1.1 Introduction
Reward systems refer to the financial and non-financial benefits an organisation provides to employees in exchange for their work and contributions. Similarly, Armstrong and Taylor (2020) describe reward management as the development of practices that recognise employee contributions and support organisational objectives. These rewards include salaries, bonuses, promotions, recognition, training opportunities and other benefits that encourage employees to perform their duties effectively. Employee performance on the other hand refers to the extent to which employees effectively perform their assigned duties and contribute to the achievement of organisational goals. At the Standards Organisation of Nigeria (SON), Abuja, employees perform responsibilities connected with standards development, product quality assurance, inspection and conformity assessment.
As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the aim and objectives of the study. Others are significance of the study, scope of work, research hypothesis and questions, limitation of the study and definition of terms.
1.2 Background of Study
The Standards Organisation of Nigeria (SON) was established in 1971 to promote standardisation and improve the quality of products in Nigeria. Its establishment reflected the need for an institution that could develop and enforce standards, support industrial development and help protect consumers from substandard products. The organisation's work has continued to involve standards development, product testing, inspection and conformity assessment within its legal responsibilities. Over the years, SON has played a role in supporting the quality of locally manufactured and imported products. Its activities are relevant to manufacturers, importers, distributors and consumers because standards help establish acceptable requirements for products and production processes. The Standards Organisation of Nigeria Act, 2015, provides a legal framework for the organisation's functions and responsibilities.
Reward systems are important parts of human resource management because they help organisations recognise employees' efforts and encourage them to perform their duties effectively. According to Armstrong and Taylor (2020), reward management involves developing policies and practices that recognise employee contributions and support organisational objectives. Rewards include financial benefits, such as salaries and bonuses, as well as non-financial benefits, such as recognition, career development and opportunities for greater responsibility (Armstrong and Taylor, 2020). Furthermore, employee performance is an important factor in achieving organisational objectives. It concerns how well workers complete assigned tasks, meet expected standards, manage their time and contribute to the success of their workplace.
Robbins and Judge (2019) reported that employee behaviour and motivation are influenced by several workplace factors, including management practices, working conditions and organisational policies. A reward system that recognises good performance is capable of encouraging workers to take their responsibilities seriously. However, rewards that employees consider unfair or inconsistent are potentially associated with dissatisfaction and reduced commitment.
Deci and Ryan (2000) explained that motivation is influenced by factors such as autonomy, competence and the feeling of being valued. This perspective indicates that employees are not motivated by money alone. Respectful supervision, opportunities to develop professional skills, constructive feedback and recognition of individual contributions are also relevant to their work experiences.
The Standards Organisation of Nigeria is a federal institution responsible for standards-related activities that support product quality, consumer protection and fair practices in the Nigerian market. Its responsibilities require employees to carry out technical, administrative, inspection and regulatory support duties in line with applicable standards and procedures. The organisation's Abuja operations provide a relevant setting for examining how reward practices relate to employee performance within a public-sector institution. Employees' ability to carry out their responsibilities effectively is important to the organisation's work, although the specific reward arrangements and their effects must be established through evidence gathered from the study rather than assumed in advance. Furthermore, public-sector reward systems operate within organisational rules, approved budgets, salary structures and established promotion procedures. These arrangements are intended to provide order and consistency, but employees may still differ in how they perceive the fairness, adequacy and usefulness of the rewards available to them. Financial rewards, including salaries and applicable allowances, are relevant because they affect employees' financial circumstances. Non-financial rewards, such as recognition, professional training and opportunities for advancement, are also important areas for investigation because they relate to employees' development and workplace experiences.
Studying reward systems at SON, Abuja is relevant because the organisation's responsibilities depend on employees who perform their duties accurately and consistently. Understanding which forms of rewards employees consider useful can assist management in identifying areas that require review. The findings can also contribute to discussions on employee motivation and reward management in Nigerian public institutions. However, any recommendation must be based on the study's actual results and must take account of the organisation's policies, available resources and applicable public-service regulations.
This study is set against the backdrop of the need to understand how financial rewards, non-financial rewards, promotion opportunities and employee recognition relate to employee performance at the Standards Organisation of Nigeria, Abuja. It seeks to investigate employees' experiences of the existing reward system and determine whether these practices are associated with productivity, commitment and the effective performance of assigned duties.
1.3 Statement of Problems
Investigation revealed that reward systems are important to employee motivation, job satisfaction and performance. At the Standards Organisation of Nigeria (SON), Abuja, employees perform duties that require accuracy, commitment and adherence to established standards. On the other hand, issues relating to the fairness of rewards, promotion opportunities, recognition and the relationship between effort and reward are relevant areas of concern that require investigation rather than assumption.
Additionally, when employees consider rewards inadequate, unclear or unfair, their willingness to maintain high levels of effort is potentially affected. A reward system that does not clearly connect performance with recognition or advancement is also capable of creating dissatisfaction among workers. However, there is a need to establish whether these concerns exist among employees of SON, Abuja and determine how the organisation's financial and non-financial rewards relate to their performance.
Furthermore, without evidence on employees' experiences, management has limited grounds for determining which reward practices require improvement. It is against this backdrop that this study seeks to examine the impact of reward systems on employee performance at the Standards Organisation of Nigeria (SON), Abuja.
1.4 Aim and Objectives of Study
The aim of this study is to examine the impact of reward systems on employee performance at the Standards Organisation of Nigeria (SON), Abuja.
The specific objectives of this research are to:
- Examine the relationship between financial rewards and employee performance at SON, Abuja.
- Determine the relationship between non-financial rewards and employee performance at SON, Abuja.
- Assess the relationship between promotion opportunities and employee performance at SON, Abuja.
- Examine the relationship between employee recognition and employee performance at SON, Abuja.
- Determine the overall relationship between the reward system and employee performance at SON, Abuja.
1.5 Research Questions
The study came up with research questions so as to be able to ascertain the above stated objectives. The specific research questions for the study are stated below as follows:
- What is the relationship between financial rewards and employee performance at SON, Abuja?
- What is the relationship between non-financial rewards and employee performance at SON, Abuja?
- How do promotion opportunities relate to employee performance at SON, Abuja?
- What is the relationship between employee recognition and employee performance at SON, Abuja?
- What is the overall relationship between the reward system and employee performance at SON, Abuja?
1.6 Research Hypotheses
The following null and alternative hypotheses are formulated in line with the study objectives.
Hypothesis One
- H0: Financial rewards have no significant relationship with employee performance at SON, Abuja.
- H1: Financial rewards have a significant relationship with employee performance at SON, Abuja.
Hypothesis Two
- H0: Non-financial rewards have no significant relationship with employee performance at SON, Abuja.
- H1: Non-financial rewards have a significant relationship with employee performance at SON, Abuja.
Hypothesis Three
- H0: Promotion opportunities have no significant relationship with employee performance at SON, Abuja.
- H1: Promotion opportunities have a significant relationship with employee performance at SON, Abuja.
Hypothesis Four
- H0: Employee recognition has no significant relationship with employee performance at SON, Abuja.
- H1: Employee recognition has a significant relationship with employee performance at SON, Abuja.
Hypothesis Five
- H0: The overall reward system has no significant relationship with employee performance at SON, Abuja.
- H1: The overall reward system has a significant relationship with employee performance at SON, Abuja.
1.7 Significance of Study
The outcome of this research will provide information on employees' perceptions of financial rewards, recognition and promotion practices, and supporting evidence-based review of reward policies. The study will also give employees an opportunity to express their views on existing rewards and how these relate to their performance and work experiences.
Furthermore, the results will provide relevant information for examining reward administration, employee appraisal and recognition practices. It will also offer a case-specific reference for discussions about employee reward management within public institutions.
Lastly, the study will serve as an academic reference for further research on reward systems, motivation and employee performance.
1.8 Scope of Study
The scope of this research is focused on the impact of reward systems on employee performance at the Standards Organisation of Nigeria (SON), Abuja, in the Federal Capital Territory, Nigeria. It covers financial rewards, non-financial rewards, promotion opportunities and employee recognition. The research is limited to SON, Abuja, and does not claim to represent every SON office or other Nigerian public institutions.
1.9 Limitations of the Study
During the course of this study, there were some problems encountered which stood as limitations to the research work. Some of the limitations include:
- Delay from respondents: Some respondents were potentially unable to complete or return questionnaires promptly because of their official responsibilities. This was addressed by allowing reasonable time for responses and follow-up.
- Financial constraints: Limited funds were capable of restricting transportation, printing, photocopying and other research expenses. The study was therefore organised within the available budget.
- Time constraints: The time available for the project was limited by academic deadlines and the need to obtain responses from employees. The researcher had to plan data collection and writing activities carefully to complete the work within the stipulated period.
1.10 Definition of Terms
Reward System:
A reward system refers to the financial and non-financial benefits an organisation provides to employees in return for their work and contributions.
Employee Performance:
Employee performance refers to how well workers carry out assigned duties and contribute to organisational goals. It is considered in this study through indicators such as productivity, punctuality, commitment and the completion of assigned tasks.
Financial Rewards:
Financial rewards are monetary payments and benefits employees receive for their work. They include salaries, bonuses, applicable allowances and other approved financial benefits.
Non-Financial Rewards:
Non-financial rewards are benefits that do not directly involve monetary payments. Examples include appreciation, professional development, flexible work arrangements where applicable, and opportunities to take on greater responsibilities.
Employee Motivation:
Employee motivation refers to the factors that encourage workers to make an effort and continue working towards set objectives.
Employee Recognition:
Employee recognition refers to acknowledging an employee's effort, achievement or contribution. It includes formal awards, commendations, appreciation from supervisors and other appropriate forms of acknowledgement.
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