ABSTRACT
This study focuses on Impact of Reward System on Performance of Selected Money Deposit Banks in Anambra State, Nigeria. The study sought to determine the effects of contingency pay on productivity in selected Money Deposit Banks in Anambra State, ascertain the extent to which employee recognition enhances employee performance in selected Money Deposit Banks in Anambra State, determine the extent of the relationship between variable pay and customer satisfaction in selected Money Deposit Banks in Anambra State, identify the effects of career opportunity on manpower development in selected Money Deposit Banks in Anambra State. The study had a population size of 1858, out of which a sample size of 369 was realised using Zigmund formula at 5% error tolerance and 95% level of confidence. Instruments used for data collection were primarily questionnaires and interview. Out of 369 copies of the questionnaires that were distributed, 350 copies were returned while 19 were not returned. The descriptive survey research design was adopted for the study. The hypotheses were tested using Pearson Product Moment Correlation Coefficient and Simple Linear Regression statistical tools. The findings indicated that contingency pay had significant effect on productivity (r = 0.652; t= 13.209; F= 174.480; p = 0.00 < 0.05). Employee recognition had significantly enhanced employee performance (r = 0.534; t = 12.589; F= 158.495; p= 0.000 < 0.05). There was a significant relationship between variable pay and customer satisfaction (r = 0.955; p= 0.000 < 0.05). Career opportunity significantly affected manpower development in Money Deposit Banks (r = 0.717;t = 20.524; F = 421.248; p = 0.000 < 0.05). The study concluded that reward system is a vital tool for employees’ effectiveness and efficiency on their job. The study recommended that organizations should adopt contingency pay strategy, which will help to retain and attract talented employees that will assist in promoting organizational productivity.
TABLE OF CONTENTS
List of Figures ix
CHAPTER ONE: INTRODUCTION
1.1 Background of the Study 1
1.2 Statement of the Problem 4
1.3 Objectives of the Study 5 1.4 Research Questions 5
1.5 Research hypotheses 5 1.6 Significance of the Study 6
1.7 Scope of the Study 7
1.8 Operational Definition of Terms 7
1.9 Background Information on the Nigerian Banking Environment 8
1.10 Profile of Selected Banks 10
References 16
CHAPTER TWO: REVIEW OF RELATED LITERATURE
2.1 Conceptual Framework 18 2.2 Theoretical Framework 41 2.3 Empirical Review 47
2.4 Summary of the Review of Related Literature 54
2.5 Critique of Literature 54
References 55
CHAPTER THREE: METHODOLOGY
3.1 Research Design 63
3.2 Sources of Data Collection 63 3.3 Population of the Study 63 3.4 Determination of Sample Size 64
3.5 Instrument for Data Collection 65
3.6 Validity of the Instrument 66
3.7 Reliability of the Instrument 66
3.8 Method of Data Analysis 67
3.9 Decision Rule 67
References 68
CHAPTER FOUR: PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA
Discussion of Findings 69
CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMEDATIONS
5.1 Summary of Findings 87 5.2 Conclusion 87
5.3 Recommendations 88
5.4 Area for Further Studies 88
5.5 Contributions to Knowledge 89
Bibliography 90
Appendixes 98
Questionnaire 99
LIST OF TABLES
| Table 4.1: | Distribution of Questionnaire 69 | |||||||
| Table 4.2: | Contingency Pay Boost Morale of Workers to Put in their Best 69 | |||||||
| Table 4.3: | Employees can Increase Organizational Productivity where there is Bonus 70 | |||||||
| Table 4.4: | Interesting and Challenging Responsibility Encourages commitment | |||||||
| which Promote Productivity | 70 | |||||||
| Table 4.5: | Employees can put in their Best on the Job if Well Recognised | 71 | ||||||
| Table 4.6: | Giving Special Incentives to Employees Promotes Growth | 71 | ||||||
| Table 4.7: | Promotion Enhances Growth in the Banking Sector | 72 | ||||||
| Table 4.8: | Giving Special Award to Best Employees Motivate them to | |||||||
| Contribute their Quote | 72 | |||||||
| Table 4.9: | Growth in the Banking Sector can be achieved as Employees | |||||||
| are Recognized with Bonus | 73 | |||||||
| Table 4.10: | Qaulity of Working Condition Induces and Encourages Customer | |||||||
| Satisfaction | 73 | |||||||
| Table 4.11: | Premium Motivate Employees to Serve Customer to their Best | 74 | ||||||
| Table 4.12: | Customer Satisfactions can be Enhanced through Employee | |||||||
| Commitment | 74 | |||||||
| Table 4.13: | There is Positive Link between Job Enrichment and Customer | |||||||
| Satisfaction | 75 | |||||||
| Table 4.14: | Employee Training Enhances Organizational Effectiveness | 75 | ||||||
| Table 4.15: | Goal Attainment can be Achieved through Employee Development 76 | |||||||
| Table 4.16: | Human Capital Development Promotes Organisational Efficiency 76 | |||||||
| Table 4.17: | Encouraging Talented Employees Enhances Goal Attainment 77 | |||||||
| Table 4.18: | Increase in Salary is Key Reward System that Ensures Staff | |||||||
| Engagement to Organisational Mission and Vision 77 | ||||||||
| Table 4.19: | Mission and Vision of the Organization can be Achieved through | |||||||
| Employee Promotion 78 | ||||||||
| Table 4.20: | Recognition is one of Most Reward Systems that Ensures Staff | |||||||
| Engagement which Promote Organisational Mission. 78 | ||||||||
| Table 4.21: | Organisational Goals can be Enhanced through Application of Suitable | |||||||
| Reward System 79 | ||||||||
| Table 4.22: | Model Summaryb 79 | |||||||
| Table 4.23: | ANOVAb | 79 | ||||||
| Table 4.24: | Coefficientsa | 80 | ||||||
| Table 4.25: | Model Summaryb | 81 | ||||||
| Table 4.26: | ANOVAb | 81 | ||||||
| Table 4.27: | Coefficientsa | 81 | ||||||
| Table 4.28: | Descriptive Statistics | 82 | ||||||
| Table 4.29 : | Correlations | 83 | ||||||
| Table 4.30: | Model Summaryb | 84 | ||||||
| Table 4.31: | ANOVAb | 84 | ||||||
| Table 4. 32: | Coefficientsa | 84 | ||||||
| LIST OF FIGURES | ||||||||
| Figure 1: | World at Work Total rewards model | 32 | ||||||
| Figure 2: | Model of Reward System and Organisational Performance | 89 |
CHAPTER ONE INTRODUCTION
1.1 Background of the Study
Reward system is an important tool that management can use to channel employee motivation in desired ways. In other words, reward systems seek to attract people to join the organization to keep them coming to work, and motivate them to perform to high levels. The reward system consists of all organizations components – including people, processes, rules and decision making activities involved in the allocation of compensation and benefits to employees in exchange for their contribution to the organization (Puwanenthiren, 2011).Reward systems are ways of promoting individual and organizational behaviour needed to achieve the organizational strategy and the organization’s goals (Lawler, 1995; Kerr and Slocum, 2005).
In order for an organization to meet its obligations to shareholders, employees and society, its top management must develop a relationship between the organization and employees that will fulfill the continually changing needs of both parties. At a minimum the organization expects employees to perform reliably the tasks assigned to them and at the standards set for them, and to follow the rules that have been established to govern the workplace. Management often expects more: that employees take initiative, supervise themselves, continue to learn new skills, and be responsive to business needs. At a minimum, employees expect their organization to provide fair pay, safe working conditions, and fair treatment. Like management, employees often expect more, depending on the strength of their needs for security, status, involvement, challenge, power, and responsibility. Just how ambitious the expectations of each party are, vary from organization to organization. For organizations to address these expectations an understanding of employee motivation is required (Beer, Spector, Lawrence, Mills, and Walton, 1984).
A well designed and functional reward system is an efficient way to increase employeework motivation. The appropriate type of reward is developed in accordance to thecompany’s reward philosophy, strategies and policy. However, it might be challengingto find the right way to combine the company’s integrated policies and practices together with the employee’s contribution, skill and competence. (Armstrong, 1999).
Kerr and Slocum (2005) define the reward system as to who gets rewarded and why. They also suggest reward systems to be powerful means of influencing organisational culture, and that reward system is a primary method of achieving control. Also, with regards to reward systems they state: the reward system defines the relationship between the organization and the individual member by specifying the terms of exchange: It specifies the contributions expected from members and expresses values and norms to which those in the organization must conform, as well as the response individuals can expect to receive as a result of their performance. (Kerr and Slocum, 2005). The reward system is a group of neural structures that are critically involved in mediating the effects of reinforcement. A reward is an appetitive stimulus given to a human or some other animal to alter its behavior. Rewards typically serve as reinforcers. Messmer, (2008) assert that a reward system is a structured method of evaluating and compensating employees based on their performance. Reward system Procedures, rules, and standards associated with allocation of benefits and compensation to employees (Kerr and slocum, 2005).
The current financial crisis the world is experiencing has made the reward system, with focus on bonuses and viable remuneration, a highly debated topic in media. Reward systems are often used as a management tool for achieving desirable objectives. One of the most common purposes is to motivate employees to perform better (Ax, Christer and Kullven, 2006). When workers are motivated, they are more likely to perform better. Improved worker performance quickens the achievement of corporate objectives.
Organizations are established to accomplish specific objectives. The organization that wishes to achieve these objectives must have a competitive and perhaps a comprehensive total reward system that is aligned with the organization’s business strategy and that reflects the competitive reality of the labour market. In a world where people have become more and more demanding about their lives and surroundings, the reward system could be used to motivate employees by satisfying these demands. However, there exists a lack of understanding in how to motivate all those high demanding individuals, making most of the reward systems sub-optimized. To create an optimal reward system, we need to better understand what really motivates, and what does not.
Individuals working for organisations are all different; their needs, thoughts and experiences are different and they are all motivated by different things. Thus, it would be more correct if the rewards also were individualized. It is important for every employer to find what motivates each employee. In a perfect world, the company has resources to ensure that all employees have a meaningful job, but this is far from reality. People want to feel that what they do make sense. What motivates us will change over time. What was seen as meaningful 25 years ago may not feel as meaningful today. We are motivated by different things depending on where we are in our development. A young worker is likely to be keener on development possibilities, while an older one is more anxious about security and to be able to use his experience (Jagult, 2005).
Banks have been keen on growth and expansion and this has led to continuous war for talent to operate in subsidiaries in the regional market and to steer innovation. In top demand are people who are technologically literate, globally astute and capable of not only developing but also executing strategy, setting off a scramble for staff among the top firms. However, in as much as banks worked to get people with the greatest potentials to occupy positions, employee maintenance has become a challenge for many of them due to the high labour costs involved, constituting up to 60 per cent of the total costs (Cherotich, 2012).
