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IMPACT OF REWARD SYSTEM ON WORKERS PRODUCTIVITY IN INSURANCE COMPANY
1.1 BACKGROUND OF STUDY
Today, an organization’s result is highly dependent on the employees work reward. It is therefore necessary for insurance firms to find out what motivates their employees so that they can plan a suitable reward system and gain better results. The right combination of immaterial and material rewards can boost up the employees' productivity and enhance their commitment to the firm.
Reward is one of the most important elements in motivating employees for contributing their best efforts to generate innovation ideas that lead to better business functionality and further improvise organizational performance both financially and non-financially (Dewhurst et al., 2010). The current financial crisis Nigeria is experiencing has made the reward system. With focus on bonuses and viable remuneration, a highly debated topic in media. The mantra that is always heard is that organizations expect employees to follow the rules, regulations and also to work according to the standards set for them whereas the employees expect good working conditions, fair play, fair treatment, a secure career, power and involvement in decision making.
Rewards systems are often used as a management tool for achieving desirable aims and objectives. One of the most common aims of reward in insurance firms is to motivate employees to perform better in the firm (Armstrong, 2006). In the present business culture, workers will give their greatest when they have an inclination or assume that their endeavours will be remunerated by administration (Baron, 1983). Inspiration is the key that motivates individuals to do what they do. Inspiration is a collection of various procedures which impact and direct the conduct of workers to accomplish some particular objective (Baron, 1983). One of the key issues that worry each labourer in an organization needs to do with the reward or remuneration for their exertion. In Lagos State, Staff not just need great pay and advantages, they likewise need to be esteemed and acknowledged for their work, treated decently, do work that is imperative, have progression openings, and chances to be engaged with the insurance firm (Frey, 1997). Prizes assume an essential job in insurance firms and office projects to pull in and hold their workers. (Perry et al 2006). It is the everyday connections that make representatives feel that their commitments are valued and that they are perceived for their own one of a kind characteristic. Getting results from your reward programs implies having the correct reward procedure, shrewd plan and viable performance (Srivastava, 2001). It is critical to take note of that after enlistment, most representatives in this way expect or interest for different advantages as remuneration for their chance and exertion towards accomplishment of hierarchical objectives separated from the standard wage or pay (Miles, 2004). In the event that the above advantages are not offered, it normally prompts distinctive types of disappointment which may incorporate; high non-attendance, steady complaints, high work turnovers, strikes and thus low performance of their due obligations (Ax et al, 2006).
In insurance firms, successful representative reward systems can fundamentally build work efficiency. As it were we can state that great prizes are most vital approach to draw in the representatives with their work and with their organization. They can spur representatives to build their work quality and amount and to adjust their performance to hierarchical goals. They can in this manner be a great effect on worker conduct, inspiration and performance and ought to be a fundamental part in any organization procedure. Performance can be viewed as a record of result accomplished and also a man's achievements. Performance can in this manner be viewed as conduct – the manner by which organizations, groups and people complete work. Armstrong (2003) reasoned that while dealing with the performance of groups and people, the two sources of info (conduct) and yield (results) should be considered. That is, performance administration cover competency levels and accomplishments and also target setting and audit. Bourne et al. (2003) perceive representatives as a standout amongst the most critical partners in their five aspects of the performance crystal. This backings Balmer and Gary's (2000) statement that for the present information organizations, the way to remaining focused is the capacity to draw in and hold talented and propelled workers. Holding uncommon abilities and information from the work showcase expects bosses to execute great reward systems. All organizations are worried about what ought to be done to accomplish maintained large amounts of performance through individuals. This implies giving close consideration regarding how people can best be propelled through such means as motivations, prizes, initiative and essentially, the work they do and the organizations setting inside which they do that work.
In the current worldwide economy with its predominant focused condition, firms as often as possible confirm that their workers are their generally most helpful asset. Firms' organization structures are vigorously reliant on representatives, which impact the organization through their commitment, states of mind and inspiration. (Bruzelius and Skärvad, 2004).
The eventual fate of enterprises is in the hand of individuals following up for the benefit of the organization as representatives, and the significance of HR have been conveyed to focal point of the audience, like never before previously (Bhattecharya and Mukherjee, 2009).
Whiteley (2002) depicts that all individuals are worried about inspiration to some degree and one thing that all workers share for all intents and purpose is the way that higher inspiration increment performance. Be that as it may, to motivate representatives to outflank amid all conditions is a standout amongst the most troublesome difficulties supervisors are confronting (Nohria, Groysberg and Lee, 2008).
Bruzelius and Skärvad (2004) contend that to get representatives spurred to work all the more proficiently and to help the organization's qualities and objectives, they have to get repaid through remunerations. The reward structure ought to urge talented representatives to remain inside the organization and additionally increment the inspiration and duty to the organization and in this manner increment the profitability. (Brickley et al, 2002). Starting today, it is generally perceived that workers' inspiration and commitment relies upon the apparent sentiment of being decently compensated for one's abilities, learning and commitment. Organizations have distinctive targets and since the reward systems are mirroring the organization's hierarchical culture, they should be custom fitted to their specific business goals. (Brickley et al, 2002).
Bhattacharya and Mukherjee (2009) portray that workers in the 21th century are scanning for something more past simply fiscal prizes. These days, it isn't conceivable to hold representatives just by paying high wages and offering alluring advantages. Dewhurst et al. (2009) posit that the current economic situation has pushed successful companies worldwide to adjust their reward systems –from financial to non-financial sensitive systems; meanwhile some firms are still adhering to the conventional method of rewards that places emphasis on bonuses and payment compensation. Also, the findings that the employees’ needs and desire from job differs from one individual to another require organization authority to develop reward systems that is designed towards the individual needs of their employees (Dewhurst et al. 2009). However, as asserted by Brian (2006), rewarding and recognizing employee can be a dicey task as there is no generally accepted model towards its implementation; saying that a successful reward system in one firm can be a failure in another organization.
1.2 STATEMENT OF THE PROBLEM
Insurance firms are set up to achieve particular destinations. The firm that desires to accomplish these targets must have a focused and maybe a far reaching absolute reward system that is lined up with the organization's business system and that mirrors the aggressive reality of the work showcase. In this present reality where individuals have turned out to be increasingly requesting about their lives and environment, the reward system could be utilized to propel employees by fulfilling these requests. Be that as it may, there exists an absence of comprehension in how to rouse every one of those high requesting people, making the vast majority of the reward systems sub-advanced.
As per Obikeze (2012), a more noteworthy level of the employees in assembling organizations have been significant guilty parties of delay to work and not keeping arrangement to clients, antagonistic and even end up unfriendly while taking care of clients, some lose centre and thus supply wrong brand of items to clients and these outcome in long sitting tight time for clients to get the required merchandise and enterprises, and the ensuing low performance as a few clients lose tolerance and subsequently withdraw and even go the choices. The poor mentalities of the business power, for example, delay to work, deferred deals calls, absence of data for clients issues, could add to the low development of employee performance in assembling organizations and these emerges from the inadequately organized and now and again inaccessible reward system through absence of incidental advantages to labourers, acknowledgment and thankfulness offered by the assembling organizations to their workers Obikeze (2012).
Different organizations staffs have demonstrated that they have assorted necessities that require a far reaching all out remuneration system to address the issues of different workers. Subsequently organizations have been looked with the test of executing and offering focused prizes to the workforce to enhance their productivity as the absence of exceptional acknowledgment to recognize remarkable individual or group accomplishments with little money grants, singular performance rewards dependent on particular employee performance criteria and stock possession prizes to experts who meet particular objectives have been ignored by administration in a few organizations (Kawara, 2014). Due to these, the theoretical and versatile performance of the employees has been on the decay prompting client misfortunes as the employees feel less persuaded towards work and authoritative benefit will decrease (Hafiza, Shah, Jamseheed, and Zamam, 2011).
The reward composes in many organizations normally are not productivity based. In this manner, they are not connected at all to business structure and worker enlistment, maintenance, inspiration, performance, input and fulfilment. Besides, the beneficiaries of these prizes in many organizations don't take part in the arranging and the performance of the reward systems in organizations. Further, there are various escape clauses in the organization of the different methods for compensating workers in organizations. Once more, most insurance firms in Lagos State see remunerate as just the financial pay given to employees to repay them for their productivity.
1.3 Research Questions
In line with the above stated problem, , the study will answer the following research questions:
i What is the effect of Sense of Accomplishment on employee’s task productivity in selected insurance firms in Lagos State?
ii What is the influence of salaries/wages on employee’s productivity insurance firms in Lagos State?
iii Evaluate the extent to which fringe benefits affect employee’s productivity in insurance firms in Lagos State?
1.4 OBJECTIVES OF THE STUDY
The main objective of this study is accessing the impacts of reward system on workers’ productivity in selected insurance firms in Lagos State, Nigeria.
The objective is further broken down below as;
- To find out the effect of Sense of Accomplishment on employee’s task productivity in selected insurance firms in Lagos State.
- To investigate the influence of salaries/wages on employee’s productivity in insurance firms in Lagos State.
- To evaluate the extent to which fringe benefits affect employee’s adaptive productivity in insurance firms in Lagos State.
To provide answers to the research questions, the following hypotheses will be tested in this study:
H0:Productivity has no significant effect on employee productivity in selected insurance firms in Lagos State.
H0: Salary/Wages has no significant effect on employee’s adaptive behaviour in selected insurance firms in Lagos State.
H0: Fringe Benefits have no significant effect on employee’s adaptive productivity in selected insurance firms in Lagos State.
1.6 SIGNIFICANCE OF THE STUDY
This study will give an understanding into the significance of remuneration systems in accordance with insurance firms in Nigeria, particularly in Lagos state and as it is required to be. An all-around outlined system for remunerating work extraordinarily has a hearing on the yield of employees and consequently effect on the performance of the organization all in all. Reward speaks to by a wide margin the most critical and hostile component in the work relationship, and is of equivalent enthusiasm to the business and worker. To the business since it speaks to a huge piece of his costs, it is progressively imperative to his employees' profitability and to aggressiveness, and influences his capacity to enlist and hold a quality work constrain. To the worker it is a key to his way of life and is a proportion of the estimation of his administrations or profitability. The related benefits and negative marks that go with remuneration systems were additionally analysed. The aftereffects of this investigation would go far to make mindfulness about the shortcomings in the performance of this system and the proposed path forward. It is consequently trusted that this study will contribute valuably towards expanding organizations and also the workers comprehension and acknowledgment of the effect of remuneration systems on individual performance and along these lines the corporate performance in chose insurance firms. The study evaluated the reward systems of organizations as a whole by focusing on selected insurance firms in Lagos State and established whether their current reward systems have any bearing on corporate productivity.
1.7 SCOPE OF THE STUDY
The study concentrated on impact of reward system on workers’ productivity in insurance firms as one of the money related foundations in Nigeria, particularly in Lagos state. The independent variable is measured in terms of salary/wages, sense of accomplishment and fringe benefit and employee productivity is the dependent variable. The research covered a period of 1 year from 2018-2019 mainly because this is the time within which the researcher is undergoing her master of business administration program. it also represents the time when insurance firms in Lagos state have been experiencing the problem of poor reward system and poor employee productivity.
1.8 ORGANISATION OF THE STUDY
The study is broken down into five chapters. Chapter one carries the introduction of the study by giving the background information on the research problem, objectives, the scope and limitations of the study. Chapter two is the review of relevant literature which comprises of conceptual review, empirical review and the theoretical framework of the reward system in organizations. Chapter three dealt with the research methodology adopted in the execution of the study and relevant justifications. Chapter four presented the results and discussion on the impact of reward systems on corporate performance in selected insurance firms. Chapter five also presented the conclusions and recommendations drawn from the research findings. References and appendices follow up beneath.