IMPACT OF REWARD ON ORGANIZATIONAL, PROFITABILITY AND EMPLOYEES PERFORMANCE (A STUDY OF EMENITE LTD, EMENE BRANCH, ENUGU STATE)
This study x-rayed the impact of reward on organizational profitability and employee’s performance, in Emenite ltd, Emene. To achieve this purpose, some objectives of the study, research questions and literature review were raised. The study adopted survey research design, due to the nature of the enquiry. The population of the study was 92 members of the staff out of which the sample size was drawn, including male and female staff of the organization. The sampling techniques used was simple random sample to avoid in the study was primary and secondary sources. The data gathered in the field during study was analyzed using tabulation, percentages and chi-square methods. The major findings on the study were lack of efficient service, poor motivation, management infectivity to workers fringe benefits not given to workers as required, poor salary structure and low level of performance. Based on the major findings, the researcher, however, recommended as follows;
That the staff of the organization should be motivated and all the due rights and privileges given to the staff. The management of ten organization should also imbibe the culture of management by objective to avoid the idea of infectivity in dealing with the staff of the organization, that proper reward of the staff performance would no doubt ginger the staff to contribute their quota earnestly to the growth and development of the organization thereby achieving their corporate objectives.
1.1 Background of the Study
Emenike ltd was incorporated in 1961 as turner asbestos Cement (TAC Nigeria Ltd,) the company commenced the actual business of manufacturing re-forced fiber-cement material such as roofing-sheet and flat sheets (ceiling board in 1963). The product line was later expanded to include pressure pipes. In 1988, turners building (turner assistors cement TAC ltd Emene was acquired by Emenite group of Belgium and in 1989, the name was charged to Emenite ltd.
Emenite ltd pays a lot of emphasis on product inspection. They start from the raw material, the raw material includes cement, wood, pulp and fibre, undergoes series of tests.
The wood is tested for the dispersion and shaper rougher S.R that determines that freeness of the wood pulp. Then the fibre is tested by solubility, which determines that dispersion ability in the fibre.
The final inspection is the finished product inspection, which a simple is collected at random from the production line, from each pallet as they are called and after (curing) drying, they test the bending strength which determines the strength of the product and also tested for all porosity and density which will show the ability of the product to absorb water, this tests are being carried out in two stages.
First after 7 days and second after 28 days, then if they are certified okay by the quality controller, it can now be sold. The control of the product is purely the responsibility of the quality control department. In Emenite ltd, the department comprises of the quality control and the process control.
The process control section is responsible for the online process of the product while the product are still in process, they control the parameters and make sure that the production crew comply to the set standard, if there is any non conformity in the process, a complaint form is being issued out to the production crew for immediate correction. This section is responsible for testing and certifying the raw material before use.
All the products have a standard that it must pass before they are released from the quality control department. The company presently has a staff strength of about 200 which is supplemented by a few contract worker hire from the time as the need arise.
1.2 Statement of the Problem
There is controversy all over the companies; there is a frequent clash between company and customers. Most times when the customers visit the company, experience is always unbearable, delayed tactics and the manner by which the workers react to their customers, mostly with harsh tones, in attending these customers, create lot of discouragement. The head office of Emene ltd in Lagos works even on Sunday without any of the staff complaining, while their counterparts of the other companies were on their weekend or holidays.
Work overload were the major problem facing Emenite ltd Company even most times, delay in receiving their salary, it takes the management one or two weeks, delay to pay their workers monthly salary especially Emenite ltd emene Enugu.
1.3 Objective of the Study
The general objective of this research work is to investigate the impact of reward on organizational profit and employee’s performance.
The researcher plans to:
- Determine the employee’s level of satisfaction on their intrinsic rewards
- Ascertain the level of satisfaction of employees on their extremis rewards
- Identify the rewards that are positively correlated with employee’s performance.
- Ascertain if there are significant differences in the level of satisfaction on reward of employees and their performance.
1.4 Significance of the Study
This study will play a very important role to the organizations, which may be having the same problem with their workers attitude in their work. This will be important to students of management studies and private business owners as it will enable them to understand their workers motivation and what maintain their happiness at the workplace.
This research would recommend to all people at all top management class in all and capital intensive organizations as no organization exist without employees.
1.5 Research Questions
- To what extent does determining the employees level of satisfaction on intrinsic reward?
- How will ascertaining the level of satisfaction of employees on their extremis rewards affect the organization profit and employee’s performance?
- How can one identify the rewards that are positively correlated with employee’s performance?
- Are there significant differences in the level of satisfaction on reward of employee’s and their performance?
1.6 Scope of the Study
The scope of this study is the impact of reward on organizational profit and employee’s performance on Emenite ltd Emene Enugu state. However, the information repaired by the researcher was particularly a recited, to select the number of staff or organization ranging from the senior staff, the supervisor and junior staff or Emenite ltd Emene Enugu state.
1.6 Definition of Terms
Performance: as a process of discharging of duty assigned to an employee.
Job Satisfaction: Is the totality of an individual’s social and psychological e being relating to his job and performance.
Product Inspection: This is a critical examination in the development of any new product.
Reward: Sees as a fringe benefit or compensation given to an employee for a job done.
Management: Is the act of getting people together to accomplish desired goals and objectives using available resources efficiently and effectively.
Satisfaction: This is a feeling one has on the job when satisfied or motivational factors are present in one’s job
Motivation: Which consist of those inner forces which energized, direct and sustain behavior towards goals attainment to Denga.
Profit: Is a gain derives from an investment after the initial cost has been deducted
Employee: is a person who entered into or works under a contract with an employer.
20 LITERATURE REVIEW
2.1 Theoretical framework
In organization, reward plays a vital role in the line with performance of an employee in any organization. It energizes the employee in bringing all efforts to their sense of belonging and makes the employees to feel recognized by the employers.
According to Amabile and Kramer (2011), the question becomes what managers can do to improve employee, engagement and the well being of their employees, which incidentally improves employee’s performance. In their research, it was discovered that the impact of reward on employee and how it boost the best performance of an employees is outstanding. It helps the employee in their preface. It encourages relationship between the employers and employees.
Lathand and Eatmest (2006) argue that managers should first make sure to provide both salaries and benefits to employees, and make sure that employee’s basic needs are met, for instance the basic needs include foods and health care. Managers should make sure that individuals they hired to work are carried along with their other colleagues. Once such lower needs satisfied, there will be highly enhancing, maximizing of profit that focus in improving their self esteem and self actualization. In so doing, the employee will improve their knowledge and skill towards their job.
Schantechi (2002), stresses on the importance of reward in order to combat burnout, which is typically experienced by most employees on the job, individual who experienced burnout in their work, do not fulfilled. They also tend to have negative out looks and with less vigor and dedication in their work. In the later researcher intends to discuss how important rewards are to boost employee performance (particularly in Emenite ltd Enugu) it was mentioned that in this business sector, there is need for companies and its leers to invest in encouraging excellent service quality from it employee to its customers. These days especially customers are demanding excellent service.
The service quality orientation experienced by the customers, may not be equal to employees own (wong 2005).
According to bitner (2007), he considers that some factors should serve as principles of importance. And also, distich considers the amount of contributor that they provide rewards in their company. In addition, members of the company ability to allocate specific rewards for older members of the organization who have proved their loyalty to their company that they work for.
2.2 employees level of satisfaction on their intrinsic reward
In determining the employee’s satisfaction on their intrinsic reward. We need to know what intrinsic reward is all about. Intrinsic rewards are psychological rewards that employee get from doing meaningful work and performing it well. Today’s workers are asked to self. Manage to a significant degree, to use their intelligence, the employees are to engage on reward of employee intrinsically so that employee will add force to their skill and experience to their job and satisfied the level of employee.
Kanfer (2013) stipulates that employee in a social exchange process that is they contribute efforts in exchange for reward. And before accomplishing their task they compare their labour with their rewards.
Bakaus (2013), sees the perception that employees has regards to their intrinsic reward climate which interference their attitude towards their employers.
In addition, the commitment of managers towards their organization is also shown by how the managers reward their employees. Benefits of the intrinsic rewards for both organization and employees for intrinsic, people with high level of reward shows greater concentration and are rated as more as more effective as their managers. The intrinsic rewards are strong prediction of retention. In the researcher finds out that the employers high level of satisfaction on their intrinsic rewards also become internal recniter ad marketers from their organization. The intrinsic rewards are also a relatively healthy and sustainable source of motivation for employee.
2.3 Ascertain the level of satisfaction of employees on their extrinsic rewards
To ascertain the level of employees satisfaction on their extrinsic rewards the researcher aids in explaining more in extrinsic rewards ad how leads to their satisfaction and improve performance.
Extrinsic rewards with finance are tangible rewards given to employees by the managers, such as pay varies, bonuses and benefits; these are referred to as extrinsic rewards because they a external to the work itself and other people control their size and whether or not they are granted. Extrinsic reward plays dominant role in earlier areas, when work was generally more routine and bureaucracies and when complying with rules and procedures was paramount. This work offered workers few intrinsic rewards, so that extrinsic rewards were often the only motivational tools available to an organization, so as to ascertain the level of satisfaction of employee’s on their extrinsic rewards.
Thomas and Kenneth (2009), states that extrinsic rewards remain significant for workers of course pay is an important consideration for most workers in accepting a job and unfair pay can be a strong demotivator. However, after people have taken a job and issues of unfair pay have been settled, the researcher find out that extrinsic rewards are not less important, as day to day motivation is more strongly driven by intrinsic rewards.
2.4 Motivations among Nigerian Employees (Emenite Nig)
Service quality orientation (SQO) was briefly mentioned in the early part of this chapter, it is actually something that is influenced by the work environment of an individual, the climate of the organization (which includes the organization’s, work, the practice policies and operational procedures) and how the employee perceives both the environment and the climate.
Claim and Birtch (2010), argue that managers need to understand the kind of role that the provision of rewards the employees service quality orientation which in them is crucial towards fastening service excellence.
Opine that towards are utilized by managers to show employees that their behaviors are being monitored or observed by the organization that they work for and it favorable, such behavior shall be used to assign interest between the company and its employees as well as customers.
Buick and Thomas (2001), had conducted a study that sought to find out the levels of burnout experienced by individuals who are workers in service sector (particular Emenite ltd Emene Enugu state). Based on the research finding, employees especially females once are most likely to experienced higher levels of burn out as compared to their male counterpart. In the same study, when also sought to determine the burnout level of managers. It was determine that the main reason for experiencing higher level of burnout are due to the lack of adequate support that managers a able to acquire m their workplace.
2.5 Employee Motivations and Company Performance.
In the 1960s, there were a number of theorists who conducted research studies on individual motivation in the workplace. According to this entire theorist, such motivation can actually be predicted and explained and influenced.
Maslow (1960), established the need hierarchy theory. According to this theory, human being has their needs and their goals are to satisfy their needs first at the lower level (physiological need). Human beings seek to fulfill their physiological needs and their security higher of levels consists of the individual want to satisfy his need for affiliation, gaining self-es and self actualization. Maslow work focused on how activities of an individual influence his or her behavior. Making use of Maslow’s theory, Porter (1963), conducted a study that show how people in lower level jobs were focused on satisfying their lower needs. It includes security. They will only move to higher level needs, if they are also able to move to a higher position. In all this, one can see that employee’s motivation creates sense of belonging in employee. Once this motivation is achieved, the employee performance will likely acknowledge and still in performance will likely acknowledge and still in performance or discharging their duties to the best of the organization and improve organizational profits.
In this chapter, the researcher has discussed the concept of employee theory of motivation, involving the two factors theory by Herzberg. The researcher also discussed the level of satisfaction of employee on their extrinsic rewards and intrinsic reward and how it motivates employee to increase their workforce. One know that the secret for organizational growth and profitability depends on employers and their ability to motivate their employees by rewarding them extrinsically and intrinsically for the employee to put their effort in attainment of organizational overall goals. It also discussed the Maslow and Porter on how employers should address the needs of the employee’s level.
In order words, employers should take into consideration the basic needs of an individual and know how to motivate and satisfied their happiness to bring togetherness work and improve their performance, some of this is what will likely motivate them to work harder. However, Hertzberg state that satisfying the lower need of an employee or individual such as provision of foods, shelter and security.
Also Schantech (2002), stress on the importance of reward in order to combat burnout, which is typically experienced by most employee on their job, because those experience such burnout closely not feel happy in their job and it ly to lead to dissatisfaction and it kills the moral of employers in putting their best in their work.
Thus, in order to help boost employee performance, it is advised that both hygiene and motivators factors should be considered to be the motivating employees and a quantitative research approach has been adopted. In the entire work, discuss the methodology of this study, where the attitude survey shall be distributed to members of Emenite ltd Emene Enugu Branch, Enugu state.
3.0 Research Methodology
This chapter explained the method and procedure used for data collection by the researcher. It also stated the population and instruments used for data collection.
Methodology of this study is the survey method. This is as a result of its effectiveness in expecting what situation actually meant.
3.1 Design of the Study
The researcher considered the design of the study based on questionnaire, interviews, personal observation and internet services. It adapted a survey design.
3.2 Area of the Study
This study was carried out in Emenite ltd, Emene branch, Enugu state and it includes all the various cadre of staff in Emenite ltd Emene branch.
3.3 Population of the Study
The total population of Emenite ltd staff Emene branch was about 92 persons, out of which 75 staff was selected from the cadre of staff in organization ranging from the senior staff, the supervisors and the junior staffs.
3.4 sample of the Study
The researcher uses Taro Yamane’s techniques in studying the population.
The Taro Yamane’s formula is as follow:
n = N
Where N = is the total number of the population
I = is constant
e = error margin (5%) constant
n = sample size
n = N
n = 92
n = 92
n = 92
n = 92
3.5 Instrument for Data Collection
Questionnaire and or interview are example of primary source of data collection. Journals, bulletin, documents and internal services are examples of secondary sources of data collection.
The information collected for this study was obtained through primary and secondary sours of data collection.
Primary data is data which is collected by the researcher themselves. It is first hand information. Such data which were obtained from other purpose, usually administrative project such as data made used of in the project that are derived from bulletin.
3.6 Validation of the Instrument
Instrument used in this study or research work was faced and content validated by my supervisor in consultant with other lecturers in business administration and management, based on their recommendations, necessary review were carried out on the instruments.
3.7 Distribution and Retrieval of the Instrument
The instrument distributed was 75 on the population, the researcher retrieved 45 out of the 75 administered 30 was not retrieve due to lack of response by workers.
3.8 Method of Data Analysis
In analyzing the data collected, the researcher would employ various techniques to enable him arrive at logical conclusion.
The following techniques were used in the study:
- Tabulation: this is the classification and cross classification that results from counting the values of the observed events. It involves tallying of collected data into meaningful groups. This enable the researcher to prepare a quantitative data so that they are readily understandable and their significant values appreciated.
- Percentages: these draws out influences over the dominance of a particular response and shows relative size of the different categories of response expressed in percentages and also for the accurate comparison and standardization of the response.
- Chi-square: in testing the null hypothesis, the statistics used for the test is the chi-square which Kazmier (1979) stated mathematically as:
Where x2 = Chi-square
Fo = Observed frequency
Fe = Expected frequency
∑ = Summation Sign
In deciding whether to accept or reject the null hypothesis, the computed value of the c-square (x2 cal) is compared with the tabulated value (x2 tab) given a level of significance and degree of freedom on which the value depends.
The decision rule is that:
- The null hypothesis is accepted if the computed value of the chi-square (x2 cal) is less than the tabulated value of the chi-square (x2 tab), that is, accept Ho if x2 cal ≤ x2 tab.
- the null hypothesis is rejected if computed value of chi-square (x2 cal) is greater than the table value of the chi-square (x2 tab) at the stated level of significance, that is, reject Ho if x2 cal ≥ x2 tab.
A chi-square (x2) test is always a one tailed test. The levels of significance are given in the chi-square (x2) table. If a 10% or 0.1 level of significance is chosen in designing a test of hypotheses, then it means that we have chance of 10 o of a 100 that we reject. In this case, we say that the hypotheses have been rejected at 0.1 level of significance that is we can be wrong with a probability of 0.1(Spiegel, 1972).