The Role Of Organizational Reward System On Employees Performance (A Case Study Of Cadbury Nigeria Plc)

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The Role Of Organizational Reward System On Employees Performance (A Case Study Of Cadbury Nigeria Plc)


Abstract


Reward system is an important tool that management uses to channel employee’s motivation in desired ways such as better functionality and further improve company performance. The purpose of this study was to examine the impact of reward systems on job satisfaction in Cadbury Nigeria PLC, Nigeria. The study was guided by four objectives. The study used descriptive research design which incorporated both quantitative and qualitative approaches. The study surveyed 65 employees from three Cadbury Nigeria PLC, using self-administered questionnaire. It also interviewed selected employees. The data was analyzed with use of descriptive statistics (SPSS and excel) and data presented as frequency distribution tables and histograms. The findings of this study showed that the three Cadbury Nigeria PLC offer both extrinsic (salary, bonus and promotion) and intrinsic (praise, recognition and genuine appreciation) rewards to their employees. However, the results found that employees were not satisfied with the current reward packages and salary level was viewed to be too low and did not reflect cost of living. The study further indicated the intrinsic (non financial) rewards were not satisfactory to employees.


Table of Content


  • Title Page
  • Certification
  • Dedication
  • Acknowledgement
  • Table of Content
  • List of Tables
  • Abstract

Chapter One:

Introduction

  • 1.1 Background of the Study
  • 1.2 Statement of the Problem
  • 1.3 Objective of the Study
  • 1.4 Research Questions
  • 1.5 Research Hypothesis
  • 1.6 Significance of the Study
  • 1.7 Scope of the Study
  • 1.8 Limitation of the Study
  • 1.9 Definition of Terms
  • 1.10 Organisations of the Study

Chapter Two:

Review of Literature

  • 2.1 Conceptual Framework
  • 2.2 Theoretical Framework
  • 2.3 Empirical Review

Chapter Three:

Research Methodology

  • 3.1 Research Design
  • 3.2 Population of the Study
  • 3.3 Sample Size Determination
  • 3.4 Sample Size Selection Technique and Procedure
  • 3.5 Research Instrument and Administration
  • 3.6 Method of Data Collection
  • 3.7 Method of Data Analysis
  • 3.8 Validity of the Study
  • 3.9 Reliability of the Study
  • 3.10 Ethical Consideration

Chapter Four:

Data Presentation and Analysis

  • 4.1 Data Presentation
  • 4.2 Analysis of Data
  • 4.3 Answering Research Questions
  • 4.4 Test of Hypotheses

Chapter Five:

Summary, Conclusion and Recommendation

  • 5.1 Summary
  • 5.2 Conclusion
  • 5.3 Recommendation
  • References
  • APPENDIX
  • QUESTIONNAIRE

Chapter One


Introduction

1.1 Background to the Study

The people who make up an organization are considered to be one of the most important resources of today’s firms. People and how they are managed are becoming more important because many other sources of competitive success are less powerful than they used to. Recognizing that the basis for competitive advantage has changed is essential to develop a different frame of reference for considering issues of human resource management (Dyer and Reeves, 1995). An organization’s success or failure is highly determined by effective and efficient utilization of resources at its disposal, such as human, material, financial, and information resources. Among these four resources, the human resource is the most important part and crucial of all resources for the survival of an organization or business firms. Rewards management has gained increased importance especially in the current dynamic and competitive environment. It is one of the most important components of an organization’s retention strategy. The aim of reward management is to reward people fairly, equitably and consistently in accordance with employees’ contribution to an organization (Michael & Helen, 2007). Reward system has been found to play a critical role in enhancing employee commitment. According to Armstrong and Murlis (2007), Reward management refers to the strategies, policies and processes that are required to ensure that the contribution of people in an organization is recognized by both non-financial and financial means.
Reward being seen as a vital instrument in employee performance. A well rewarded employee feels that he/she is being valued by the company that he/she is working for. They are also encouraged to work harder and better if they are aware that their well-being is taken seriously by their employers, and that their career and self development are also being honed and taken care of by their company. Employees are the engine of organization vehicles while reward is the fuel. In the modern time management, no organization can achieve its stated objectives without commiserate rewards and fringe benefits for its employees (Martocchio, 2011).

The role of reward system in shaping the live of an organization cannot be overemphasized. Reward system has been described as the development, implementation, maintenance, communication and evaluation of compensation processes (Galanou, Georgakopolous, Sotiropoulous and Dimitris, 2010). Ordinarily, the management of people at work is an integral part of the management process, put differently managers need to understand the critical importance of people in their organizations so as to recognize that the human element and the organization are synonymous (Popoola and Ayeni, 2007). Therefore, it is imperative and morally worthwhile to have a sound reward system and fringe benefits in place.

Fringe benefit is defined as any form of compensation provided by the organization other than wages or salaries that is paid for in whole or in part by the employer. Employee benefits are also essential for the development of corporate industrial relations. Examples include retirement plans, child care, elder care, hospitalization programs, social security, vacation and paid holidays (Christoph, cited in Ju, Kong and Hussin, 2008).

Cascio (2003) asserted that because of the importance that rewards holds on people’s lifestyle and self esteem, individuals are very concerned about what they are paid. While on the other hands organizations are concerned with what they pay because it motivates important decisions of employees about job satisfaction and overall corporate performance.

The happier people are with their jobs, the more satisfied they are said to be (Odunlade, 2012). The perception of being paid what one is worth predicts job satisfaction. Job satisfaction is perceived as an individual’s attitude and behavior towards aspects of his own job. Personal job satisfaction is an affective or emotional response toward various facets and outcomes of one’s job; meaning that personal satisfaction in relation to a job is not unitary, as a person may be satisfied with one aspect of his or her job and may be dissatisfied with the rest (Bozeman and Gaughan, 2011).

Employees will demonstrate pleasurable positive attitudes when they are satisfied with the corporate reward system and fringe benefits which the job brings. Thus, good reward system and fringe benefits will increase the employees’ job satisfaction which will invariably affect corporate productivity and performance (Millan et al, 2011). But, whether reward system and fringe benefits negatively or positively determines workers job satisfaction in Nigeria remains open to empirical studies. Hence, this study will investigate the role of organizational reward system on employees performance (a case study of Cadbury Nigeria plc).


1.2 Statement of the Problem

Owing to the high level of unemployment that has plagued the labour market in Nigeria, many employers of labour have taken advantage of this menace by unilaterally fixing salaries and wages without the participation of their employees. Empirical researches also indicate that labour is largely underpriced since the numbers of job seekers are more than the number of available jobs. According to the National Manpower Board, (2009) the Nigeria labour market can barely absorb 10% of the over 3.8 million graduates turned out by the Nigeria educational system on a yearly basis.

Sometimes, employers prove very difficult to negotiate with. While the employee wants the highest and the best package, the employer would like to minimize cost as much as possible for profit maximization. Bad and depressed economic condition in Nigeria makes it the more difficult to fully implement a good reward and fringe benefits system.
Many of the studies on the dynamics of reward system, fringe benefits and job satisfaction were done outside Nigeria.

These studies particularly focus on workers in the banking industry. In Nigeria, most of the available studies such as Odunlade (2012) and Aninkan (2020) were too brief and lacking depths. Moreover, these researches were also theoretical studies whose findings were subjectively based on researchers’ personal opinions. It is noted that the past studies did not give adequate attention to reward system and fringe benefits, as well as highlighting plausible strategy that can stimulate employee job satisfaction in Nigeria. It is against this backdrop that this study seeks to fill in the gap in knowledge by critically examining the role of organizational reward system on employees performance (a case study of Cadbury Nigeria PLC).


1.3 Objectives of the Study

The overall objective of the study is to assess the role of organizational reward system on employees performance (a case study of Cadbury Nigeria PLC). specifically, the study aims;

  1. To determine employees view of reward system used by Cadbury Nigeria PLC
  2. To assess the effect of fringe benefits (salary, bonus and promotion) on job satisfaction.
  3. To assess the effect of intrinsic Rewards (Praise and recognition) on job satisfaction.

1.4 Research Questions

What are reward systems currently used in Cadbury Nigeria PLC?

  1. What is the view of employees on reward system used by Cadbury Nigeria PLC?
  2. What is the effect of fringe benefits (Remuneration, bonus, salary and promotion) on job satisfaction?
  3. What are the effect of Intrinsic Rewards (praise and recognition) on job satisfaction?

1.5 Hypothesis of the Study

  • HO: There is no significant relationship between reward system and employee job satisfaction Cadbury Nigeria PLC
  • Hi: There is a significant relationship between reward system and employee job satisfaction Cadbury Nigeria PLC

1.6 Significance of the Study

In view of the study objectives, findings of this study will have some practical relevance. First, it will provide a deeper understanding of the appropriate reward systems that required to be adopted by Cadbury Nigeria PLCs organization to influence employees work performance.

Second, the findings of the study will help the planners of Human Resource rewarding system on how to implement appropriate reward strategies within the organisation to enhance work performance. Third, tome of this study will help Cadbury Nigeria PLC to reflect more on the purpose and benefits of rewarding employees in line with work performance.

Finally, the findings of this research will add to the body of knowledge in the field of reward systems in private sector, especially commercials banks on their suitability and adequacy of reward packages to be introduced to lift employees’ performance.


1.7 Scope of the Study

This research was conducted in Lagos and specifically focused on impact of reward system work performance of employees in Cadbury Nigeria PLC. It was also limited to employees who have been working in the bank for at least 12 months and hence have experience reward system in their firm. These firms were selected because they are near to researcher and able to easily access the required information.


1.8 Limitation of the Study

In the course of carrying out this study, the researcher experienced some constraints, which included time constraints, financial constraints, language barriers, and the attitude of the respondents. However, the researcher were able to manage these just to ensure the success of this study


1.9 Definition of Terms

The following operational definitions are given for the terms used in this study

Reward

Reward is something given or received for worthy behavior, or compensation given as an inducement to cause a desired act or circumstance to occur (Armstrong, 2007).

Job Satisfaction

This is the feeling by the employee towards the job they do with regard to conditions of work and the rewards accrued.

Intrinsic Rewards

Refers intangible rewards or psychological rewards like appreciation, meeting the new challenges, positive and caring attitude from employer, and job rotation after attaining the goal(Hafiza, Shan, &Jamshed, 2011).

Extrinsic Reward

Extrinsic rewards are tangible rewards and these rewards are external to the job or task performed by the employee. Extrinsic rewards can be in terms of salary or pay, incentives, bonuses, promotions, job security, etc.(Hafiza, Shan, &Jamshed, 2011).


1.10 Organization of the Dissertation

The dissertation is organized into five chapters:

  • Chapter One presents background information to the study; statement of the research problem; objectives of the study and research questions; justification and significance of the study; scope and delimitation of the study and conceptual framework.
  • Chapter two is about review of the extant literature that consists of the theoretical and empirical review on reward systems and job satisfaction.
  • Chapter three explains the research methodology used in this research.
  • Chapter four provides a presentation and discussion of the research findings.
  • Finally, Chapter five presents, the summary,

Chapter Five


Summary, Conclusion and Recommendations

5.1 Introduction

This chapter summarizes the findings on the role of organizational reward system on employees performance using Cadbury Nigeria PLC as case study. The chapter consists of summary of the study, conclusions, and recommendations.


5.2 Summary of the Study

In this study, our focus was on the role of organizational reward system on employees performance using Cadbury Nigeria PLC as case study. The study is was specifically focused on determining the reward systems currently used in commercial Banks in Lagos; determining employees view of reward system used by commercial Banks in Lagos; assessing the effect of fringe benefits (salary, bonus and promotion) on job satisfaction and assess the effect of intrinsic Rewards (Praise and recognition) on job satisfaction.

The study adopted the survey research design and randomly enrolled participants in the study. A total of 65 responses were validated from the enrolled participants where all respondent are staff of Cadbury Nigeria PLC.


5.3 Conclusion

The importance of reward system in day-to-day performance of workers’ duties cannot be over emphasized especially when it comes to being rewarded for job done. Human performance of any sort is improved by increased motivation. From the results of this study, it can be concluded that bank workers reward system matters a lot and should be a concern of the bank and employees. The results of this study indicated that workers place a great value on different rewards given to them by their employees (Cadbury Nigeria PLC). The current system at the Cadbury Nigeria PLC is not sufficient enough to consistently motive workers.

The study also found that when, both financial and non fringe benefits are present at workplace, employees are motivated and so their job performance is improved and those efforts are reflected in the overall organisation performance. In absence of adequate reward, workers would tend to express their displeasure through poor performance and non- committed to their jobs. The study further highlighted that appropriate and consistent rewards to employees not only raise their motivation to work harder but also improves overall job satisfaction.

In brief, this study has demonstrated that intrinsic rewards (social recognition and appreciation) and extrinsic rewards (salary, bonus and performance promotion) affect on employee and organisation performance in Cadbury Nigeria PLC. The study agrees with previous study by Aktar, Sachu & Ali (2012) who found that each factor within both extrinsic and intrinsic reward was a highly significant factor which affects employees’ performance in Cadbury Nigeria PLC of Bangladesh.


5.4 Recommendations

This study uncovered some areas of concern that require attention of various stakeholders in the Cadbury Nigeria PLC. Next are recommendations to address those concerns. The research revealed that the present salary level offered to employees of Cadbury Nigeria PLC is very low and employees are not satisfied. This has led to low workers’ motivation and employee turnover.

  1. The HRM department in conjunction with senior management and Trade unions should revise the current salary scale in line with prevailing economic environment and set an appropriate and competitive salary scale. This will not only motivate employees but also increase employees’ performance and reduce employees’ turnover.
  2. The research revealed that bonuses are given to managers only and not ordinary employees this has generated discontentment and demotivation of employees as they see job satisfaction as collective action. The Human Resource Department (HRD) in conjunction with senior management should develop innovative bonus plan that also recognizes the efforts of non-managerial staff. This will not only motivate the employees to work harder during the year but will also bring harmony in the organization and encourage team work and overall greater performance in the organization.
  3. The study revealed that current reward system especially remuneration in the surveyed Cadbury Nigeria PLC are motivating workers enough.
  4. The HRD of the commercial department in conjunction with the senior management should develop appropriate incentive plan of a mix of extrinsic and intrinsic rewards that will encourage workers to be purposeful and improve their performance.

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