EFFECT OF REWARD SYSTEM ON EMPLOYEE PERFORMANCE AMONG SELECTED MANUFACTURING FIRMS IN THE LITORAL REGION OF CAMEROON.

Author:Ngwa, Walters T.
 
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INTRODUCTION

In this present world of globalization where business has gone beyond national boundaries and employees are protected by international laws and engagement, reward systems are fast becoming a competitive tool to many firms. The advent of globalization has brought about greater pressure on business management to be proactive, creative and innovative in order to survive the turbulent business environment that now transcends national boundaries (Ezigbo, 2011). Business management has gone beyond routine processes of mass production with the aim of benefiting from economy of scale. Consumer needs, taste and fashion not only vary from one society to the other but constantly change with time and season. Consumers are in constant demand for product differentiation and new product features. Different consumer groups based on health age and need emerge on a day to day basis. This calls for a better management of resources and a prompt response to consumer needs as a key determinant of survival (Hill, 2004).

Maximizing the performance of organizations is the main issue for an organization (Candy, 1997; Milkovich et al., 2011). Plants, machinery, and equipment cannot generate the desired output. They have a relatively fixed production capacity. It is only the human resource whose output is subject to a number of motivating factors. The success of every organization depends not only on the quality of human resources available to the organization but also on the ability to trigger the optimum output from an employee (Pratheepkanth, 2011). Ahindo (2008) opines that success in today's increasingly competitive environment is to a greater extent a function of effective and efficient management of human resources available to the business organization. This calls for the development of a work force that is motivated to yield the highest possible performance and productivity for the firm towards achieving its organizational goals and objectives.

Having the best strategy in place and appropriate organizational architecture is not a guarantee that an organization will be effective. This can only be complimented when organizational members are motivated to perform at a high level. While machines and robots can be programmed and controlled to consistently produce the same amount of output, upgrade to perform better or replaced if not functioning properly, humans cannot be programmed and controlled. Their level of productivity is subject to their level of motivation (Bayon, 2013). Employees are bound to the organization by terms of a contract, labour union laws, state and human right regulations. As such employees cannot be replaced like machined or compelled to deliver under adverse conditions. However, when an organization undertakes to satisfy the needs of employees, it triggers a desire in the employee to return this favour with hard work and commitment. Thus, identifying the needs of the employees and answering it is the most basic approach of every organization to earn their commitment to organizational goals and objectives (Chughtai, 2008).

Generally, individuals are motivated to work by the needs they have which require satisfaction. Such individuals are committed to jobs they perceive to have a possibility of satisfying their needs through the reward they will receive for the work done. The type of motivation depends greatly on the nature of the reward. Remuneration is, therefore, one of the factors that have the ability to improve the performance of individuals and organizations by increasing productivity, quality of performance and encouraging positive work attitudes from workers to be in line with organization's objectives (Bayon, 2013).Intrinsically motivated individuals will be committed to their work only when they find out that their job contains task that is intrinsically rewarding (Ajila, 1997). In the same light, extrinsically motivated persons will be committed to the extent that they can gain or receive external rewards for their job. In a nut shell, you can only get what you reward. Good remuneration, therefore, is expected to contain elements that reward both intrinsically and extrinsically to trigger both extrinsic and intrinsic motivation from the employee. With a well-motivated workforce, employee performance can be manifested on organizational effectiveness, which allows individuals to focus on the development of their work, in terms of behaviour, knowledge, ethics, skills, and effectiveness (Pratheepkanth, 2011).

The performance of every employee is a major concern to the human resource department. In spite of the qualification and longevity of service of an employee, workers are sometimes reluctant to put in their best at their job site. Some who show a high level of performance at the start of their career start diminishing at the time they are expected to use their experience and perform even at a higher level. Many work only within the confines of their job specification and are not interested in putting in any additional effort in driving the organizational goals. This takes away creativity from the work place, limits invention and improvement and places such a firm at a competitive disadvantage in the adverse business world that is constantly shifting to meet consumer needs and expectations. It takes only motivation to transform these employees into a self-driven and work oriented labour force (Grant, 2008). As pointed by Pierce et al. (2003), an effective reward system is not static but constantly fine-tuned and its effectiveness often evaluated to ensure it constantly captures employee motivation. It must constantly increase the desire to attain high standards, increase employee satisfaction and give a feeling of competence and freedom (Danish & Usman, 2010). Employers get more of the behaviour that they reward, not actually what they assume they will naturally get from employees. Thus when employees surpass their target or exceed their standard they expect to be rewarded immediately as a way of motivating them. By doing this, employees directly connect reward with work behaviour and the higher performance they have attained (Torrington & Hall, 2006).

To this note, reward systems are very critical for an organization (Maund, 2001). Though reward systems have the ability to attract the right employee, keep them and constantly motivate them to deliver desirable performance (Otieno, 2006), a poorly structured reward system can result in high labour turnover, low level of productivity and a general laissez faire attitude at the workplace. It is therefore important for management to develop a reward system that will provide positive consequences for contributions to desired performance by employee. This will create an ever burning desire in employee to be creative, innovative and performance oriented, resulting in high-level productivity thereby placing the organization at a competitive advantage amidst global competition.

In many manufacturing settings, instead of the reward systems to harmonize the interest of employee and employer by fine-tuning employee interest towards performance, the systems have progressively made parallel the interest of employee and employers. If research is not done to correct this situation, many firms will continue to experience low levels of employee performance, high production cost, and low-profit margins. There will be conflicting interest between employee and employer resulting in high labour turnover with its associated cost effect. It is on this premise that this research work is designed to investigate the effect of reward system on employee performance using selected firms in Cameroon littoral region. The study specifically (i) assesses the degree to which profit sharing affects employee commitment in manufacturing firms; (ii) ascertains the effect of flat-rate systems on employee work values in manufacturing firms; and (iii) appraises the influence of collective bargaining reward systems on employee cohesiveness in manufacturing firms.

REVIEW OF LITERATURE

Concept of Reward Systems

Reward systems can be traced back to the scientific management era where management principles and philosophies were developed some of which are still existing today. Reward systems played an important role in this era in the success and implementation of this philosophy of scientific management. It all started with the American Society of Mechanical Engineers who was the first promoter of management. The most challenging problem they had was what they termed "wage problem" (Drury, 1915). It was in 1895 that Taylor made the first formal presentation in a paper titled

"A piece-rate system: A step toward partial solution of the labour problem".

One of the major issues addressed in this paper is the "wage problem". Though Peach & Wren (1992) traced the evolution of pay for performance to the 1950s, many management programs had existed in the 1915s many of which were identified with the names of the management engineers themselves like: the Taylor system, the Gantt system, Emerson system and so on (Nadworny, 1957).

Although scientific management is not a reward system as stated by Taylor in his testimony before the special committee when he defined what scientific management is not, it is the major concern of scientific management. Scientific management is not a pay scheme for employee neither is it a piece works system. It is not a bonus or premium system neither is it a scheme for paying men but under scientific management, the pay system is simply one of the subordinate elements. However, task and bonuses constituted the most important elements in scientific management. In this era, Taylor pressed on the need for management to develop plans that offer high wages to workers and a relatively low labour cost to employers while fostering individual pay for performance. This was illustrated in a proposed pay system: the piece-rate plan (Taylor, 1947).

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