Understanding the impact of reward system on employees' effective performance in the Nigerian automobile service industry

ABSTRACT

The aim of this empirical study is to understand the impact of reward system on employees’ effective performance in the Nigerian Automobile Service Industry. The purpose of the study is to identify result-oriented reward strategies that will enhance, retain and develop competence and capability of workers in the industry in outweighing prevalence rate of economic recession and competitive rate in the industry. Hence, the primary objective of the study is to critically investigate the relationship between reward system and employees’ effective performance in the automobile service industry; using the pay structure and motivation as independent variables and performance, the dependent variable of the study.

In quest of investigating relationship existing between reward system and employees’ effective performance, triangulation method of data collection was used, while data were collected from 87 respondents to administered questionnaire and 4 interviewees to semi - structured open-ended questions from four automobile service firms in Lagos, Nigeria. Data collected through these sources were analysed using frequency distribution for quantitative analysis of the 87 respondents, and manual content analysis for collated data from interviewees. The research finding revealed that there is a strong and positive relationship between reward system and employees’ performance. Similarly, the result further showed that pay structure and motivation has a direct impact on the performance of workers in the industry. However, generated result cannot be generalised to the entire industry due to the concentration of appraised firms in one state (Lagos) amongst 36 other states in Nigeria. Therefore, further research in incorporating other automobiles service firms across the six geo-political zones should be conducted focusing more on the quantitative approach.

It was recommended that firms in the industry should consider rewarding overtime financially in boosting effort and commitments of workers. Secondly, the issue of training and recognition should be highly emphasised in the industry in sustaining effective performance and continuous development of skills, knowledge and behavioural attitude towards work.

Table of Contents

ABSTRACT. 1

STATEMENT OF ORIGINALITY AND AUTHENTICATION.. 2

ACKNOWLEDGEMENTS. 3

LIST OF FIGURES AND TABLES. 4

LIST OF ABBREVIATIONS. 6

CHAPTER ONE. 10

INTRODUCTION.. 10

Background and Context11

Aim and Objectives. 12

Scope and Importance. 12

Rationale. 13

1.5 Overview of Dissertation. 13

CHAPTER TWO.. 15

LITERATURE REVIEW.. 15

2.1 Introduction. 15

2.1.1 Literature Search Strategy. 15

2.1.2 Conceptual Framework of the Study. 17

2.1.3 Structure of the Literature Review.. 18

2.2 HUMAN RESOURCE MANAGEMENT. 19

2.2.1 Definition of HRM.. 20

2.2.1 Model of Human Resource Management22

Soft HRM:22

Hard HRM:23

2.3 PERFORMANCE.. 24

2.3.1 Performance Management24

2.3.2 High Performance Work System.. 26

2.4 REWARD MANAGEMENT. 27

2.4.1 Reward System.. 29

2.4.2 Total Reward System.. 32

2.5 Motivation and Definition. 33

2.5.1 Factors and Determinants of Motivation. 34

2.5.2 Types of Motivation. 36

2.5.3 Theoretical Framework of Motivation. 37

2.5.4 Taylorism Theory. 38

2.5.5 Maslow’s Hierarchy of Needs. 38

2.5.6 Alderfer’s ERG Theory of Motivation. 39

2.5.7 Herzberg’s Two Factor-Theory of Motivation. 40

2.5.8 McClelland Theory of Motivation. 41

2.6 Pay Structure. 42

2.6.1 Types of Pay. 44

2.6.2 Theories of Pay Structure. 45

2.7 Empirical Literature Review of Relationship between Reward System, Motivation, Pay Structure and Performance. 50

2.8 Conclusion. 52

CHAPTER THREE. 54

RESEARCH METHODOLOGY. 54

3.1 Research. 54

3.2 Research Philosophies. 55

3.2.1 Rationale for the choice of Research Philosophy. 56

3.3 Purpose of Research. 57

3.3.1 Rationale for the choice of Research Purpose. 57

3.4 Types of Research. 57

3.4.1 Rationale for the choice of Research Type. 58

3.5 Research Process and Design. 59

3.6 Methods of Data Collections. 61

3.6.1 Design of Questionnaire and Interview Guide. 61

3.6.2 Reliability and Validity of Collected Data. 62

3.7 Data Analysis. 63

3.8 Sampling Techniques. 63

3.8.1 Rationale & Choice of Sampling Technique. 63

3.9 Research Ethics. 63

3.10 Research Limitations. 64

CHAPTER FOUR. 66

DATA PRESENTATION AND ANALYSIS. 66

4.1 Introduction. 66

4.1 Success analysis of Respondents. 66

4.2 Research Objective 2. 67

4.3 Research Objective 3. 70

CHAPTER FIVE. 75

RESULTS AND DISCUSSIONS. 75

5.1 Generated Result and Discussion. 75

5.2 Identify Gaps. 80

5.3 Contribution to Knowledge or Solution to Problem.. 80

CHAPTER SIX. 81

CONCLUSION AND RECOMMENDATIONS. 81

6.1 Summary. 81

6.2 Evaluation of Results. 82

6.3 Recommendations Based on Evaluation. 82

6.4 Future Work. 83

CHAPTER SEVEN.. 84

PERSONAL DEVELOPMENT PLAN.. 84

7.2 Skills before the Project84

7.3 Skills during the Project84

7.4 Skills after the Project85

REFERENCES. 86

BIBLIOGRAPHY. 93

APPENDIX. 101

Appendix 1. Research Proposal101

BACKGROUND OF THE STUDY.. 101

BRIEF PROFILE OF WAJGEE AUTOMOBILE LTD.. 103

LITERATURE REVIEW... 103

The Reinforcement and Expectancy Theory. 105

Equity Theory. 106

Agency Theory. 107

MOTIVATION.. 108

Theories of Motivation. 109

Maslow’s Theory. 109

Alderfer’s ERG Theory of Motivation. 110

Herzberg’s Two Factor-Theory of Motivation. 111

McClelland Theory of Motivation. 112

OBJECTIVES.. 112

METHODOLOGY. 113

Appendix 2: Letter of Introduction. 114

Appendix 2.1: Research Questionnaire. 116

Appendix 2.2: Interview Guide. 119