EFFECT OF REWARD
SYSTEM ON THE MOTIVATIONAL LEVEL OF EMPLOYEES;
A SURVEY OF SELECTED
INVESTMENT COMPANIES IN LAGOS METROPOLIS
ABSTRACT
The
research is an appraisal of the effect of reward system on the motivational
level of employees; it analyzes the concept of reward system, types and
significance as a motivational strategy. Organizations must learn to align
reward policies and types in line with employee’s aspirations in other to
maximize employee productivity.
INTRODUCTION
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
organization components – including people processes rules and decision making
activities involved in the allocate of compensation and benefits to employees
in exchange for their contribution to the organization.
In order for an organization to meet its obligations
toshareholders, 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, &
Walton, 1984). Baron (1983) defines motivation as “a set of processes concerned
with the force that energizes behavior and directs it towards attaining some
goal.” Kreitner and Kinicki (1992) 1 postulate that motivation represents
“those psychological processes that cause the arousal, direction and
persistence of voluntary actions that are goal directed.” If it is the role of
managers to successfully guide employees toward accomplishing organizational
objectives, it is imperative that they understand these psychological
processes. Schermerhorn, Hunt and Osborn (1991) conceptualizes motivation as
based on content and process approaches. The content theories of motivation
emphasize the reasons for motivated behavior and/or what causes it. These
theories specify the correlates of motivated behavior that is states, feelings
or attitudes associated with motivated behavior, and help to represent
physiological or psychological deficiencies that an individual feels some
compulsion to eliminate. Establishing this balance and meeting this need is one
of the first reasons, according to Deeprose (1994) to reward and recognize
employees. Formal reward programme which denote financial rewards such as
salary, fringe benefits, bonuses, promotions or share
CHAPTER 1
1.1
BACKGROUND OF THE STUDY
Increasingly,
organizations are realizing that they have to establish an equitable balance
between the employee’s contribution to the organization and the organization’s contribution
to the employee. Establishing 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. Studies that have been conducted on the
topic indicates that the most common problem in organizations today is that
they miss the important component of Reward, which isthe low-cost, high-return
ingredient to a well-balanced reward system. A key focus of recognition is to
make employees feel appreciated and valued. Research has proven that employees
whoget recognized tend to have higher self-esteem, more confidence, more
willingness to take onnew challenges and more eagerness to be innovative.
The
research intends to investigate the effect of reward system on the motivational
level of employees
1.2 STATEMENT OF THE
PROBLEM
The problem confronting this research is to appraise the effect of
reward system on the motivational level of employees; with a case study of
selected investment companies in Lagos Metropolis.
1.3
RESEARCH QUESTION
1
What is the nature of reward
system?
2
What is employee motivation?
3
What is the effect of reward
system on the motivational level of employees?
4
What is
the nature of reward system of selected investment companies in Lagos
Metropolis?
1.4 OBJECTIVE OF THE
STUDY
1
To appraise the nature of reward
system
2
To appraise the nature of
employee motivation
3
To determine the effect of reward system on the motivational level
of employees
4
To determine the effect of reward system on the motivational level of
employees of selected investment companies in lagos metropolis.
The study shall project the
importance of reward system on the motivational level of employees and shall
serve as a source of information for managers, human resource experts,etc.
1.5
STATEMENT OF HYPOTHESIS
1
H0
Motivational level of employees in selected investment companies
in Lagos is low
H1
Motivational level of employees
in selected investment companies in Lagos is high
2
H0 Reward system in selected investment companies
in Lagos is low
H1
Reward system in selected
investment companies in Lagos is high
3
H0 The
effect of reward system on employee
motivational level
in selected investment companies in Lagos is low
H1 The effect of reward system on employee
motivational level in selected investment companies
in Lagos is high.
1.7 SCOPE OF THE
STUDY
The study is an investigation into the effect of reward system on the
motivational level of employees with a case study of selected investment
companies in Lagos metropolis
1.8
DEFINITION OF TERMS
REWARD SYSTEM
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 organization components – including people
processes rules and decision making activities involved in the allocate of
compensation and benefits to employees in exchange for their contribution to
the
organization.
MOTIVATION
(Beer, Spector,Lawrence, Mills, & Walton, 1984). Baron (1983)
defines motivation as “a set of processes concerned with the force that
energizes behavior and directs it towards attaining some goal.” Kreitner and
Kinicki (1992) 1 postulate that motivation represents “those psychological
processes that cause the arousal, direction and persistence of voluntary
actions that are goal directed.” If it is the role of managers to successfully
guide employees toward accomplishing organizational objectives, it is
imperative that they understand these psychological processes. Schermerhorn,
Hunt and Osborn (1991) conceptualizes motivation as based on content and
process approaches. The content theories of motivation emphasize the reasons
for motivated behavior and/or what causes it.
.