Project Abstract

Project Overview

<p> </p><p><b>INTRODUCTION</b></p><p><b>1.1 &nbsp;</b><b>Background to the Study</b></p><p>It is the concern of organizations all over the world on effective<br>human capital strategies to enhance their productivity. It is clear that<br>employee’s productivity in the expanding organization is a key factor in<br>organization performance. Employees, technically known as human resources in<br>modern organizations, are rightly considered as the most important assets (Ong<br>&amp; Teh, 2012). In developed countries such as USA, JAPAN, UK and Germany<br>organizations recognize employees as the important asset that needs high<br>consideration in promotion (Lawler &amp; Worley, 2006). The rationale behind<br>the use of rewards to employees is that motivated employees become satisfied in<br>terms of fulfilling their wants, both financial and non financial. Failure to<br>do so, employees will be tempted to leave the organization. (Azasu, 2009). On<br>one hand, employees prefer receiving intrinsic rewards in terms of praise and<br>recognition for certain work accomplishments, while other employees are happy<br>with extrinsic reward in terms of salaries, bonus and incentive offered to<br>employees (Lawler, 2008, Sajuyigbe, Bosede &amp; Adeyemi, 2013).</p><p>In developing countries such as China, India and Thailand also<br>employees reward is one of highly demanded factors in influencing organization performance. One of<br>the most important factors in rewarding employees for organization performance<br>is through recognition and appreciation (Ajila &amp; Abiloa, 2004).</p><p>In Tanzania like any other country employees are motivated by<br>rewards. There is a</p><p>need for organization to reward its employees for creating a<br>successful competitive</p><p>Environment. This is one of the essential for the organizations to<br>achieve high work performance. Some employees are highly motivated by extrinsic<br>rewards such as increase in pay, promotions and bonus, others employees are<br>motivated with intrinsic rewards such as appreciation, praise and recognition<br>on (Bana &amp; Kessy, 2007).</p><p>Paying employees for productivity has been the cornerstone of<br>industrial and business development for centuries. Financial reward has always<br>been important in managing employee’s performance, but over the last 25 years<br>other elements of compensation have been developed to provide employers with<br>more scope to reward, and thus, motivate employees. Performance management<br>influences performance by helping people to understand what good performance<br>means and by providing the information needed to improve it. While reward<br>management influences performance by recognizing along with rewarding good<br>performance as well as providing incentives to improve it. The rewards that an<br>enterprise apply to both individual and team performance are critical in<br>determining how affective the reward strategy will be. Also performance<br>management involves the value an enterprise workforce could<br>make to the overall business goals and how it could be groomed and cultivated<br>to add most value to competitive advantage. This necessitates the<br>need to identify how these rewards impact employee performance and how<br>well the current reward system does this, within the chosen manufacturing<br>companies forming the basis for this research.</p><p>The<br>productivity and success of every organization is highly dependent on its staff<br>(Ali, 2013; Gabcanova, 2011; Markova &amp; Ford, 2011; Vlachos,2009). Thus<br>maximizing the overall organisation performance requires an understanding of<br>those factors that encourages the employees to put in extra effort at work and<br>also in enhancing their performances (Hafiza,Shah,Jamseheed&amp;Zaman, 2011).<br>Reward system and management is one important Human Resource Management<br>strategy for attracting and retaining high quality employee as well as facilitating<br>them to improve performance (Dewhurst, Gutridge&amp; Mohr, 2010; Ibrar&amp;<br>Khan, 2015).</p><p>According<br>to Anku-Tsede&amp;Kutin(2013) reward system can be seen as a means of actively<br>engaging and the renewing the employee’s sense of community and mission of an<br>organisation. In this view, an effectively administered system of rewards can<br>provide incentive for quality workmanship and performance. Likewise, a poorly<br>administered reward system can lead to low morale, unproductive performance and<br>in the extreme cases a high percentage of employee turnovers. Organizations<br>provide rewards to members in the form of wages and salaries, promotions, long<br>service awards and certificates, end of the year bonus and other fringe<br>benefits. These rewards are to motivate behaviour that will contribute to the<br>achievement of the goals of organizations.The questions that readily come to<br>mind are, what sort of behaviour does an organization want? How can reward<br>process promote that behaviour? What motivates an organization to design reward<br>packages for the employees? Nearly all organizations invest in the provision of<br>rewards to motivate their employees in order to get the desired results.<br>According to equity theory, the adequacy of such rewards will to a large extent<br>depend on the value the employees place on the inputs they bring to the job in<br>the form of education, experience, training, time, effort etc, with the<br>outcomes (rewards) such as pay, promotions, praises and recognitions they<br>receive as a result of performing the job (Fajana, 2002).</p><p>Reward<br>systems is a broad construct that generally represents anything that employees<br>may value and are willing to acquire in exchange for his or her contribution to<br>work.Chiang &amp; Birtch (2008).Pratheepkanth (2011) describe reward system to<br>include all organisation components which may include people, processes, rules<br>and decision making activities involved in the allocation of compensation and<br>benefits to employees in exchange for their contribution to the organisation.<br>From both definitions, rewards can be described as tangible benefits one can<br>receive from engaging in a specific task. This opinion is reiterated by<br>Torrington, Hall, Taylor and Atkinson (2011) who argue that although there are<br>few people who claim to enjoy work for the sake of it, most people work in<br>large part because it provides a means sustaining livelihood. This implies that<br>people generally are concerned with the amount of benefits (whether financial<br>or non-financial) attached to their work. The positive relationship between<br>reward systems (especially financial rewards) on employee performance has been<br>established in past studies (Lazear,2000;Osa,2014;Prendergast,1999;Metha ,2014;<br>Saleem, 2011<b>.</b>).</p><p>Other<br>commentators have put forward the notion that non-financial rewards are also<br>important facilitators of organisational performance with the argument that<br>financial performance on its own is incapable of effectively motivating<br>employees towards optimum performance (Babakus, Yavas, Karatape&amp;Avci, 2003;<br>Bason, 2003; Dewhurst et al.(2009); Perry,Mesch&amp;Paarlberg, 2006;<br>Neckermann&amp;Kosfeld, 2008; Dewhurst et al. (2009) for instance<br>advanced the notion that non-financial rewards have a more significant<br>influence on employee performance than financial rewards with the argument that<br>financial rewards are mostly effective in boosting employees’ energy in the<br>short-term and in most cases can have damaging unintended consequence. Three<br>major non-monetary rewards reported to have significant effect on employee<br>morale are: (i) praise from immediate managers, (ii) leadership attention (i.e.<br>one on one conversation) and (iii) the opportunity to lead projects or task<br>forces. In addition, Neckermann and Kosfeld, (2008) identify significant<br>non-financial rewards to include social<br>recognition from managers and colleagues alike in the form of appreciation for<br>job completed, acknowledgement and certificates of recognition, were reported<br>to be better drive improved performance than financial/monetary rewards .</p><p>The debate on whether to use<br>monetary or non-monetary rewards has led to the development of the concept,<br>Total Reward System. WorldatWork<br>(2011) defines total rewards as holistic approach that strategically<br>incorporates several employment factors (such as compensation, benefits and<br>work-life amenities) in unison, to deliver desired employee attraction,<br>motivation and retention. Thompson (2002) also defines total reward to<br>typically encompass not only traditional, quantifiable elements like pay and<br>benefits, but also more intangible elements such as scope to achieve and<br>exercise responsibility, career opportunities, learning and development, the<br>intrinsic motivation provided by the work itself and the quality of working<br>life provided by the organisation. Kaplan (2007), also sharing this view, define total rewards as a<br>holistic approach aligning business strategy and people strategy, aimed at<br>bringing about maximum return and builds up employment brand, all of which<br>create sustainable competitive advantage for organisations. According to<br>Armstrong (2007) the conceptual basis of total reward is the bringing together<br>of the different reward processes (that are interrelated, complementary and<br>mutually reinforcing) with the focus of stimulating a deeper and long-lasting<br>impact on the motivation and commitment of employees.</p><p>Similarly,<br>Nazir, Shah and Zaman (2012) describe total rewards as an enclosing of aspects<br>of work benefits that employees attach value to; whether it concerns provision<br>of healthy work environment, better opportunities of learning and development<br>or the benefits package linked to the pay. Hence, an effective reward system<br>incorporates both the financial incentives (such as pay, fringe benefits and<br>other money-related plans) and non-financial incentives (such as<br>vacations/holidays, recognition and appreciations) in driving employee<br>motivation for improved performances. Given that employees’ morale and improved<br>productivity go hand in hand, it is therefore imperative for organisations to foster a properly<br>administered reward system which not only has the capacity to improve the<br>quality work efforts and employee but also act as a strategic tool for<br>attracting skilled employees to the organisation (Armstrong &amp; Brown, 2005;<br>Herman, 2009). &nbsp;Notwithstanding, most organizations are still<br>finding it difficult to establish an effective reward system that fairly suits<br>the organizational demands in relation to employee performance and over<br>organizational profitability (Osa, 2014; Roberts, 2005; WorldatWork, 2011.).<br>Dewhurst <i>et al.</i>&nbsp;(2009) argue that the<br>present economic situation has pushed successful companies around the world to<br>adjust their reward systems – moving from financial to non-financial sensitive<br>systems; whereas some organizations (to their detriment) are still sticking to<br>the traditional method of rewards that emphasis bonuses and payment<br>compensation. Additionally, the findings<br>that the workers’ needs and desire from work differs from one individual to<br>another require organization management to develop reward systems that is<br>tailored towards the individual needs of their staffs (Dewhurst et al.<br>2009). Nevertheless, as emphasized by<br>Brian (2006), rewarding and recognizing employee can be a tricky task as there<br>is no generalized model towards its implementation; arguing that a successful<br>system in one organization can be a failure in another.</p><p><b>Company Profile</b></p><p><b>Unilever Nigeria Plc</b></p><p>Unilever Nigeria Plc. was established<br>in 1923 as a soap manufacturing company – Lever Brothers West Africa by Lord<br>Leverhulme. Today, it is the oldest surviving manufacturing organization in<br>Nigeria (Unilever Nigeria Plc. 2016).After a series of mergers/acquisitions,<br>the Company diversified into manufacturing and marketing of foods and personal<br>care products. These mergers/acquisitions brought in Lipton Nigeria Ltd. in<br>1985, Cheesebrough Industries Ltd. in 1988 and Unilever Nigeria Ltd. in 1996.<br>The Company changed its name to Unilever Nigeria Plc. in 2001 in line with the<br>global strategic direction of the business. The Company was quoted on the<br>Nigerian Stock Exchange in 1973 and with equity holdings of 58.53% Unilever,<br>and 41.47% Nigerian investors, the company is a true Multi-local Multinational<br>organization with very outstanding international and local brands in her<br>portfolio. The international brands include Close-Up toothpaste, Pepsodent<br>toothpaste, LUX beauty soap, Lifebuoy soap, Rexona, Vaseline lotion and<br>Vaseline Petroleum Jelly in the Personal Care Unit of the business; Blue Band<br>Margarine, Lipton Yellow Label Tea and Knorr bouillon cubes in the Foods Unit;<br>and OMO Multi-Active Detergent ,Sunlight washing powder and Sunlight Dish<br>washing liquid in the Home Care Unit. Other Regional and local products include<br>the Pears Baby Products range and Royco bouillon cubes. As at 2015, the<br>organisation currently has over 1,200full time employees across three core<br>departments: administration, technical/production and sales and marketing.</p><p><b>Cadbury Nigeria Plc</b></p><p>Cadbury<br>Nigeria Plc was incorporated in Nigeria on 9th January 1965 as a<br>company limited by shares. It became a publicly listed company with its shares<br>traded locally on the Nigerian Stock Exchange in 1976 (Cadbury Nigeria Plc.<br>2016). The company is principally engaged in the manufacture and sales of<br>branded fast moving consumer goods mostly to the Nigeria market, but also<br>exports to other West African countries. The company’s brands fall into three<br>principal categories, namely: Refreshment Beverages, Confectionery and<br>Intermediate Cocoa Products. Cadbury Bournvita, Cadbury 3-in-1 Hot Chocolate<br>are the main brands in the refreshment beverage category. In the Confectionery<br>category, the main products are TOMTOM Classic, TOMTOM Honey Lemon, TOMTOM<br>strawberry and BUTTERMINT. Lastly, the main brands within the intermediate<br>cocoa products include; Cocoa Powder, Cocoa Cake and Cocoa Butter.</p><p><b>Nestle Nigeria Plc</b></p><p>Nestle<br>Nigeria Plc is a Nigeria-based food manufacturing and marketing company founded<br>in 1961 (Nestle Nigeria, 2016). The Company operates through two segments: Food<br>and Beverages. The Food segment includes the production and sale of Maggi,<br>Cerelac, Nutrend, Nan, Lactogen and Golden Morn. The Beverages segment includes<br>the production and sale of Milo, Chocomilo, Nido, Nescafe and Nestle Pure Life.<br>The Company manufactures and markets a range of brands, which include Infant<br>Formula-Nestle NAN, Nestle LACTOGEN, Infant cereals-Nestle NUTREND, Nestle<br>CERELAC, Family cereals-Nestle GOLDEN MORN, Confectionery-Nestle CHOCOMILO,<br>Nestle KITKAT, Bouillon-MAGGI Cube, MAGGI Mix’py and Table Water-Nestle PURE<br>LIFE. Its products include MAGGI Star Cube, MAGGI Crayfish, MAGGI Chicken,<br>Ginger &amp; Garlic, Golden Beef and Classic. It promotes food cultures through<br>MAGGI Star Cook participatory cookery program in neighborhoods, and MAGGI Women<br>Forum, a home management program targeted at semi urban and rural women.</p><p><b>1.2 &nbsp; &nbsp; &nbsp; Statement<br>of the Problem</b></p><p>Osa (2014)<br>reveals that several organisations are still finding it difficult to establish<br>an effective reward system that fairly suits the organisational demands in<br>relation to employee performance and over organisational profitability and this<br>position is also shared by Dewhurst <i>et al</i>(2009)<br>and Roberts (2004).There is a natural disparity between what<br>people think they should be paid and what organizations spend in compensation<br>thus affecting employees sense of accomplishment and this is a challenge<br>employees in organizations face (</p><br> <br><p></p>