. It’s easy to point that finger of blame at them. But
in most companies, it’s the reward system, not the workforce, that’s causing
poor attitudes and performance: many reward systems actually discourage desired
behaviours while rewarding the very actions that drive executives crazy (Steve
Kerrr 2008).
It
is a statement of fact that employees are the lifeblood of any organization. It
is however unfortunate that these all important set of workers are usually
neglected while taking key decision concerning their jobs.
No
two individuals are the same, just as people differ in their needs, values,
beliefs, perceptions, abilities, attitudes, preferences and of course, their performances,
in the same vain, people differ in their expectations from work (D.M. Baridam
and B.M. Nwibere, 2008). Therefore, the fact that reward is not tailored along
individual but group needs is a big problem.
Many
executives understand the concept of rewards, yet fall woefully short in
Schneider and Bowen (1995) posit that there are four ways organizations fail to
use reward effectively.
1. They fail to sue the full range of
available rewards,
2. They fail to sue the intrinsic reward of
goal accomplishment,
3. They fail to use reward systems to
facilitate service quality and
4. They fail to manage reward systems
effectively.
One
of the major issues faced by human resources departments and specialists is the
issue of employee motivation. In the workplace, motivation is a primary factor
when it comes to getting work done. No matter how skilled the workers in any
specific department may happen to be, the goals of the supervisor will not
reach desired levels of success and timelines if the proper employee motivation
is not in place.
Yet
in spite of the myriad of available theories and practices, managers often view
employee motivation as something of a mystery. Thus, with so many opportunities
available, job tenure continues to decline, experts agree that one of the most
crucial problems of a booming economy is retention of valued employees.
Therefore,
it is imperative for the organization to enhance motivation level of the
employees in order to bring out the best in them, to get them to work on time
with the right attitude.
1.2 PURPOSE OF THE STUDY
The
purpose of this study is:
i. To
evaluate the effectiveness of the organizations reward systems as regards
employee motivation.
ii. To
find out if the reward system reflects the employees’ personal values and the
overall culture of the organization.
iii. To
assess the extent of flexibility in the organizations rewards systems.
iv. To
find out if the reward system contributes to better performance.
1.3 RESEARCH QUESTIONS
1. Do
employees require any special incentives/rewards in order to be motivated?
2. Is
there any significant relationship between the type of incentives offered and
level of employee motivation?
3. Is
there any significant difference in job performance between motivated employees
and non-motived employees?
4. Does
perceived equity/inequity affect employee’s work effort?
5. Does
the reward system in place attract and also facilitate the retention of valued
employees?
1.4 STATEMENT OF HYPOTHESIS
H01:
There
is no significant relationship between the type of incentives offered and the
level of employee motivation.
H02:
There is no significant difference in the job performance of motivated employee
and non-motivated employee.
1.5 SIGNIFICANCE OF THE STUDY
Consequently,
this study derives its significance from the attempt to add to existing
literature on the subject. It shall be a welcome addition to the vast field of
resources based on personnel administration, particularly in the field of
compensation.
Furthermore,
the study shall highlight steps to creating an effective reward system at would
motivate employees in the food processing firms to work at their optimum level.
The study shall point out the need of innovative strategies in order to
motivate employees of selected food processing firm in Port Harcourt into
upgrading their level of competency as well to permeate organizational commitment
among them.
Specifically,
managers seeking means of putting proper employee motivation in place, in the
food processing firms would find this study immensely useful. The study would
be able to help prospective administrative department of food processing firms
by providing them a concrete study regarding the potential of an effective
reward system to boost up the performance of the organizations as a whole.
The
food processing sector is expected to boost if the measures recommended are
adopted, as unmotivation and low performance will be drastically reduced if not
eliminated.
1.6 SCOPE OF THE STUDY
This
study is limited to the identification of the causes of demotivation, low
performance in employees and the ineffectiveness in the rewards systems of some
food processing firms.
In
identifying the causes of unmotivation, low performance in employees and the
ineffectiveness of the rewards systems in the food processing firms, only Port
Harcourt metropolis, which has a good number of food processing firms in it,
are covered by the study.
1.7 DEFINITION OF TERMS
1. Reward System: A formal or informal
program used to recognize individual employees achievement, such as
accomplishment of goals or projects.
2. Motivation: Motivation is a kind of
internal which drives a person to do something in order to achieve something.
3. Effectiveness: A reward system is said
to be effective if it contribute to better performance, employee motivation,
organizational learning, increased product quality, and the resolution of
organizational problems.
1.8 LIMITATIONS OF THE STUDY
This
study was limited to Port Harcourt because of time constraint. However, Port
Harcourt being one of the commercial nerve centres of the country with a good
number of food processing firms in it minimized the impact of the limitations.
Convenience
sampling method was used because of time, finance and the availability of
research materials.
The
selection of the sample size, the design and administration of the
questionnaire, and the reliance on respondents for objective responses must
have introduced sampling error/bias into the data generated and the findings
made.
The
above notwithstanding, the findings and recommendation of the study would be
very useful to any organization seeking to adopt effective reward system that
would have long term motivating effect on employees.
1.9 ORGANIZATION OF THE STUDY
This
survey is organized into five chapters
Chapter
one is an introductory chapter which deals with the overview, statement of the
problem, purpose of study, research questions, statement of hypothesis,
significance of the study, scope of the study, definition of terms, limitation
of the study and organization of the study. Chapter two reviews related
literatures in the subject of study.
Chapter
three reports the methodology adopted to collect data, the strategy to verify
the hypothesis and then to answer the research questions. This chapter is
organized around the following themes: research design, sampling procedure,
method of data collection, and validity of instrument, operational measures of
the variables and data analysis techniques. Chapter four deals with
presentation and analysis of data.
Chapter
five contains discussion, conclusion and recommendations.
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