CHAPTER ONE

INTRODUCTION

1.1 Background Of The Study

Reward system is one of the most important areas that is mostly discussed in the health sector of Nigeria. Paying employees or recognizing their contribution to the development of an organization is one the most important tools for organization performance (Chan et al., 2010, p. 331). The smooth running and success of an organization can be ensured through an appropriate management of the three resources (Reward, Retention, and Policy). This study specifically focuses on the effective management of the human resources in an organization in pursuit of organizational success. In order to ensure effective human resource management, an organization should develop a tool that governs human resource practices which serves as a reference point when decisions are being made about the rewards of people who are employed in the organization. Inverting the management Pyramid applies to non bureaucratic style of functioning by the managers. They must recognize and reward talent, if they hope to keep the people responsive to organizational aims and objectives. If there is a bull run in which managers can not differentiate the wood from the trees, mediocrity, sycophancy and demotivation of the excited employees would take place to the detriment of the organization. The managers must learn to wear all the six hats while encouraging their teams to do the same constantly. Any organizational model that does not reward creativity and originality of thought is doomed (Sterman, 2010).

Organizations look up to the leadership for a large number of things. The foremost is the manager’s supportive role in providing the overarching vision, coherence and capacity to operate see aimlessly through the chaos of the work and market place. This translates into leadership’s extreme tolerance for ambiguity and capacity to absorb Ristakes (Risk plus Mistakes) in the environment around them both in and out of the organization. That develops faith which simplifies the manager led equation where teams continue to surprise the managers by their initiative and proactive adaptation to change. Kreitner (2010) defined rewards as the material and psychological payoffs for performing tasks in the workplace.

Rewards is also defined as anything perceived valuable that is given to an employee as recognition for good contribution made and once well chosen can be good motivators. On the other hand, Hornby (2012) defines rewards as something given or received in return of doing something good and working hard. The working definition of rewards for this study was adapted according to Kreitner (2010). Reward refers to material and psychological payoffs given to an employee as recognition for good contribution and for performing tasks well in the workplace. Daft L.R (2008), says that rewards given by another person, typically a manager and includes promotions and pay increase. Extrinsic rewards attract and retain competent performers. Employees who are motivated by these rewards execute their duties as expected hence boosting their performance.

Armstrong (2011) suggests that financial rewards are defined as indirect motivators that enhance employee’s financial wellbeing as they provide tangible means of recognizing achievements; for instance bonus and profit sharing. Financial rewards motivate employees in doing their jobs better than before and with less supervision, especially when profits are shared to employees hence improving their performance. Ivancevich (2012), reported policies on wages and salaries of employees are typically adjusted at some point during the year, historically; the adjustment has resulted in pay increase. In his view, most employees expect to get at least one raise annually. However, when the general economy is not health or in the case of increased foreign competition in some industries, employees have actually accepted a constant pay. Pay is usually adjusted upward through four types of increase which include general across the board that is, increase for all employees’, merit increase paid to some employees based on some indicators of job performance, cost living adjustment based on the consumer price index and seniority. Rewards are given to employees by another person typically a manager on the performance of a specific tasks or behavior. Example of rewards includes money, employee benefits, promotions, status symbol recognition and praise. Mitchel, (2012) argues that accidents are the means of venting anger and frustration and getting attention. The higher the job satisfaction the lower the accidents and vice versa. The employee would not be careless or negligent and could encounter less possibilities of running into accidents. The more favourable attitude towards job would make him more positive inclined to his job and there would be a lesser possibility of getting unexpected, incorrect and uncontrolled event in which either his action or the reaction of the object or person may result in personal injury. Dissatisfaction among the workers may be a major reason for missing work. The fact however remains that the absence from work irrespective of the reasons, adds considerable cost of retaining a large number of employees that is required to meet the consequences arising out of the phenomena of absenteeism Retention on the other hand refers to the employees’ willingness to stay in a particular organization and the ability of the organization to maintain its employees in service.

Organizations that retain their high performers are bound to be successful in performance and at the same time avoid expenses that are incurred in advertisement of vacant positions, recruitment and selection, induction and training new employees that follow when an employee is lost. It is therefore advisable that every organization should maintain its best performers especially in today’s competitive economic arena where competitors are observed to ‘poach’ employees from each other.

1.2 Statement Of The Problem

Some organizations over the years see employee as additional cost as well as liability to their operations, hence do not remunerate them appropriately, and where it is more appropriate, the reward is not commensurate with the efforts and skills that workers put into the organization’s activities, instead of paying attention on how employees will be rewarded appropriately, some organizations concentrate more on other resource, such as materials, machines and money. The effort is more on how to improve the production process with little or no consideration for human efforts. This had led to the inability of such organizations to attain their set objective, organization success relies heavy on how much attention pay to its employees’ reward policies. It is in view of this that the study seeks to evaluate the reward practices in the public health sector of Niger delta region of Nigeria

1.3 Aim And Objectives Of The Study

The main aim of the research work is to evaluate the reward practices in the public health sector of Niger delta region of Nigeria. Other specific objectives of the study are:

1. to identify all the types of rewards that can be provided to people using the total rewards model
2. to assess the issues related to limiting reward practices to transactional rewards
3. to identify the benefits of total rewards system
4. to determine the challenges associated with implementing rewards more in line with a total reward approach 
5. to provide recommendations to improve reward practices in Niger Delta region of Nigeria

 1.4 Research Questions

The study came up with research questions so as to ascertain the objectives of the study; the research questions for the study are:

1. What are the types of rewards that can be provided to people using the total rewards model?
2. What are the issues related to limiting reward practices to transactional rewards?
3. What are the benefits of total rewards system?
4. What are the challenges associated with implementing rewards more in line with a total reward approach? 
5. What are the ways to improve reward practices in Niger Delta region of Nigeria?

1.5 Statement Of The Hypothesis

H01: there is no significant relationship between total reward system and employee retention in tertiary hospitals in the Nigeria delta regions of Nigeria

H02: total reward system has no significant effect on employee retention in tertiary hospitals in the Nigeria delta regions of Nigeria

1.6 Significance Of The Study

The study on the impact of implementing a total reward system on employee retention in the health sector in Nigeria will be of immense benefit to the entire tertiary hospitals in the Nigeria delta regions of Nigeria in the sense that:

1. The findings of the study will educate the health sector in Nigeria types of reward system and how to implement a total reward system so as to improve employees’ retention.
2. It will serve as a repository of information to other researchers/students on that desire to carry out similar research on the above topic.
3. Finally the study will contribute to the body of the existing literature on the impact of implementing a total reward system on employee retention in the health sector in Nigeria 

1.7 Scope Of The Study

The study on the impact of implementing a total reward system on employee retention will be limited to the public health sector in Nigeria; with focus on five (niger delta teaching hospital, university of uyo teaching hospital, federal medical centre, Delta, meridian hospital) public hospitals in the Nigeria delta regions of Nigeria

1.8 Limitation Of The Study

Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work

1.9 Definition Of Terms

Compensation: Compensation of all form of financial return, tangible services and benefit an employee receives as part of an employment relationship.

Industry: This is the group of firm that engage in the production of similar product (i.e. goods / services)

Productivity: Productivity is the output unit / per labour input into the production process given the level of existing technology.

Management: This is the process of planning, organizing, staffing, leading, directing, coordinating and controlling available resources toward s achieving a target objective.

Reward: This is the core-faced of an employment relationship. Reward system consists of an organization’s integrated policies process and practices for rewarding its employees in accordance with their contribution skills competence and their market worth.

Remuneration: This is the financial reward accruing to employee for his or her performance in the organization.

Motivation: Motivation is a factor which make an employee to participate to action, it is referred to as those factors which arose employee to action and could be measured by identifying various needs of the individuals workers and how such needs influences the behavior of the workers in the work situation in an organization.

Research: Is a way of arriving at a dependable solution to business and management problem through a systematic way of data collection, data analysis and data interpretation.

Pay Structure: Is a framework for managing base pay progression over time for employee benefit.

Policy: Is organizational guiding principles that regulate its operation and activities.

Job Analysis: According to Raymond, etal (2010) it is the process of getting detailed information about jobs.

Job Description: Is the setting out of the purpose of job, where it is fit in the organization structure the content within which the job holder function and the principal accountability of job older. Main task the employee has to carry out.

Job Enlargement: Is the act of combining previously fragment task into one job to add greater autonomy and responsibility to a job and is based on the job characteristic approach and maximizing the interest and challenges of work.

Job Evaluation: Is a systematic process for establishing the relative work of job within an organization.

Reward Strategy: It is a definition of the intention of the organization on how its reward policies and process should be developed to meet business requirement

Employees’ Turnover: Employee turnover refers to the number or percentage of workers who leave an organization and are replaced by new employees

Employee Welfare Scheme: In this study employees welfare scheme is also variously known as the employees welfare services. Employee scheme, the fringe benefits, which the employees receive from the organization besides his pay or salary

Employees’ retention: Employee retention refers to the ability of an organization to retain its employees