An Investigation Into The Effect Of Rewards On Employee Motivation: A Case Study Of Agribank, Windhoek.

ABSTRACT

The primary objective of this study is to examine the relationship between rewards and employee motivation. More specifically, the study aims to analyze the effectiveness of the current reward system at Agribank in motivating employees. The theoretical part of the study introduces different theories of motivation and rewards. Emphasis is put on Maslow's hierarchy of needs, two-factor theory, the goal setting theory and the total reward system. Eight intrinsic and extrinsic factors which denote employee motivation are utilized, as follows: 1) Salaries; 2) Fringe benefits; 3) Promotion; 4) Job security; 5) Recognition/Appreciation; 6) Empowerment and autonomy; 7) Challenging tasks; and 8) Sense of achievement. The empirical part of the research was conducted using quantitative research design. A self-developed questionnaire with closed-ended questions was administered to respondents. Data was analysed using SPSS statistical software. Six hypotheses were developed, interpreted and tested using Chi-square goodness of fit. The population in the study is 120 and consist of employees in job grades A1 to D3, which are the non-managerial employees. Simple random sampling was used to arrive at a sample of 80. Seventy three (73) questionnaires were returned, translating into a response rate of 91.25%. The result indicates that there is a positive association between intrinsic and extrinsic rewards and motivation. Accordingly, if rewards and recognition offered to employees were to be altered, then there would be a corresponding change in employee motivation and satisfaction. The results also revealed that the current remuneration philosophy at the bank is competitive but marred with inconsistencies and unfairness in the allocation of performance-based rewards. As a result thereof, team spirit is seriously compromised to the extent that it negatively impacts performance.