1.0 Introduction
1.1 Background of Study
Globally, Organizational reward system has remained one of the most important components of management for encouraging people to achieve company goals and objectives. Reward system is crucial to the organization, through this they have the ability to attract the right employee retain them and motivate them to give desirable performance (Otieno, 2006). It is a common knowledge that organization be it business concerns, mutual benefit as societies, require their employees or workers to perform well and behave in certain ways if the organization wants to survive and achieve its aims. The various forms of behaviour and attitudinal disposition which organization require of their employees in order to actualize set goals depend on the kind of reward and incentive existing in the organization.
Organizational reward system refers to the structured methods and processes through which an organization provides compensation, benefits, and other forms of recognition to its employees in return for their contributions and performance. These systems include both monetary and non-monetary rewards (Armstrong, 2010). Management involves motivating people and any human productivity inevitable leads to the question of incentives and rewards to most people an incentives implies money, any reward but this is not necessarily so. Incentives and reward may be financial and non-financial. It has to be mentioned here that incentive and reward are used for four main purposes;
- To persuade people to come to work
- To encourage people to work harder while they are at work
- To help people to identify themselves with the objective of the organization
- To show management appreciation of the employee's contribution to the survival of the organization.
A well package incentive system coupled with appreciation reward has a tendency of influencing employees in the organization. In fact, with increased productivity through incentives and reward, and system, workers will be more satisfied with the job, and hence put in their utmost best into achieving organization goals and effectiveness. However, several writers have come to associate personal productivity with the type of reward and incentives available in the organization as well as the satisfaction of the needs of the employees. The most need of the employees are meet within the organization through appropriate reward and incentives, the more the like hood that they would be motivated to work and thus satisfy the need of the organization.
In the current organizational context, reward systems have become increasingly sophisticated, integrating both extrinsic and intrinsic rewards to cater to the diverse needs and preferences of employees (Armstrong, 2010). Extrinsic rewards, such as bonuses and promotions, are directly tied to performance outcomes, while intrinsic rewards, such as opportunities for professional growth and meaningful work, address the psychological needs of employees (Deci & Ryan, 2000). Today, the impact of reward systems on employee productivity is well-documented, with research consistently showing that well-designed reward systems can lead to higher levels of motivation, job satisfaction, and organizational commitment (Deci & Ryan, 2000). As organizations continue to adapt to changing economic and social landscapes, the ongoing challenge lies in designing reward systems that not only incentivize productivity but also foster a positive organizational culture and long-term employee engagement.
In this study, the researcher is really going to look at organizational reward system and its impact on the productivity of staff. This is to look at generally and specifically referring to Small scale shoe manufacturing industry Aba. This research will also focus on ways organization reward/incentives can be administered so as to reduce job dissatisfaction and improve productivity of staff.
1.2 Statement of Problems
Investigation revealed that the effectiveness of organizational reward systems in driving employee productivity remains a critical issue for many organizations. Despite substantial investments in reward programs, many companies struggle to achieve the desired impact on employee performance and overall productivity (Armstrong & Taylor, 2020). The problem also extends to the measurement and evaluation of the impact of reward systems on productivity. Many organizations lack robust metrics to assess the effectiveness of their reward programs, making it difficult to determine whether the investment in rewards is yielding the expected returns (Lawler, 2003). Without clear evidence of effectiveness, organizations may either over-invest or under-invest in their reward strategies, leading to suboptimal outcomes.
Additionally, there is the issue of perceived fairness and equity in the distribution of rewards. Employees often compare their rewards to those of their peers, and perceived inequities can lead to dissatisfaction, reduced motivation, and even turnover (Adams, 1965). This presents a challenge for organizations to design reward systems that are not only effective but also perceived as fair by all employees. It is against the backdrop that this study seeks to address these problems by evaluating the impact of organizational reward system on employees productivity.
1.3 Aim and Objectives of Study
The aim of the study is to examine the Impact of Organizational Reward System on Employees Productivity using Small Scale Shoe Manufacturing Industry Aba, Abia State as a case study. In achieving this aim, the following specific objectives were laid out as follows:
- To analyze the role of perceived fairness and equity in the distribution of rewards and how it affects employee satisfaction and performance;
- To assess the effectiveness of performance-related pay systems in improving productivity and job satisfaction among employees;
- To identify factors in the reward system that impinges organizational staff performance in the area under review;
- To assess the relationship between the reward system and organizational staff performance in the area under study; and
- To provide recommendations for designing and implementing reward systems that align with the diverse needs and motivations of employees, thereby optimizing organizational productivity.
1.4 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:
- Does reward system enhance organizational staff performance in the study area?
- What is the impact of reward system on organizational staff performance in the area under review?
- What is the relationship between the reward system and organizational staff performance in the area under study?
- What are the factors in the reward system that impinges organizational staff performance in the area under review?
- How effective is performance-related pay system in improving productivity and job satisfaction among employees?
- What is the role of perceived fairness and equity in the distribution of rewards and how it affects employee satisfaction and performance?
1.5 Research Hypothesis
In order to pursue the objective of this study, the following generalized statements have been designed to guide and aids in obtaining the result for the experiment to be conducted. For this work, the null hypothesis will be represented with H0 while the alternative hypothesis will be represented with hypothesis H1.
Hypothesis One
- H0: There is no significant impact of reward system on organizational staff performance in the area under review
- H1: There is significant impact of reward system on organizational staff performance in the area under review
Hypothesis Two
- H0: Perceived fairness and equity in the distribution of rewards do not significantly influence employee satisfaction and their subsequent productivity
- H1: Perceived fairness and equity in the distribution of rewards significantly influence employee satisfaction and their subsequent productivity
Hypothesis Three
- H0: Reward system does not enhance organizational staff performance in the area under review
- H1: Reward system enhances organizational staff performance in the area under review
Hypothesis Four
- H0: There is no significant positive relationship between monetary rewards and employee productivity
- H1: There is a significant positive relationship between monetary rewards and employee productivity
1.6 Significance of Study
The outcome of this study will provide evidence for organizations to construct, develop or structure an enhanced rewards system for their employees through the development of a reward framework.
This study will explore the impact of non-monetary and monetary reward programmes on organizational staff performance thereby contributing to the increased overall performance of the organization.
This will serve as guide to entrepreneurs, managers and administrators of both nongovernmental and governmental organization towards improved organizational performance and productivity.
This study will be of immense benefit to other researchers who intend to know more on this study and can also be used by non-researchers to build more on their research work. It will also contribute to knowledge and could serve as a guide for other study.
1.7 Scope of Study
The scope of the research is focused on the Impact of Organizational Reward System on Employees Productivity using Small Scale Shoe Manufacturing Industry Aba, Abia State as a reference point.
1.8 Limitations of the Study
During the course of this study, many things militated against its completion, some of which are:
- Time Constraint: The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
- Distance: The long distance between Owerri and Lagos was one of the major constraints; moreover, there was a (problem of shutting from one location of the corporation to the other.
- Information Constraint: Getting the needed information was not easy. This is probably because of the stingy manner managers handle information especially those bordering the life of the organization.
- Financial Constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
1.9 Definition of Terms
Employee Productivity:
Employee productivity is the measure of an employee's efficiency in converting inputs, such as time and resources, into outputs, such as goods and services. It is often assessed in terms of the quantity and quality of work produced by an employee over a specific period (Lawler, 2003).
Monetary Rewards:
Monetary rewards refer to financial incentives given to employees as part of the reward system. These include wages, salaries, bonuses, profit-sharing, and other forms of direct financial compensation aimed at motivating employees to achieve higher levels of productivity (Milkovich & Newman, 2020).
Organizational Reward System:
An organizational reward system refers to the structured methods and processes through which an organization provides compensation, benefits, and other forms of recognition to its employees in return for their contributions and performance. These systems include both monetary (e.g., salaries, bonuses) and non-monetary rewards (e.g., recognition, career development opportunities) (Armstrong, 2010).
