Abstract

This study aimed at assessing the role of reward systems on the performance of employees in CAMACO and Telcar Cocoa companies. The study made use of primary data collected using well-structured questionnaires issued to sixty-four (64) employees of both CAMACO and Tecar sampled through the use of two stage convenience sampling technique. Through the use of frequency counts, percentages and the use of sign tests interesting results were obtained. The empirical results showed that employees were significantly motivated by the rewards offered by their employers. The findings also showed that although both CAMACO and Telcar provide both monetary (extrinsic) and non-monetary (intrinsic) rewards to their employees, their provision are not even and preference is given more to the intrinsic rewards or motivators. Moreover, the study found that within the class of extrinsic rewards bonuses and insurance are the most laudable by employees while for intrinsic rewards providing workers with challenging task, praising them for good work and delegating control to them, were the most applicable, even though not linear between the two companies.  However, the perception of respondents reveals that the personal growth of employees which is also an essential human capital development component is given less attention in both CAMACO and Telcar. Also, the study did not find any significant variation in the levels of employee satisfaction with the existing motivation frameworks in both CAMACO and Telcar. On the basis of this, the study recommended that both companies should put in place an optimal mix of both intrinsic and extrinsic rewards so as to spur employees to achieve better organizational goals.

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

Increasingly, organizations are realizing that they have to establish an equitable balance between the employee’s contribution to the organization and the organization’s contribution to the employee (Pratheepkanth, 2011). Irrespective of the sector, size or industry there is an utmost need for motivated workforce that ensures the efficiency, high organizational output and achievement of the objectives set by an organization. The success of an organization in achieving its objectives relies heavily on the motivation level of employees.  Also, with the present global economic trend, most employers of labour have realized the fact that for their organizations to compete favourably, the performance of their employees has an enormous role to play and goes a long way in determining the level of such competition.   As such,several techniques are often used by organisations to motivate employees towards achieving organisational goals.

Rewards are one of the important elements to motivate employees for contributing their best effort to generate innovative ideas that lead to better business functionality and further improvise company performance both financially and non-financially. This is so because employees who are not motivated are likely to put in little or no effort in their jobs, produce low quality work, mostly avoid their workplace and even exit the organization when an opportunity arises (Cheema et al., 2013). These rewards are in some cases monetary, in others non-monetary and yet other organisations use a combination of both monetary and non-monetary rewards to spur their workers towards hard work. In some organizations these rewards are in the form of wages and salaries, promotions, long service awards and certificates, end of the year bonus and other fringe benefits. As explained by Armstrong and Murlis (1994), Schuler and Jackson, (1996) and Lai (2009), total remuneration consists of financial rewards (fixed and variable) and non-financial rewards (praise, achievement, responsibility, freedom, job satisfaction, job security and personal growth etc).  Also, Dewhurst et al., (2010) are in conformity with the former authors that there are other means to reward employees that do not just focus on financial compensation. Some of these include the praise that employees are able to acquire from their managers, the opportunity to take on important projects or tasks, and even leadership attention.

However, attractive remuneration has been found over the years to be one of the policies an organization can adopt to increase their worker’s performance and thereby increase the organizations productivity. Vroom (1964), supports the assumption that workers tend to perform more effectively if their wages are related to performance which is not based on personal bias or prejudice, but on objective evaluation of an employee’s merit. Indeed, the performance of workers has become important due to the increasing concern of human resources and personnel experts about the level of output obtained from workers due to poor remuneration.

At the same time, equity theory holds that the adequacy of such rewards will to a large extent depend on the value the employees place on the inputs they bring to the job in the form of education, experience, training, time, effort etc, with the outcomes (rewards) such as pay, promotions, praises and recognitions they receive as a result of performing the job (Fajana, 2002).  This implies that the extent to which rewards spur workers towards hard work varies with individual workers based on the value they attribute to a given form of reward because different individuals have different perceptions of rewards (La Belle, 2005). Whereas some employees consider being recognized by their leader as more rewarding others are highly motivated more by extrinsic motivators such as financial incentives. Herzberg believes that such factors are the main driving force of satisfaction and that they help boost the employee to work harder and better, due to the motivation that is brought about.

This shows that not only monetary rewards are needed to motivate workers towards the attainment of organizational objectives. Irrespective of the fact that it is a known fact that most employees work well in an organization if they are being paid well but yet money is not the only thing that can motivate employees to stay because money may attract people to the front door but something else is needed to keep them from going out the back door (Masaiti and Naluyele, 2011). As pointed out by Odell (2005), that non-cash rewards programs wouldwork better than cash,  in cases such as reinforcing organizational values and cultures, improving teamwork, increasing customer satisfaction and influencing specific behaviors among employees.

It is but normal that organizations can benefit from reward strategies so long as they are fairly implemented, well communicated to employees, and managers clearly understand the link between reward strategies and employee’s performance. This shows that the reward systems adopted by an organisation is an important tool that management can use to channel employee motivation in desired ways.  Reward systems seek to attract people to join the organization to keep them coming to work, and motivate them to perform to high levels. Organizations that follow a strategic approach to creating this balance focus on the three main components of a reward system, which includes, compensation, benefits and recognition. Such rewards systems (monetary and non-monetary based) seek to attract people to join an organization and keep them motivated to perform up to high levels.

Paul (1981) suggested that a reward strategy can point out the significant areas of an organization, and guides its future orientation. Developing an appropriate reward system will ensure that the variable compensation costs in the organization are predictable and controllable, as well as employees have clear understanding about the connections between their efforts, productivity, and performance results, and between company results and their reward opportunities (Vicki, 1994). As such, it becomes evident that one of the most compelling challenges facing contemporary organizations is how to make sure that employees are highly motivated in order to achieve organisational objectives.

However, an effective reward program may have three components namely immediate, short-term and long term (Njagi et al., 2013). Whereas immediate rewards in the form of praise by an immediate supervisor or a tangible reward are given to employees repetitively so that they can be aware of their outstanding performance, short term rewards such as cash benefits or special gifts for exceptional performance are made either monthly or quarterly basis depending on performance and long- term rewards are given for showing loyalty over the years (Schoeffler, 2005).

1.2 Problem Statement

Reward management is one of the strategies used by company management to attract and retain suitable employees as well as helping them to improve their performance through motivation and to comply with employment legislation and regulation (Njagi et al., 2013). The cocoa sector in Cameroon is known to be a very lucrative sector that has the means to reward workers in various ways despite the fact that it also faces persistent price fluctuations. Many individuals who work within the sector tend to remain in the sector due to the solicited indirect gains from the sector. Indeed, one is tempted to say that it is the perceived gains from the activities that tend to make operators within the sector to stay in the line of business and not necessarily the motivators that employers offer in the sector.

Indeed, a well-designed rewards system or strategy often rewards measurable changes in behaviour that contribute to clearly defined goals. The challenge in developing such a program lies in determining what rewards are effective agents of change, what behaviours can be changed and the cost and benefits of eliciting change (Hartman et al, 1994). It is unquestionable that a good reward system that focuses on rewarding employees and their teams will serve as a driving force for employees to have higher performance hence end up accomplishing the goals and objectives of the organization.

From employee’s perspective in some cocoa companies in Cameroon, they are motivated by their employers through various means such as the remunerations they receive monthly or following ventures they carry out. Such motivators include cash bonuses which are often in pursuit of increasing employee performance so as to ensure prompt and quality service. Although these organizations seem to put in place various strategies to motivate their employees, little is known about their impact on employee’s performance. This is because the strategies adopted are not formed by empirical research nor with consciously defined systems hence do not sometimes reflect the wishes of employees as they seem not well motivated to work by the existing motivation strategies and systems in place. At the same time, despite all the initiatives, the employees’ performance especially when it comes to meeting the deadlines and actual work delivery have not improved as envisaged. Rather some workers tend to pursue their own goals including private business during working hours, completely neglecting the goals of the organizations. Others derive different strategies to “pilfer” the products they are assigned to sell or convey to warehouses. This motivates one to ponder the effectiveness of the reward systems put in place in cocoa purchasing companies and the level to which these influence employee performances and the attainment of organisational objectives.

1.3 Research Questions

This study therefore seeks to provide answers to the following questions:

1. What are the components of reward package in CAMACO and Telcar?
2. To what extent do intrinsic rewards offered employees influence employee performance of CAMACO and Telcar?
3. Do the extrinsic rewards offered employees influence employee performance of CAMACO and Telcar?
4. Is there any difference in the level of employee satisfaction with the rewards systems in Telcar and CAMACO?

1.4 Objectives of the Study

The main objective of this study is to assess the effect of reward systems on employee performance in the cocoa sector. To achieve this, the following specific objectives are targeted to;

1. Identify the basic components of reward package in CAMACO and Telcar;
2. Assess the influence of extrinsic rewards on employee performance;
3. Evaluating the role of intrinsic rewards on employee performance;
4. Comparing the level of employee satisfaction in CAMACO and Telcar as regards the existing reward systems in the two companies;
5. Provide policy recommendations on improving worker’s performance through rewards.