abstract
The study is on effective reward
system in the improvement of performance in public organizations. This study therefore sought to
ascertain the extent of the relationship between reward system and
organizational performance, identify the major implications of effective reward
system on employee performance, determine the extent to which effective reward
influence employees’ behaviour, and ascertain whether monetary rewards
influence employee behaviour more than non –monetary rewards. This study
adopted survey research design. Simple random technique was used in selecting
the ministries in Enugu
State. The ministries
selected were: Ministry of Transport, Agriculture, Finance and Budget/Planning.
A sample of 288 respondents was determined from the population of one thousand
and thirty-three (1033) drawn from the senior and junior staff of the selected
ministries using Taro Yamane’s sample size determination method. The sources of
data for the study were primary and secondary. The main instrument used for
primary data collection was questionnaire and interview. The secondary data
were sourced from journals, textbooks and internet. The questionnaire was
structured in five-point Likert scale in line with the objectives of the study.
Content validity approach was used to ensure that the variables measured were
all covered. The instrument was checked for reliability using test-re-test
method. The result gave reliability co-efficient of 0.98% showing high degree
of item consistency. The total number of the questionnaires distributed for
this study was two hundred and eighty-eight (288) copies, while two hundred and
sixty five (265) copies representing 92% were completed and returned. The
research design adopted was survey design. The data generated from the field
survey were presented and analyze using frequency distribution table and simple
percentages. The hypotheses were tested using Z-test and Chi-square. The
findings indicate that there is a significant relationship between
reward system and organizational performance; Low labour turnover and improved
performance are the major implications of effective reward system; the extent
to which reward influence employee behaviour is high and that monetary rewards
influence employee behaviour more than non-monetary rewards. The study recommends that reward system should be carefully drawn to
reflect equity or fairness as compensation usually has several meanings to
employees; to ensure
that ministries provide reward that is both competitive and equitable,
compensation experts or specialists in the human resource department should be
created to develop, administer and oversee the reward system. The study concludes
that reward system focuses on positive reinforcement, because it stimulates
people to take actions since they get something of value for doing it.
TABLE OF CONTENTS
Title Page – – – – – i
Approval – – – – – ii
Certification – – – – – iii
Dedication – – – – – iv
Acknowledgements – – – – – v
Abstract – – – – – vi
Table of contents – – – – – vii
List of Tables – – – – – x
Lists of figures – – – – – xii
CHAPTER ONE: INTRODUCTION
1.1 Background of the Study – – – – – 1
- Statement of the Problem – – – – – 3
1.3 Objectives of the Study – – – – – 3
1. 4 Research Questions – – – – – 4
1.5 Research Hypotheses – – – – – 4
Significance of The Study – – – – – 4
1.7 Scope of the
Study – – – – – 5
1.8 Limitations of the Study – – – – 5
1.9 Historical Background of the Ministries understudied – 6
1.10 Definition of Terms – – – – – 7
References
CHAPTER TWO: REVIEW OF RELATED LITERATURE
2.1 The Concept of Reward Systems – – – 9
2.2 Effective Reward System – – – – 10
2.2.1 Reward Systems and Human Resource Processes
and Practices – 11
2.3 The Theories of Reward System and Motivation – 12
2.3.1 Maslow Theories of Reward – – – 13
2.3.2 Hertzberg’s Theory of Motivation. – – – 14
2.4 Total Reward Defined – – – – – 15
2.4.1. The Significance of Total Reward – – – – 16
2.5 The Expectancy Theory Model – – – 17
2.6 Designing Reward Systems for Competitive Advantage – 22
2.6.1 Strategic Design of Reward Systems – – – 23
2.7 Criteria for an Effective Reward System – – – 23
2.8 Types of Payment Scheme – – – – 24
2.8.1 Time Rates – – – – – 25
2.8.2 Payment by Result – – – – – 26
2.8.3 Plant/Enterprise-Based Scheme – – – 29
2.8.4 Performance –Related Pay – – – 31
2.9 Corporate Culture, Innovation And Rewards – – 32
2.9.1 How Employee Reward System Promote Organizational Performance 33
2.10 Organizational Goal – – – – 34
2.11 Employee Retention – – – – – 34
2.12 Organizational culture – – – – 34
2.13 Flexibility – – – – – 35
2.14 Gap in Knowledge – – – – – 35
References
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Research Design – – – – – 40
3.2 Sources of Data – – – – – 40
3.3 Population of the Study – – – – – 40
3.4 Sample Size Determination – – – – – 41
3.5 Description of the Research Instrument – – – 43
3.6 Data Analysis Techniques – – – – 44
3.7 Validity of the Research Instrument – – – 44
3.8 Reliability of the Research Instrument – – 45
CHAPTER FOUR: PRESENTATION,
ANALYSIS AND INTERPRETATION
OF DATA
CHAPTER FIVE: SUMMARY OF MAJOR FINDINGS,
CONCLUSION AND RECOMMENDATIONS
5.1 Summary of findings – – – – 70
5.2 Conclusions – – – – – 70
5.3 Recommendations – – – – – 70
5.4 Contribution to knowledge – – – – 71
5.5 Suggested areas for further research – – – 71
Bibliography
Appendix
1
Appendix 2
LISTS OF
TABLES
TABLES
Table 2.1 A checklist for assessing the
effectiveness of reward strategy 24
Table 3.1 Population distribution – – – 41
Table 3.2 Breakdown of sample size – – – 43
Table 3.3 Correlation coefficient of reliability – – – 45
Table 4.1 Distribution
and Return of the Questionnaire – – 47
Table 4.2 Sex Distribution of Respondents – – 47
Table 4.3 Age Distribution of Respondents – – 45
Table 4.4 Marital Status of Respondents – – 45
Table 4.5 Academic Qualifications of Respondents – 49
Table 4.6 Extent of relationship between reward system and
organizational performance. – – – 50
Table 4.7 Extent
of relationship between reward
system and
organizational
performance. – – – – 50
Table 4.8 Extent of relationship between reward system and
organizational
performance. – – – – 51
Table 4.9 Condensed outcome of the three questions
administered for
research question 1 – – – – 52
Table 4.10 Aggregate Response for the three Ministries – 52
Table 4.11 The
major implications of effective reward on employee
performance. – – – – 53
Table 4.12 The
major implications of effective reward on employee
performance. – – – – 53
Table 4.13 The major implications of effective
reward on employee
performance. – – – – 54
Table 4.14 The major implications of effective reward
on employee
performance. – – – – 55
Table 4.15 Condensed outcome of the four questions
administered
for research question 2 – – – – 55
Table 4.16 Aggregate Response for the three Ministries – 56
Table 4.17 The extent to which effective reward
influences
employee’s behaviour. – – – – 56
Table 4.18 The extent to which effective reward
influences
employee’s behaviour.
– – – – 57
Table 4.19 Condensed outcome of
the three questions administered
for research question 3. – – – – 57
Table 4.20 Aggregate Response for the three Ministries – 58
Table 4.21 Wheithermonetary rewards influence employee
behaviour
more
than non- monetary rewards. – – – – 58
Table 4.22 Wheithermonetary rewards influence employee behaviour
more than non-
monetary rewards. – – – – 59
Table 4.23 Wheithermonetary rewards influence employee
behaviour
more than non- monetary rewards. – – 59
Table 4.24 Condensed outcome of the
three questions administered
for research question 4. – – – – 60
Table 4.25 Aggregate Response for the three ministries – 60
Table
4.26 Relationship
between effective reward system and
organizational
performance response Cross tabulation – 61
Table 4.27 Z-Tests – – – – 61
Table 4.28 Descriptive Statistics – – – – 61
Table 4.29 One-Sample Kolmogorov-Smirnov test table – 62
Table 4.30 Factor
Analysis – – – –
Table 4.31 KMO and Bartlett’s test table – – 63
Table 4.32 Correlation Matrix table – – – 63
Table 4.33 Communalities Total Variance Explained table – 64
Table 4.34 Influence of reward on employee behaviour *
response
Cross tabulation – – – – 66
Table 4.35 Chi-Square test table – – – 66
Table 4.36 Descriptive Statistics – – – 67
Table 4.37 One-Sample Kolmogorov-Smirnov test table – 67
LISTS OF FIGURES
Figure 2.1 The Expectancy Theory Model – – 21
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND
OF THE STUDY
Over the years, managers
are increasingly realizing that they have to establish a balance between
employees’ contribution to the organization and the organization’s contribution
to the employees. Developing this balance is one of the main reasons to reward
employees. Organizations that follow a strategic approach to creating this
balance focus on the three main components of a reward system, which includes,
compensation, benefits and recognition. A key focus of recognition is to make
employees feel appreciated and valued. Research has proven that employees who
get recognized tend to have higher self-esteem, more confidence, more
willingness to take on new challenges and more eagerness to be innovative.
Reward system is an important ingredient in managing innovation
in a company. It is essential for the firm’s success to reward innovators for
their contributions, to reward people who collaborate as well as individual
performers. Rewards can be given in many different forms. Profit sharing
programs that result from gains achieved through innovation are an outstanding
means of rewarding individuals for improving the company’s standing but the
down side is that all employees generally get an equal reward proportion that
does not recognize their individual contributions. More specific options are
merit rating and bonuses based on performance evaluations because they take
into account individual innovation and collaboration. Reward practice deals
with many different recognition programs both intrinsic and extrinsic than can
be used. Many firms that achieve high levels of innovation
