REWARD MANAGEMENT AND WORKERS PERFORMANCE IN BANKING INDUSTRY: A CASE STUDY OF FIRST BANK

REWARD MANAGEMENT AND WORKERS PERFORMANCE IN BANKING INDUSTRY: A CASE STUDY OF FIRST BANK

ABSTRACT: This study examines the relationship between reward management and employee performance in the banking industry (selected First bank branches in Rivers state Nigeria). The study adopted a descriptive survey research design. The study also used stratified sampling techniques and the sample was collected through a structured survey questionnaire distributed to five (5) Banks. The total number of 128 copies of the questionnaire were printed and administered to prospective respondents across the banks that form the population of the study. 82 copies of the questionnaire (64%) were filled and returned, 46 copies of the questionnaire (36%) were not returned. Out. The analysis of this study is limited to 82 respondents. Data were analyzed using SPSS version 20 and Pearson Correlation was used to test the relationship between variables. The results indicated that there is a positive significant relationship between task autonomy, task involvement, recognition, salary, job security, and working condition, and employee performance. Job security has a high positive relationship with employee performance than other variables and task autonomy has a low positive relationship with employee performance. It is recommended that banks should provide a variety of both intrinsic and extrinsic rewards to their employees since there is no one best reward that befits all in all situations, time, and places.

CHAPTER ONE: INTRODUCTION

1.1 Background to the Study

The reward is one of the important elements to motivate workers for contributing their best effort to generate innovative ideas that lead to better performance.  According to Dodd (2005), there are other means to reward workers that do not just focus on financial compensation. Some of these include the praise that workers received from their managers, the opportunity to take on important projects or tasks, and even leadership attention. Workers will put in their maximum effort when they have a feeling of trust that their efforts will be rewarded by the management. There are many factors that affect workers’ performance, among all those factors which affect workers’ performance, the motivation that comes with rewards is of utmost importance (Akhtar 2007). Motivation is an accumulation of different processes that influence and direct workers’ behavior to achieve some specific goal (Baron, 1983) cited in (Akhtar 2007). Rewards can be extrinsic or intrinsic, extrinsic rewards are tangible rewards and these rewards are external to the job or task performed by the workers. External rewards can be in terms of salary/ pay, incentives, bonuses, promotions, job security, etc. Intrinsic rewards are intangible rewards or psychological rewards like appreciation, meeting the new challenges, positive and caring attitude from employer, and job rotation after attaining the goal. According to Leonard (2000), there are two basic types of rewards, financial and non-financial and both can be utilized positively to enhance the performance behaviors of workers. Financial rewards mean pay-for-performance such as performance bonuses, job promotion, commission, tips, gratuities, and gifts, etc. Non-financial rewards are non-monetary/non-cash and it is a social recognition such as acknowledgment, certificate, and genuine appreciation, etc. The non-financial rewards are also called materials award (Narimawati,2007).

An organization must carefully set the rewards system to evaluate the workers’ performance at all levels and rewarding them whether visible pay for performance or invisible satisfaction. The concept of performance management has given a rewards system that contains; needs and goals alignment between organization and workers, rewarding workers both extrinsically and intrinsically. The system also suggests where training and development are needed by the workers in order to complete the defined goals. This training or development needs assessment of workers gives them intrinsic motivation. Frey (1997)  found in (Akhtar 2007) argued that once pay exceeds a subsistence level, intrinsic factors are stronger motivators, and staff motivation requires intrinsic rewards such as satisfaction at doing a good job and a sense of doing something worthwhile. There is mix finding in the literature to determine which type of reward is more effective to increase workers’ performance. According to Segal et al (2005), financial rewards are not the most motivating factor and financial results have a de-motivating effect among workers (Puwanenthiren, 2011). Several studies have found that among workers surveyed, money was not the most important motivator, and in some instances, managers have found money to have a demotivating or negative effect on workers. On the other hand, Alimi (2002) indicated that non-monetary types of rewards can be very meaningful to workers and very motivating for performance improvement. According to him, the creative use of personalized non-monetary rewards reinforces positive behaviours and improves workers’ retention and performance. These types of recognition can be inexpensive to give, but priceless to receive.

The reward system consists of all organization components such as people, processes, rules, and decision-making activities involved in the allocation of compensation and benefits to workers in exchange for their contribution to the organization (Wilson 1994 cited in Usman, 2010).In order for an organization to meet its obligations to shareholders, workers, and society, its top management must develop a relationship between the organization and workers that will fulfill the continually changing needs of both parties (Wilson, 1994 cited in Usman 2010). At a minimum, the organization expects workers 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. Similarly, workers expect their organization to provide fair pay, safe working conditions, and fair treatment. Like management, workers often expect more, depending on the strength of their needs for security, status, involvement, challenge, power, and responsibility. The expectations of both parties (employers and workers) vary from organization to organization and from workers to workers, hence, to address these expectations an understanding of workers’ needs is required (Beer, Spector, Lawrence, Mills, & Walton, 1984 cited in Puwanenthiren, 2011).

Workers’ job performance has been studied extensively throughout the history of industrial/organizational behaviour (Judge, Thoresen, Bono, & Patton, 2001) in Abejirinde (2009). It has been referred to as the “Holy Grail” of industrial/organizational behaviour (Landy, 1989) in Alamdar, (2011). An intrinsically motivated individual will be committed to his work to the extent to which the job inherently contains tasks that are rewarding to him or her. An extrinsically motivated person will be committed to the extent that he can gain or receive external rewards for his or her job. He further suggested that for an individual to be motivated in a work situation there must be a need, which the individual would have to perceive a possibility of satisfying through some reward. If the reward is intrinsic to the job, such desire or motivation is intrinsic. But, if the reward is described as external to the job, the motivation is described as extrinsic. Good remuneration has been found over the years to be one of the policies the organizations adopted to increase their worker’s performance and thereby increase the organization’s productivity. Also, with the present global economic trend, most employers of labour have realized the fact that for their organizations to compete favorably, the performance of their workers goes a long way in determining the performance of their organization in the global community. So many people have carried out researches in this area, some of which are Oloko (1977), Kayode (1973), Egwuridi (1981), Nwachukwu (1994), Ajila (1997) cited in Ali and Ahmed (2009). The performance of workers has become important due to the increasing concern of human resources and personnel experts about the level of output obtained from workers due to poor remuneration. This attitude is also a social concern and is very important to identify problems that are obtained in industrial settings due to non-challant attitudes of managers to manage their workers by rewarding them well to maximize productivity. All efforts must be geared towards developing workers’ interest in their job so as to make them happy in giving their best to their work, this will ensure industrial harmony. In view of this, this study attempts to identify the influence that rewards have on workers’ performance in order to address problems arising from motivational approaches in organizational settings. Vroom (1964), in Alimi (2002) supported the assumption that workers tend to perform more effectively if the wages are related to performance which is not based on personal bias or prejudice, but an objective evaluation of worker’s merit. 

1.2      Statement of the Problem

There is no one best reward for all workers for a reward that varies with time and situations. According to La Belle (2005), different individuals have different perceptions of rewards. Some individuals may consider cash as a sufficient and adequate reward for their efforts at work, while others may consider holidays and material incentives (such as a car) as more rewarding in exchange for their work. Others may consider a shift in the treatment that they get from their managers to be a more rewarding experience. Some workers consider being recognized by their leader as more rewarding than financial incentives, but a young man who is struggling to settle down for life will prefer financial rewards to recognition. What served as a reward to one worker may not be seen as a reward to other workers as a result some workers feel rewarded than others.

Therefore, this study rewards system and workers performance aroused from the fact that most workers in Nigeria do not receive adequate and expected rewards for the job done or the job they are expected to perform, hence some bank workers are working-poor. When workers’ efforts are not properly rewarded workers will be prompted to render preferential services in exchange for undue gratifications. Simply, unsatisfied basic needs push workers to satisfy themselves at the mercy of “corporate begging.” There exists a variety of purposes of a reward system; one very common is to motivate workers to perform better. For a rewards system (extrinsic or intrinsic) to be ideally motivational the reward should satisfy a number of criteria; have value, be large enough to have an impact, be understandable, be timely, the effect should be durable and cost-efficient (Locke 2009). The ability to meet most of the stated criteria remains a challenge to manage in the Nigerian banking sector.

1.3 Objectives of the Study

The objective of this study is to examine Reward management and workers’ performance in the Banking Industry, using the first bank in rivers state as our case study. Specifically, the study has the following objectives;

1. To determine the effect of working condition (i.e. hours of work, rest periods and work schedules)  on workers performance in the banking industry
2. To examine the effect of job security on workers performance in the banking industry
3. To ascertain the effect of salary on workers performance in the banking industry
4. To investigate the effect of task autonomy on workers performance in the banking industry
5. To evaluate the effect of task involvement on workers performance in the banking industry
6. To assess the effect of job/person recognition on workers performance in the banking industry

1.4 Research Questions

The study is guided by the following research questions;

1. What is the relationship between working conditions (i.e. hours of work, rest periods, and work schedules) and workers’ performance in the first bank?
2. How does job security affect workers’ performance in the first bank?
3. What is the relationship between the worker’s salary and workers’ performance in the bank?
4. What is the effect of task autonomy on workers’ performance in the bank?
5. What is the relationship between task involvement and workers’ performance in the first bank?
6. Is there a relationship between job/person recognition and workers’ performance in the first bank?

1.5 Research Hypotheses

It is of utmost importance to form a tentative statement to the above research questions so as to provide the required empirical foundation for carrying out this study. An attempt was made to determine the relationship between the variables with the following hypotheses;

Hypothesis I

There is no direct relationship between working conditions (ie hours of work, rest periods, and work schedules) and workers’ performance in the banking industry.

Hypothesis II

Job security has no relationship with workers’ performance in the banking industry.

Hypothesis III

There is no significant relationship between salary and workers’ performance in the banking industry.

Hypothesis IV

There is no relationship between task autonomy and workers’ performance in the banking industry.

Hypothesis V

Task involvement has no direct relationship with the workers’ performance.

Hypothesis VI

There is no significant relationship between job/person recognition and workers’ performance.

1.6      Significance of the Study

The main purpose of the reward system of any organization is to fulfill three important goals of the organizations such as attracting potential workers, retain present workers, and inducing them to do their best. Moreover, this study aims at contributing to efficiency in organizational performance and sustainability by raising awareness for the need for good rewards, especially in the ‘banking sector. Accordingly, the findings will help banks to understand the effect of their rewards system so that corporate begging can be addressed properly.

Also, the findings will help stakeholders of the said industry including the government to come out with appropriate policy guidelines on how compensation will be paid to workers in the banks to retain and boost performance. Students of similar studies and other researchers will also find this as reference material and a contribution to the literature on the subject matter.

1.7      Scope of the Study

This study focused on the Relationship between Reward management and workers Performance in First Bank in Rivers State. The 5branches of the bank were used in the study, this includes; Rumoula Branch, Rumokoro Branch, Choba Branch, Artillery Branch, Woji Road Branch.

1.8      Organization of the Study   

This study organized into five chapters. Chapter one is the general introduction of the study and contains the background of the study, problem statement, study objectives, research questions, and hypothesis as well as the significance and scope of the study. Chapter two deals with the literature review which is an in-depth analysis of research already conducted in the study area. Chapter three is the methodology and outlines the various strategies and techniques used to achieve the study objectives. It contains type and source of data, sampling and sampling techniques, techniques for data collection, and analysis. Chapter four focuses on data representation and results in the discussion. The final chapter deals with the summary of major findings, the conclusion as well as the recommendations regarding the study.

TABLE OF CONTENTS

Title Page

Declaration

Certification

Dedication

Acknowledgments

Abstract

Table of Contents

List of Tables

CHAPTER ONE: INTRODUCTION                                                                              

1.1      Background to the Study

1.2      Statement of the Problem

1.3      Objectives of the Study

1.4      Research Questions

1.5      Research Hypotheses

1.6      Significance of the Study

1.7      Scope of the Study

1.8      Organization of the Study

CHAPTER TWO: LITERATURE REVIEW               

2.1      Theoretical Review

2.1.1   The Concept of Reward management

2.1.2   Theories of Reward Management

2.1.3   Dimensions of Reward Management

2.1.4   Classification of Reward Management

2.1.5 Components of Reward Management

2.1.6 The Purpose of Reward management

2.1.7 Basis for Rewards

2.1.8 Different Types of Rewards

2.1.9 Challenges of Reward management

2.1.10 Job Evaluation: An Integral Element in Wage and Salary Administration

2.1.11 Employee Performance

2.1.12 Measurement of Employees’ Performance

2.2 Empirical Literature Review

2.3 Evaluation of Literature reviewed

CHAPTER THREE: RESEARCH METHODOLOGY                                                  

3.1       Research Design

3.2       Institutional Profile (First Bank Nigeria)

3.3       Population of the Study

3.4       Sampling Techniques and Sample Size

3.5       Method of Data Collection

3.6       Method of Data Analysis

CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS                                 

4.1       Evaluation of Administered Questionnaire

4.2       Presentation and Analysis of Result

4.3       Test of Hypothesis

4.4       Discussion of Findings

CHAPTER FIVE: SUMMARY, CONCLUSION, AND RECOMMENDATIONS     

5.1       Summary of Major Findings

5.2       Conclusion

5.3       Recommendations

References

Appendix

LIST OF TABLES

Table 3.1 Distribution of Population of Study

Table 3.2 Sample Size determination

Table 4.1 Distribution and Retrieval of Questionnaire

Table 4.2 Gender of Respondent

Table 4.3 Work Experience

Table 4.4 Educational Qualification

Table 4.5 Descriptive Outcomes on Working Condition

Table 4.6 Descriptive Outcomes of Job Security

Table 4.7 Descriptive Outcomes on Employee pay

Table 4.8 Descriptive Outcomes on Task Autonomy

Table 4.10 Descriptive Outcome on Task Involvement

Table 4.11 Descriptive Outcomes on Workers Performance

Table 4.12 Pearson Correlation of Independent Variables and Employee Performance

OTHER RELATED PROJECT TOPICS HERE