ABSTRACT
Over
the years, rewards and job satisfaction have been issues of concern to
employers and employees in various organizations globally. Outsourced service
providers in Jos, Plateau State are not exceptions. Besides, inadequate reward
factors such as pay, fringe benefits, recognition, promotion and job security
are some of the major reasons responsible for employees’ dissatisfaction and
intention to leave their current organizations. Moreover, the immediate
precursor of lack of satisfaction or dissatisfaction of employees of outsourced
service providers has been caused by low or poor rewards which raises great
concern for both academic administrators and human resource managers in
Nigeria. In light of the above, this research sought to examine the relationship
between rewards and employees’ job satisfaction of selected outsourced service
providers in Jos Plateau State.
A
survey research design was adopted. The population consisted of all the
employees of the five (5) selected outsourced service providers in Jos, Plateau
State. The sampling technique used was census. A census method was used to
study thepopulation which stood at 541being the entire employees of the five
selected outsourced service providers. A total of 541 copies of the
questionnaire were distributed; out of which a total number of 448 (82%) were
properly filled and returned, while 93 (17.2 %) were not returned. A validated
questionnaire was used as the research instrument. The result of the
reliability test utilizing Cronbach’s Alpha test ranges from 0.762 to 0.956.
Simple regression analysis and Pearson product moment correlation test were
used to test the hypotheses.
The
findings of this study revealed that pay (R2 = 0.665, p<0.05),
fringe benefits (r=0.747, p<0.05), Recognition (R2 = 0.558, p<0.05),
Promotion (R2 = 0.683, p<0.05), and Job Security (R2 =
0.711, p<0.05)have positive significant effect on employees’ job
satisfaction of selected outsourced service providers in Jos, Plateau State.
The
study concluded that, all the reward factors had a significant positive
relationship with employees’ job satisfaction of the outsourced service
providers in Jos, Plateau State. It is therefore, recommended that management
of these outsourced companies improve on these rewards that have a direct and
significant effect on employees’ job satisfaction (pay, fringe benefits,
recognition, promotion and job security) in order to reduce the level of
dissatisfaction among employees which could lead to low performance and
productivity.
CHAPTER
ONE
INTRODUCTION
1.1 Background to the
Study
The human
resources of every organization have been identified as the most important
assets of that organization as its success depends largely on their effective
and efficient contributions. Thus, in today’s competitive business environment
and global workplace, one of the strategies that successful companies use to
attract competent, skilled and qualified human resources, retain top talent, and
maintain a highly motivated and satisfied workforce is rewards (Wekesa& Nyaroo, 2013; Nadia, Syed,
Humera & Khalid 2011; Mujtaba &Shuaib, 2010).
Rewarding
employees is a fundamental function of human resource managers in an
organization as they deal with assessment of job values, the design and
management of payments (expenditures), job satisfaction, pay system, employees’
benefit and pensions. Mujtaba and Shuaib (2010); Kock (2007) asserted that
effective, appropriate, timely and market-driven rewards tend to motivate both
managers and employees.
Khalid, Salim and Loke (2011) also explained that rewards are received as an
exchange of services between employees and employers. Hence, the rewards
offered by employers have been found to significantly improve employees’
motivation towards their job and consequently increase job satisfaction (Negash, Zewude & Megersa, 2014; Khalid et al., 2011; Rafikul &
Ahmad, 2008; Milne, 2007). Organizations and human resource managers nowadays
recognize rewards as important factors that motivate employees to act willingly
and exert considerable effort on behalf of the organization as they maintain
strong relationship, which in turn increase their job satisfaction (Zaini,
Nilufar & Syed,2009).
Job satisfaction is a yardstick for quality work
experience. It is a positive emotional feeling, a result of one’s evaluation of
his job experience by comparing what he expects from his/her job and what he
actually gets. Generally, job satisfaction describes
how happy employees are with their jobs and the feelings that they have towards
the various aspects of their jobs. Job satisfaction has become a very
significant feature in every organization because of its importance to the
behaviour of employees in the work place. Therefore, human resources managers
tend to seek for total reward programs that could enhance employees’ job
satisfaction and in turn increase organizational performance and productivity (Galanou, Georgakopoulos, Sotiropoulos & Dimitris,
2010; Mujtaba & Shuaib, 2010). The use of effective rewards has been
found to have a direct relationship with job satisfaction and motivation of the
employees in organizations (Priya & Eshawar, 2014; Rehman, Khan, Ziauddin & Lashari, 2010).
Wekesa and Nyaroo (2013); Aktar, Sachu and Ali (2009); Luthans (2008); Agu, 2003;
Malik, Maira & Muhammad (2011) assertedthat
pay (salaries and wages), fringe benefits, recognition, promotion and
job security are the various types of rewards that are provided to employees by
their employers with the view of enhancing their job satisfaction.This study however, focused majorly
on the following types of rewards: pay (salaries and wages), fringe benefits,
recognition, promotion and job security as the factors responsible for
significantly influencing employees’ job satisfaction in their work place.
Thus, pay (salary and wages) refers to a form of periodic financial payment
provided to an employee by his employer, which is usually specified in the
employment contract (Sharma & Bajpai, 2011). Chepkwony and Oloko (2014) describe fringe benefits as elements of remuneration given
to employees in addition to the various forms of cash pay, while recognition is
the identification and appreciation of an employee for a job well done (Chepkwony & Oloko, 2014). Furthermore,
promotion is defined as the shifting upward of an employee to a job of higher
significance and higher compensation (Lazear, 2000). Job security is one’s
expectation about continuity in a job situation and it has to do with
employees’ feelings over loss of job or loss of desirable job features such as
lack of good current working conditions, as well as long-term career
opportunities (Akpan, 2013).
Rewards have over the years continued to be
recognized as powerful determinants of job satisfaction and as a source of
increasing the well-being of employees in their work place (Rafiq, Javed, Khan,
& Ahmed 2012; Abdulla et al., Ahmed, Muddasar &Perviaz,
2012).Thus it is not surprising
thatorganizations both public and private have adopted the use of rewards as a
tool for enhancing employees’ job satisfaction and performance (Bako, 2010).
However, rewards have continued to be source of problems for employees of
outsourced service providers in Jos, Plateau State;because the companies over
the years see their employees as additional cost as well as liability to their
operations. Thus, outsourced service providers do not provide adequate rewards
(remuneration) that are commensurate with the efforts, skills and timetheir employeesput
into the work, thereby causing lack of job satisfaction among their workforce.
It is obvious that rewards and job satisfaction have
enjoyed massive popularity among the theorists and human resource practitioners
in the last century. Extant literature has effectively shown
the relationship between rewards and employees’ job satisfaction (Abayomi &
Ziska, 2014; Nazir, Khan, Shah & Zaman, 2013, Kalleberg & Loscocco,
1983). It is for this reason that this
study intends to evaluate the relationship between rewards and job
satisfaction of selected outsourced service providers in Jos, Plateau state.
1.2 Statement of the Problem
In spite of the
increasing interest of organizations toprovide effective reward programs that
can motivate employees to work harder and increase their job satisfaction, most
employees in Nigeria appear to be dissatisfied with their rewards. Thus, the
intention of any reward system is to attract, retain and maintain a satisfied
workforce that will always stay focused on producing quality products or
services in an efficient manner (Mujtaba & Shuaib, 2010; Karami, Dolatabadi & Rajaeepour, 2013).
Consequently, a substantial number of literature have been developed, to
advance the understanding of reward system and the extent to which it
influences the level of employees’ work related factors such as job
satisfaction, commitment, performance, motivation (Galanou, Georgakopoulos, Sotiropoulos, & Dimitris 2010;
Chepkwony,2014). This is because reward
system remains a controversial and difficult issue for both human resource
managers and employees in the work place (Galanou et al., 2010; Mujtaba &
Shuaib, 2010).
Failure
in designing appropriate reward has continued to have a negative effect on
employees’ job satisfaction and overall effectiveness of many organizations (Neo,
Hollenbeck, Gerhart & Wright 2006).Similarly,
Chepkwony and Oloko (2014)
asserted that rewards and job satisfaction of employees currently remain a
problem of most organizations. Nevertheless, employees’ job satisfaction is
critical for the success of any organization as well as quality of products or
services provided by the organization to their customers or clients
respectively. However, outsourced service providers have continually failed in
their efforts at achieving organizational goals and objectives due to lack of
job satisfaction (dissatisfaction) of their employees as a result of poor
formulation and implementation of reward policies (Armstrong 2006; Chepkwony & Oloko, 2014).
Amah,
Nwuche and Chukwuigwe (2013); Okafor
(2007);Wright and Bonnett (2007); Arokiasamy, Tat and Abdullah (2013) confirmed in their separate researches that
low employees’ job satisfaction and performance in the work place are
attributed to low pay. Similarly, poor or inadequate pay (salaries and
wages) has been found to be responsible for the strained employer employee
relationship, threatened industrial peace and have been attributed to about 80%
of industrial actions experienced in Nigeria (Fapohunda 2012a; Akomolafe,
1993).
Ahmad, Yei, and Bujang (2013); Amah et al.,
(2013) affirmed that inadequate fringe benefits have been identified to lower
employees’ quality of work life, reduced employees’ job satisfaction and
consequently led to financial
insecurity, an inability to plan for the future which often result in severe
emotional and psychological stress (Okafor, 2012).
Outsourced
service providers also referred to as non-standard employment are gaining momentum globally and Nigeria is no
exception (Mutiat, Oladapo & Kabiru, 2013). In Nigeria, it is an avenue for
enhancing Government revenue as well as providing job opportunities to the
unemployed Nigerians of working age (The National Outsourcing Policy
and Institutional Framework 2007). In spite of this, outsourcing companies in
Nigeria are presently undergoing some challenges, among them is high level of
employee turnover due to lack of employees’ recognition which has successively
led to lack of job satisfaction (Mutiat et al., 2013; Mutia & Sikalieh, 2013;Sun, 2013).
Arokiasamy, Tat and Abdullah (2013) recognized
that lack of promotion and mundane work has significantly contributed to
employee’s lack of satisfaction and intention to leave the organization.
Inadequate or lack of promotion opportunities into positions of higher
responsibility has caused lack of satisfaction and negative consequences such
as lower commitment, high employee turnover and absenteeism among employees. Similarly,
those employees who remain in one position with no opportunities for moving to
higher positions have been said to exhibit negative attitude towards their work
and their organizations (Arokiasamy et al., 2013).
Furthermore,
arbitrary dismissal or lay off of workers in private outsourcing companies
(non-standard employment) has been a source of worry to employees and
government in this sector. Recent survey has identified job insecurity as one
of the significant factors that drives workers to develop poor attitude and
withdrawal tendencies in their organizations and reduces employees’ job
satisfaction (Fapohunda 2012a; Senol 2011; Yih & Htaik 2011; Suleiman,
2013; Preuss & Lautsch, 2002). Furthermore, Fatimah, Noraishah, Nazir and
Khairuddin (2012) asserted that threat to employees’ job security negatively
affects their job satisfaction and well-being as well job performance.
The researcher’s pilot report (2016) of three
outsourced services providers(Crown
Security Company, M & U Company and Kings Guard Security)in Kano, showed
that there is general lack of job satisfaction among the employees as a result
of low wages and salaries, few fringe benefits, lack of recognition, low
promotions and lack of job security.
This report is consistent with the research studies of (Okougbo,2004;
Mokwenye, 2008; Ogundare & Elijah, 2011; Daljeet, Manoj & Dalvinder, 2010). Similarly, Akinbode and
Uwem (2013) asserted that the rewards of outsourced organizations
studied in Lagos state remain unstructured because what the client’s company
pays determines what the staff is paid;this suggests that employees in the same
level might receive different salaries or wages which often creates
dissatisfaction among employees (Mutiat et al., 2013). Thus, rewards have continued to be a major source
of problem for employees of outsourced companies in Jos, Plateau State. It
is therefore, the aim of this study to examine the relationship between rewards
and job satisfaction of employees of Selected Outsourced Service Providers in
Jos, Plateau State.
1.3 Objective of the
Study
The main objective of the study is to
examine the relationship between rewards and employees’ job satisfaction of selected
outsourced service providers in Jos, Nigeria. The specific objectives are to:
1.
examine the effect of pay onemployees’
job satisfaction of selected outsourced service providers in Jos;
2.
ascertain the relationship between
fringe benefits and employees’ job satisfaction of selected outsourced service providers
in Jos;
3.
investigate the effect of recognition on
employees’ job satisfaction of selected outsourced service providers in Jos;
4.
examine the effect of promotion on
employees’ job satisfaction of selected outsourced service providers in Jos
5.
determine the effect of job security on
employees’ job satisfaction of selected outsourced service providers in Jos.
1.4 Research Questions
For the purpose of this study the following
research questions were formulated.
1.
What is the effect of pay on employees’
job satisfaction of selected outsourced service providers in Jos?
2.
What is the relationship between fringe
benefits and employees’ job satisfaction of selected outsourced service
providers in Jos?
3.
How does recognition affect employees’
job satisfaction of selected outsourced service providers in Jos?
4.
How does promotion affect employees’ job
satisfaction of selected outsourced service providers in Jos?
5.
What is the effect of job security on
employees’ job satisfaction of selected outsourced service providers in Jos?
1.5 Hypotheses
The
following hypotheses were derived from research question and are written in the
null format
Ho1:
Pay has no significant effect on employees’ job satisfaction of selected
outsourced service providers in Jos.
Ho2: There is no significant
relationship between fringe benefits and employees’ job satisfaction of
selected outsourced service providers in Jos.
Ho3:Recognition
has no significant effect on employees’ job satisfaction of selected outsourced
service providers in Jos.
Ho4:Promotion
has no significant effect on employees’ job satisfaction of selected outsourced
service providers in Jos.
Ho5:Job
security has no significant effect on employees’ job satisfaction of selected
outsourced service providers in Jos.
1.6 Scope of the Study
The study focused on the relationship
between rewards and employees' job satisfaction of five selected outsourced
service providers in Jos with special interest in two security companies and
three cleaning companies respectively- Strike
Force Nigeria limited, Active Security Limited, Masters and General (M &
G), Confer Limited and Kelstrad Nigeria limited. The research design
that was adopted for this study is survey research method. The target
population of the study consisted of all employees of the five selected
outsourced companies which stand at 541 as extracted from the companies’ pay
rolls as at (March 2016).
1.7 Significance of the
Study
The findings of this study would help
management on how to deal with the challenges of rewards and how it affects
employees’ job satisfaction in the work place and also how to design an effective
reward system that would attract, retain and maintain a competent and satisfied
workforce in different organizations. The result obtained from the study would
give management of outsourced companies a better understanding of the numerous
reward packages and practices available that will motivate and enhance their
employees’ job satisfaction. It would also help them to know how to respond to
their employees’ needs with the view of satisfying such needs. The study hopes
to come out with a template that would help government to develop basic rules
and guidelines (laws and policies) on employees’ rights and privileges in
private outsourcing industry especially with respect to their rewards in other
to protect them from unfair labour practices and to also ensure compliance with
the laws of the land. In addition, the findings would add knowledge and trigger
additional research in the field of human resource management as it could be
referenced in other related future studies to either support or reject their
findings.
1.8 Operationalization
of Variables
Y
= f (X)
Y
= Dependent Variable
X
= Independent Variable
Where:
Y = Job Satisfaction
X = Rewards
Y = (y)
X=
(x1, x2,
x3, x4 x5)
Where:
Y = Job Satisfaction (JS)
x1= Pay (P)
x2 = Fringe benefits (FB)
x3 = Recognition (R)
x4 = Promotion (PR)
x5=Job security (JC)
Y= α0 + β1x1
+ µ---------------------------------------- Equation 1
Y= α0 + β2 x2
+ µ----------------------------------------Equation 2
Y= α0 + β3x3
+ µ----------------------------------------Equation 3
Y= α0 + β4x4
+ µ----------------------------------------Equation 4
Y= α0 + β5x5
+ µ----------------------------------------Equation 5
β=
regression parameter, which measures the coefficient of the independent
variable, each of these indicators measures the effect of a given change in the
independent variable on the dependent variable.
α0=
constant or intercept of the independent variable, this is the average value of
the dependent variable when the independent variable is equal to zero.
µ=
error term or stochastic variable, this is included in the model to accommodate
the influence of other variables that affect the dependent variable but which
are not included in the model.
1.9 Operational Definition of Terms
Reward: Reward
refers to what an employee receives from his employer as payment or
compensation for performing a job.
Reward system: Reward
system refers to the different types of rewards available and provided to
employees by their organizations.
Job Satisfaction: Job satisfaction is the extent to which an
employee like or dislike his work.
Motivation: Motivation is the
positive drive that leads a worker to perform his work willingly.
Commitment: Refers to the attachment and loyalty that an
employee has to the organization.
Outsourced
service providers or outsourcing: outsourced service
providers are those companies that perform certain operations or services on
behalf of their client organization for a fee.
Pay: Pay is the financial reward that an employee
receives from his employer in an employment relationship.
Promotion:
Promotion
is a shift in upward direction in organizational hierarchy with more
responsibility and pay raise.
Fringe
benefits: Fringe benefits are those rewards that an employee
receives from the organization other than wages and salaries.
Recognition: Recognition refers to the praise and
appreciation that an employee receives from his organization for performing a
task.
Job
security: Job security
refers to the assurance of the continuity of one’s job in the future.
Employee: An employee is the person that performs a
task for a fee.
Job: Job refers to the task
or work that is carried out by an employee.
Non-
standard employment:
Non- standard employment is a type of employment that is an aberration
from the standard employment (pensionable), they include contract, casual,
outsourced and month to month which do not conform to the labour standards.
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