CHAPTER ONE:

INTRODUCTION

1.1 Introduction

In today global competitive world, the human asset is seen to be the most paramount asset of organizations and for employees to be effective and efficient, human resource motivation is imperative. The objective of this work is to establish the effects of non-monetary rewards on employees’ performance with special attention to micro finance institutions in Buea.  This chapter provides introductory information on the background to the study, problem statement, research questions, objectives and hypotheses of the study and scope and significance of the study.

1.2 Background of the Study

Employee performance is defined as the achievement of set standards in terms of accuracy and completeness over a specified period of time (Afshan et al. 2012). Employee performance is the successful completion of tasks, responsibilities or assignments by a selected employee or group of employees based on set performance objectives and indicators of efficiency and effective utilization of available resources (Dewhurst et al., 2010). The operational definition of employee performance is a situation whereby an employee accomplishes the assigned task and responsibilities as required by his employer within a specific time. Employee Performance is fundamental component that facilitates organizational growth and sustainability, specifically being affected by the reward system employed in an organization (Ngulube, 2003). Over the last few decades, the world business environment has undergone a radical transformation and the world has become smaller, not physically, but in terms of communications, competition and economics. This haschanged the way successful organizations do business and how they look at their employees. Today’s customer demands value in both products as well as services. Even more significantly, customers do not have to tolerate sub-par performance because they can readily turn to alternative sources that offer faster, cheaper, better and more innovative products and services.

A reward refers to the total amount of monetary and non-monetary compensation or total remuneration given to an employee in return for labor or service provided to their employer (Anku et al. 2018). Total Reward is the combination of monetary and non-monetary incentives made available to employees. The operational definition of reward can be referred to as both financial and non-financial incentives given to an employee by his employer after providing labor or services to his employer.

Non-Monetary Rewards are non-cash payments or benefits provided by an employer to an employee. Examples of non-monetary rewards include extra time off, work flexibility, and experiential rewards (Esparza 2021). Non-financial incentives may include a conducive work environment, training and development opportunities, empowerment and autonomy, recognition of individual effort, flexible working arrangements and team rewards (Saraswat and Arora 2016). Work recognition basically refers to giving positive feedback to the employees for their contribution and efforts while working. Recognition motivates the employee to work harder and to give innovative and creative ideas because employees know that their creativity will be recognized and appreciated (Rani &Srivastava, 2015).

From the empirical studies done, it is evident that the concept of non-monetary rewards and employee performance was studied by different scholars in different context. For instance, a study by Ololade (2022) noted that organization that praises and recognizes employee effort not only attract but retain talents. It further noted the employee recognition redundancy the rate of employee turnover as well as reduces the rate of grievance and conflict in an organization. It was specifically revealed that non-monetary reward practices such as staff recognition, and staff development opportunities have influence job commitment, efficiency and overall job performance of employees in Port Harcourt Electricity Distribution Company (PHED) in Cross River State.(OZAH, Jonathan Peter et al, 2022).

Innocent.Duru et al (2023) did a study on the effect of reward systems on workers’ performance at the University of Abuja and came out with results which showed that employees are contented with the recognition accorded to them for executing good works.The study carried out by JumaHamza (2022) reveals that appearing in any form of media to represent the organization increases employees’ desire to perform better, and this is because most of the employees strongly agreed. Employees feel happy once they are recognized by the management to represent the company to the media, like during the advertisement of the products. Furthermore, the study demonstrated that when employees’ contribution is recognized, they feel encouraged to do more for the organization. Similarly, Adoko (2015) suggest that recognition of the employees is an important component that assures attainment of the motivation of the employees.

In the same context, Rose (2018) suggests that recognition of workers within an organization contributes to a crucial effect on job performance. If appreciation as a prize is successfully used, it increases the efficiency of workers.Abwot Dorcas (2016) in her study revealed that when employees receive an award, they will be encouraged to work harder. This further confirms that appreciating employees improves their performance. Relatedly, the study revealed that certificate of recognition may motivate most employees to put more efforts in their work. According to Cecilia Nkanabo (2022) non-monetary rewards increases the quality of work, timeliness of doing task, reduced absenteeism, improves the employees motivation  to work on targets, they use time well and they improve innovation in their work.