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.
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
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
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
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.