Exploring the Process, Impact and Outcome of Pay and Reward Systems on Employees in Nigeria.

A dissertation submitted to The University of Manchester for the degree of Master of Science in the Faculty of Humanities

2010

OHIOKHARA IRAGBESON KERY-ANN MANCHESTER BUSINESS SCHOOL

CONTENTS P Abstract Declaration Copyright Statement Acknowledgement

CHAPTER ONE- Introduction 1.1 Background of study 1.2 Statement of Problem 1.3 Research Aims 1.4 Research Statement 1.5 Scope of Study 1.6 Structure of Dissertation 1.7 Conclusion CHAPTER TWO- Literature Review 2.1 Introduction 2.2 The Motivational Impact of Money 2.3 The Influence of Pay on Employee Motivation, Performance and Satisfaction 2.4 Reward Systems: The Influence of Reward on Employee Satisfaction 2.5 Motivational Theories of Money, Pay and Reward 2.5.1 Expectancy Theory 2.5.2 Porter-Lawler Expectancy Model of Work Motivation 2.5.3 Equity Theory 2.6 Factors affecting Satisfaction with Pay and Rewards 2.7 Pay and Reward System in Nigeria 2.8 Pay and Reward in Media Organisations
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2.9 Conclusion

CHAPTER THREE- Research Methodology 3.1 Introduction 3.2 Types of Research 3.3 Research Design 3.4 Research Purpose 3.5 Qualitative Versus Quantitative Research 3.6 Types of Qualitative Methods 3.6.1 Interview as a Qualitative Method 3.7 Data Collection- Primary and Secondary Data 3.8 Participants/Sample 3.9 Research Procedure 3.9.1 Obtaining Information 3.9.2 Interview Process 3.10 Data Analysis 3.11 Conclusion CHAPTER FOUR-Data Reporting 4.1 Introduction 4.2 Overview of Daar Communications Ltd 4.2.1 The Pay and Reward System in Daar Communications 4.3 Presentation of the Data Collected and the review of Findings. 4.3.1 Motivation and Performance 4.3.2 The Significance of Pay to Employees 4.3.3 Employee Expectations 4.3.4 Organisational Commitment 4.4 Conclusion
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CHAPTER FIVE- Data Analysis and Discussion 5.1 Introduction 5.2 Data Analysis 5.3 Discussion of the Findings 5.4 Conclusion

CHAPTER SIX- Conclusion, Implication and Recommendations 6.1 Introduction 6.2 Conclusion of Study 6.3 Implication of Research 6.4 Recommendation 6.5 Limitation of Research

References Appendices

LIST OF FIGURES Figure 1.1 Dissertation Structure Model Figure 2.1 Employer-Employee Exchange Process Figure 2.2 Vroom-Lawler-Adam Theories Inter-relation Figure 2.3 Consequence of Pay Dissatisfaction

LIST OF TABLES Table 3.1 Differences between Qualitative and Quantitative Methods Table 3.2 Tables of Interviewees in Daar Communications Ltd

Abstract

Declaration

I declare that no portion of the work referred to in this dissertation has been submitted in support of an application for another degree or qualification of this or any other university or institute of learning.

Copyright Statement

Acknowledgement I would like to give thanks to God Almighty. I also want to say a big thank you to my mother, Mrs Patricia Ohiokhara for supporting me throughout my studies. Thank you so much mum, I couldnt have done it without you. I also want to thank my supervisor, Miss Anastasia Kynighou for her time, attention and guidance thought the writing of this dissertation.

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CHAPTER 1 INTRODUCTION 1.1 Background of Study Every successful organisation engages in total reward package for its employees in an attempt to attain its organisational goals and objectives. These organisations measure the contribution and performance of their employees in order to fairly and equitably distribute pay and rewards. Also, the employees who spend their time, effort, energy, skills and expertise anticipate adequate compensation and reward for their contribution (Ofili, 2004). Several researchers have agreed that pay and rewards would greatly influence employees in any organisation (Armstrong & Murlis, 1994; Kerr, 1995; Lawler, 1971; Blinder, 1990; Taylor, 1911) In the present day and with the global economic trend, employers of labour have come to the realisation that the performance of employees is crucial to the success of the organisation. However, this performance is not only significant for the growth of the organisation but also for the development of the employee (Ajila & Abiola, 2004). The question then is what motivates individuals to perform better? Is it the pay that they receive, or the rewards they are given? According to McCormick (1979), rewards can be either intrinsic or extrinsic. Intrinsic rewards are rewards inherent to the job itself and are enjoyed by individuals who have successfully completed a task. On the other hand, extrinsic rewards are rewards external to the task of job and could include pay, fringe benefits, working conditions, promotion, security, contract of service, the conditions of work as well as the work environment (Ajila & Abiola, 2004). Research evidence has shown that the overall satisfaction of an employee at
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work is derived from a mix of rewards rather than from any single reward (Cameron & pierce, 1994; Lachance, 2000). Hence, this evidence suggests that both extrinsic rewards and intrinsic rewards are very important and cannot be substituted for one another (Beer and Walton, 1990). The effective use of reward to motivate performance or workers in Nigeria began in the 1970s (Ajila & Abiola, 2004). Rewards were designed to increase performance and employee productivity within organisations. However, the reward system of organisations in Nigeria has suffered strongly over the past years due to its economy, corruption, and favouritism (Abudu 1986). Little wonder Dike (1999), states that even though there are many problems in Nigeria, the one which involves the non payment of workers for several months is a difficult problem to comprehend. This makes the study of pay and reward in Nigeria an interesting one. 1.2 Statement of Problem Employees are a great asset to any organisation and the organisation that wants to be successful needs to pay attention to the needs of the employees who contribute to its success. For a while now, the economic and social factors present in Nigeria has posed a major challenge to the way organisations handle reward systems (Ajila & Abiola, 2004; Dike, 2000). This economic situation has made it difficult to fully practice good pay and reward system. Employers always refer to the poor conditions in Nigeria as their excuse for not having good reward systems; on the other hand, employees usually cite their contribution to the progress of the organisation as reason for better condition. Also, employers hardly regard any labour law in Nigeria that is if it is in existence. This condition leaves the employee with no other choice than to accept what they are been offered.

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If they dont, they risk loosing their jobs. Consequently, the fear of loosing their jobs makes it very difficult for employees to insist on an increase in pay or rewards when they are entitled to it. As Dike (2000) points out, some of these workers know their rights but cannot demand for them when it is due. For this reason, this study would seek to explore the whole process of pay and rewards system in Nigeria as well as the difficulties involved in implementing these system. Secondly, the study seeks to examine the effect these pay and reward systems have on employees motivation and performance as well as on their overall job satisfaction. Furthermore, the study shall seek to point out problems associated with pay and rewards in organisations in Nigeria, as there is the belief that a problem known is one that is already half solved. Thus, understanding these problems would make it easy to provide solutions. 1.3 Research Aims The aim of this research is to explore the process, impact and outcome of pay and reward system on employees in organisations as well as its influence on employee motivation and performance. The objectives are: To explore the concept of pay and reward system To determine how firms in Nigeria administer the pay and reward system and its effect on employees. To examine the causes of satisfaction and dissatisfaction with pay and reward. To point out the problem associated with pay and reward in organisations in Nigeria using the research organisation (Daar Communications). Finally, the study would attempt to make recommendations using literatures from the Anglo-Saxon Countries on how best to apply pay and reward system in Nigeria.
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1.4 Research Statement It is imperative to point out some statements which would be used in the research to form basis of data collection and analysis on the research topic. pay and reward will have a positive influence on satisfaction of employees Pay has an effect on the level of Absenteeism, Commitment and employee Turnover in the organisation Employees would be motivated to perform better when they are sure of getting certain rewards. The standard of living will influence employee overall satisfaction with pay and reward. 1.5 Structure of the Dissertation The dissertation comprises of six chapters. Chapter one has briefly talked about the concept of pay and reward and the stated the reason for carrying out this research. In Chapter 2, the researcher reviewed the various literatures on pay and reward and has discussed previous studies of other authors on the subject matter. Furthermore, Chapter 3 deals with the methodology used by the researcher in carrying out the research. Chapter 4 reports the data collected for easy analysis. The analysis of data collected is done in Chapter 5 as well as the discussions of the results. Finally, in Chapter 6, the researcher concluded and summarised the research findings, discussed the implication of this research for future researches, makes recommendations and outlines the limitations encountered while conducting the research.

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BACKGROUND TO STUDY

STATEMENT OF PURPOSE

RESEARCH AIMS AND OBJECTIEVES

REVIEW OF PREVIOUS LITERATURE

RESEARCH METHODOLOGY

DATA REPORTING

DATA ANALYSIS AND DISCUSSION

CONCLUSION, IMPLICATION AND RECOMMENDATION

Figure 1.1 Dissertation Structure Model 1.6 Conclusion This research is an attempt to explore the process, impact and outcome of pay and reward system on employees in Nigeria. The research will study and examine the various dimensions of pay and reward and the impact it has on employees. This chapter has introduced the issue of pay and rewards as well as the complexities associated with it. The research is fascinating because it does not only explore pay and reward in general, it looks at how it is handled in a media organisation in Nigeria. A number of literatures have been written on pay and reward in relation to motivation of employees and their overall performance. The next chapter would review some selected and related literatures.
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CHAPTER TWO LITERATURE REVIEW 2.1 Introduction There is a large body of literature on pay and rewards around the globe but there is scarcity of this work in the Nigerian environment. Many of these studies focus on the effect of rewards on task interest and performance and are mostly found in the literature concerned with both intrinsic and extrinsic motivation. Several researchers have agreed that pay and rewards greatly influence employees in any organisation (Armstrong & Murlis, 1994; Kerr, 1995; Lawler, 1971; Blinder, 1990; Taylor, 1911). Hence, an attempt to fully comprehend the concepts of pay and rewards makes it necessary to review existing literature on the subject matter. This would help inform the current research on the impacts of pay and reward on employees in Nigeria. It would also examine the outcome of pay and reward incentives in organisations in terms of motivation and increased performance. 2.2 The Motivational Impact of Money Far back as 1911, Fredrick Taylor and his scientific management associate described money as the most important factor capable of motivating the industrial workers to achieve greater productivity. Taylor promoted the establishment of incentive wage systems as a means of stimulating workers to higher performance, commitment and eventual satisfaction (Tella, 2007). According to Akintoye (2000) money remains the most significant motivational strategy. To Dornstein (2007), money seems to be an effective method used by organisations to stimulate actions that will facilitate organisational accomplishments.

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Vroom (1964) argues that money acquires valence as the most significant with which individuals needs and desires can be obtained. To Gellerman (1963), money possesses significant motivating power in as much as it symbolises intangible goals like security, power, prestige and a feeling of accomplishment and success. Opsahl and Dunettee (1966) in their review of studies on the impact of money as a motivator in an industrial organisation identify some attributes expressed by other researchers who described money as a conditioned incentive (Wolfe, 1940); a generalised conditioned reinforcer (Skinner, 1953); an anxiety reducer (Brown, 1954 ); a symbol of intangible goods (Gellerman, 1963) and an instrument for obtaining desired outcomes (Vroom, 1967). Browns view that money is an anxiety reducer results from the fact that the lack of money can cause unnecessary anxiety, concern and other psychological problems for individuals. If individuals have enough money to take care of basic needs, all the anxiety and problems would disappear. Ani (1977) also states that money has received attention as an instrument of industrial motivation not because of its intrinsic value but because it seems to be a unit of account for most essentials of life. However, even though some writers have argued that money is a dissatisfier rather than a motivator (Herzberg et al, 1959), others agree that it motivates, at least to a certain level (Whyte, 1955). In Gellermans (1968) opinion, money is used primarily to entice people to join an organisation and stay in it, and he continues by saying that workers might leave the organisation because of the monetary opportunities elsewhere or take a partial leave by means of strikes or slow-downs when they are not satisfied with their income.

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Therefore, it is argued that money is a significant instrument for obtaining the most essentials of life and although it motivates people for different reasons, Kovach (1987) argues that the need to provide the basic necessities of life motivates people the most. Having looked at the concept of money and how it motivates people in general, it is important to understand how pay motivates and influences the behaviours of employees in an organisation. 2.3 The Influence of Pay on Employee Motivation, Performance and Satisfaction From the inception of organisational science, pay has been considered an important reward to motivate the behaviours of employees (Heneman & Judge, 2000; Taylor & Vest, 1992; Taylor, 1911). This is because it allows employees to obtain other rewards (Lawler, 1971). However, it was until theorists began to explore the fairness in social exchanges (Adams, 1963; Homans, 1961) that the precise cognitive methods through which pay motivates workers became apparent. Shortly after, some researchers speculated that the feeling of fairness lead to certain relevant attitudes in the organisation, such as job satisfaction (Locke, 1969), as well as satisfaction with pay (Locke 1976). These researchers conclude that job satisfaction and pay satisfaction would influence employee behaviour in organisations (Scott & Taylor, 1985; Tett & Meyer, 1993). Hence, for organisations to be successful in the global market, it needs a highly motivated, skilled and satisfied workforce that can provide quality goods (Wagar, 1998). Bacon et al (1996) also state that a business can only compete favourably in the global market if it has good and competent employees. However, the question according to Julien (1998) is how would organisations compete if they lack these competent and satisfied workers? To this,

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Cooke et al (1987) attempts to answer the question by saying that linkage between pay and the behaviours of employees result in better individual and organisational performance because pay increases the individuals power to work and their job satisfaction simultaneously. Hence, Hertzberg (1957) expresses the opinion that the more satisfied workers will tend to add more value to an organisation. To Heneman and Judge (1999), pay can be a factor for employees to stay or leave the organisation. In addition, the level of pay is important for employee satisfaction because it is found to have an effect on the level of absenteeism and turnover of the organisation (Jerald, 1997, Omolayo & Owolabi, 2007). Moreover, asides from the level of pay, the characteristics of an organisations pay system also influences an individuals decision to join a firm (Lawler, 1997). Heneman and Schwabs (1979, 1985) suggest that pay can be broken down into four distinct categories: Pay level, Pay structure, Pay system and Pay form. According to them, pay level is the average of different wages or salaries in the organisation; pay structure is the hierarchy of pay grade or levels among employees in organisations; the pay system is the method used by the organisation to determine pay raises for individuals which can be calculated based on the amount of time the employee spends on the job or for his performance. Finally, pay form is the type of pay received by the employee. It could be direct remuneration and indirect remuneration in form of benefits. Heneman (1985) added a fifth dimension which is pay policies and administration. This is based on the theoretical work of Dyer and Theriault (1976). They studied Canadian and American managers and tested a category of variables which was not previously included in the study of pay satisfaction. This is employees perception of pay system administration.

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Their assumption that employees may be dissatisfied with their pay because they do not understand or agree with how it is administered is supported by their initial test. Furthermore, in a study of the effect of pay level and pay administration on work motivation Kuvaas (2006) explains that the base pay of employees is the result of several years of performance and other employee contributions and is less influenced by temporal factors. Employees are entitled to pay and those who receive high levels of pay are trusted to continue to perform well without being externally regulated or controlled by short term performance contingencies. Banjoko (2006) also states that the level of employees pay is a reflection of his growth and development within an organisation in terms of the capabilities, performance and level of responsibility that he can assume in the organisation. Some literatures on pay have shown that to influence performance, pay level should not only be high, it must be adequately different to reflect the contribution and efforts existing within the organisation (Livernash, 1957; Hamilton & Macy, 1923 However, Luthan (1988) and Bloom (1999) argue that if there are significant pay differences between hierarchical levels, employees may focus on being successful rather than effective. Belcher (1974) examines the significance and impact of pay on employees. He argues that the payment of salaries indicates a valuable transaction between employers and employees, where there has been an exchange of labour or services.

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AVAILABILTY CAPABILITY PERFORMANCE

EMPLOYEES

ORGANISATION

EMPLOYERS

REWARDS [BASIC PAY BENEFITS, INCENTIVES]

Figure 2.1 Employer- Employee Exchange Process. (Adapted from David Belcher (1974) The figure above shows that every employer pays out compensation and rewards to employees for their availability, capability and performance. According to Banjoko (2006), employees have expectation that they believe the organisation must fulfil. These expectations have changed remarkably in the past two decades. As a result of the change, it has necessitated the need for management to be more tactful and realistic in setting pay levels and in determining various sizes of employee benefits. On the part of employers, effective pay administration is important for several reasons. First and foremost because it is the most single expensive item of costs in any organisation, and as a result, employers need to ensure efficient management by making sure that money is paid for services actually rendered. Secondly, the remuneration package of employees is a major criterion in attracting, retaining, and motivating good performance. Consequently, Banjoko sees pay as important to both parties (employees and the organisation) and he claims that

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management must learn to devise an effective compensation package that meets with the expectations and aspirations of the employees and also satisfy its own profitability and growth objectives. Herzberg (1968) indicates that pay is a hygiene that prevents an employee from being motivated by such things as the work itself. He states that if an organisation wants to motivate employees, the organisation must first make sure that pay and other hygiene factors are at a level that dissatisfaction would not occur. Finally, Miceli and Lane (1991), argue that from research, employees determine how much they receive not only in comparison with others, but also on individual needs that include factors such as family size. To them the perception of fairness of pay is affected by environmental factors such as the cost of living and individuals knowledge of other pay systems. If the cost of living is high, the individual will expect higher pay and if they have knowledge of other pay systems, this knowledge will serve as the basis of comparison. It is thus imperative to state that pay is an important aspect of any organisation and organisations need to have a good pay system in place if they want to keep their workers motivated and also increase employee performance (Saleem, 2009). 2.4 Reward Systems: The Influence of Reward on Employee Satisfaction There has been a continued debate as to what the component of rewards should be (e.g. Foot and Hook, 1999; Milkovich and Newman, 2002; Wilson, 2003; Armstrong and Stephens, 2005; Opute, 2007). In general terms, rewards systems come within the concept of compensation strategies which are defined as the

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The deliberate utilisation of the pay system as an essential integrating mechanism through which the efforts of various sub-units or individuals are directed towards the achievement of an organisations strategic objectives (Gomez-Mejia and Balkin, 1992; 1989:438). To Lawler and Cohen (1992:8), reward systems are the management tools that contribute to a firms effectiveness by influencing individual or group behaviour. According to Armstrong (1996) reward consists of financial rewards (fixed and variable pay) and employee benefits, which together compromise total remuneration. It also includes nonfinancial rewards such as recognition, achievement, praise, responsibility and personal growth. He agrees with the view expressed by Beer (1984) who argues that competent, loyal and committed employees in an organisation need to be given some intrinsic rewards in form of responsibility, personal growth, and a feeling of competence and acknowledgement as well as extrinsic rewards such as salary, promotion, fringe benefits and bonuses. Tuch and Martin (1991) identifies that a gathering of extrinsic (pay, promotion and good relationship in the workplace) and intrinsic (achievement of tasks) rewards offered by a job leads to the overall satisfaction that an employee gets from an organisation. Lawler (1985) also states that intrinsic and extrinsic rewards determine employee satisfaction and overall performance. However, Lawler argues that because the rewards that individuals desire differs, so also is the value they attach to it. Kanter (1987) looks at reward systems from a different perspective when she noted that in many organisations rewards are differentiated on the basis of status (rather than contribution) and often, the only way an individual can increase his or her pay is to get promoted. As a result of this, employees are motivated to look out for themselves rather than improve their overall contribution.
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To Milne (1997), incentives like rewards, praises and recognition programmes are used in the belief that they would reinforce organisations values, promote outstanding performance and encourage continuous learning by openly acknowledging role model behaviour and ongoing achievement. In spite of this, she states that rewards are dependent on managers recognising the subordinates achievements whether as individuals or as part of a team. Nevertheless, some researchers have argued that not all rewards have positive outcomes as some can undermine productivity and performance (Ali & Ahmed, 2008). One of such researchers is Denning (2001) who suggests that the moment employees are offered reward for performance, they begin to perform the task for external reward rather than intrinsic reasons. In recent years, Dennings view has gained popularity by some researchers (Kohn, 1993; Powell, 1998). Herzberg, Mausner and Synderman (1959) are of the opinion that the rewards which are typically used by organisations are not motivators. Gellerman (1968) and Katz (1973) state that incentives can influence the intentions that an individual develops on his job and that monetary incentives can convince an individual to accept the tasks and goals assigned to him. However, they maintain that an individual would not accept any task unless it achieves other valued goals. They contend that monetary incentives is likely to affect the degree of commitment of an individual to his goal or behavioural intention and this commitment will influence his degree of perseverance in the face of difficulty and frustration at work. Hence Gellerman argues that the behaviours that rewards would affect are more likely to relate to membership in the organisation rather than contribution to its effectiveness or productivity. Nonetheless, a significant study by Cameron and Pierce (1994) which was based on an extensive Meta analysis of 25years of earlier research examines rewards and performance and refutes the argument that rewards undermine both motivation and performance. The research

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found that, people generally enjoy activities or tasks more when they receive a reward and the contention that rewards undermine performance and interest was not supported by the experimental data. They concluded that rewards can be used efficiently to enhance interest, motivation and performance. Cameron and Pierce also examined whether different types of reward have different effects. I Cameron and Pierce from the research concluded that rewards increases performance and interest when they are made contingent on quality or performance or are given back to employees for meeting clear standards of performance and are delivered for excellent effort and activity. In addition, Lachance (2000) state that the reward that binds an employee to an organisation has more to do with the way an employee is treated rather than any particular pay scheme. She is of the opinion that while people may come to work for the pay, they stay at work for many other reasons. For this reason, managers need to identify and manage those other rewarding conditions as part of an overall strategic approach towards rewards. To Beer al (1984) as part of reward from the organisation, employees expect to be provided fair pay, safe working conditions and fair treatment. These employees sometimes expect more depending on the strength of their needs for security, social status, challenge, power and responsibility. However the extent of expectations of each employee varies from organisation to organisation and for an organisation to address these expectations, an understanding of what motivates an employee is required. Armstrong and Murlis (1994) also assert that the reward process would most likely improve motivation, performance and commitment and enhance quality if they are operated fairly and if they are equitable, that is proportionate with the value of the job and of the person to the organisation. They also state that the three factors that affect the level of pay of individual
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employees within an organisation include the value of the job to the organisation, the value of the person to the organisation and the value of the job or the person in the market place. Research has also shown that the attraction and retention of workers in an organisation is influenced by the kind, and level of rewards the organisation offers (Mobley, 1982; Mobley, Hand, Meglino & Griffeth, 1979). Thus, Lawler (1971) posits that organisations which give the most reward would attract and retain quality people because individuals who are satisfied with their jobs would want to stay within the same organisation. Over the years, reward has been regarded as one of the many policies organisations adopts to increase its workers performance and the organisations productivity (Ajila & Abiola, 2004). To this, Ani (1977) makes an important argument stating that many managers have become accustomed with using reward to commend or punish employees. Employers believe that it is capable of motivating workers to greater productivity by instilling fear and compelling loyalty and sustained output. Hence the fear of been fired from work or retired due to poor performance as well as the desire to be promoted or financially compensated would stress on the need for increased performance on the part of the worker. Nevertheless, Herzberg (1966) expresses the view that using rewards and punishment as a yardstick for motivation adopted by managers rests on their understanding of man in terms of his wants and avoidance needs. To Herzberg, organisations adopt this motivational pattern because it seems easier to introduce increased performance through the threat of hygiene deprivation rather than to motivate in terms of achievement and actualisation of goals. Thus by offering certain rewards, the individual is encouraged to perform desirable actions and restricted from performing actions that are not desirable through the threat of punishment. Finally, from research, reward seems to be the umbrella for all forms of payment and compensation that any organisation gives. It was important to discuss the notion in isolation

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of pay so as to have an insight to it. It is also note worthy to state that both pay and reward were used interchangeably in some of the literatures. 2.5 Motivational Theories of Pay and Reward It has already been stated that pay and reward motivate employees to perform well in any organisation. According to Fagbohungbe (2009), since no human activity is devoid of theoretical explanation, pay and reward should not be an exemption. Several motivational theories have been established over the years to adequately explain pay and reward systems. The early research on pay and reward satisfaction relied upon the expectancy (Vroom, 1964) which was later developed by Porter and Lawler 1968, and equity theory (Adam, 1963). VROOM
TASK ACTIVITIES (Employee Job Satisfaction)

LAWLER
REWARD (Received by Employee)

ADAM
REWARD PERCEIVED (Critical evaluation of reward for satisfaction or dissatisfaction)

Figure 2.2: Vroom-Lawler-Adam Theories Interrelation (Source: Fagbohungbe, O., 2009) From the above, it can be deduced that every employee carries out task activities in an organisation, and by doing this tasks the employees get certain rewards and thereafter accesses the reward he receives for satisfaction or dissatisfaction. In organisations, both employees and employers have expectations. The employees want to be treated fairly, provided with work that uses their abilities, rewarded according to their contribution and have opportunities to grow. On the other hand, employers expect that employees do their job satisfactorily and should be committed to the organisation.

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This, according to Argyris (1960) is referred to as the psychological contract. He sees the contract as the implicit understanding and relationship between employees and their employers. While the employees maintain high production, low grievances and so on, the employer guarantees and respects the employees informal culture such as giving adequate wages and providing security of jobs. 2.5.1 Expectancy Theory Vrooms (1964) expectancy theory proposes that employees tend to apply more energy towards attaining goals when both the probability of receiving a reward and the extent of the reward is known in advance. The concept of expectancy was originally contained in the Valency-Instrumentality-Expectancy (VIE) theory. Valency stands for value, Instrumentality is the belief that if we do one thing it would lead to another, and Expectancy is the probability that action or effort will lead to an outcome. At this point, Vroom argues that motivation is likely only when there exists a clear and usable relationship between performance and outcome, and the outcome is seen as a means for satisfying needs. This would explain why an extrinsic financial motivation (a bonus or an incentive scheme) works only if the link between effort and reward is clear and the value of the reward is worth the effort. It also explains why intrinsic motivation which arises from the job itself can be more powerful than extrinsic motivation. 2.5.2 Porter-Lawler Expectancy Model of Work Motivation Vrooms theory was later developed into a model by Porter and Lawler (1968). Porter and Lawler assume that the relationship between productivity and satisfaction is not a straight one. Rather, a third variable mediates this relationship. This variable is Reward. Thus, an employee does not only become satisfied because he has performed his job but he must receive a reward for such performance. Consequently, it is the value the employee places on
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that reward (which he must perceive as equitable) that leads to satisfaction. They state that work must be recognised as a means to an end not an end itself such that those individuals who put in extra efforts want these efforts rewarded. It is this realisation that has today compelled organisations to attach pay and reward to performance. 2.5.3 Equity Theory Adam (1963) came up with the theory of equity measurement and perception. Equity theory suggests that individuals are concerned with sustaining fairness in their relationships with organisations. Fairness is established by social comparison (Festinger, 1957) which is based on social exchange (Homans, 1961). Adam is of the view that people would be better motivated if they are treated equitably. The feeling of satisfaction according to him comes from the belief that an individual has been fairly rewarded for his labour and services. This is buttressed by Jacques (1961) who states that pay systems will be fair if they are felt to be fair. His assumptions are that: there is no recognised standard of fair payment for any level of work unconscious knowledge of the standard is shared among the population at work to be equitable, pay must be felt to match the level of work and the capacity of the individual to do it People should not receive less pay than they deserve in comparison with their fellow workers (Armstrong, 1996: 45). Hence, to Jacques (1961), the employee is not so much concerned with the absolute amount of money paid out to him but with the perceived relationship of what he gets in comparison with what others, for example his counterparts receives. Therefore, if an employee receives the same pay as his counterparts who possess the same job inputs such as education,

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experience and skills and also achieves the same amount of output, he is likely to feel a sense of equity and fairness. The equality theory is reinforced by Dornstein (2007) who maintains that incentives are evaluated according to whether they provide fair return to employees individual or group investments. From research, employees have been found to be sensitive to the principle of equality and equality of opportunity (Belcher, 1974, 1996; Whyte, 1955). Both Belcher and Whyte agree that pay incentives quite often arouse fury among employees because they create inequality among individuals. The Equity theory is an important development in the study of reward and pay satisfaction because it make makes clear of how individuals form an attitude regarding pay and reward. It has already been mentioned that people need money and thus work for money (pay). It is a powerful motivator, even though it might not be the only motivator. However, Herzberg et al (1957) have doubted its effectiveness. This stems from the belief that although the lack of money may cause dissatisfaction, pay does not necessarily result in lasting satisfaction. Nevertheless, money motivates people because it is linked directly or indirectly with the satisfaction of many needs. If income is regular, it clearly satisfies the basic need for survival and security.

2.6 Factors Affecting Satisfaction with Pay and Rewards Over the years, one major concern that researchers have faced has to do with the satisfaction that employees get from their pay. Pay is one of the major aspects of job satisfaction (Butt, Rehman & Safwan, 2007). Also, Senguin (2003) supported Hinshaw and Atwood (1984)

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view that salaries and pay is one of the major variables for employee motivation in any organisation. Lawler (1990) is of the opinion that individuals most of the time are never satisfied with their pay. He points out that the feeling that people have about the adequacy of their pay is based upon the comparisons they make between their own and others. He argues that the external market comparisons are the most crucial because they are the one that strongly influence whether individuals want to stay with an organisation. Banjoko (2006) also states that for employees to be certain that they are not underpaid, they tend to survey their environment as to establish if their pay is similar to their counterparts in other organisations. Porter (1961) and Lawler (1971) in the research conducted in the United States discovered that majority of the managers interviewed expressed dissatisfaction with their remuneration. One of the reasons for low pay satisfaction as discovered by Lawler seems to be that individuals seek out unfavourable conditions. First, they look externally and if the comparison is favourable, they focus on internal comparisons. It is only when these are favourable as well are they most likely to be satisfied. Lawler proposed that the possibility of an individual to experience pay satisfaction will depend on the relationship between what he perceived he should receive and what he actually received. According to him, the perceived amount one should receive is influenced by: the perceived job input of the individual perceived job characteristics wage history perceived non-monetary rewards And perceived inputs and outcomes of referent others.

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As a result, an employee will expect to receive a higher level of pay if his various job inputs (such as education, experience, skills) are high; if the job is difficult complex, demanding; if the wage history shows higher pay; if the perceived non-monetary rewards (status and security) are attractive; and lastly if he has a better input and output ratio that his fellow worker (Banjoko, 2006). Dyer and Thierault (1976) are also of the belief that employees may be satisfied with the amount of money paid to them but may be dissatisfied if the pay policies and procedures are faulty. For example, if the pay is irregular, or if there is discrimination in pay administration between individuals. To this, Armstrong and Murlis (1994) states that the pay and reward process should be based on reward philosophies and strategies containing arrangements in the shaping of policies, guiding principles, practices, structures and procedures which are devised and managed to provide and maintain appropriate types and levels of pay, benefits and other forms of rewards. Besides, there is the possibility that people might launch their dissatisfaction with other aspects of organisational life (for example their work and working conditions, security, opportunity for training and so forth) on pay, but there has not been much evidence to support this contention. Armstrong (1996) posits that the reaction to reward policies and practices will depend largely on the values and needs of individuals on their employment conditions. Thus, it is dangerous to generalise about what the causes of pay satisfaction or dissatisfaction are. Even though causes of pay and reward satisfaction or dissatisfaction cannot be generalised, people are often still and would continue to be dissatisfied with their pay. Pay has been reported to have adverse effect on employer-employee relationship thereby leading to some of the consequences illustrated by Banjoko (2006) below:

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Low performance due to moonlighting

Strikes Pay dissatisfaction Desire for more money

Grievance Absenteeism Search for a higher paying job

Turnover

Lower attractiveness of job

Job dissatisfaction

Absenteeism

Figure 2.3 consequence of pay dissatisfaction. Source: Banjoko, 1996 Figure 1.3 illustrates that, when a worker is not satisfied with their pay, their desire for more pay rises and they build up their effort by putting pressure on the organisation through strikes, grievances and complaints. Also, these individuals may decide to search for better paying jobs and in the process the level of labour turnover and absenteeism might increase. To Guest (1991), high organisational commitment is associated with lower turnover. The consequence of pay dissatisfaction is always doubtful. It could damage employee morale, and also limit the achievement of higher productivity within the organisation. Myer and Allen (1991) in an exploratory analysis argued that the factors that could predict organisational commitment include promotion, satisfaction, intrinsic and extrinsic motivation. 2.7 Pay and Reward Systems in Nigeria

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According to Ajila and Abiola (2004) the interest in the effective use of rewards in Nigeria to influence the performance of workers began in the 1970s. Rewards were designed to increase employee productivity in organisations. Over the years, the economic and social factors present in Nigeria have posed a major challenge to the way and manner in which organisations handle reward systems. Although Vroom (1964) states that the wages and rewards of workers should not be based on personal prejudice but rather on objective evaluation of an employees merit. However, Abudu (1986) argues that Nigeria is a country where the reward system is not so much linked (that is if at all) to effort and performance. Rather it is based on unknown factors such as ethnic background, age, and sex, coupled with a perception of favouritism, corruption or simply the lack of competence. he assets that there is a high pay differential amongst grades of employees who regard climbing up the career ladder a difficult task often as a result of factors such as favouritism through tribalism and corruption. Since Abudu wrote this in the 1980s, it is important to note that nothing much has really changed. The adoption of performance related pay system, and the reward based system is still been overshadowed by the presence of favouritism, social connection, and so on in Nigeria (Ajila & Ajibola, 2004, Fagbohungbe, 2009). Dike (2000) supports the above point stating that pay and rewards in Nigeria does not depend on skills and experiences but in social networks. He argues that the society has acquired an unenviable reputation of being slow in meeting her workers needs. He goes on to state that workers do not get their moneys worth and often are not paid when due. Hence, employees do so much work for very little pay and sometimes with no form of acknowledgement. 2.8 Pay and Reward in Media Organisations Since this study is on pay and reward in a media organisation in Nigeria, it is important to review literatures on pay and reward in media organisation.

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The work life style of media professionals everyday consists of a rather restless combination of network socialisation, deskilling (unlearning new skills) reskilling (training on the job skills) and preparing for the (potential) next job, coupled with an all encompassing emphasis on creating, sustaining and mining personal knowledge networks of colleagues, clients and customers (Deuze 2007: 104). According to Felstead and Jewson (1999), in terms of pay, there is a high degree of financial flexibility in the media. For example, there has been a move from single and uniform payment systems towards more individualised performance based system of reward and remuneration. Also, Katz and Darbishire, (2000) stated that an increase in wage in-equalities emerged in most of the developed capitalist world during the 1980s and 1990s and this is observed in the media and telecommunications industries today. Weaver (1998) is one of the many researchers to suggest that pay among media workers in various professions is one of the weakest predictors of job satisfaction. In a survey of journalists in twenty- two countries, he reports how intrinsic motivators such as peer acknowledgement, status, prestige are valued mostly by workers in media industries. Another study carried out by Curran and Park (2000) and Tunstall (2001) state that asides pay, a general lack of evaluation, feedback, and discussion to employees in the work environment is a predictor of job satisfaction. Furthermore, Deuze (2007) contends that a study of about Ninety newspapers in the United States found employing testifying that their organisations did not have good people management practices citing a lack of training and promotional opportunities as well as the exclusion of employees in decision making process on the future of the company as well. Finally, Deuze argues that asides financial, for some workers, it is the notion of feeling good while on the job that keeps them working.
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2.9 Conclusion The review of existing literature has drawn so much attention to pay and reward. Several issues have been raised. However what can be gathered from the review of these issues is the lack of concurrence and concrete findings in the various studies. Having this in mind, this study carried out fifteen interviews with employees in the research organisation on the various issues that have been raised in this chapter. The next chapter attempts to explain the research methodology used by the researcher in conducting the study.

CHAPTER THREE RESEARCH METHODOLOGY 3.1 Introduction

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This chapter focuses on the research approach and methodology adopted by the researcher to tackle the statement of problem. The main objective of this chapter is to clearly define the specific guidelines which will enable the researcher to confirm the attained hypothesis. This research has explored the concept of pay and reward system in detail through the review of literature. The researcher has also tried to explore the correlation between the process of pay and reward system on employee overall satisfaction, looking at the impact of pay and reward on employee motivation and performance at work. On the basis of this relationship, the researcher has been able to explore the various aspects of pay and rewards. The research is exploratory because it is conducted with the intention to explore the concept of pay and reward (Lilani, 2008). It is also an explanatory research because it attempts to answer some why questions. For examples, it attempts to know why employees are satisfied or dissatisfied with the pay and reward that they receive. Hence, this research is an exploratory and explanatory one because it does not only deal with the underlying factors of pay and reward satisfaction, it also looks at why employees are satisfied or dissatisfied with their pay. 3.2 Research Design A research design is a plan, structure and strategy of investigation which is conceived to obtain answers to research questions and problems. The plan is a complete scheme or program of the research. It includes an outline of what the investigator will do from writing the hypotheses and their operational implications to the final analysis of data (Kerlinger, 1986).To Selltiz et al (1962), a research design is the arrangement of conditions for collection and analysis of data in a manner that aims to combine relevance to the research purpose with economy in procedure.

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Hence from the above definitions, the research design has two functions: the first is to identify and develop procedures and logistical arrangements required to undertake a study, while the second emphasizes the importance of quality in these procedures to ensure their validity, objectivity and accuracy (Kumar, 2005). This research was carefully designed and has the following characteristics: -it falls within the qualitative research paradigm -it is based on primary data 3.3 Research Purpose According to Kumar (2008), the main purpose of research is to discover answers to questions through the application of scientific procedures. The purpose of research is to find the truth that is hidden and which is yet to be discovered. The main purpose for conducting this research is to identify the process, impact and outcome of pay and reward systems on employees and how this affects their motivation to work as well as their performance. The Study is Beneficial because: It will broaden managements understanding that pay and reward plays a significant role in the overall Job Satisfaction of their employees. Therefore, they would understand the motivational impact of pay and reward on employees The study would help managers to devise pay and reward strategies that would keep highly motivated employees.

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After reading extensively into the enormous literature published on the area of study, the researcher has attempted to identify the vagueness and ambiguity that covers the concept of pay and reward. 3.4 Qualitative Versus Quantitative Research Qualitative research is a class of research methods in which the investigator takes an active role in interacting with the participants he or she wishes to study (Muchinsky, 2003; Ehigie & Ehigie, 2005). To Shaughnessy et al (2003), qualitative research is that which produces verbal summaries of research findings with no statistical summaries or analysis. On the other hand, quantitative methods rely heavily on tests, rating scales, questionnaires and psychological measures (Stone-Romero, 2002). Therefore, while quantitative research produces results in number, qualitative research produces flows diagrams and narrative descriptions of events and processes (Landy& Conte, 2004). The methodical differences in the characteristics of qualitative and quantitative methods are illustrated below in table 3.1 Table 3.1 Differences between Qualitative and Quantitative methods Qualitative 1 Quantitative

The aim of qualitative research is a The aim is to classify features, count them, complete, detailed description and construct statistical models in an attempt to explain what is observed

Researcher may only know roughly in Researcher knows clearly in advance what advance what he/she is looking for he/she is looking for

It is recommended during the earlier It is recommended during the latter phases

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phases of the research project 4 The design emerges as the study unfolds

of the research project All aspects of the study are carefully designed before the data is collected

The researcher is the data gathering Researcher instrument

uses

tools,

such

as

questionnaires or equipment to collect numerical data

Data is in the form of words, pictures or Data is in the form of numbers and objects statistics individuals OBJECTIVE- seeks precise measurement

SUBJECTIVE-

interpretation of event is important. E.g. and analysis of target concepts. E.g. uses uses participants observation, in-depth surveys, questionnaires etc. interviews etc 8 Qualitative data is more rich, time Quantitative data is more efficient, able to test hypotheses, but may miss and lack contextual details 9 The research tends to become Research tends to remain objectively

consuming, and less able to be generated

subjectively immersed in the subject separated from the subject matter matter Adapted from Neill (2007 Although both qualitative and quantitative methods are very different, they are thorough in their approaches and the decision for the researcher to use qualitative method over quantitative approach was based on the suitability of purpose. Qualitative research is used principally because it involves in-depth interviews since quantitative methods are based on the grounds that a large representative sample is needed. Qualitative research is therefore selected because it is well situated for a research that seeks to understand and explain
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individuals social behaviour and how this individuals view their world and also to discover the underlying motives of human behaviour. since qualitative research gives insight into participants experiences of the world, this research attempts to report rich and detailed experiences of participants in their organisation and also seeks to know in what ways, if there are any that pay and reward influences employees. 3.5 Types of Qualitative Methods Qualitative research studies typically include ethnographies, case studies, interviews, observation, surveys, historical and document analysis and generally descriptive studies which are often called ethnographies but are somewhat more specific. It is conducted in a natural setting without intentionally manipulating the environment. However, for the purpose of this research, in-depth interviews have been adopted as a means of gathering data. 3.6 Interviews as a Qualitative Method An interview is seen as the favoured digging tool of social sciences (Kvale, 1996). Cannell and Kahn (1968:527) defines the research interview as a two person conversation initiated by the interviewer for the specific purpose of obtaining research-relevant information, and focused by him on content specified by research objectives of systematic description, prediction, or explanation. Interviewing in an organisational setting simply requires verbal accounts to learn about the social life of workers (Ehigie & Ehigie, 2005). It can be structured, unstructured or semi structured. For qualitative research, interviews are flexible and dynamic, and are thus described as in-depth interviews (Taylor& Bogdan, 1998). The Indepth interview is a repeated face-to-face encounter between the researcher and participants directed towards understanding participants perspectives of their lives, experiences, or situations as expressed in their own words. Hence, this research was conducted through semistructured interviews which is used to explore or probe in detail the hidden attitudes and
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feelings of respondents. Participants were asked questions about the pay and reward they received in the organisation. Some were not willing to divulge any information, but from their gesture, it was certain that they had information they were holding back. When they decided to discuss the issues of pay, they were very ardent about it. 3.7 Data Collection- Primary and Secondary Data In carrying out any research, the collection of data plays an important role. It can be collected from various sources. There are two major approaches to gathering information about a situation, problem or phenomenon. Sometimes, the information required may be already available and only needed to be extracted. However, there are other times information need and must be collected. Based on these approaches to information gathering, data are categorised as: -primary data -secondary data (Kumar, 2005) For this research, the researcher has collected both primary and secondary data. Data was collected primarily through interviews. These interviews were conducted on employees in a media organisation in Nigeria to garner information of how employees view pay and rewards. The purpose of the study is to find out how satisfied or dissatisfied employees are with the pay and reward they receive at work. Hence the interview was a good way to acquire this information. According to Patton (2002), the purpose of interviewing is to allow us to enter into the other persons perspective. Patton goes further to state that we interview to find out what is in and on someone elses mind, to gather their stories (Patton, 2002:341). Thus the researcher wanted to get the stories of employees to understand their perspective and to find answers to the problem of their satisfaction and dissatisfaction with pay at work.

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Data was also gathered secondarily through document analysis which includes published sources such as books, journals and magazines and unpublished sources such as the company profile and staff handbook. Secondary data was used to obtain theoretical information. 3.8 Participants/Sample Sampling is the method of selecting an adequate number of elements from the population so that by studying the sample and understanding the properties of the features of the sample subjects, one can generalise the properties of features to the population element (Sekaran, 1992: 226). Sampling is a research strategy that is used to study a phenomenon as representative examples of a larger population of similar phenomenon (Mouton, 1996). A good sampling procedure fulfils two criteria: the sample should be representative of the population, and the sample should be adequate, allowing for sufficient confidence to exist in the stability of its characteristics (Martin 2007; Goddard & Melville, 2001; Babbie and Mouton, 1998). This research addresses both criteria through a purposeful sampling of the participants in terms of their rank, work tenure, and the adequacy of the sample size (Mathie and Camozzi, 2005). The study achieved 15 in-depth responses. A letter of introduction was included explaining to the respondents the reasons for the interview and also emphasizing the importance of their contribution to the study (see appendix). The date considered for the interviews was between the 13th of July and the 22nd of July. A mix of males and female was required in the sample and also different ranks of employees and this was basically to address any gender related issues as well as power-distance that were not foreseen. The participants interviewed are summarised below:

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S/N 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Position held Director Corporate communication and Planning Human Resource Support staff Deputy General Manager Assistant Manager, Programming Assistant Manager Public relations Head Programmes Accounts Officer Secretarial Staff Officer, Producing/ Reporting Sports Officer Officer Officer Accounts officer Programme Officer Treasury Officer

Gender MALE FEMALE MALE FEMALE MALE FEMALE MALE FEMALE MALE MALE MALE FEMALE FEMALE FEMALE MALE

TABLE 3.2: Tables of interviewees in DaaR Communication Ltd.

3.9 Obtaining Permission

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Confidentiality is of great importance throughout the research and it is vital in gaining access to organizations and individuals. Saunders et al (2009) argues that as soon as the promise of confidentiality is made, it must be maintained. The researcher followed this principle and obtained the permission to carry out the research in the research organisation from the Director Human Resources of Daar communications. The Access to the Director human Resources was influenced by the relationship that the researcher has with the director, being her relative. However, procedures had to be followed and there was a formal documentation of the permission to interview employees in the organization. Furthermore, although the researcher would keep in mind the sensitivity of the information gathered, the researcher will not disclose names of the people involved and a sincere effort will be maintained throughout this research to stick to the ethical concerns. 3.10 Interview Process A scheduled interview was carried out with fifteen participants in the research organisation. This involved about eight visits to the research organisation and the interviews were carried out mostly during the lunch hours of respondents and at leisure which varied between individuals. 15 interviews were conducted and it was done in a quiet setting to avoid distractions. To keep the attention of the participants, interview lasted no longer than one hour. With permission, the interview was audio taped and a pen and paper was used for easy jottings. The interview was thus transcribed verbatim. Through this approach, the researcher was able to develop a more accurate response analysis. The interview was conducted both within the organisation and outside the organisation as some participants were sceptical about giving information at workplace.

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During the interview, the anonymity of participants was maintained and at no time were the respondents required to disclose any information against the authority of the management of the organisation. This anonymity was to build up trust between the researcher and the respondent. At the beginning of each interview, the interviewer always repeated the purpose of the research and also emphasised that participation was voluntary and that it had the support of the management of the organisation. At the end of each interview, participants were asked to keep the content of the interview confidential so that there would be no preconceived notion for other participants yet to be interviewed. Some of the questions asked include: 1) How satisfied are you with the pay and reward you receive from Daar communication? Why are you satisfied with it? 2) When it comes to the issue of pay, do you think pay increase is fairly handled by the organisation? Why? 3) If you had the opportunity to move to another company would you leave the organisation? Why would you leave the organisation? 3.11 Data Analysis Data analysis is the process of bringing order, structure and interpretation to the mass of collected data (Marshall & Rossman, 1999). It was decided that the interviews would be analysed and written up using a case study approach. That is the case study of a media organisation in Nigeria. As stated earlier, the researcher audio taped the participants, transcribing the interviews verbatim. With the use of different colours of makers, the data was coded after transcription and the researcher began to look for common relationships and

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patterns. From the relationships, categories were then developed and the researcher had the flexibility to modify categorised when necessary as analysis progressed throughout the study. Thus careful analysis led to the generation of themes (Patton, 2002) and as specific themes emerged, some inferences were made as to why employees may or may not be satisfied with their pay and the reward they receive at work. The categories and themes that emerged from data include i. ii. motivation and performance the significance of pay to employees- for examples participants talked about the fairness of pay, regularity of pay, and comparison with what their counterparts earned iii. iv. v. vi. employee expectations- in terms of job security, promotional opportunities standard of living- influence of the cost of living on pay satisfaction of employees rewards- monetary and contingent rewards Organisational commitment- how reputation of organisation, structure of organisation lead to turnover and commitment of employees to the organisation. 3.12 Conclusion In summary, this chapter has looked at the choice of research methods and the processes involved in gathering data. The procedure includes obtaining permission, conducting interviews and how the interviews would be analysed. The data collected through interviews is extremely valuable in evaluating the attitudes, perceptions and behaviours of employees to the issue of pay and reward. The next chapter focuses on analysing the data already collected. CHAPTER FOUR DATA REPORTING
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4.1 Introduction This chapter focuses on the presentation of data obtained from the conducted interviews. The interviews were summarised and responses were analysed for any obvious themes and patterns. It starts with a brief introduction of the selected research organisation which is a media house in Nigeria, looking at its pay and reward system and structure. Following that is the presentation of research findings. 4.2 Overview of Daar Communications Nigeria LTD DAAR Communications is a private independent African organisation based in Lagos, the former capital of Nigeria. It is the economic nerve centre of the West Africa sub-region and was incorporated in Nigeria in August 1988. The organisation launched its broadcast

services in 1994 with the promotion of Nigerias first private independent radio station Raypower 100.5FM. A second channel Raypower 2 106.5FM commenced formal operation in April 1999. It also launched a 24 hour global television service called Africa Independent Television (AIT) and has a philosophy that is geared towards the promotion of African values and traditions of black people around the world. In the last quarter of 1999, Daar communications launched into the information super highway with the commencement of the Daar broadband services with capacity for voice, internet access, video conferencing, data, telephony and other multi media capabilities. The company has a staff of about 600 people in Africa, Europe and the United States and it is worth over 3.5 billion naira. The vision of the company is to promote rapid integration of the African continent with the rest of the world; encourage development in Africa; attract development to Africa; project the hope and common aspirations of the black race and advance the positive goals of humanity. 4.2.1 The Pay and Reward System in Daar Communications

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In the organisation, a rise in pay may be awarded annually and is subject entirely to the discretion of the company and the basis of an assessment of the employees performance and conduct during the preceding year. Also, promotion in the organisation is not a right. However, if it does occur it is based on merit and also subject to vacancy. Furthermore, all employees of the organisation who are on the payroll as at 31st December of every year and have rendered satisfactory service during the year may be entitled to annual bonus of one month salary or on pro-rata basis for a period of service less than one year. The decision to pay bonus is determined by the board of directors on the basis of the financial performance of the company in the relevant year. The employees in the company are also entitled to 15% of their annual basic salary as leave allowance and those who are permanent employees of the organisation are deemed automatic member of the pension scheme approved by the federal government under the Nigerian pension reform acts 2004. 4.3 Presentation of the Data Collected Fifteen (15) employees in Daar Communications were invited to participate and they responded. The employees interviewed were from different working backgrounds, ranging from the Human Resource support staff, Account officer to the Director Corporate Communications and Planning. The idea of doing this was to understand how pay and reward influence the motivation of employees to do better in different levels of the organisation. The questions asked in the interview are shown in the Appendix attached. Only the most important questions required for the purpose of this study were included in the interviews. However, due to the fact that most people were interviewed at the workplace, they were not able to give as much detailed answers as expected. More so, although the participants were told that the information received would be completely confidential, some still found it difficult to open up.

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During the interviews, several general themes and sub themes emerged from the discussions that was common to most of the employees, if not all. These themes would be useful in the analysis and conclusion chapters of the research. These themes include: 4.4 Motivation and Performance This section deals with the influence of pay and reward on motivation of employees which in turn would increase their performance in the organisation. Employees believed that pay and reward would greatly motivate and influence their performance. When a particular employee was asked if certain benefits and bonuses would influence his attitude towards work, he replied was that The idea of getting certain bonuses would influence you to deliver to time and put in your best in achieving it. Also, another employee acknowledged the fact that getting certain benefits would boost his motivated spirit to continue to do better. To him pay motivates the workforce to do more. An interesting comment was made by an employee who stated that My attitude to work would be positive and would make me more encouraged and committed to work, but at the moment i am not. Furthermore, with regards to the performance related system of the company, majority of the employees agreed that this has not affected their performance in any way. While an employee maintained that You dont give your best because you cannot really be bothered. A director stated that my performance is intrinsic and professionally induced and not sycophantic. He also stated that
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Pay and reward are fundamental and germane for the attainment of the organisational objectives, goals and aspirations as they are motivational elements that ensure the best output from the workplace 4.5 The Significance of Pay to Employees This section deals with pay issues that arose from the discussion with employees such as: Regularity of pay Fairness of pay Comparison with colleagues in external market/industry Satisfaction with pay

Questions were asked about the regularity of pay, its fairness and employees overall satisfaction with the pay that they received. The interview gathered that pay was significant to all the employees. They all understood the concept of pay and interpreted it in their own way. To these employees, it is very important as it is the reason why they work. In view of the regularity of pay in the organisation, all the employees including the managers agreed that pay in the company was irregular and they uttered their resentment to it. An employee was swift to say this I am not satisfied with the pay I receive because salaries are not paid as at when due. I work so hard and I get very little in return. It is not fair but now it looks like this is the best I can get Also, a manager confirmed this saying that The salary is not regular because of the prevailing economic situation generally in the country. The organisations business and revenue yield is credit based. The amortisation of the same affects the income stream. He
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further stated that although the salary is irregular, people understand that it is due to the circumstances facing the country as a whole An intriguing discovery was made when an employee said The salary is just ok, not spectacular, it is the job satisfaction I derive from the job that is the most rewarding Nevertheless, asides from the regularity of pay that they receive, majority of the employees believed that the pay they received was not fair compared to what others in the organisation received. One of the employees who believed that his pay was not fair argued thus pay in Daar Communication is not fair at all, you do not say how much you earn when you know that others on the same level as you earn two, three times more than you earn Another employee with a similar opinion asserted that Pay is not fairly handled in the organisation because the so called management do not follow the structure, which they claim that they have. You cannot do anything because you do not even know what structure is in place in the first place. You keep working and some people who dont do as much work as you do come to work in flashy cars, live in the best of houses and talk to you like trash and we are all supposed to be on the same level. It is a really big shame However, when the question of fairness of pay was posed at managers, one of them responded that

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I consider pay to be fair. You dont expect everyone to earn the same amount of salary. It is what you work for that you get at the end of the day, so no employee is expected to complain. Yes the salary is irregular but to say that it is unfair, I dont think so It is also worthy to note that even though some of the employees agreed that they knew how the pay structure in the organisation was determined, others argued that the pay structure was beyond comprehension and that it was simply shoved in their faces. An employee said that There is nothing like bonus or benefit in Daar communications and I do not know how the salary structure is been done but the management would know On the other hand, a managers response to the same question was The pay structure is based on the organisations laid down profile of payment which is a function of positions, academic qualification and experience he further went on to state that salary increment is based on yearly assessment and proven track record and output. Subsequently, employees were asked if they were satisfied with the pay that they received even though it was not regular and was considered as unfair. A greater part of the employees were quick to say that they were not satisfied with the salary that they received from the organisation. One of the employees who stated his dissatisfaction with the pay said: Pay is not well handled. I think the people at the top do not value employee relations and do not care if we are suffering and satisfied Another employee who also stressed his dissatisfaction expressed that:

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Pay in the organisation is reducing instead of increasing; they choose to reduce our pay without staff consent A similar opinion was expressed by another employee who state that There is hardly pay increase and when it is to be done, it is discriminately done. It was fascinating to note that an employee, who has worked for the organisation for 6 years expressed that if he compared his pay with that of his colleagues in the external market, it was very low. He argued that You are not proud to say how much you receive outside. People outside expect you to earn higher but the reverse is the case As a result of the findings from what this employee said, some other employees were asked about the competitive nature of their pay relative to that of others doing similar work in same industry. Conversely, although some agreed that it was competitive compared to other companies, majority of the employees interviewed were of the opinion that it was not competitive at all and was even lower than some other companies. One employee said that: It is not competitive. People in same industry earn a lot higher than we do. Its a shame because some people look up to this organisation not knowing that you should never judge a book by the cover. It looks attractive on the outside but is a different ball game on the inside. Another employee with a similar view expressed that: You are not proud to say how much you receive outside. People outside expect you to earn higher but the reverse is the case

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However, when this same question was posed at the managers, some agreed that the pay was competitive compared to other companies. One of them expressed that: Yes, it is competitive considering the state of the economy. However, it is in the nature of people never to get satisfied with what they earn. Even when they earn millions, they believe some people outside earn high than they do. 4.6 Employee Expectations Benefits Job security Rewards (the satisfaction with rewards not necessarily monetary) given for good performance Promotion

This section looks at what employees expect from the organisation. After interviewing the employees, it is worthy to note that asides from getting their salaries when due and also been satisfied with their pay, employees had so many other expectations from the company. Employees felt that if these expectations were fulfilled, they would not have to worry so much on how much they get as salaries as they would be satisfied to a large extent (although they still categorically stated that pay is important). Some of these expectations included benefits, rewards such as praises, acknowledgement and recognition; job security and promotional opportunities. With regards to benefits, some employees mentioned that they were entitled only to leave allowances. Others claimed that they were not eligible to benefit packages like holidays and pensions. One employee stated that

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There are no bonuses and deducted pensions are not remitted. They tell us in the handbook that we are entitled to certain bonuses, but in the real sense there is none. Medical allowance is gotten only when one is almost dead and not just ill. Yet again, a manager responded to this question saying The organisation pays holiday bonuses to members of all staff and pension is based on the number of years imputed into the organisation. Another manager stated that The companys benefit programme is based on an assessment by the various department heads and the managements approval eventually. The benefit system is thorough as it is not based on sentiments. Your benefits are standard. Performance is not based on sentiments and financial inducement but on professional actualisation and sometimes certain incentives can elicit extra efforts. Many of the employees also agreed that there is no job security in the organisation and this could be a reason for high employee turnover. One employee stated that There is no more job security in the organisation. I am discouraged because the company has not fulfilled all the promises they made when i got the job. Sometimes I think of quitting, but I always remember that I have a family to feed at home. I really consider leaving the organisation. A managers response was that

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There is job security but sometimes downsizing is done considering the state of the economy which also affects the company. It is not the fault of the company; it is the situation of the economy. Sometimes it cannot be avoided. Although data gathered from the interview revealed that managers and non managerial staff had diverse opinions as to the fairness of promotion, they all hoped and wished to get promoted. All non managerial staff was quick to say NO when they were asked if promotion was fair. One employee was of the opinion that Promotions are not fair. It is who you know and who you have good rapport with. If you are not friends with a manager or someone on top, you might end up staying in the same position for a long time and they would only remember you by stroke of luck. On the other hand, a manager stated that Promotions are fair and objective sometimes. If you dont do so well, then you should not expect to be promoted. Promotion is based on performance and vacancy. Employees also expect that their performance to be adequately rewarded. Majority of them claimed that they did not get acknowledgment, praises or recognition for good performance. They believed that the organisation has failed to meet these expectations thus reducing their morale. A particular employee believed that: Waiting for reward for performance is a waste of time, I am driven by passion. Another employee maintained that individual performance is not sufficiently rewarded because
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The organisation is too political. There is so much politics going on in the company. They never reward the right set of people. The same set of people get rewarded every time, it has become a way of life in the organisation One employee also stated that Since I joined the organisation, I have not received any; if I do receive one it would make me feel better. Some asserted that when they did received praises, which was once in a while, it made them put in more effort. Nevertheless, one of the managers argued that The organisation acknowledges individual inputs and the quality and this are usually rewarded by the management. Consequently, most of the employees believe that their morale would be high if they are given certain benefits and if their performance at work is adequately rewarded. 4.7 Organisational Commitment Reputation of the Organisation Structure of the organisation Turnover Standard of living

A number of employees stated that they were proud of the organisation, although there was selection of those who argued otherwise. Employees claimed that their only commitment to the organisation was the reputation it has with other media companies in Nigeria. particular employee asserted that
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I am proud to work for Daar Communication because it has a big name which is respected by other companies However, most of the employees stated that even though they are proud of the organisation, they were not pleased with the structure in place. They argued that there was no proper structure in place in the organisation and that the management neglected employee welfare. One employee attributed the lack of proper structure to Bad management strategies. Management is not really bothered. The people at the top keep enjoying while the staff who do all the work suffer A similar opinion was expressed by another employee who claimed that: I am not proud of the organisation because of neglect of management towards taking care of the able employees. When all the employees were asked the reason for their dissatisfaction with the structure of the organisation, they replied by saying that the organisation needed to review its salary policy to fit into the standard of living of its employees. One of the employees argued that It is long overdue; it does not conform to the standard of living in the country A similar view was expressed by another employee who stated that It is due as a result of the increase in prices of goods and commodities. The way we lived 5years ago cannot be the same as now so the organisation as to review its policies if it wants to retain good people.

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Also another employee opined that: The cost of living in Lagos is very high and the salary I receive is not regular. How do I pay for rents, bills, buy clothes, feed the children and live well if there is very little salary which is not paid as at when due and if there is hardly any reward for my performance which would at least make me feel good with my self. It is tiring, but you cannot just leave as jobs are hard to come by these days. Surprisingly, a manager also admitted that salary policy in the organisation was overdue for review. However, he stated that Salary can never be the best as the economic situation in the country is usually on the rise so is staffs ambition and desire for pay rise Finally, it is imperative to note that all employees felt that there was need to review salaries if the organisation wanted to retain quality workers. An employee stated that he would love to leave the company because I want to be in a company where hard work and regular pay are appreciated Conversely, a particular employees answer to whether or not he would leave the organisation was captivating. He said: If I have the opportunity to leave, of course i will leave. I seriously believe in God for another job. However if you ask me why i want to leave, i have more than a thousand reasons best known to me. The employee was cajoled to divulge this reasons but he would not disclose.

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4.8 Conclusion The rationale of this research is to explore the process, impact and outcome of pay and reward on employees. Data which has been transcribed is reported verbatim. This chapter has discussed the themes that arose from the interviews. The next chapter would attempt to analyse and discuss the findings from these interviews.

CHAPTER FIVE DATA ANALYSIS AND DISCUSSION 5.1 Introduction This chapter focuses on the analysis of data and discusses the results obtained from the data reported in the previous chapter. The themes and sub themes generated from the previous chapter will be analysed and discussed.

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5.2 Data Analysis It is imperative to begin with the diverse opinions of employees on the issue of pay and reward in the organisation. The data gathered from the interview revealed that managers and non managerial employees had different opinions to most of the questions asked. While employees where willing to give out the loop holes in the organisation, the managers were a bit diplomatic in their answers. For example, although the managers believed the organisation was fair, all the junior level employees considered the structure put in place by the organisation as unfair. Also, before going to analyse the data, it is interesting to mention that, both the managers and the employees only agreed on the irregularity of pay which posed a big problem for all employees in the organisation. From the research findings, the initial factor that attracts employees to the organisation is the reputation of the company. People want to work in an organisation that has a high profile and where wages are high, regular and fair. This is similar to Lawlers (1971) thinking that organisations which give the most reward would attract and retain quality people because individuals who are satisfied with their jobs would want to stay in the organisation. However, from the data gathered, retaining these employees might be a difficult task if they are not satisfied with the pay and reward system in the organisation. This also agrees with the view of Heneman and Judge (1999) who states that pay can be a factor for an employee to stay or leave an organisation as the dissatisfaction with pay is a key factor to turnover of employees. The research findings is also in line with Katz (1973) who posits that an individual might leave his current job for another one within the same community if it offers a more greater system of rewards in terms of wages and other benefits. The importance of salary was also identified from the findings. Employees stressed that pay is a reason why they work. This confirms the findings of Banjoko (2006) who argues that pay

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is a matter that is closest to the heart of every employee. The research findings also identified some issues that existed in the organisation. They include the irregularity of pay; fairness of pay; equality of pay in comparison to colleagues and the external market. All these factors were regarded as de-motivators which led to employee dissatisfaction in the organisation. This is in accordance with Adams (1963) theory of equitable measurement and perception. He is of the view that people would be better motivated if they are treated equitably and demotivated if they are treated inequitably. According to him, the feeling of satisfaction comes from the belief that an individual has been fairly rewarded for his labour and services. The research finding is thus similar to what Adam has said in the sense that employees believe that their pay should be fair and equal with the counterparts working in the organisation. Data further uncovered that when employees consider their pay as unfair, they tend to compare what they earn and receive to what their colleagues get. This is recognised by Jacques (1961) who opines that employees are not necessarily concerned with the absolute amount of money paid out to him but with the perceived relationship of what he gets in comparison with what others for example his counterparts receives. Consequently, result shows that when employees believe that pay is unfair compared to others, they become dissatisfied with their pay. Employees also compared their pay with colleagues in similar industry and expressed that they received less compared to their counterparts in the external market. This supports Lawlers (1990) opinion that the feeling people have about the adequacy of their pay is based upon the comparisons they make between their own and others. He further states that the external market comparisons are the most crucial because they strongly influence whether individuals want to stay in the organisation. Banjoko (2006) shares a similar opinion to this stating that for employees to know for certain that they are not underpaid; they tend to survey their environment so as to
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establish if their pay is similar to their counterparts in other organisations within the same industry. If they notice any significant difference, they are most likely to engage in such obnoxious behaviours like reduced productivity. In addition, it was surprising to discover that most of the employees do not know how the pay structure in the organisation is determined or administered. From literature, Luthan (1988) argued that employees should be acquainted with the pay structure of their organisation. He states that the pay structure of any organisation will impact individual consequences. If there are significant pay differences between hierarchical levels, employees would know and may focus on being successful rather than effective. For these reasons, employees were not satisfied with the whole process of pay in the organisation and as Luthan (1988) posits, unsatisfactory pay and benefit levels may reduce the motivation of employees and eventually negatively impact individual, group and organisational performance Furthermore, data gathered from the interview have shown that pay and reward influence employee motivation and the desire to perform better in the organisation. Both managers and employees acknowledged that pay and reward had a huge impact on their motivation at work which in turn increased their performance. The opportunity of getting certain bonuses increases their zeal to work. This agrees with Herzberg (1968) who suggested that if an organisation wishes to motivate employees, the organisation must first ensure that pay and other hygiene factors are at such levels that dissatisfaction would not occur. Also, from findings, employees expect certain incentives from the organisation. This could come in the form of praises, acknowledgement, promotion, job security and so on. This is in agreement with Beer et al (1984) who assert that every employee expects the organisation to provide them with fair pay, safe and good working conditions and fair treatment. He goes on
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to state that these employees sometimes expect more depending on the strength of their needs for security, social status, power and responsibility. The data gathered has recognised a small piece of psychological contract where employees stated that the organisation promised them job security, rewards, benefits and promotion for good performance and has not fulfilled most of the promises. From findings, employees have stated that rewards, benefits and promotion were given to those close to managers and were based on personal relationships and favouritism and not on performance. Although the managers argued otherwise, stating that rewards and benefits were given to the most deserving employees, majority of the employees were resolute about it. Then the issue of favouritism and personal relationship springs forth. In view of this, it is important to note that even though Vroom (1964) argues that the wages and rewards of workers should not be based on personal prejudices but on objective evaluation of employee merits, Abudu (1986) confirmed the research findings from literature that Nigeria is a country where the reward system is not so much linked to effort and performance. Rather it is based on unknown factors such as ethnical background, age, and sex, coupled with the perception of favouritism, corruption or simply the lack of competence. Findings also show that the employees are committed to the organisation only when they are satisfied with the pay and reward that the organisation gives to them. This supports Guest (1991) argument that high organisational commitment is associated with lower turnover. To him, it is possible to be dissatisfied with a particular feature of the job while retaining a reasonably high level of commitment to the organisation as a whole. However, employees in the organisation argued that their commitment is quite low due to the faulty policies and procedures in the organisation. An example is the irregularity of salary which seems to be of great concern to the employees. Hence, the result of findings confirms that the irregularities of salary of employees have affected their standard of living and this is due to the high cost of living in Nigeria. For this reason, employees suggested that the company review its
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procedures and standards if it wants to increase staff motivation and retain workers. This is in line with Armstrong and Murlis (2004) view that pay and reward process should be based on reward philosophies and strategies and should contain arrangements in the shaping of policies, guiding principles, practices, structures and procedures which are devised and managed to provide and maintain appropriate types and levels of pay, benefits, and other forms of reward. Moreover, Meyer and Allen (1991) also argued promotion, satisfaction, job characteristics as well as extrinsic and intrinsic reward would increase the commitment of employees to an organisation. From findings, employees that were not satisfied with the whole organisation process did not feel committed to the organisation in any way. For those employees committed to the organisation based on prestige and the reputation, the findings also showed that the commitment was just based on reputation, but the employees were not proud of the structure in place in the organisation due to the irregularity, unfairness and dissatisfaction with pay and reward that they receive. 5.3 Discussion of the Findings From analysis, the research has highlighted many factors in this area of study. It also gives attention to the diverse opinions of managers and employees. According to the analysis above, it is important to state that the themes follow into one another. All employees believe that they are motivated when they are sure of getting certain bonuses and rewards. This motivation would increase their performance in the organisation. However they must also be satisfied with the pay that they receive, although some other intrinsic reward such as the acknowledgement of good performance would keep them motivated. Consequently, asides from pay and rewards, they expect job security and promotion from the organisation, as all this would keep them committed to the organisation. This is in accordance with Beer (1984) who states that competent, loyal and committed
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employees need to be given some intrinsic rewards in form of responsibility, praise, personal growth and a feeling of competence and acknowledgement and extrinsic rewards like salary, promotion, fringe benefits and bonuses amongst other things. Their commitment to the organisation would influence the overall turnover. The reason for all these expectations is because of the high standard of living in Nigeria which has made it necessary for the organisation to review some of its policies. The findings from the interviews also show that employees in Daar communications are motivated by the pay and reward that they receive. However, the irregularity of the pay and reward and its lack of fairness have made these employees generally dissatisfied with the overall structure, policies and procedures of the organisation. The result also reveals that the lack of proper structure in the organisation is as a result of bad management strategies. Pay and reward are very important motivating tools and they help increase the performance of employees in any organisation. Employees are motivated when they are rewarded based on their performance and this would influence them to perform better. Satisfaction of pay is of great importance, as the findings have shown that the more satisfied workers are, the more motivated they are to improve their performance. This is supported by Hertzberg (1957) who expresses that satisfied workers will tend to add value to the organisation. Armstrong and Murlis (1994) have also stated that the reward process is most likely to improve motivation, performance which would in return enhance commitment if they are operated fairly and equitable. The research finding is similar to what Armstrong and Murlis have said in the sense that employees believe that their pay should be fair and equal with the counterparts working in the organisation.

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The results of findings also show the presence of favouritism as employees argues that promotion and reward is based on who they know in the organisation rather than on their performance. This finding is supported by Dike (2000) who points that pay and reward in Nigeria hardly depends on skills and experience but on social networks. Furthermore, results show that the level and kind of reward that an organisation gives would attract and retain workers in that organisation. Hence, the turnover of employees in the organisation is influence by their overall satisfaction. Also, the findings of this research showed that employees believe that there is hardly anything as reward in the organisation. This negates Ajila and Abiolas (2004) opinion that reward in recent times is regarded as one of the many policies adopted by organisations to increase the performance of its workers as well as the organisational productivity. However, from the result, it is evident that in any organisation, monetary reward is an index for determining the level of employee commitment. Hence, it can be said that monetary reward is a key influence on employees as long as they remain in the organisation. It is vital to note that the investigation conducted on pay and reward raises two issues of concern. Firstly, it is either the management of Daar Communications are not conscious of the impact that pay or reward has on its employees in terms of motivation and performance or the organisation is not willing to spend money or effort that will achieve excellent results for both the organisation and its employees. 5.4 Conclusion Hence, from the findings of this study, it is shown that pay and reward given to employees in Daar Communication is very important especially if the organisation wants to realise and achieve its goals and objectives. This is because pay and reward affect the commitment level
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of employees irrespective of their status, gender or work tenure. For this reason, insufficient monetary reward system hinders employee commitment thus increasing low performance, complaints and grievances and employee overall turnover. It is also concluded that employees need adequate and regular pay to keep up with the standard of living of the country. If the cost of living is high, the individual will expect higher pay, and if they have knowledge of other pay systems, this knowledge would serve as a basis for comparison. They also need to be given certain non monetary rewards such as promotion and recognition for good performance to keep them motivated and to increase their performance. However, the organisation needs to develop a proper pay and reward system which would lead to satisfaction of employees. It is also important to state that although the level of employee satisfaction with pay and reward cannot be fully determined, organisations need to strive to meet the basic demands of its employees if they want to be successful. For this reason, Banjoko (2006) stresses that pay and reward is a significant aspect of any organisation and is important to both parties (the employees and the organisation). Hence, management must learn to devise an effective compensation package that meets the expectations and aspirations of the employees while trying to satisfy its own profitability and growth objective. CHAPTER SIX CONCLUSION IMPLICATION AND RECOMMENDATION

6.1 Introduction The purpose of this study was to explore the process, impact and rewards of pay on employees in organisation. The research also wanted to identify the factors that led to pay and reward satisfaction of individuals in a media organisation. This chapter would draw

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conclusion based on result of finding stating the implication it would have on management and also given recommendation to management of the research organisation as well as to other organisations. 6.2 Conclusion of the Study The importance of pay and reward in encouraging workers to carry out their duties effectively cannot be over emphasised, especially when they are rewarded for good performance. Also, it has been established that the performance of employees is increased by their motivation. Going from the findings of this study, it can be said that pay and reward packages matter a lot in an organisation and should be the concern of both employers and employees. The result shows that workers place great value on pay and the different types of rewards given to them by their employer. When employees do not get these rewards, they express their discontentment and displeasure through poor performance and lack of commitment to their job and the organisation. Therefore, Organisations need to put the interest of its employees to heart and consider their needs and feeling, because a happy employee would be very productive at work.

6.3 Implication of Research for Organisations The findings of this research have important implications for organisations and human resource practitioners both in Nigeria and in other parts of the world with a similar economic environment as to the way they design their pay and compensation and benefit programmes. It is crucial for organisations and managers to understand and recognised that pay and incentive systems are a distinct element of the pay structure and employees form specific perceptions based on the system.
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There is also tension between what organisations pay their employees and the external market (internal versus external pay). Management needs to make decisions as to where to place emphasis. They also need to strive for regular pay allocation and monitor internal pay structure as well as their position in the external market for uniformity. 6.4 Recommendations From the result of this study, several recommendations can be made. For every business to thrive it needs to identify employee needs. Some other the factors that organisations need to take into account include: 1) Effective Management This study is not only beneficial to the researcher but it also sheds more light on issues that management sometimes overlook while managing people at work. Management need to take the following factors in account: they, they need to be aware of where they are going wrong they also needs to be aware of areas where employees are unhappy Need to improve the pay and reward structure to meet employee expectations. Pay and reward should be related to performance, contribution and competence. Employees should be involved in designing pay and reward systems Pay and reward policies should be transparent and communicated effectively to employees Management need to understand the relationship between pay and reward and the motivation of employees. 2) Increased and Regular Salary

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Employees should be paid what they deserve. Increasing salaries of workers does not mean that the organisation should pay enormous amount of money for poor performance. Management needs to learn to reward people for excellent performance. Secondly, people work to get paid. It is unfair if employees have to work so hard and do not get their wages when they should get it. These employees work to promote the organisation so they should be paid regularly. For any organisation to gain commitment from its employees, it must set wages in relation to attainable targets which employees perceive as realistic and fair.

3) Staff Development/ Promotional Opportunities Management should provide employees opportunities to participate in educational activities and other activities that would develop their skills and knowledge. From the research, there was no mention of staff development opportunities which makes the researcher assume that this might not be taken into account by the organisation. It is a win-win situation as employees benefit by expanding their knowledge and skills, while organisations benefit from the additional proficiency that individuals bring to the job. Employees would be motivated to work harder when they know that the organisation is investing in them. Furthermore, promotion of employees should be a long term reward that acknowledges individual professional growth, skills, and the competence to contribute to the organisation. Promotion should also be associated with an increase in salary and this could motivate an employee to perform better.

4) Praises and Recognition Praises and recognition from managers and supervisor is one of the most important motivators. Employees need to be praised, recognised and acknowledged for good

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performance so that they feel that their contributions are noticed and valued by the organisation. Management need to recognise the value and importance of recognition and acknowledgement for employee contributions. 6.5 Limitation of Study This study is not without limitations. The researcher faced some difficulties when carrying out the research. Firstly, the time period for conducting the research and gathering data was quite short. Not all the participants scheduled for interviews turned up, as some said they were very busy. Those participants who were available for interview were so in a hurry to finish as they said they had things to do. As a result of this, some issues were not explored in-depth. Secondly, there is lack of literature on pay and reward in Nigeria, so most of the research relied on Anglo-Saxon literatures. However, the research was not comparable in nature and the use of Anglo-Saxon literature was to shed more light on the issue of pay and reward. Thirdly, as has been stated earlier, the interview was conducted on only 15 employees who were available and this represents a small amount of the total population of employees in the organisation. The researcher also recognised that the relationship with the Director of Human Resources in the research organisation was responsible for the easy access into the organisation. However, the researcher believes that this affected the responses of the participants as some of them were unwilling to provide certain information. Despite the researchers attempt to build trust and credibility with the participants, they were not still wiling to give detailed information. Lastly, the research is limited to the view of employees in Daar communications in Nigeria and cannot be generalised. Since one cannot generalise findings to other organisations in
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Nigeria, future research should focus on the limitations and work in relations to improving the generality of results. 6.6 Future Research Hence, this research lacked little bit of in depth and a more detailed study is needed to gain better understanding of the subject matter. A larger sample size should be interviewed in future research. This would help gather and understand a larger view on the subject matter. The sample size used in this study was not enough to conclude and obtain a wide ranging feedback that is not biased. Employees from different cities should be interviewed and the results obtained should be compared. This type of research would be comprehensive and give more depth to the study.

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Appendices COVER LETTER

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My name is Iragbeson Kerry-Ann. Ohiokhara. I am presently studying for a Postgraduate degree in Manchester Business School. My research topic is exploring the process, impact and outcome of pay and reward system in Nigeria. More specifically it examines the impact it has on the organisation. I would like to conduct an interview with about 15 to 20 employees in your organisation. I would be grateful if employees and senior staff can spare some time and have a chat with me. Personal interviews with participants should last between 45mins to 1 hour. It is important to state that there are no risks associated with the project and there shall be no personal benefit (i.e. compensation) for participation. The participation is entirely voluntary. However, I do feel that any findings gleaned from this project will be quite informative for those persons choosing to participate and this will help improve our understanding of the Nigerian pay and reward system. By answering some interview questions, you are consenting to participate in this research project. Please note that all responses shall be kept completely confidential and at no time will individual identities be used in any reports or publications from this project. The responses shall only be used for analysis by the Researcher and Supervisor. I am happy to provide a summary report of the collective results once this project is complete (Late summer 2010). Please feel free to contact me if you have any further questions. Thanks in advance for you time and effort. Your participation is greatly appreciated Iragbeson K. Ohiokhara Iragbeson73ng@yahoo.com
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(+44) 07889082151

INTERVIEW QUESTIONS

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The aim of this interview is to obtain your view on pay and reward. Your responses would be valuable. Your answers to the interview questions will be treated strictly confidential and at no time will individual identities be used in any reports or publications from this project. it would be used only by the researcher and her supervisor. The interview should last between 45mins to 1 hour. 1) How long have you been working in Daar Communications? 2) Can you please state what your job function is? (for example, your position in the organisation and what your roles are) 3) How clear are you about the end results expected of you on the job? ( for example, did you get any training or induction when you got into the organisation) 4) How do you perceive the concept of pay and reward? 5) Can you please tell me about the pay structure in Daar communications? For example, bonuses and benefits, compensation etc. Do you have an understanding of how salaries and increases are determined? 6) How satisfied are you with the pay and rewards you receive from Daar communication? (Is your salary regular)? Why are you satisfied or dissatisfied with it. 7) What bonuses are you eligible to? (is your benefit package competitive i.e. holidays, pensions etc) 8) As an employee, do you think your individual performance is adequately rewarded? WHY? 9) When it comes to the issue of pay, do you think pay increase is fairly handled by the organisation? Why? 10) How satisfied are you with the companys benefit programme and why? 11) How would the prospect of getting certain bonuses and benefits influence your attitude towards work? 12) How would you describe the morale in Daar Communications? 13) How secure do you feel about your job? 14) Do you think that you posses relevant skills and abilities which are currently not used? 90

15) How proud do you feel working for Daar Communications? 16) If you have the opportunity to move to another company would you leave the organisation? Why would you want to leave Daar Communications? 17) How often do you get praises and acknowledgement for good performance and how do the praise, recognition and acknowledgement make you feel? 18) Would you say the pay and reward you receive in Daar communications is competitive compared to other companies? If yes, Why? 19) Are promotions fair? 20) In your opinion, is the salary policy in your organisation overdue for review? 21) If yes, why do you think it is due for review? 22) Is the pay level in your organisation flexible enough to allow your manager use pay to motivate workers? 23) Do you perceive your pay as been fair compared to people doing similar work in the company? What makes it fair? (do you have meetings with colleagues where you discuss each others salaries) 24) In your opinion, how has the current performance related system in the organisation affected your performance? 25) Is there any other thing you would like to add?

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