The general objective of this study is to assess the effect of reward on employee motivation in Kirkos sub city administration, Addis Ababa. The study aims at assessment of the effect of reward on employee motivation in selected Kirkos sub city administration. Descriptive and inferential analysis was used to describe the effect of intrinsic and extrinsic rewards on employee motivation. Out of a total target population of four hundred fortify one administrative employee; two hundred ten samples were taken in probability sampling more specifically, stratified sampling, technique from the Kirkos sub city administration chief executive pool. Questionnaire was developed and distributed to the administrative employees. The finding of the study indicated that administrative employees of the administration have moderate satisfaction with the total reward practices. However; employees are motivated better by intrinsic rewards than extrinsic rewards. When each extrinsic reward items were computed, employees showed dissatisfaction from bonuses, similarly, when variables of each intrinsic reward were examined employees have moderate satisfaction the relationship of manager.
Table of Contents
Abstract
Acknowledgments
Table of Contents
List of Table
List of Figure
List of Abbreviations / Acronyms
CHAPTER ONE: INTRODUCTION
1.1 Background of the study
1.2. Statement of the Problem
1.3. The objective of the study
1.3.1 General Objective
1.3.2 Specific Objectives
1.4. Research questions
1.5. Scope of the study
1.6. Limitation of the Study
1.7. Significance of the study
1.8. Operational Definition of Key Term
1.9. Organization of the Study
CHAPTER TWO: REVIEW OF RELATED LITERATURE
2.1. INTRODUCTION
2.2. Theoretical Framework of Literature Review
2.2.1. Meaning of Motivation
2.2.2. intrinsic versus extrinsic motivation
2.2.3. Content (need) theory of motivation
2.2.4. Theories of Motivation
2.2.5. Processes theories of motivation
2.2.6. Definition of Reward
2.2.7. Types of Reward Intrinsic and Extrinsic Rewards
2.2.8. Reward system
2.3. Empirical Literature Review
2.3.1. Conceptual Framework
CHAPTER THREE: METHODOLOGY OF THE STUDY
3.1. Introduction
3.2. Research design
3.3. Research approach
3.4. The population and sample size
3.5. Sampling design
3.6. Source and Instrument of Data Collection
3.7. Data collection techniques
3.8. Methods of Data Analysis
3.9. Validity and Reliability of the Research Instrument
CHAPTER FOUR: RESULTS AND DISCUSSION
4.1. Introduction
4.2. Socio-demographic Characteristics of the Respondents
4.3. Data Analysis of Reward Variables and Employee Motivation
4.4. Mean and Standard Deviation of Intrinsic Reward
4.5. Data Analysis of Reward Variables and Employee Motivation
4.6. The impact of intrinsic rewards on employee motivation information section
4.7. Level of Employee Satisfaction from Extrinsic and Intrinsic Rewards
4.8. The level of motivation related questions
4.9. Mean & standard deviation of work motivation
4.10. Relationship between Reward Practices and Work Motivation
4.11. The Effect of Reward Practices on Motivation
4.12. Discussion
CHAPTER FIVE
Summary of Major Findings, Conclusion and Recommendation
5.1. Major Findings
Summary of major findings
5.2. Conclusion
5.3. Recommendation
Appendices A
Appendices B
Abstract
The study aims at assessment of the effect of reward on employee motivation in selected kirkos sub city administration. Descriptive and inferential analysis was used to describe the effect of intrinsic and extrinsic rewards on employee motivation. Out of a total target population of four hundred fortify one administrative employee; two hundred ten samples were taken in probability sampling more specifically, stratified sampling, technique from the kirkos sub city administration chief executive pool. Questionnaire was developed and distributed to the administrative employees. The finding of the study indicated that administrative employees of the administration have moderate satisfaction with the total reward practices. However; employees are motivated better by intrinsic rewards than extrinsic rewards. When each extrinsic reward items were computed, employees showed dissatisfaction from bonuses, similarly, when variables of each intrinsic reward were examined employees have moderate satisfaction the relationship of manager. The spearman’s correlation coefficient result revealed that each of extrinsic reward indicators, such as salary, wage and bonus are positively associated with motivation of workers, with the correlation coefficient respectively. Likewise two of three intrinsic reward indicators, namely relationship of coworker & leader positively associated with motivation of workers, with the correlation coefficient respectively. The hypothesis testing for the observed association of the aforementioned variables is statically significant at one percent level of precision error. Therefore, we reject the null hypothesis of no correlation in favor of alternatives hypothesis
The estimated ordinal regression model indicated that the proportion of variation in dependent variable explained by independent variable is sixty nine percent. The estimation result also revealed that four variables such as wage, bonus, relationship of coworker, & relation of leaders were found significant in explaining the employee motivation .the parameter estimates for wage, bonus, relation with coworkers & relation with leaders is respectively, all of them statically significant at one percent level.
Key Words: Reward, Motivation, Effect, Employee
Acknowledgments
First and for most, all praises be to Almighty God for endowing me the endurance and courage of going through all ups and downs to reach the stage where I am now. Secondly, heart full thanks extend to my thesis advisor Dr. Abera Demis for his friendly approach and valuable guidance throughout conducting this thesis. Really without his un-tireless support this thesis would have not been possible to finish.
Furthermore, I would like to thank my wife, Liyouwork Tsegaye and my son Nathanim Getaneh for their devotion of time and moral courage from the beginning to the end of my study. My gratitude also goes to my unique friend Israel Endale for his unconditional technical support of the thesis.
Lastly but not least, I am indebted to thank the concerned employees of KSC Administration who have made sincere cooperation in the computer work in distributing and collecting questions & providing raw data and assisted me by encoding data in to the statistical software. May God bless you all for the work you have done to make this paper Complete!
List of Table
Table 1 Sample size determination
Table 2, Summary of Socio-demographic characteristics of the participants
Table 3, Descriptive statics of reward practices
Table.4, Descriptive statics of work content (intrinsic reward)
Table 5, Descriptive statics of extrinsic reward practices
Table 6, the impact of responsibility related intrinsic reward on employee motivation
Table 7, Coworker related intrinsic reward
Table 8, Leader related intrinsic reward
Table 9, Descriptive statics of intrinsic & extrinsic reward mean & standard deviation
Table 10, Descriptive statics of reward work motivation
Table 11, Correlations Matrix for Motivation and Reward Variables
Table 12, Ordinal regression estimation result
List of Figure
Figure 1, Conceptual Frameworks
Figure 2, Respondent sex composition
Figure 3, Frequency Distribution Age
Figure 4, Frequency distribution of current Education status
Figure 5, Presents Martial status of the Respondent
Figure 6, Frequency Distribution of Respondent work Experience
Figure 7, Frequency Distribution of current job position
Figure 8, Current salary Scale of Respondent
List of Abbreviations / Acronyms
KSCA – Kirkos Sub City Administration
CEOP– Chief Executive Officer Pool
MBA – Master of Business Administration
STD --Standard Deviation
OLS--Ordinary logistic STATA
CHAPTER ONE: INTRODUCTION
1.1 Background of the study
In today’s world of business environment, sustainable human resource (HR) factor play a vital role in order to remain competitive. Most winning organization in the 21st century will be those focuses on integrated human resource processes and systems (Ayaz, 2010). Reward is one of the most critical functions that bring global success in human resource management. Formal rewards of employees, which are typically scheduled annually or semiannually, are one of the most important human resource management practices. Reward system includes extrinsic & intrinsic rewards. Extrinsic reward can be listed as wage salary, bonus, promotion that an employee receives as part of their job. In return intrinsic reward is associate with the satisfaction that comes from actually performing the work such as responsibility, meaningful work & achievement & so on (Ibid). Reward system consists of the policies & mechanisms by which organization administer employee rewards .reward system should satisfy the goal associate with the strategy of an organization while the same time attractive ,cost effective & fair (Mahaney & Ledger,2006). According to Griffin (2008) an organization reward system is the most basic tool for managing employee motivation and individual performance is generally determine by three things motivation- the desire to do the job, ability-the capability need to do the job & the work environment. Motivation is a problem through which the task of the manager will be more challenging.
Having said that the subject that often comes with reward is motivation, which is core point of an organizations performance in bringing about the organizations success as well as the employees satisfaction and encouragement. Motivation is a set of energetic forces that originate both with in as well as beyond an individual’s being to initiate work relate behavior & determine its form direction ( towards organization goal),intensity ,duration (Pinder ,1984). Reward system is an essential tool for governmental & non-governmental organization used to excel organizational performance (Ibid).
With due respect, this study has intended to assess the reward system of Addis Ababa City government by taking the case of kirkos sub city administration. So, this study focused on the relationship between rewards practice and employee motivation . The Researcher also hopes that it was explained the main problems arise from the Rewards practice that has effect on employee’s motivation.
1.2. Statement of the Problem
The success of an organization largely depends on the quality of its employees which is measure by their employee motivation. This can be attributed to the way their performance is apprised, recognized and relevant motivation put in place (Nurse, 2005). Thus, according to Armstrong (2009), people are motivated when they expect certain course of action was likely lead to achievement of a goal and a valued reward one that satisfies their needs and wants.
Recently, most of organizations are fully aware of the importance of employee motivation, increasing employee motivation or to find out the ways through which high level of employee’s motivation can be achieved is becoming one of the decisive factors for any organization success (Ayaz, 2010). Employees’ reward can ..be increase by putting efforts to factors that enhance the employees’ motivational level, creativity, job satisfaction and comfort workplace environment (Armstrong, 2009). Only when employees are motivated towards appropriate goals that there is a likelihood of organizational success is enhanced. Since productivity is influenced by employee motivation level, organizations and particularly their line managers have to realize what inspires employees to reach the highest level of their performance (Beardwell and Claydon, 2007).
Working as public servant, the researcher understands that, Kirkos Sub-City Administration has good working environment expressed by provision of adequate equipment, working tools, and good office layout. According to Amina (2009), comfortable and ergonomic office design motivates the employees and increases their performance substantially.
In spite of the above fact, the 2011 E.C annual assessment report of Kirkos Sub-City Administration evinces that the employees’ motivation towards reward systems and its practice is very low. Primarily, effective reward system helps the organization to achieve its goals by developing productive and motivated employees. The sector offices in the Sub-City administration uses performance management tool which is called “Balanced score-card”, which would enable it to formulate and implement its strategy and to track its performance. Without on time feedback on employee’s performance it’s difficult to create employee’s motivation. The second reason of employee’s low satisfaction is less communication between the employees and leaders. Besides, it is difficult to identify employee training needs based on the result of the reward (Report KSCA, 2011).
Besides the researcher has tries to observe and understand the management of KSCA has no trend of participating employees in decision making processes; good relationship of coworker; good relationship of manager; sharing authority & giving responsibility to employees ;assigning meaningful work & autonomous because the existing leadership style doesn’t consider those factor as reward which motivate employee. (Armstrong & Murlis, 2004) state that leadership style within an organization has a bearing on encouraging or inhibiting employee’s performance.
Most researches in reward and motivation have been conducted in business making organizations (Armstrong & Murlis, 2004; Bardwell and Calydon, 2007). But employee motivation in services-orient organizations is also an important issue. Therefore, this study investigates the relationship between rewards (salaries and wages, bonuses promoting, relationship of coworkers, relationship of manager, responsibility and work environment) with work motivation by perspective of employees in KSCA.
The researcher is self-motivate and self-initiate to conduct this study for academic and organizational purpose. This study is design to generate valuable information and relevant evidence through a detail study to draw some solutions to improve problems associate motivation of employees in Kirkos Sub-City Administration. Generally, this study tries to assess the effect of reward on motivation and individual employees in KSCA that can be benefit the management of the office and HR department. Furthermore, it also tries to draw some recommendations and indicates directions for further research.
1.3. The objective of the study
1.3.1 General Objective
The general objective of this study is to assess the effect of reward on employee motivation in kirkos sub-city administration, Addis Ababa.
1.3.2 Specific Objectives
This study specifically attempts to:
- To evaluate the level of employee’s motivation in KSCA.
- To examine how employees perceive the reward system in KSCA.
- To examine the relationship between reward and employee motivation.
1.4. Research questions
This study primarily focuses on answering the following basic research questions:
- What is the level of employee’s motivation in KSCA?
- How do employees perceive reward practice of in KSCA?
- What is the relationship between reward and employee motivation?
1.5. Scope of the study
Kirkos Sub-City Administration has twenty-eight sector offices. These sector offices are clustered in to four pools; namely Public Service & Human Resource Development, Construction, Land Development Management and Chief Executive Pool. Among these only one pool (Chief Executive Pool) is selected, accordingly the geographical scope is due to resource constraint, it is difficult to cover all sectors in each pool, and to keep the study manageable. And also the conceptual scope of this paper was focused only on reward and employee’s motivation on human resource management programs and will not covered other elements of the sub-city’s overall business practice.
1.6. Limitation of the Study
During the study the researcher were faced some challenges like failure of the respondents to return all responses of the questionnaire to conduct on the time, being carelessness of some selected informants to give data on time was the major operational limitations. However data gathering takes more time than expected, the researcher have tried to minimize the above stated limitations through different mechanisms: through confessing , arranging the contact on their off times and waiting to the respondents to return from the field.
1.7. Significance of the study
The primary importance of this study is to assessment of the effect of reward on employee motivation in Kirkos Sub-City Administration Chief executive pool. The result of the study serve as an input and it can be give possible and value conclusions and recommendations for the management of the organization and concern bodies which helps to reconsider and re-examine the system to take appropriate action in order to improve and increase the reward of motivation employees in the study area. Furthermore, this study serves as a reference for further studies to be undertaken in the future on the same or relate topic.
Reward issues & employee motivation are becoming major consideration in kirkos sub city administration chief executive pool. Consequently; the study is expect to contribute the following uses.
- It will give obviously image of the existing gaps on reward system in KSCA Chief executive Pool.
- It gives away for other researchers, who want to make future investigation in the area. It is helpful in enriching the existing literatures on impact of reward system on employee.
- It is helpful enriching the existing literatures on effect of reward system on employee motivation in KSCA Chief executive Pool.
1.8, Operational Definition of Key Term
Wages; earner is paid by the hour. Someone who is paid wages receives a pay rate per hour, multiplies by the number of hours work.
Salary: is a fixed amount of money or compensation paid to an employee by an employer in return for work performing. Commonly pay in fixed intervals, for example, monthly payments of one-twelfth of the annual salary, not hourly as opposed to wage.
Promotion: refers to the advancement of an employee's rank or position in a hierarchical structure.
Bonus: is usually made to employees in addition to their base salary as part of their wages or salary.
Reward: Formal, impartial, and equitable exchange. A material or financial expression of appreciation that is conditional on results (Baskar & Raikumar, 2014).
Motivation; It is the process of boosting the morale of employees to encourage them to willingly give their best in accomplishing assigned tasks (Baskar &Raikumar, 2014).
Recognition; is a return on an employee's effort and dedication at work, as well as his or her results (Baskar and Raikumar, 2014).
Intrinsic motivation: however is an internal form of motivation rewards a goal for personal satisfaction or accomplishment, intangible rewards like appreciation (Aysha, 2014)
Extrinsic motivation: is an external motivation & tangible rewards are external to task performs by the employee (Aysha, 2014).
1.9 Organization of the Study
This study was organize in five chapters. The first chapter deals with background of the study, statement of the problem, objectives of the study, significance of the study, scope and limitation of the study, definition of terms and organization of the paper. The second chapter covers the review of literature, empirical study, hypothesis and conceptual framework in the area of study. The third chapter discuss about the methodology employed by the study. The fourth chapter presents about analysis of data collected. And finally chapter five contains finding, recommendation and conclusion of the study.
CHAPTER TWO: REVIEW OF RELATED LITERATURE
2.1. INTRODUCTION
An attempt has been made to review the concepts of reward and motivation of employee in various literatures, so that there is substantial foundation of conceptual background behind this thesis. Extensive research of the available literature helped in identifying the gap which in turn served as the basis of the research undertaken. This chapter presents review of related literatures that the study was considered. In the first part Concepts and meaning of motivation, theories of motivation, definition of reward, and type of reward and the second part includes the empirical studies conducted in the area of reward and employees motivation in the situation of the different countries and Ethiopia and the third one is the conceptual frame work on the effects of reward on employee motivation.
2.2. Theoretical Framework of Literature Review
2.2.1 Meaning of Motivation
Motivation is the process that starts with a physiological or psychological deficiency or need that activates behavior that is aim at goal or incentive. Motivation usually one or more of the following word includes desire, wants, wishes aims goal need motive & incentive.
Motivation theory tries to explain why people at work behave the way they do in terms of their efforts & strive for achievement. Motivation can also be defined as ones direction to behavior or what causes a person to what to repeat a behavior & vice versa.
2.2.2. intrinsic versus extrinsic motivation
Motive can be thought of as being generated not only by needs discussed so far, but also by two separate but interrelated set of sources,
Extrinsic; are tangible & visible to others, they are distributed by other people or agent .in the work place extrinsic motivator include, pay benefits &promotion. Extrinsic motives also include the drive to avoid punishment, such as termination or being transferred.
Intrinsic; are internally generated, in other word they are motivators that the person associated with the task or job itself .intrinsic rewards includes feeling of responsibility ,achievement ,accomplishment or that something was learning from an experience feeling of challenged or competitive or that something was an engaging work or goal. Performing meaningful work has long been associated with intrinsic motivation; any explanation of intrinsic & extrinsic motivation. Cognitive evaluation theory suggests more intricate relationship. This theory propose that a task may be intrinsically motivating but that when an extrinsic motivating becomes that a task may be intrinsically motivating ,but that when an extrinsic motivator becomes associated with that task ,the actual level of motivation may decrease.
2.2.3 Content (need) theory of motivation
This theory is based on the presumption that all people have needs with each need having a different weighting for different individuals. All of these needs vary in intensity and are primarily influenced by environmental factors. Odurukwe (2005:251) claims that every individual has a set of personal needs and it is this set of needs that influences a person to adopt a specific behavior. Thus, individuals will be motivated to behave in a manner that will result in these needs being satisfied.
2.2.4. Theories of Motivation
The content theories are concerned with identifying the needs & drives that people have & how these needs & drives are prior zed .they are concerned with the type of incentives or goal that people strive to attain in order to be satisfied & perform well. at first money was thought to be the only incentive ( scientific management) & then a little later it was thought that incentives include working conditions severity & perhaps democratic style of supervision ( human relation ). sub subsequently the content of motivation was deemed to be the so called higher level needs or motives such as esteem & self-actualization ( Maslow ) responsibility , recognition ,achievement & advancement ( Herzberg) & growth & personal development.
A) Maslow’s Hierarchy of Needs
He thought that a person ‘s motivational needs could be arranged in a hierarchical manner ,in essence he believe that once a given level of need is satisfied it no longer serves to motivate .the next high level of need has to be activated in order to motivate the individual Maslow identified Physiological needs(the most basic level in the hierarchy, unlearned primary needs, example hunger, thirst, sleep & sex), safety needs(roughly equivalent to the security need, stressed emotional as well as physical safety), love need(intermediate level of need loosely cross ponds the affection & affiliation need), esteem needs(level represent the higher need of human. The need power, achievement & status can be considered), need for self-actualization (culmination of all the lower intermediate & higher need of human) hierarchy (Stephen et al, 2012).
Maslow did not intend that his needs hierarchy be directly applied to work motivation .he stressed that human behavior is multi determined & multi motivated .research findings indicate that Maslow’s is not the final answer in work motivation yet the theory does make a significant contribution in term of making management aware of divers need of employees (Stephen et al, 2012).
B).Herzberg’s two factor theory
Plunkett & Attner (1983), stated that two- factor theory was developed by Herzberg and his associates. According to Herzberg factors that can produce job dissatisfaction are called hygiene factors. Those that can produce job satisfaction are called motivation factors. Hygiene factors are the primary causes of unhappiness on the job, the person's work to its real nature. These are part of the job's environment, its context, not its content. When an employer fails to provide these factors in sufficient quality to its employees, the result will be job dissatisfaction. When they are provided in sufficient quality they will not necessarily act as motivators, stimuli for growth or greater effort. They will only lead employees to experience no job dissatisfaction. These factors include salary, job security, working condition, status, and company interpersonal relations among peers, supervisors and subordinates. Motivation factors are the primary causes of job satisfaction. They are intrinsic to the job because they relate directly to the real nature (job content) of the work people perform. When an employer fails to provide these factors in sufficient quality to employees, they will experience no job satisfaction when they are provided in sufficient quality; they affect and provide job satisfaction and high performance.
C). Alderfer’s ERG theory
Aldefer identified three groups of core need existence, relations & growth .the existence need are concerned with survival (physiological wellbeing ).the relation needs stress the importance of interpersonal ,social relationship ,the growth needs are concerned with the individual intrinsic desire for personal development. Aldefer is suggesting more a continuum of needs than hierarchal levels or two factors of prepotency needs .according to ERG theory the person’s background or cultural environment may dictate that the relatedness needs will take precedence over unfulfilled existence needs & that the more the growth needs are satisfied (Stephen et al, 2012).
D). Expectancy theory (vroom’s)
The strength of an individual performance for particular outcome other terms might be used includes value incentive attitude & expected utility. Thus superior performance (first level outcome) is seen as being instrumental in obtaining promotion (the second level outcome) expectancy in vroom’s theory is probability that a particular or action or effort will lead to particularly first level outcome. Instrumentally refers to the degree to which first level outcome will lead to addressed second level outcome (Stephen et al, 2012).
2.2.5. Processes theories of motivation
Processes theories of motivation concentrate more on the cognitive & behavior processes behind motivation. Armstrong ( 2009) argued that in the processes theory ,the emphasis is on the psychological processes or forces that affect motivation ,as well as on basic needs .according to Armstrong( 2006) ,the main processes theories are ;
Equity theory: - argues that satisfaction with pay is related to perceptions about the ratio between what one receives from the job outcomes in form of pay to what one puts into inputs in the form of effort and skill compared with the ratios obtained by others (Armstrong, 2005).
Expectancy theory:-it states that motivation will be strong if individuals can reasonably expect that their efforts and contributions will produce worthwhile rewards. These two factors determining the effort people put into their jobs.
- The values of the rewards to individuals in so far as they satisfy their needs for security, social esteem, and self-actualizations.
- The probability that rewards depend on effort, as perceived by the individual in other words, his or her expectations about the relationships between effort and reward. The greater the value of a set of rewards, and the higher the probability that receiving each of these rewards depend upon the effective effort, ability, and role perceptions of employees.
Expectancy theory states that an employee will be motivated to exert a high level of effort when he or she believes that effort will lead to a good performance appraisal; that a good performance appraisal will lead to organizational rewards like a bonus, a salary increase, or a promotion; and that the rewards will satisfy the employee’s personal goals (Armstrong, 2005).
Goal - setting theory; propose that setting goal that are accepted, specific & challenging yet achievable will result in higher performance than having no or easy goals. In these goals has advantage of increase the acceptance of goal, foster commitment to difficult to public goal, provide for self-feedback (internal locus of control) that guides behavior & motivates performance.
Self-efficacy ( also known as social cognitive theory or social learning theory) refers to an individual’s belief that he or she is capable of performing a task. The higher your self-efficacy, the more confidence you have in your ability to succeed. Employees whose manager sets difficult goals for them will have a higher level of self-efficacy and set higher goals for their own performance.
Three need theory (McClelland’s Theory of Needs); acquired needs that are major motives in work. Those are need for achievement (the drive excel &succeed) , need for power (influence the behaviour of others ),need of affiliation (interpersonal relationship) .
Motivational factor
It seems that in Singapore, not enough emphasis has been placed in these areas. Some of these factors are self-evident. However, some need elaboration to clarify what employees are really looking for and what managers can do to make these factors happen.
Appreciation or recognition
Recognition is not only to make employees feel good about their work and accomplishments. That is only a by-product. We recognize and praise because we want to reinforce a particular effort or result that helps the business. The more these specific behaviors are recognized, the more frequently an employee will repeat them.
Being in the know about organization matters
People want to feel that they are part of something bigger than just their job. It is the difference in coming to work in order to receive a paycheck or coming to work in order to help the organization be successful. Believing in something larger than the job is key ingredients for employee engagement. In short, people want to know where is the organization going: is it going somewhere or nowhere? If somewhere, is the place
Desirable, Attractive and Inspiring
Being in the know in these areas not only helps employees feel informed; the information actually helps them to make the best possible decisions in their daily activities. Often, management would view an employee as making wrong decisions, when the truth is that the employee made the best possible decision based on the information he or she has.
Good wages
As you can see, good wages isn't top but middle on the list. Money is typically not a motivator at all. It becomes a real motivator only if an employee is not making enough money to meet his or her basic needs. If this is the case, the employee will do what is necessary to survive. Base compensation on performance is not seniority. Pay people what the position and their performance is worth. Don't wait until they have received a better offer before you are willing to do that. Give them the respect they deserve. Ultimately, you should aim to provide more than just a paycheck to your employees. If all your organization means is a source of a paycheck, any comparable paying job will suffice. Provide them with challenges, opportunities for development and advancement, recognition, prestige, and a place that they can feel proud to work at.
Working conditions: - provision for better working conditions such as air conditioned rooms, proper plant lay out, Proper sanitation, equipment, machines est., motivates the employees.
Job security: - guarantee of job security or lack of fear for dismissal, etc. can also be a good way to motivate the employees. Employees who are kept temporary for a long time may be frustrated and may leave the organization.
Job enrichment: -involves more challenging tasks and responsibilities for instance an executive who is involved in preparing and presenting reports of performance, may also be asked to frame plans,
Workers participation: - inviting the employee to be a member of quality circle, or a committee, or some other form of employee participation can also motivate the work force.
Others motivations factors: There are several other factors of motivating the employees; training to employee, performance fed backs, job placements, and promotion and transfer are motivational factors.
2.2.6. Definition of Reward
Reward refers to all Categories of financial benefits, tangible services and benefits that an employee receives as part of employment relationship with the organization (Bratton and Gold 1994).It is the benefits that arise from performing a task, rendering a service or discharging a responsibility (Collin,1995). In conclusion, the above definition imply that rewards are the tangible and the Intangible benefits that employees‟ receive from their work and have a significant effect on the performance and behavior of employees as well as on organizational effectiveness.
2.2.7. Types of Reward Intrinsic and Extrinsic Rewards
Intrinsic rewards are rewards which satisfy an employee internally. Only money is not enough to motivate people and it is important to make people realize their contribution to the organization matters. That motivates employees internally. Intrinsic rewards can be giving meaningful work to employees, giving autonomy to employees, allowing employees to take responsibility in areas of their expertise and provide developmental opportunities to employees
Extrinsic rewards unlike intrinsic rewards are mostly tangible rewards like pay, advancement, recognition, time off etc. Extrinsic rewards are tangible rewards and these rewards are external to the job or task performed by the employee. It can be in forms of salary/pay, incentives, bonuses, promotion, job security, etc. (Armstrong & Brown2006).
2.2.8. Reward system
Reward Systems are a critical part of any organization's design. How well they fit with the rest of the systems in an organization has an important impact on how effective the organization is and on the quality of life that people experience in the organization. Over the past decade, some new reward systems practices have become popular in order to align reward systems with the important changes that are occurring in the way organizations are designed and managed (Lawler, 1990; Schuster and Zingheim, 1992). The research on reward systems suggest that potentially they can influence six factors which in turn impact organization effectiveness. Attraction and Retention - Research on job choice, career choice and turnover clearly shows that the kind and level of rewards an organization offers influences who is attracted to work for an organization and who will continue to work for it (see e.g. Lawler, 1973; Mobley, 1982). Overall, those organizations which give the most rewards tend to attract and retain the most people (Gerhart and Milkovich, 1992). This seems to occur because high reward levels lead to high satisfaction, which in turn leads to lower turnover. Apparently this is true because individuals who are presently satisfied with their jobs expect to continue to be satisfied and, as a result, want to stay with the same organization. The reward system that is very effective at retaining the most valuable employees. To do this, a reward system must distribute rewards in a way that will lead the more valuable employees to feel satisfied when they compare their rewards with those received by individuals performing similar jobs in other organizations. The emphasis here is on external comparisons because turnover means leaving an organization for a better situation elsewhere. One way to accomplish this is to reward everyone at a level that is above the reward levels in other organizations.
2.3. Empirical Literature Review
It has been shown that there is a direct and positive relationship between reward and recognition with work motivation. Baskar, (2014), indicated that if reward and recognition offered to employees were to be altered, then there would be a corresponding change in work motivation and satisfaction. Zaman (2011) also indicated that there is a significant and positive relationship between extrinsic rewards and employee motivation and hence performance, but the challenge is that employers are not offering fair and adequate financial rewards to their employees. If employees feel that their effort is appreciated & the company has a good compensation structure based on job evaluation, the employees ``motivation and commitment will be improved and hence performance.
According to research findings of kalim (2010), it is observed that there is direct and positive relationship between reward and employee motivation. They found that Change in rewards offered to employees necessarily changes the work motivation and performance of employees. Better the rewards, the higher the levels of motivation and greater levels of employee performance.
Mikander (2010), also found that there is strong relationship between reward system and employee motivation. According to her research finding „‟ immaterial rewards were considered almost equally motivating as material rewards „‟ verbal recognition from the manager and the coworker as well as the possibility to give and receive feedback was perceived highly motivating other factors such as personal growth, work environment, achievement, recognition, responsibility and work itself were also seen to have an impact on motivation .Besides, a raise in salary and the possibility to influence on work tasks were found to motivate the employees the most. A study sought to find out the influence of reward and compensation aspects on employee commitment in Kenya, was found that poorly designed reward and compensation package is a source of dissatisfaction and employee turnover. Furthermore, a reward and compensation package fails to secure employee commitment when it is viewed as not being fair, inequitable, and in consistent, (Elizabeth, 2014).
A study was conducted to identify the relationship between rewards (extrinsic and intrinsic) and their impact on employee performance and actions to motivate the employees of telecommunication industry. Data was gathered from 81 employees of different telecommunication companies and was analyzed using mean values and frequency percentage tables. The result was found that, with the advancement in carrier path, income level and age intrinsic rewards become the vital factors for employee motivation (Ayesha, 2014).
Based on the above theoretical & empirical literature review concepts the researcher draws a lesson & create a conceptual framework on the relationship between effective reward system & employee motivation.
2.3.1 Conceptual Framework
This study has mainly independent variables namely intrinsic & extrinsic dependent variable motivation effect of reward of motivation employees in Kirkos Sub-City Administration chief executive pool. Employee motivation is taken as dependent variable and intrinsic and extrinsic reward variables are taken as independent variables
Figure 1: Conceptual Framework
Abbildung in dieser Leseprobe nicht enthalten
Source: Adapted from Tran, 2002
CHAPTER THREE: METHODOLOGY OF THE STUDY
3.1 Introduction
This part describes the methodologies that the researcher deploys under the course of research actions. It comprises the research approach, research design, the population and sample, the data source, data collection techniques and method of data analysis.
3.2 Research design
For this study, descriptive research design was used, since it describes the data and characteristics about effect of reward on employee motivation in the study area.
3.3. Research approach
In business research there are broadly two methodological approaches to choose from; quantitative and qualitative research. The quantitative method is mainly focuses on the interpretation of scientific norm and methods. The main difference between these two approaches is that the qualitative approach emphasizes more verbal aspect; while the quantitative method is based on numerical data (Bryman & Bell 2007).This study was based on quantitative approach which was align with the aims to attain the objective of the study.
3.4. The population and sample size
A population is a group of individuals, objects or items from among which samples are taken for measurement (Singh, 2007). The target populations for this study are the 49 processes unit 12 head office and 380 employees of chief executive pool of KSCA. The study is on a target population of 441 permanent employees in the chief executive pool of KSCA. The sample size for the study was 210 employees. This sample size is expected to be a representative sample for the population under study.
The sampling technique used is
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Where
n=the sample size
N=size of population
e=the error of 5 percentage points
Source: (Yamane, 1967)
Although there are many alternatives to determine sample from a population this sampling technique (Yamane, 1967) the researcher believes was give optimum sample size which is neither excessively large nor too small. It is a sample size which is representative enough.
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