Research project

Study of the Impact of Reward Systems On Employee Performance of Tesco

Table of Contents

1.0 Introduction .......................................................................................................................... 3

1.1-Introduction: .................................................................................................................... 3

1.2-Study Rationale.............................................................. Error! Bookmark not defined.

1.4 significance of the study – ............................................. Error! Bookmark not defined.

1.5 Aim of the research: ......................................................................................................... 4

1.6 Research objectives:......................................................................................................... 4

1.7 Research Questions .......................................................................................................... 4

2.1 Introduction: ................................................................... Error! Bookmark not defined.

3.1 Research design ............................................................. Error! Bookmark not defined.

3.2 Research method ............................................................ Error! Bookmark not defined.

3.3 Data Collection Process ................................................. Error! Bookmark not defined.

3.4 Population and Sampling: .............................................. Error! Bookmark not defined.

3.6 Limitation of the study ................................................... Error! Bookmark not defined.

Findings................................................................................................................................ 12

4.1 Importance of Motivating Employees ........................... Error! Bookmark not defined.

4.2 Usage of Monetary and Non-Monetary Reward SystemsError! Bookmark not

defined.

4.3 Equitable Reward System .............................................. Error! Bookmark not defined.

4.4 Data Analysis – ................................................................................................................ 5

5.1 Conclusion: .................................................................................................................... 13

5.2 Recommendations: ......................................................................................................... 14

References ............................................................................................................................ 14
 1.0 Introduction

1.1-Introduction:

In this, today’s highly competitive and ever-changing business world employee retention is

the major concern for many organizations. Employees are the assets of the organization and

retaining them will give the organization competitive advantages and sustainability in the

modern business environment. Rewards are given to the employees with the aim of

increasing the productivity of their as well motivate them to work more enthusiastically to

achieve the goal of the organization.

Tesco is one of the multinational retailers in the UK which is operating with more than

4,70,000 employees all over the world. This research deals with mainly two topics that are

the reward system and the effect of reward on the employee’s performances.

This study is based on the topic of the impact of reward on the employee’s performances

which is significant for any organization. As employees are the major strength of the

organization they need to be motivated and give their best of efforts so that they can

contribute to the organizational goal achieving. There are many ways that organization can

motivate the employees those can be financial and non-financial rewards which had a great

impact on the performances of the employees.

There are primarily two types of reward systems; extrinsic rewards to be one that is giving a

financial reward to the employees for them. Offering additional payments, bonuses are

common form extrinsic reward. On the other hand, in case of intrinsic reward, the rewards

come in non-monetary forms (Moon, 2014).

1.2 Aim of the research:

The aim of this research is to find out if the employee performance of Tesco employees can

be impacted using various reward systems.

1.3 Research objectives:

 To identify various factors in relation to reward systems

 To find out various factors regarding employee motivation

 To find if out the employee performance of Tesco employees can be impacted using

various reward systems.

1.4 Research Questions

 What are the various factors in relation to reward system?

 What are the various factors regarding employee motivation?

 Does the employee performance of Tesco employees can be impacted using

various reward systems?

Chapter two – Literature review

Acceding to Anjali (2013) rewards are the outcomes which are positive and offered to the

employees when they perform in an expected manner. Moreover, organization rewards are

linked to the organization goal and objectives and whenever employees assist the

organization to achieve them, the organization offers rewards so that a similar performance is

repeated in the future.

Frey (2013) referred to employee performance as the ability and skills of an employee to

accomplish the duties and responsibilities which are also related to the goals and objectives of
the organization. Therefore, a common link is visible between employee performance and

reward system as they aim to achieve the goals and objectives of the organization. Frey

(2013) additionally implies that employee’s motivation is highly affected with the way of the

rewards that are given to them and whenever the employees don’t get expected reward for

performing well, the level of motivation of his or her motivation decreases. This turns the

employees to less efficient and demoralized. However, providing rewards very frequently

increases the expectation of the employees and the value of the reward is reduced as Anjali

(2013) points out.

Moon (2014) indicates, there are two types of reward system one is Extrinsic and another is

intrinsic. The reward system which is related to the monetary value is known as extrinsic

rewards. There are many forms of extrinsic rewards like an increase in the salary, additional

bonus, extra payment for a trip etc. All the reward those are related to monetary value is

highly influential those motivate the employees. On the other hand, the intrinsic rewards are

the rewards that are not related to monetary value rather appreciation is being used to

motivate the employees. Some of the forms of intrinsic rewards are various awards, lucrative

office, title, enhanced responsibility etc.

Chapter four – Findings and Analysis

4.1 Data Analysis –

Data obtained from the 100 employees of Tesco will be discussed here:

Frequency Percent Cumulative

Percent
 Female 56 56 56

Male 44 44 100

From the above table, it shows that the percentage of the male and female of the respondent.

As from the 100 respondent, 56% were female and the rest of the 44% were male.

60 56

50
44

40

30

20

10

0
Male Female

Series1

Figure 1: Gender analysis

Frequency Percent valid percent cumulative

percent

Strongly Agree 53 53 53 53

Agree 35 35 35 88

Neutral 3 3 3 91
 Disagree 9 9 9 100

Strongly 0 0 0

Disagree

Total 100 100 100

Table 4.2: Tesco encourages expected behavior by providing rewards to the employees

The response is indicating that 53% of the employees strongly agreed, 35% agreed, 3% was

neutral and rest of 9% disagreed with the statement implying Tesco encourages expected

behavior by providing rewards to the employees.

Tesco encourages expected behavior

by providing rewards to the
employees
1% 7%

33%
59%

Strongly Agree Agree Neutral Disaqgree

Table 4.2: Tesco encourages expected behavior by providing rewards to the employees

Frequency Percent valid cumulative

percent percent

Strongly 56 56 56 56
 Agree

Agree 25 25 25 81

Neutral 5 5 5 86

Disagree 8 8 8 94

Strongly 6 6 6 100

Disagree

Total 100 100 100

Table 4.3: I find the rewards given to me by Tesco is satisfactory

The statement tries to find out if the reward system of Tesco is satisfactory or not and 56%

strongly agreed and 25% agreed that they find the rewards are satisfactory while 5%

remained neutral, 8% disagreed and the rest of 6% were strongly disagreed.

I find the rewards given to me by

Tesco is satisfactory
1%
1%
7%

33%
58%

Strongly Agree Agree Neutral Disaqgree Strongly Disagree

Figure: 4.3 I find the rewards given to me by Tesco is satisfactory

Frequency Percent valid cumulative

percent percent
 Strongly 52 52 52 52

Agree

Agree 34 34 34 84

Neutral 5 5 5 89

Disagree 4 4 4 93

Strongly 5 5 5 98

Disagree

Total 100 100 100

Table 4.4 Rewards do not help me to improve my skills and abilities

Skills and abilities are directly linked to performance and this statement tries to find out if

rewards are enough to increase the skills and abilities of the organization and it can be seen

52% strongly agreed, 34% agreed to imply that rewards do not improve skills 5 % neutral,

4% disagree and the rest of 5% were strongly disagreed.

Rewards do not help me to improve

my skills and abilities
1%
1%
7%

33%
58%

Strongly Agree Agree Neutral Disaqgree Strongly Disagree

Figure 4.4 Rewards do not help me to improve my skills and abilities

 Frequency Percent valid cumulative

percent percent

Strongly Agree 58 58 58 58

Agree 33 33 33 91

Neutral 1 1 1 92

Disagree 7 7 7 99

Strongly Disagree 1 1 1 100

Total 100 100 100

Table 4.5: Whenever I receive a reward I want to improve my level of performance

This statement tries to find out if rewards are motivating for the employees of Tesco to want

to improve their performance or not. According to the responses are given 58% strongly

agreed, 33% agreed with the assertion while 1% remained neutral, 7% disagreed and the rest

of 1% strongly disagreed.

Whenever I receive a reward I want

to improve my level of performance
1%
1%
7%

33%
58%

Strongly Agree Agree Neutral Disaqgree Strongly Disagree

 Figure 4.5: Whenever I receive a reward I want to improve my level of performance

Frequency Percent valid percent cumulative

percent

Strongly Agree 53 53 53 53

Agree 35 35 35 88

Neutral 3 3 3 91

Disagree 9 9 9 100

Strongly 0 0 0

Disagree

Total 100 100 100

Table 4.6: Every time I receive a reward; I expect it to be better than I rewards I have

previously received.

In order to find out the expectations that Tesco employees have on the rewards, they receive

the above statement has been included in the questionnaire. The responses show that 53% of

the employees strongly agreed and 35% agreed to imply that they always expect better

rewards next time while 3% were neutral and rest of 9% disagreed but none strongly

disagreed.
 Every time I receive a reward; I
expect it to be better than I rewards
I have previously received.
1% 7%

33%
59%

Strongly Agree Agree Neutral Disaqgree

Figure 4.6: Every time I receive a reward; I expect it to be better than I rewards I have

previously received.

4.2 Findings
After conducting the survey of Tesco employees regarding their performance and the rewards

system of Tesco it can clearly be seen that these factors are related. Majority of the

employees shared their views that whenever they are working they need some kind of

motivation and these rewards drives them to perform better for the organization and well for

themselves. However, even though rewards play a key role in motivating the employees,

rewards cannot improve the skills and ability of the employees which are the principal

components of employee performance. The research also finds out that the rewards given by

Tesco are satisfactory to them and they feel motivated to improve their performance

whenever they receive a reward.

Additionally, the research pointed out that the expectation of the quality of the reward also

increases with each reward.

 Chapter five – Conclusion and Recommendation

5.1 Conclusion:

The aim of this research is to find out if the employee performance of Tesco employees can

be impacted using various reward systems.

The first chapter of the research includes a brief dissuasion about the topic and factors related

to the research.

In the following chapter, a literature review has been produced and the third chapter points

out the methodology used in the research. The research has been conducted using a

positivism research philosophy, deductive approach and quantitative strategy. A

questionnaire has been used in order to collect primary data from 100 employees of the

organization. Data has been collected in a quantitative way so that statistical analysis and

graphical representation of the data is possible. In order to collect quantitative data the 5-

point Likert scale has been used against each of the statements that evaluate respondents’

responses.

In the fourth chapter data collected from the respondents have been analyzed and discussed.

The chapter interprets the responses of each of the statement of the questionnaire while

justifying the reason for the statement to be included in the questionnaire. The research

indicates that employee performances are related to the reward system and it motivates the

employees to perform better.

Having said that, the research further points out that, even though employees feel motivated,

that does not mean that their skills are abilities improve.

The employees find the rewards given by the organization satisfactory but their expectation

increases each time a reward is given.

5.2 Recommendations:

From the research that has been conducted above the following recommendations can be

made:

 The quality of rewards provided by the company to their employees is satisfactory to

the employees and Tesco must maintain that. The research indicates that the

expectations of reward changes as each time they are given, so the rewarding strategy

must be formulated very carefully on the basis of the available resources to keep the

rewards up to their expectation.

 The research shows that rewards are very effective in motivating the workforce,

however, not enough to increase the level of work skill. Therefore, it can only be used

as a motivating tool to increase performance but on as an active skilling enhancing

tool. Tesco should note that and design their strategies accordingly.

 The importance of reward clearly indicates that a lack of rewards would really

damage for the overall employee motivation and performance. This is also true if the

rewards lose their value. So, the value of the rewards given must be set very carefully

and in accordance with the resources available.

References

Anjali, G, (2013), "Understanding the Relationship between Employee Motivation and

Customer Retention", St. Joseph Engineering College. 102-112

Frey, R., Bayón, T. & Totzek, D. (2013), "How Customer Satisfaction Affects Employee

Satisfaction and Retention in a Professional Services Context", Journal of Service Research,

vol. 16, no. 4, pp. 503-517.

Moon, T.C., Beck, S. & Laudicina, R.J. (2014), "Retaining Experts: Administrators' Views

on Retention Incentives and Older Employees", Clinical Laboratory Science, vol. 27, no. 3,

pp. 162.

Cameron, S. and Price, D. (2013). Business research methods. London: Chartered Institute of

Personnel and Development.

Appendix

Questionnaire

Study of the Impact of Reward Systems on Employee Performance of Tesco

Gender (Please Tick Mark)

Male

Female

(Please Tick Mark)

Tesco encourages expected behavior by providing SA A N D SD

rewards to the employees

I find the rewards given to me by Tesco is satisfactory SA A N D SD

Rewards do not help me to improve my skills and SA A N D SD

abilities
Whenever I receive a reward I want to improve my level SA A N D SD

of performance

Every time I receive a reward; I expect it to be better SA A N D SD

than I rewards I have previously received.

NOTE: SA = Strongly Agree, A = Agree, N = Neutral, D = Disagree and SD = Strongly

Disagree