ABSTRACT
The inability of the management of Zenith Bank Nigeria Plc, Ekpoma, Edo
State to effectively reward their employees necessitated the determination of
the effect of reward system on the performance of the organization. Survey
research design was used for the study, the data collection tool employed by
the researcher was the questionnaire, a population of 28 respondents were used
for the study, complete enumeration sampling was adopted because the population
was a manageable size and the chi-square statistical tool was used to analyse
the collected data. The findings of the study revealed that intrinsic and
extrinsic rewards impacts employee performance. It was against this back drop
that the researcher concluded that effective reward system impacts the
performance of employees in Zenith Bank Nigeria Plc, Ekpoma, Edo State. Based
on that, the researcher recommended that the management of the organization of
study should redesign the present reward system, employ the usage of joint
consultation between management and employees so as to determine the most
effective reward strategy and the usage of intrinsic and extrinsic rewards as
it positively impacts the performance of the organization.
CHAPTER ONE
INTRODUCTION
1.1
BACKGROUND OF THE STUDY
Paying employees for productivity has
been the cornerstone of industrial and business development for centuries. Financial
reward has always been important in managing employee’s performance, but over
the last 25 years other elements of compensation have developed to provide
employers with a broad scope to reward, and thus motivate employees. Armstrong
and Taylor (2010) states that performance is defined as behavior that
accomplishes results. Performance management influences performance by helping
people to understand what good performance means and by providing the
information needed to improve it. Reward management influences employee performance level
which can on the long run foster
the actualization of an organization’s
goals and objectives.
The purpose of this research study is to attempt to identify how these
reward systems impacts employee performance in an organization. Torrington
(2011) describes the importance of workplace rewards as clearly central to the
employment relationship. While there are a lot of people who enjoy working and
who claim they would not stop working even if they were to win a big cash prize
in a lottery, Most people work hard because of the nature of the reward system
used in an organization. How much employees are paid and the nature of
reward system used to reward deserving employees is essential (Torrington, 2011)
The rewards that we apply to both
individual and team performance is critical in determining how effective employees are. Wilson, (2003) describe
rewards and their purpose as including systems, programmes and practices that
influence the actions of people. The purpose of reward systems is to provide a
systematic way to deliver positive consequences. Its fundamental purpose is to provide
positive consequences for contributions to desired performance. Defining the concept of human resource
management in the mid-1980’ led to a greater appreciation for the value your
workforce could make to the overall business goals of the organization and how
it could be groomed and cultivated to add most value to competitive advantage.
This made the usage of effective reward systems necessary. Weightman (2004) argues that “the importance
of reward management is to ensure the optimum performance of employees
.”
Rewarding
employees is associated with the motivation of the workforce of organization
for better performance. However, what type and mix of rewarding tools to use is
a challenge for organizations. Several studies have demonstrated that rewards
have positive impact on employees’ commitment level. It is one of the factors
that increase employee engagement in the workplace, which is the key element in
the work performance (Furtado, 2009).
It is the concern of organizations all
over the world to adopt effective human capital strategies to enhance their
productivity. It is clear that employee’s productivity in the expanding organization
is a key factor in a organization .
Employees technically known as human resources in modern organization are
rightly considered as the most important assets for banking industry success,
(Lawler & Worley, 2006).Therefore, effectively rewarding them is important.
The rationale behind the use of reward
to employees is that motivated employees become satisfied in terms of
fulfilling their wants, both financial and non financial; failure to do
so, employees will be tempted to leave
the organization. (Azasu, 2009). On one hand,
some employees prefer receiving intrinsic rewards in terms of praise and
recognition for certain work accomplishments, while other employees are happy
with extrinsic reward in terms in salaries, bonus and incentive offered to
employees (Lawler, 2008, Sajuyigbe, Bosede & Adeyemi, 2013)
1.2
STATEMENT OF THE PROBLEM
The basic aim of every business
organization is to achieve objectives, goals or targets successfully. Goals set
by organizations will be in vain if much attention is not paid to reward of employees for successful accomplishment
of set tasks. In other to achieve set goals and objectives successfully, there
is the need to focus on different reward
packages. Reward systems should
be attractive to employees so as to ensure a high productivity level.
The
researcher observed that the management of Zenith Bank Nigeria PLC, Ekpoma, Edo
State has failed to adopt the usage of effective reward systems. This organization has failed to apply the
usage of reward systems that aligns the need of the organization with that of
employees. They have failed to apply the usage of extrinsic reward elements
like money, remuneration, promotion and performance bonuses familiar to
Nigerian employees. They do not use intrinsic reward packages like additional
responsibilities and challenging jobs that can spur the performance level of
higher level employees. This by extension has negatively inhibited the
performance of this organization.
Employees are the life blood of every business
organization; therefore their welfare should be of paramount interest to
business organizations. If management does not invest much into the welfare of
their workers, issues like low commitment to work, low morale and low productivity
of employees are bound to evolve. This could directly impact the long term
growth and survival of these business organizations and the banking industry.
The
non-challant attitude of the management of Zenith Bank Nigeria PLC Ekpoma, Edo
State towards effectively rewarding their employees cannot be ignored. It is
against this back drop that this study seeks to ascertain it’s effect on
organizational performance.
1.3
RESEARCH QUESTIONS
1. What is the reward system currently used in Zenith Bank
of Nigeria PLC, Ekpoma, Edo State?
2.
What is the view of employees on the reward system used by Zenith Bank
of Nigeria PLC Ekpoma, Edo State?
3. What is the effect of extrinsic
reward (remuneration, bonus, salary and promotion) on the performance of Zenith
Bank Nigeria PLC Ekpoma, Edo State?
4. What is the effect of intrinsic rewards
on the performance of Zenith Bank
Nigeria PLC Ekpoma, Edo State?
1.4
OBJECTIVES OF THE STUDY
The broad objective of the study is to
determine the effect of reward system on the performance of Zenith Bank Nigeria PLC Ekpoma, Edo State
The
Specific objectives are:
1.
To
determine the reward system currently used in Zenith Bank Nigeria PLC Ekpoma, Edo State
2.
To
determine employee view of reward system used by Zenith Bank Nigeria PLC Ekpoma, Edo State.
3.
To
determine the effect of extrinsic reward (salary, bonus and promotion) on the
performance of Zenith Bank Nigeria PLC
Ekpoma, Edo State.
4.
To
ascertain the effect of intrinsic rewards on the performance of Zenith Bank Nigeria PLC Ekpoma, Edo State.
1.5
RESEARCH HYPOTHESIS
The following hypothesis were
formulated by the researcher:
Hypothesis
1
Ho:
There is no significant relationship between the reward systems
currently used in Zenith Bank and
employee performance.
Hi:
There is significant relationship between the reward systems currently
used in Zenith Bank PLC and employee
performance.
Hypothesis
2
Ho: There is no significant
relationship between employees view of reward system used by Zenith Bank of
Nigeria PLC and organizational performance.
Hi: There is significant relationship
between employee’s view of reward system used by Zenith Bank of Nigeria PLC and
organizational performance.
Hypothesis
3
Ho:
Extrinsic reward (salary, bonus and promotion)
has no significant effect on the performance of Zenith Bank Nigeria PLC Ekpoma,
Edo State.
Hi:
Extrinsic reward (salary, bonus and
promotion) has significant effect on the performance of Zenith Bank Nigeria PLC
Ekpoma, Edo State.
Hypothesis
4
Ho: Intrinsic rewards has no significant effect on the performance
of Zenith Bank Nigeria PLC Ekpoma, Edo State.
Hi: Intrinsic rewards has
significant effect on the performance of
Zenith Bank Nigeria PLC Ekpoma, Edo State.
1.6
Significance of the study
The study was carried out to enable all
staff, especially those in management positions of the organization of study to
understand and appreciate the effect of reward system on employee performance.
The study
will also be of immense benefit to other Nigerian business organizations as it
will give them an insight of the effect an effective reward system has on the
performance of employees.
The study will also be of immense benefit to
students as well as future researcher who intend to carry-out a related study
as it will serve as an existing body of knowledge.
1.7
SCOPE
This
study is centered on the impact of reward system on the performance of Zenith
bank Nigeria Plc, Ekpoma, Edo State as the organization of study.
1.8
LIMITATIONS OF THE STUDY
The following limitations were
encountered by the researcher during the study:
1. Time Constraint: This posed a
problem as the combination of the research work with other academic activities
was not an easy task.
2. Respondent Apathy: This posed a
problem as the employees of the organization of study found it difficult to
divulge certain information. However, the researcher was able to overcome it by
convincing the respondents to divulge the information.
1.9 ORGANIZATION OF THE STUDY
The study was organized into five
chapters. Chapter one introduced the study by giving the background information
on the research problem, objectives, the scope and limitations of the study.
Chapter two dealt with the review of relevant literature and the theoretical
framework of the reward system in organizations. Chapter three discussed the
research methodology adopted for the study and relevant justifications. Chapter
four presented the findings on the impact of reward systems on employees’
performance in Zenith bank PLC. Chapter five also presented the conclusion
drawn from research findings and recommendations.
1.10
ORGANIZATIONAL CORPORATE PROFILE (HISTORY OF THE BANK)
Zenith
bank was established in May 1990. It started its operation in July the same
year. It became a Public Limited Company on June 17th 2004. The bank
currently has a share holder base of over one million and is currently the bank
with the highest shareholders’ in Nigeria. Its head quarters are in Lagos. It
has over 500 branches and business offices including the one located in Ekpoma,
Edo State. The bank has built a brand as a reputable international, financial
institution, recognized for innovation, superior customer service and
performance.
1.11 DEFINITION OF TERMS
REWARD
SYSTEM: This is
group renewal structures responsible for incentive salience (i.e, wanting,
desire or craving) pleasure (i.e, hedonic liking) and enforcement learning
(i.e, positive reinforcement)
EMPLOYEE PERFORMANCE:
Employee performance is a composite
assessment of how well organization employees performs on their most important
parameters
CORPORATE
PERFORMANCE ANALYSIS : This
is a subset of business analytics/
business intelligence that is
concerned with the health of the
organization which has traditionally
been measured in terms of financial
performance . However, in recent years the concept health of corporate
health has become broader
PERFORMANCE:
This is the act of contributing ones
measure to output and production
BANKING
INDUSTRY: It is the
section of the economy devoted to the holding of financial assets for others,
investing those financial assets as leverage to create more wealth, and the
regulation of those activities by government agencies
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