The aim of this chapter is to
review related literature on “Reward Systems and Performance Measurement in
Nigerian Organizations “with a focus on the latest and most current relevant
theoretical positions and models in management literature. The rationale is to
anchor on previously existing knowledge, in a bid to developing both
theoretical and empirical support to our ongoing study. In this study, the
different reward theories would be reviewed chronologically, with latest
empirical evidences on all sides of the debate.
2.1. Theoretical
Framework
Reward policies and practices are
largely founded on assumptions about the factors affecting the motivation of
people to join and stay with the organization and to work hard and effectively,
while they are there. Reward policies can be no better than the motivational
theories and beliefs upon which they are based, indeed reward systems are
designed on the assumption that the only thing that motivates people is money.
Of course money is important, but it is not as simple as that. Those managers
who have heard about Herzberg (1957) know that his two-factor model of
motivation indicates that money can create dissatisfaction, but is not as good
as other non-financial motivators at producing lasting satisfaction. The desire
to excel and pride of ownership gives workers a more lasting satisfaction.
The need theory states that it is
an unsatisfied need that motivates behaviour. The best known needs theory is
the one propounded by Abraham Maslow (1954) which suggested that five different
needs apply to human beings, such as basic needs which he refers to as
Physiological needs; safety need, social affiliation need, Esteem or Ego need
and Self Actualization.
Maslow in his theory stated that
when a lower need is satisfied, the next higher one takes over to be a
motivator of behaviour. Although in the need theory, money is not mentioned as
a need, yet money is a reward for a job done; and all the basic needs of life
may be satisfied with money.
The study of motivation is
concerned with what determines behaviour and directs it towards goals. The
issue of reward is all about what motivates employees to be committed.
According to Irene (2006) the feeling of recognition has a direct relationship
with productivity and one of the media through which an organization expresses
the acceptance of an employee is through the provision of good reward and other
fringe benefits.
The process of motivation can be
described in terms of needs and goals theory. However, theoretically this study
is going to be based on Maslow’s theory of need, while other theories would
also be taken into consideration.