Effects of reward system on employee's perfomance in private manufactutring companies in Nyeri County
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Date
2013-08-29
Authors
Wanjohi, Eunice Nyaguthii
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Abstract
Reward system is intended to recognize performance or influence behaviour that contributes to
growth of organizations. This has led these companies to adopt different types of rewards, and
the researcher sought to establish effects of reward system on employee's performance. This
research project was conducted to establish the effects of reward system in employee's
performance in private manufacturing companies in Nyeri County. A conceptual framework
showing the relationship between the dependent and independent variables of the study was then
developed. The researcher used target population of 517 permanent employees and a sample size
of 150permanent employees in private manufacturing companies in Nyeri County. The stratified
simple random sampling method was used to arrive at the sample. Data was collected using self
administered questionnaires targeting the employees from all the departments. Data was
analyzed using descriptive analysis, qualitative and quantities techniques and presented using
tables, graphs and pie charts. The study revealed that the rewards that have most effect on the
employee's performance are individual/group incentive 83%, annual salary increment 80%,
promotion 79% and monetary rewards 74%. These rewards have the highest influence because
they have an impact on the disposable income thus raising the living standards of the employees.
The study further revealed that the rewards that's had no relevant impact on employees
performance includes certificate of long service 22%, product awards 14%, recognition
programmes and career growth at 9%. These low percentages were because these rewards do not
give direct benefit to the employees. Stock option has the highest of 38% of neutral response and
this is realized because most employees do not have awareness on investment portfolios. The
most preferred rewards in the company were the financial based rewards with the non- financial
rewards not very attractive to most employees. The study concludes there is correlation between
the rewards system and performance in private manufacturing in Nyeri County
Recommendations were done based on the research findings on the impact of reward systems or
Private manufacturing companies in Nyeri County. They include the need to develop a humar
resource policy which will capture the element of performance on the performance basec
rewards. Secondly capture the issues that revolve around recruitment on the skills based reward:
and capture macro enabling environment inside the company to retain a competitive edge to it:
employees on the service based rewards and finally on innovative based rewards include
programmes and incentive to encourage creativity among the employees.