The success of an organisation greatly depends on fulfilling the continuous changing needs of organisation and employees; therefore, a large responsibility falls on management to build strong relationship between them. Employees are expected to follow the rules and regulations, work according to the standards set for them and therefore expect good working conditions, fair treatment, reasonable pay, and participation in decision making. For organisations to manage these expectations, an understanding of employees' motivation is required (Puwanenthiren, 2011)
Research has proven that when employees are adequately rewarded, they tend to have higher self-esteem, more willingness and confidence to take on new challenges and more enthusiasm to be innovative. (Kalim, Syed & Muahmmad, 2010) . Employee performance therefore has become a source of concern for HR experts especially the level of output of workers due to poor remuneration and the often lackadaisical attitudes of managers towards effectively rewarding them to maximize productivity.
Therefore, all hands must be on deck to develop and incite employees to be dedicated to their jobs through effective pay and reward systems.(Roberts, 2005). In view of this, this study attempts to propose an appropriate pay and reward strategy that would adequately motivate employee performance using Etisalat communications Nigeria as a case study.
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OBJECTIVES OF THE STUDY
This research paper basically aims at:
Thoroughly examining the existing reward and pay system and strategies practiced by the organisation.
Determining the level of successfulness of the reward and pay system
Recommending and proposing further strategies that may enhance overall productivity
1.3 OVERVIEW OF THE COMPANY
The Nigerian telecommunications sector witnessed major transformation since 2000 when it was first embraced the Global System of Mobile communication (GSM) opening the market for many operators, Etisalat inclusive. This no doubt heightened the telecommunications awareness of individuals, made communication easier, and promoted market sustainability.
Etisalat is the leading telecommunications operator in the Middle East and Africa, headquartered in the UAE (www.etisalat.com.ng). Etisalat, though the newest contender in the business of telecommunications in Nigeria, invests heavily in the Nigerian economy as well as in its human resources. Etisalat provides a world class environment for fulfilling career aspirations fostered by its dynamic pay and reward systems which would be analysed in other sections of this paper.
1.4 SIGNIFICANCE OF THE STUDY
This study has both theoretical and practical significance. Theoretically, it is hoped that by the end of this study, additions will be made to the knowledge of human resource management
Practically, this study will address reward and pay schemes in organisations and how the motivate employees toward better performance. It will seek to formulate policies regarding reward and pay for employers of organizations that can help improve their organizational structure.
CHAPTER TWO: LITERATURE REVIEW
2.1 THEORETICAL FRAMEWORK
V room's (1970) in Armstrong (1991) expectancy theory in sees man as a goal seeking or need satisfying organism whose action such as taking a job and how efficiently he works depends on his expectation of a reward. Thus how far the expected reward satisfies the job aspiration of the employee is the extent to which he contributes to organizational effectiveness and efficiency. Nevertheless, the expectancy theory offers insight into the motivational process of the worker, and gives substantial evidence that pay and reward schemes influence employee performance.
Maslow's theory of motivation (1954) in Armstrong (1991) provides some explanation for employees' job satisfaction and productivity. Maslow saw human needs in terms of hierarchical structure with higher level needs as physiological and safety needs being the most important. He argued that all human beings are in a motivational state and failure to satisfy any of these needs will hinder employees work motivation and job satisfaction. Maslow was however criticized for not subjecting his formulation to empirical validation. His critiques also argue that the way in which he presented his hierarchy of human needs is misleading and does not always obtain in reality.
Contingency theory, (Roberts, 2005) argues that an appropriate reward and pay strategy is required to "best fit" with organisational strategic objectives and HR practices. Thus, reward and pay schemes should be designed to suit the organisational strategy and overall objectives in order to effectively motivate employees towards improved performance thus the simple equation:
Always on Time
Marked to Standard
Effective pay and reward systems in a "best fit context" Heightened employee motivation Improved organisational productivity
REWARD AND PAY
According to Armstrong (2005), reward strategy refers to the alignment of the reward policies and practices with the business and HR strategies of the organisation, its environment and culture, providing a set of goals and a declaration of intent as to what the organisation wants to reward and how critical issues will be addressed.
Pilbeam & Corbridge (2010) state that out of the three principal pay strategies; graded pay- based on job evaluation and incremental advancement, market related pay- based on the commercial worth of an employee, and performance related pay based on the individual worth of an employee, the performance related method is more preferred in the global organisation and is motivated by the managerial desire to make organisations more responsive to competitive markets by delegating decision making and relying more on employee initiative.
Wright (2004) defines total reward as not focusing on pay alone as one part of the reward picture but involves bringing in other aspects that affect the quality of the individual's working life such as employee involvement, employee recognition and participation in decision making and opportunities for learning and development.
Thompson (2002) makes reference to the "total reward scheme" as one which makes recruitment of better quality staff easier, reduces wastage from staff turnover and enhances the reputation of the organisation as an employer of choice.
CHAPTER THREE: PAY AND REWARD STRATEGIES IN ETISALAT NIGERIA
Etisalat Nigeria, knowing that long term investment is needed for survival at the top, has a reward strategy of paying salaries at the upper level to attract, develop motivate and retain high performing staff. They also ensure that quality of performance of employees and the business is monitored and recognised. Furthermore, Etisalat Nigeria's reward system encourages innovations and the use of initiative.
In summary, Etisalat Communication Nigeria's strategic reward and pay scheme encompasses:
Providing a sense of direction by integrating with HR and business strategy
Valuing people according to their own contribution especially at higher levels
Respecting organisation values and paying for what it gets from employees
Adopting a total reward philosophy
See below an illustration of pay plan adopted from Etisalat Nigeria, formulated from the corporate business report 2010.
Graded pay; Same salary structure of all staff, basic benefits such leave entitlements and health schemes.
Basic University degree, little or no working experience
MIDDLE MANAGEMENT LEVEL
Hybrid pay and reward scheme encompassing both graded and performance based pay schemes; salary scale not equal any more but dependent on performance and sometimes extra skill or expertise acquired wider coverage of benefits and health schemes, more opportunities for training and development
Consistently achieving business objectives and meeting job expectations, fully reliable and demonstrates a good level of knowledge, skill, effectiveness and initiative.
TOP MANAGEMENT LEVEL
Majorly performance based; total reward philosophy is evident at this point. Salary scale varies depending on achievements and contribution to organisational success. Employees at this level are entitled to more benefits live travel allowance e.g. (business class trips abroad), more opportunities for training and development
Achieving exceptional results; exceeding set targets, making distinctive contribution in regards to business objectives and serving as a role model for organisation values.
CHAPTER FOUR FINDINGS AND ANALYSIS
An evaluation of the reward system of the company shows that it is comparatively beneficial to the employees, meaning that there is room for employment. From the researcher's findings, the company employs a hybrid reward-pay scheme which includes an exclusive graded pay strategy for entry level staff and performance based/total reward strategy at the higher levels of management.
The graded pay system; allows for everyone to be paid and rewarded almost equally and promotion is based on the length of time spent on the job; it is believed that expertise comes with experience and long term on the job learning. Most "graduate trainees" are rewarded through this system; they move and grow at the same pace until a certain level where more expectation is required. At that stage, only exceptional staff successfully move from this system, often times a lot of employees get frustrated when they have stayed too long on this level and look for other jobs. Though the graded pay system is relatively transparent, it allows for little training and development opportunities and sometimes fails to recognise exceptional performances of staff appropriately which may lead to demotivation. The various levels present under the graded pay system of Etisalat Communications include:
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Performance based pay strategy; is a direct linkage of payment within the contract of employment to an assessment of performance based on the contribution or value of the individual employee to the organisation at one point in time. (Pilbeam & Corbridge, 2010). It is at this stage that performance is recognised and rewarded respectively. The ability to take initiative and work effectively under little or no supervision is greatly expected from employees at this stage. Employees here may also benefit from the total reward system. The various levels present under the performance based strategy include:
The total reward system; is one in which financial and non-financial benefits are combined to develop a suitable approach of reward and pay. It encompasses provisional pay, non-monetary reward (recognition) and training/development opportunities. Reward here is also highly performance based and requires making distinctive contribution towards achieving organisational goals. The various levels present under the total reward system include:
The company maintains a reasonably high salary policy at all levels but at a stage requires high competence and performance related results from staff. As a result, hardworking staff in entry levels might not be adequately rewarded since reward is graded in structure. This may lead to employees resigning and seeking other options or losing faith in the organisation hereby developing a lackadaisical attitude towards work. Furthermore, in the graded pay structure, the underperformers often get away with their actions because reward is equal for each staff except in cases of gross incompetence on the part of the employee. There is little room for training and development opportunities at this level as emphasis is placed on "learning through experience". This also tends to frustrate employees to leave the organisation.
At higher levels of management, the graded pay structure is gradually shed and performance becomes the focus. There are fewer employees that are rewarded based on performance perhaps because fewer people are easier to monitor and supervise. However, the question still remains about how to develop an effective performance measurement system. Etisalat Nigeria has an appraisal process which is mostly dependent on line manager or supervisor's remarks and recommendations. Often, politics or personal bias might fall into play and discredit an employee. Also scholars have argued that performance based reward systems divides teams and encourages individuals to pursue selfish goals. ( Shelton, 2008).
However, there is provision for training, growth and development opportunities base on department and field. Technical and management trainings are organised and sponsored; home and abroad by the company for members of staff. In special cases, study leave for as long as a year can be arranged and sometimes sponsored (without salary), but the employee can conveniently go back to his job on return.
The total reward philosophy basically encompasses financial and non-financial benefits and employees under a grade pay structure are not entitled to benefit from this scheme.
Etisalat's total reward strategy provides symbolic rewards where appropriate like praise and recognition when necessary and practicing a culture of managerial feedback.
CHAPTER FIVE: RECOMMENDATION AND CONCLUSION
Based on the research findings, this researcher proposes an integrated total rewards approach for improved employee performance and organisational productivity. This approach encompasses and takes into cognizance the importance of culture and environment, the uniqueness of different work situations and the diversity of the concerned group of employees at hand. The exploration of national cultural values when developing a flexible reward system is no doubt beneficial in the global business setting. Etisalat Nigeria is a multinational that exists in a multi-cultural environment thus facing a diverse workforce; hence, employing effective reward systems is imperative to obtain maximum employee performance.
Going into detail, it was observed in the course of research that all decisions about the reward and systems were made by upper managers and the lower level employees have little or no influence in the process. Puwanenthiren (2011) suggests that organisations should endeavour to include employees in decision making process about pay and reward schemes. For instance employees could be given an opportunity to give feedback on reward systems.
The research conducted shows that the biggest challenge in motivating the employees in the company especially in entry level employees under the graded pay structure is to find the right balance between individual based reward and company based reward. It seems unfair in company based rewards that people who are under performers get rewarded by the hard work of others. Also the difference in remuneration gaps amongst the various levels of employees should be reviewed.
Total reward philosophy should be modified to extend training facilities to all members of staff and encourage opportunities for new learning experiences and also provide room for flexible work patterns, greater time autonomy for individuals and wellness activities. (Pilbeam & Corbridge, 2010)
Finally, the organisation should endeavour to continue to improve on it reward and pay scheme to arrive at a "best fit" strategy which suits HR policies and overall business strategy.
This study intended to examine various aspects and factors required for motivating improved employee performance. It is therefore ascertained that there is positive relationship between effective pay and reward systems and employee motivation towards increased organisational productivity. From the foregoing, it can be argued that a strategic pay and reward system would ultimately motivate employees to achieve organisational objectives.