The correlation between rewards and performance

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The job of the manager is to get tasks completed through employees. This should be accomplished by adopting suitable communication channels and by having the ability to motivate employees. But that is easier said than done!

The general consensus of management is that the best motivators are monetary based and extrinsic motivators. There have been observations that extrinsic rewards no longer impacts on employees and that an altruistic approach to treating employees as human beings and respecting human dignity motivates employees into increasing productivity and becoming creative.

Ruebusch 2003, states that motivation thrives and survives in organizations where all factors affecting motivation have been taken into consideration. The provision of incentives is a major factor in motivating employees towards achieving higher goals and fulfilling the organization ultimate goal, thus most organization has put into place a reward system mechanism to motivate employees.

It is apparent that both management and employees' perception differs and management persists in its endeavours in searching for an amicable and equitable reward system. This study examines one of the factors that improve performance - valued rewards at the Trinidad and Tobago Civil Aviation Authority. This will provide management with a more in-depth understanding and the correlation of motivators - performances and rewards.

Both the expectancy theory and the two factor theory of motivation frameworks and other factors affecting performance level will be examined in this study.

3.0 Background

On October 1, 2003, the Civil Aviation Division (CAD) of the Ministry of Works and Transport (MOWT) transitioned into The Trinidad and Tobago Civil Aviation Authority (referred to as "the Authority" which was established by the Civil Aviation Act, 2001 (Act 11 of 2001). The Authority`s main office is located at Golden Grove Road, Piarco.

The principal function of the Authority is to regulate and administer a safe civil aviation system whist ensuring that the Trinidad and Tobago properly discharges its obligations under international civil aviation agreements and treaties, in particular the Convention on International Civil Aviation commonly known as "the Chicago Convention".

3.1 Corporate Statement (Annual Report 2008-2009)

The Board has developed a corporate statement for the Authority defining the Authority`s Vision, Mission, Guiding Principles and Core Values.

3.2 Vision (Annual Report 2008-2009)

To ensure the highest level of Safety, Security and effectiveness in the Trinidad and Tobago Aviation Industry.

3.3 Mission (Annual Report 2008-2009)

Provision of a Regulatory Framework to facilitate a Safe, Security and Effective Aviation industry and Air Navigation Services within the Piarco Flight Information Region.

3.4 Guiding Principles (Annual Report 2008-2009)

Safety, Performance, Professionalism, Teamwork, Accountability, Quality and Diversity.

3.5 Core Values (Annual Report 2008-2009)

Honesty, Integrity, Respect and Equity.

3.6 Organizational Structure

Sourced TTCAA REPORT

4.0 Rationale for the study

On October 1, 2003 when the CAD transitioned to the Authority employees were given a choice of one of the following options

To voluntarily retire from the Public Service

To remain in the Public Service

To transfer to the Authority;

This study focuses on the incentives (terms and conditions of employment) and the rewards for performance of employees who chose option 3 - to transfer to the Authority. From the inception of the Authority in 2003, management has been faced with difficulties in the area of employee motivation and the question remains "Was it an efficient transition for the employees?" If the answer is No and the specific needs and expectations of the transferees were not satisfied then the goals and objectives of the Authority - an essential service - will be jeopardized. An effective system for rewarding efficiency and performance is no longer optional and measures must be put in place to guarantee mutual benefits of the parties concerned in providing efficient and effective air navigation services in the designated Piarco Flight Information Region.

Ruebusch, 2003 states that in order to motivate people you must appeal to their deepest desire. (Ruebush, P.,(1993),"Need to motivate employees", Canadian Transportation Logistics, 106,Iss.3:12) To do so consideration must be given to the needs of each employee considering differences in age, background, skill set and levels of authority and responsibility. If the employee perceives that the organization cares about his well being, growth and development he would be motivated to optimum performance.

The bases for this study are:

To provide the Management with a pragmatic view of the sentiments of the employees of the Authority, in particular the transferees in relation to commitment, motivation and productivity in fulfilling its objectives.

To acquaint and propose to Management reward and industrial relation trends to develop and sustain an environment conducive to excellence in productivity and performance in fulfilling its mandate.

To assist Management in understanding why employees behave the way they do

To propose techniques and HR practices for improving efficiency and effectiveness in employees' productivity and performance.

To identify to Management the benefits to be derived from the implementation of a system for gauging employees skills and abilities, to train and develop them and to reward good performance.

Aims and Objectives

An overview of motivation literature suggests that the underlining objective of every manager is to try to find the most suitable method of motivating their employees. Therein lies the basic question "How to motivate?", thus the aims and objectives of this study are:

To determine the relationship between valued rewards, employees and organizational performance.

To evaluate the rewards management methods and systems of the Authority and determine if it's sufficient to influence behaviour.

To determine factors that affect the performance output and identify strategies that improve and sustains performance.

6.0 Introduction to Literature Review

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7.0 Literature Review #1

Motivation

Reward for performance is an extrinsic motivator and a key driver of high performance. It encourages individuals to work hard, and achieve a higher goal and a better performance. According to Mitchell (1982) motivation is psychological process that cause encouragement, direction and insistence of voluntary actions that are goal oriented. Robbins (1993) shares the same view, that it stimulates the willingness to exercise high levels of effort towards organization goals and satisfy individual needs. McKenna (2002) explains that it is personal in nature, comes from within the individual. Robbins (1993) also describes it as the individual needs that make the outcomes to attractive.

There are processes involved in satisfying a need, the extrinsic motivation (reward) and staff retention via an effective performance appraisal system. Maslow identifies a hierarchy of needs i.e. physiological, safety, social esteem, self-actualization and which is portrayed in the shape of a pyramid, the most fundamental levels of needs at the bottom and the need for self-actualization at the top. He states most basic level of needs must be met before the secondary or higher level needs.

Views posit by Hertzberg is one of a democratic nature, he suggests that once the organization provides an environment that allows the employees a sense of fulfilment the employees will be directly motivated to work harder. Herzberg categorizes these factors as motivational factors e.g. job interest, recognition, opportunities for personal growth.

The theory also identifies hygienic factors, which are factors which are not directly related to but surround the job e.g. work environment, the type of amenities available, equitable salary. These factors are required to be present or employees will be de-motivated, its presence, however, does not motivate the employees.

The Equity Theory insists on fairness judged by comparison--internal, external. Adams theory argues equilibrium must exist between the employees' proficiency and remuneration from management to achieve a strong and productive relationship with the overall result being satisfied employees .The idea behind Adams' Equity Theory is to strike an acceptable balance for all parties involved.

7.1 .1 Literature Review #2

Perception of Value

The real keys to job satisfaction are neither skills nor values, but "deeply embedded life interests." (Butler and Waldroop) Most employers believe that employees desire monetary rewards this is not necessarily true, according to Darling et al (1997) "employers waste thousands of dollars on incentive programs that employees do not want".

Whilst monetary rewards and bonuses assist with daily finance it does not denote the individual importance and contribution to the organization. There are some employees place value on the sense of achievement, job satisfaction and enjoyment and prefers alternative recognition approach such as framed certificate, recognition on company news letter etc as an alternative to monetary rewards. Sincerity, fairness, appropriate consistency, timeliness and validation of accomplishment all add to the perceived value of recognition and ultimately increased level of performance.

According to Nel et al (2001) "the critical factor that organisation should bear in mind is from Maslow`s theory" referred to in 6.1 above, in addition to similar theories, where theorist maintains that people can be motivated by intrinsic satisfaction and not just by extrinsic rewards. Nel et al (2001) continues to identify that organizations whose primary focus is on monetary rewards and falls short in promoting intrinsic rewards "fails to tap a very powerful source of motivation that can lead individuals to perform at extraordinary levels."

Barton (2002) further maintains that "the distinguishing factor in Fortune`s annual list of "100 Best Companies to work for is that these companies see recognition as an integral component of the organisation`s total rewards programme" as such it can be identified that while financial rewards are important, there are other factors that would influence employees' level of performance.

The above is accurately summarized and enforced by Nelson 1994, p.22 "Receiving acknowledgement of success in one`s profession and organization, while contributing to society, adds value to our existence."

7.1.2 Literature Review #3

Desirability of recognition

Spitzer 1996. p 45 "Despite unprecedented an effort to motivate employees, employee motivation is at an all time low. And, recent studies show that the majority of hourly employees and managers in the United States report feeling "under-rewarded".Spitzer 1996 again writes "rewards are as different as the people who receives them and it does not make sense to give the rewards that recipients does not find rewarding."

Branham (2001) recommends that managers reward workers the way the workers want to be rewarded. The question arise "How will managers know what the employee consider rewarding to them? Response - ask them. When given options some workers will prefer monetary rewards while others may consider non -cash rewards. There are employees who consider a pat on the back or a verbal appreciation "job well done" a significant incentive.

"Despite their disclaimers, people want to be acknowledge even a small symbolic rewards is cause for positive celebration and reinforcement of one`s self - efficiency (Henry, 1995).When a company reports success at the end of the financial year employees believe that their contribution was by no means insignificant in the overall achievement of the company and has a yearning for recognition of their contribution or a share in equitable success.

7.1.3 Literature Review #4

Attitude of the organization and guidelines provided to employees

According to Milas, 1995 "a recognition and rewards system should be unique to every company; therefore, it must be constantly monitored and modified as the values change for both the organization and its members."

The reward methodology chosen by any organization must have qualities and features that allow the management to manipulate and ability to provide and equitably distribute, accordingly it must be formulated on the unique characteristics of the organization. As mentioned in the introduction stage of this paper the job of the manager is to get tasks completed through employees consequently the goals of the organization must be identified and linked to reward recognition. It is also critical that employees understand the Core Values, Vision and Mission of the organization and their role in and expectations required of the accomplishing this.

Schuster and Zingheim, 1992 surmise as follows," The rewards offered to employees, and the occasions for these rewards, are amongst the most visible and potent manifestations of the organization`s culture."

8.0 Research Methodology

This empirical study was undertaken to evaluate the current rewards and recognition program through participants' feedback to form an objective approach and make recommendations for the organization to move forward. The literature review was a source of information external of the organization regarding value and varied techniques of recognition.

The methodology chosen was Qualitative and Quantitative as both are considered to be the best approach to answer the research issue. Qualitative approach seeks to understand social lifestyle and adds texture to the report as it includes realism and Quantitative presents statistical data. Extracts from both methodologies will provide accurate representation of data for management to analyze and improve current strategies and process.

9.0 Research Design

Research design blueprints the methodology and procedures required for collecting and analysing the data to provide required information. The strategy utilize was the use of questioners and interviews to obtain information.

The data and observations will be recorded manually on questioners/ forms customized specific to the research topic and information gathered will be then input into a computer database to general statistical reports and graphs for further analysis comparable to the theoretical concepts. Recommendations will be made and concepts can then be implemented.

The effectiveness of the system is dependent on the cooperation of both employer and employees.

10.0 Sampling

....................................

11.0 Data Collection Tools

A mixed method approach of primary and secondary will be adopted. This approach will help in understanding the topic in a more rounded and complete fashion. The relevant primary sources (Quantitative data) will provide a wider perception of organization as a whole. Collection of data will be through survey, questionnaires and interviews. Data editing will be carried out simultaneously to identify omissions, ambiguities and errors as well as for clarification with the respondents.

Secondary data (Qualitative data) will from data which was already recorded as information from past records, company policies, and the organizations reward strategies would help to establish focus for the project.

It is expected since that this may be the first research into this specific field there will not be enough secondary data. However information such as numerical data from previously recorded staff turnover, recruitment and staff that left the company will be utilized as Quantitative data.

12.0 Limitations

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13.0 Data Analysis

Upon receipt of data from the interviews and questionnaires subsequently data will be presented in the form of compiled data tables charts, graphs and percentages and manipulated / analyzed as appropriate. Software such as Microsoft Word and Excel would be used for presenting, formatting and organizing the interpretation of the information.

14.0 Timescale

Ghantt Chart

15.0 Resource Statement

Expenses incurred in the process of obtaining data from respondents surveyed include:

Printing of Questionnaires

$100.00

Stationery

$50.00

Phone Calls

$75.00

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