Full Project – The effect of organizational reward system on employee performance

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CHAPTER ONE

INTRODUCTION

BACKGROUND TO THE STUDY

Reward system is an important tool that can use management to attract people to join the organization, keep them coming to work, and monitoring them to perform at higher levels. The reward system consists of all organizational components including people, processes, rules and decision making activities involving the allocation of compensation and benefits to employees in exchange for their contribution to the organization (Cheng, 1995).

The success of an organization is to fulfill these continued changing needs of employees for effective performance, heavy responsibility falls on top management to develop strong relationship between them. Organizations that expect employees follow the rules and regulations, work according to standard set for them; also, employees that expect good working conditions, fair treatment, secure career, power, and involvement of employees in decision making. These expectations of both parties vary from organization to organization. For organizations to address these expectations, an understanding of employees motivation through proper reward system is required. (Beer, Spector, Lawrence, Mills & Walton, 1984).

Decprose (1984) examined that an effective reward system improves employees motivation and increases employees productivity which contributes to better enhancement of organizational performance. Wilson (1994) argued that the performance management process is one of the primary elements of the total reward system. It is a system that impacts performance between wages or salaries and provides the basis on which employee’s results are measured and calculated. Robert (2005) reported that it is the relationship and linking agent in programs that direct rewards to true performance.

Flyn (1998)states that reward system is to examine how originations classify their reward schemes and how they communicate to the employees and how clearly they understand the link between reward and performance. Robeert (2005) takes into account the works of Banson(1998) in which he mentioned that not only motivation can influence performance but performance can also influence motivation. It follows by rewards. To summarize from the above facts, it is absolutely clear that organizations could benefit from implementing total reward systems in which employee performance will be enhanced.

Reward systems in organizations typically consists of three basic components namely; compensation, benefits and recognition (Stroh, 2001) the ability of an organization to reward employees properly according to Armstrong (1991) depends on how well the various components of a reward system are combined. However, organization needs to combine the various components of a reward system which are compensation, benefits and recognition effectively in order to elicit high performance from employees.

More often, when the right mix of components of reward system is achieved, employees feel satisfied thereby enhancing their performance. It is against this background that this study seeks to examine the effects of organizational reward system on the performance of employees in BIRS Makurdi, Benue State.

STATEMENT OF THE PROBLEM

Increasingly, organizations are realizing that they have to establish an equitable balance between the employee’s contribution to the organization and the organization’s contributions to the employees. Establishing these balance is one of the main reasons to reward employees. A key focus is to make employees feel appreciated and valued. This means that, employees who get rewards tends to have self-esteem, more confidence, more willingness to take on new challenges and more eagerness to be effective.

The numerous industrial actions embarked upon, by public sector employees in Nigeria often bother on the issues of inadequate reward. This means that, most public sector employees in Nigeria are not satisfied with the reward system, which is bound to affect their performance. These and many other factors are responsible for the low productivity of the public sector in Nigeria.

Thus, the main problem that called for this research is to ascertain whether organizational reward system which is expressed in terms of compensation, full benefits and recognition affects or influences employees’ performance of Benue

State Internal Revenue Service (BIRS), Makurdi, Benue State.

OBJECTIVES OF THE STUDY

The main objective of the study is to examine the effects of employee performance of BIRS Makurdi. The specific objectives include the following:

To examine the effects of compensation on employee performance in BIRS Makurdi.
To examine the effects of employee benefits on employee performance in BIRS Makurdi.
To examine the effects of employees recognition on employee performance BIRS Makurdi.
- RESEARCH QUESTIONS

This study seeks to answer the following research questions:

Is there a significant relationship between compensation and employees performance in BIRS Makurdi?
Is there a significant relationship between employee benefits and employee performance in BIRS Makurdi?
Is there a significant relationship between employee recognition and employee performance in BIRS Makurdi?

RESEARCH HYPOTHESES

In order to achieve the objectives of the study, the following hypotheses are formulated and stated in null form.

HO₁: There is no significant relationship between compensation and employee performance in BIRS Makurdi.

HO₂: There is no significant relationship between employee benefits and employee performance in BIRS Makurdi.

HO₃: There is no significant relationship between employee recognision and employee performance in BIRS Makurdi

SIGNIFICANCE OF THE STUDY

The importance of this research is geared towards appraising the benefits of reward system employed by BIRS management in order to increase performance level and effectiveness. The study derives its significance from the attempts to add to literature on the subject.

The information from the research will help improve the economy of Benue State through effective utilization of revenue collected, since the taxes and other related sources of income are the most sustainable revenue sources all over the world.

The information will aid the organizational policy maker use adequate managerial techniques in making policies that would help the performance evaluation, such as providing computers and other communication gadgets will enable the organization to take advantage of technology. Also, adequate data would be kept for day to day use.

The information will be useful to the government of Benue State to increase performance level of employee through good governance. it entails Government using the collections from various sources and the project that has direct citizens.

The research will help the employee understand the relevant research methods which motivates them in achieving organizational objectives.

SCOPE OF THE STUDY

The theoretical issues to be discussed are reward systems and employee performance. The study is limited to the Benue State Internal Revenue Service (BIRS), Makurdi.

LIMITATION OF THE STUDY

Time: The time given to the researcher was too short to carry out the research effectively.

Finance: There was a problem of inadequate finance to carry out the research work.

Attitude of Respondents: There was a delay in filling and returning these questionnaires administered to workers. There was a fear on the part of staff of BIRS in providing some information needed for the research.

DEFINITION OF TERMS

Reward System: Reward system consists of all organizational components including compensation, recognition and benefits.

Compensation: Expressing gratitude to someone for his showing appreciation to employees by acknowledging excellent performance.

Recognition: Acknowledging someone before their peer for a specific accomplishment achieved, actions taken or attitude exemplified.

Employee Performance: A process for establishing a shared workforce understands about what is to be achieved at an organizational level. It is about aligning the organizational objectives with the employee skills, competency, requirements, development plans and delivery result.

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Full Project – The effect of organizational reward system on employee performance

Full Project – The effect of organizational reward system on employee performance

Full Project – The effect of organizational reward system on employee performance

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