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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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.
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