The Reward System influence the Employee performance in hospitality Industry

Table of Content

1.Introduction……………………………………………………………………………………………………….. 3

2.Statement of Problem……………………………………………………………………………………….…3

3.Methodology ……..……………………………………………………………………………………………….5

   3.1 Research Philosophy …………….……………………………………………………………………….5

   3.2 Research Approach ………………………………………………………..……………………………..5

   3.3 Research Instrument ……………………………………………………………………………….…….6

4.The Sampling Scheme & Sample Size…………………………………………………………………..6

5.Data Collection …………….………………………………………………………………………………………7

6.Pilot Study…………………………………………………………………………………………………………… 8

7.References…………………………………………………………………………………………………………….8

8.Appendix………………………………………………………………………………………………………………10

 Appendix 1 -Job Performance questionnaire…………………………………………………………..10

 Appendix 2: Data Entry Shell (SPSS Screenshot) ….……………………………………………….…………….12

Appendix 3: Response from Participant in data entry (SPSS Screenshot) ………………….………….13

1.Introduction:

Satisfaction of employee play important role in achieving organisation goal. Employee performance is associated with motivating and rewarding employee. The challenge of organisation is what sort of tools to be used for rewarding. Researcher verified that there is positive effect on work place and health of employee. It is one of the factors that sought increase employee’s engagement in the work place, which is the key element in the work performance (Furtado, et al. 2009).

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Rewards and recognition play an imperative role in motivating employees and improving performance (Lawler, 2003) which help employee to be more creative in their work which help organisation to improve the productivity and performance and increase business functionality which lead to financially or non-financially improvement of organisation. Rewards are classified into two types external and internal, external is pay, promotion and bonus whereas internal physiological which is appreciation, caring toward employee, new challenges. The important role of Reward is to get positive response as a consequence which can help to shape the organisation future.

Rewards having intrinsic nature are typically non-monetary or non-cash rewards, for examples, sharing success stories, recognising employee of the month or year achievement, providing professional training opportunities. A good balance of extrinsic and intrinsic rewards enables the organisation to maximise employee’s commitment, motivation, and job satisfaction which in turn maximises the performance of employees particularly in terms of productivity (Khan, et al. 2013).Employee receive praise and recognition as intrinsic reward  for their work whereas on other hand some employee become happy when extrinsic rewards is given like salaries, incentive and bonuses .

To both team and individual performance, the reward we apply are critical to determine how affective will be the reward strategy. Wilson (2003, p.128) describes rewards and their purpose as including systems, programmes and practices that influence the actions of people. The motive of reward system is to provide a systematic way to deliver positive consequences which lead to contribute to desired performance. Performance in hospitality industry play key role because hospitality industry is man-power intensive industry for which hotel needs to highlight on performance and take appropriate measure to increase performance. There is direct interaction of employee with customer so if employee perform better it will make sure customer satisfaction as well.

2.Statement of problem

Every food industry organization is giving higher priority to keep their employees satisfied in term of compensation and benefits, employee engagement and also working environment that help to improve the performance of employee. For organisations specially, hotels in hospitality industry should stay focused on employee performance and look for ways to enhance it as it is manpower intensive industry. Various researchers such as Qureshi et al, (2010); and Armstrong, Reilly and Brown, (2011) all argue that organizations’ reward systems have both positive and negative effects on employee performance. Though the research is not been done in hospitality sector

On one of the key sectors in terms of employment, growth and overseas earning in UK is hospitality sectors as per Price, Waterhouse & Co. (PWC) and with 4.49 million people is 4th largest employer and hold 6th position for largest export earnings. On performance bonuses in UK around £36.9 billion was spent in between 2012-13. UK is becoming one of the top tourist attractions after EU referendum as pound declining at this point it is important to analyse the reward system influence employee performance because employee performance play important role in growth of organisation. As compare to other sector hospitality industry has no routine and employee has to work 7 days a week and in day 24 hours (Yih and Htaik, 2011).There is less attractive working environment like low wage, working hours are long, employment is seasonal, workloads, high turnover of employee because of less job satisfaction. Manager should focus more on employee benefit that will help them to influence performance.

There is key improvement done in UK hospitality sector still there is lots of challenges that is been faced like less incentive, compensation high turnover, lack of performance (RBS,2016), the special attention should be paid on the employee performance enhancement to increase the quality  of service that will profit hospitality sector and employee will stay longer with organisation with full dedication ,In today competitive environment it is important that employee should perform better and satisfied and how rewards system whether Intrinsic or extrinsic impact on performance and to what extend is important to find out for organisation growth.

Researcher in their previous study states that money is not the only factor that play role in employee performance. Frey (1997) argues that once the salary exceeds the subsidence level the intrinsic factor start playing important role, there is equal increasing interest on both reward system related to performance. A study by Asudi, (2013) looked at challenges in the tourism sector but did not focus on effects of rewards on performance from the hospitality industry perspective. Therefore, this study will establish the effects of rewards on employee performance in the hospitality industry, by examining Relationship between Intrinsic and extrinsic reward on employee performance

Research question

1.What are the impact of reward system on performance of employee?

2 What impact Intrinsic reward system have on employee performance?

3 What Impact Extrinsic reward system have on employee performance?

Hypotheses

H1: There is a Significant relationship between intrinsic rewards and employee performance.

H2: There is a Significant relationship between extrinsic rewards and employee performance.

3. Methodology:

3.1 Research Philosophy:

The research philosophy explains the choice of philosophy that is made for assessing the influence of reward on employee performance in hospitality sector in UK. Research philosophy act as a guide to get to the insightful conclusion and help to create knowledge. A research philosophy is the way the data is collected, analysed and used and also decided the nature of knowledge created and quality.

There are two type of philosophy that is epistemology and ontology that explain the way of thinking about the research philosophy. Ontology is the study of ‘being’ and is concerned with ‘what is’, i.e., the nature of existence and structure of reality as such or what it is possible to know about the world (Snape & Spencer, 2003). Epistemology in general is the assumptions we make about the kind or the nature of knowledge (Richards, 2003) Epistemology is the way we look at the world and make sense out of it and it is about what exist.

There are two philosophical assumption ontology and epistemology on which use of paradigms is based. There are three types of paradigms Positivism, Interpretivism and realism/ pragmatism Saunders (2009). In Positivism the data collected is analysed without any bias. With this type of research there will great emphasis on a well-structured methodology and quantifiable observations that can be analysed statistically (Gill and Johnson, 1997) In realism, the actual facts regarding the current scenario in the research area are stated and are subsequently validated by the researcher through the research (Kumar & Phrommathed, 2005). Whereas the interpretive paradigm is associated more with the methodological approach to provide an opportunity for the concerns, practices and voices of the research participants to be heard (Cole, 2006; Weaver & Olson, 2006).

The aim was to assess the impact of former on the latter. Since both rewards and employee performance are quantifiable variables, therefore, methods of natural sciences, such as statistical techniques, are applicable in studying these phenomena. Thus, the most appropriate underlying epistemological assumption was positivism because it depends on quantifiable observations which lead to statistical analyses.

3.2 Research Approach:

The  positivist  research  paradigm  underpins  quantitative  methodology.  The  realist/objectivist  ontology  and

empiricist epistemology contained in the positivist paradigm requires a research methodology that is objective or

detached, where the emphasis is on  measuring variables and testing hypotheses  that are linked  to general causal

explanations (Sarantakos, 2005; Marczyk, DeMatteo and Festinger, 2005). Positivist  research uses experimental

designs to measure effects, especially through group changes. The data collection techniques  focus on gathering

hard  data  in  the  form  of  numbers  to  enable  evidence  to  be  presented  in  quantitative  form  (Neuman,  2003;

Sarantakos, 2005).  In  terms  of  methodology, truth in positivist  inquiry  is  achieved through the verification  and

replication  of  observable  findings  (Guba  and  Lincoln,  2005),  variable  manipulations  of  the  research  objects

(Trochim,  2000)  and  the  application  of  statistical  analysis  (Bryman,  1998;  Kim,  2003).  Positivists  therefore,

emphasise the use of valid and reliable methods in order to describe and explain the events

The  positivist  research  paradigm  underpins  quantitative  methodology.  The  realist/objectivist  ontology  and

empiricist epistemology contained in the positivist paradigm requires a research methodology that is objective or

detached, where the emphasis is on  measuring variables and testing hypotheses  that are linked  to general causal

explanations (Sarantakos, 2005; Marczyk, DeMatteo and Festinger, 2005). Positivist  research uses experimental

designs to measure effects, especially through group changes. The data collection techniques  focus on gathering

hard  data  in  the  form  of  numbers  to  enable  evidence  to  be  presented  in  quantitative  form  (Neuman,  2003;

Sarantakos, 2005).  In  terms  of  methodology, truth in positivist  inquiry  is  achieved through the verification  and

replication  of  observable  findings  (Guba  and  Lincoln,  2005),  variable  manipulations  of  the  research  objects

(Trochim,  2000)  and  the  application  of  statistical  analysis  (Bryman,  1998;  Kim,  2003).  Positivists  therefore,

emphasise the use of valid and reliable methods in order to describe and explain the events

Approach There are two types of research approaches; inductive and deductive. According to the Deductive approach, also called “top-down” reasoning, a study begins by collecting general observations about the phenomenon and analyses data and makes specific observations (Bryman and Bell 2011). A deductive approach will seek to use an existing theory that shall enable qualitative research and data analysis. Whereas research conducted from an inductive position will create a theory which is contrastingly grounded in relevant cases (Saunders et al, 2003).

 This study aimed to test the relationship between rewards and employee performance there is cause link effect so the deductive approach is appropriate because this study is testing hypotheses and help to generalise the data. It is commonly declared that positivist approach is deductive and more inclined to experimentation.

3.3 Research Instrument

There are three types of research qualitative, quantitative and mixed research. In qualitative the research is based on data which is collected which is qualitative and not measurable while on the other hand quantitative the data is measurable. Each one of them have their own benefit a limitation. Quantitative research is known be more reliable and less bias. In this research we will be using quantitative method to meet the objective and to answer the questions because it will provide the statistics data and have valid scale to measure the variable based on research question Saunders, et al. (2009) The quantitative analysis often relies on the deductive approach. The collection of quantitative data in this research has indicated the positivistic method. In this research the most up to date information is require answering the research question and test the hypotheses and most reliable as well and hospitality industry is one of the most rapidly growing industry.

The main method of quantitative research we are using Survey /questionnaire. Questionnaire is a common word which consist of all methods of data collection and every respondent is asked the same set of questions by a fixed technique (Saunders, et al., 2009). It helps to collect large number of responses from the participant as hospitality industry is wide sector and collecting data through interviewing each individual is not possible. In addition to this, it is an inexpensive way of gathering information compared to other methods like interviews, where a lot of expenses may have to be incurred (Johnson and Turner, 2003).

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To eliminate the error pilot study is carried out that will increase reliability and validity and it will test the influence of reward system on employee performance which is quantitative study used in this study. The pilot study will help to make changes on any question or language. The data which is collected through questionnaire will analysis through SPSS 24 .

4 The Sampling Scheme & Sample Size

A population is the entire set of individuals or other entities to which study findings are to be generalized (Berg, 2009).).The target population for this research is hotels and restaurants employee in Bedfordshire county ,small hotels with only 20 rooms will be targeted .The participants will be employee from lower to senior level employee working in both restaurant and hotel in various departments like manager, supervisor, administration, cleaning staff.

The Sample size for this research will be 70 employees from hotel and restaurant. “A sample refers to a group of cases, participants, events or records consisting of a portion of the target population, carefully selected to represent that population” (Cooper and Schindler, 2006: p.725).The research aim to have 70 employee from hotel and restaurant from various department and expecting that some will refuse to participate so 50  employee sample size is considered for research. The sample size of 50 will be suitable for examine the reward system influence employee performance in hospitality sector because the perspective of managers and other employee is taken into consideration and questionnaire is designed to record the response.

There are two types of sampling technique probability and non -probability. When using non-probability samples, it is possible for the researcher to select sample elements by personal judgements (Malhotra, 2004Probability sampling methods give all members of the target population a nonzero chance of being selected for the sample (Zikmund, 2003) .

 In this research probability sampling is used, Probability sampling methods rely on the principle that if you select certain members of the research population at random or with a degree of randomness, they will at least provide an unbiased snapshot of the research population as a whole. Daniel(2012). There are three types of probability sampling simple random sampling, systematic random sampling, stratified random sampling and cluster /multi stage sampling. The simple random sample means that every case of the population has an equal probability of inclusion in sample (Ghauri and Gronhaug, 2005). Systematic sampling is where every nth case after a random start is selected. Cluster sampling is where the whole population is divided into clusters or groups. Subsequently, a random sample is taken from these clusters, all of which are used in the final sample (Wilson, 2010). “A stratified random technique refers to the probability sampling that includes elements from each of the mutually exclusive strata within a population” (Cooper and Schindler, 2006: p.727, because population of employee is not same in this research.

In this research Stratified sampling is adopted. There is employee from different department and level. In Stratified random sampling based on each member strata are formed which is based on common characteristics or traits. A random sampling from each stratum will be taken in a number proportional to the stratum size. These strata sub groups will then be pooled to create random sample. To balance the representation of employee stratified sampling is used because it take into account each department and each level of employee from lower level to senior level ,most importantly the most important advantage is each population characteristics is captured in this sample and for this research where we need to look into rewards system influence employee performance for which we need to look into every department employee of each level perceptive so stratified sampling is appropriate .

5 Data collection

According to Chandran (2004), data collection involves operationalizing the research design into instruments of data collection with a view of collecting data in order to meet the research objectives. Th questionnaire is used to collect data with close ended question. The questionnaire is physically delivered to hotel and restaurant before taking permission from restaurant and hotel manager. There will be proper explanation about the research and importance of research and it will be informed earlier that participation is voluntary and no award and penalty for participating and completing the questionnaire. There will be given time for five days to fill the questionnaire it can just take 2 hour or may be 2 days to complete but sufficient time will be given and after 5 days researcher will collect the questionnaire and if there is any data missing it will be returned to complete.

Questionnaire is prepared on the bases of research hypotheses. The question asked in questionnaire is adapted from various research done in past on reward system and employee performance. The aim is to collect the data based on the independent and dependent variable of the hypotheses. The questionnaire will have socio-demographic question and question related to variable extrinsic and intrinsic variable and employee performance .Five point Likert scale is used for response which will vary from : Strongly Disagree, somewhat agree, neither disagree or agree, somewhat agree and strongly agree on the scale of  1-5.Likert scale is easy to use, simple to administer, highly reliable, and is tested in many contexts (; Zikmund 2003). Earlier studies argued that Likert scale decrease the chance of participant will answer the question without taking into account the items of measurement, because participant cannot choose middle point in this rating scale(chang,1993). The questionnaire is in Appendix 1.

Questionnaire help to collect large number of people to collect the data in less time in cost effective way. It helps research to easily reach the target population and get information. Questionnaire help to gather more information because it helps to cover the main themes of the research on influence of reward system on employee performance, researcher will get on point information and answer of exact question and less time-consuming compare to interview. The limitation of questionnaire is   question can be mis interpreted and it is difficult to motivate them to fill the questionnaire, it will also fail to understand the primary reason for the outcome. Questionnaire doesn’t provide opportunity to get clarity or detailed view or thought about question and some hidden meaning or different perspective left unexplored.

6.Pilot Study

Pilot study is conducted before final survey. The main aim to check the data procedure and method is accurate and data received will be reliable or not. The pilot study response can be used to make changes and improve the questionnaire validity and reliability, it helps to re work on the questionnaire if the response or answer of question is answered as expected.

The pilot study is conducted on 5 participant and gave them few days’ time to fill that questionnaire in their own time, they took 5-8 mins time to fill the questionnaire as told to me by the participant. The overall feed back of my questionnaire is ok but there are few point and changes which is suggested by the participant feedback. Firstly, there should me a question related to marital status because the employee performance of reward system depend on the if person is married or single because of various different reason like responsibility for example. Secondly, more question should be added in both Intrinsic and extrinsic rewards system and Q 5, Q6 can be merged and Q7 and Q8 can be merged or can be re written in different way. This response and feedback will help in initial analysis and improve the questionnaire. The Data entry shell is in Appendix 2 and response in Appendix 3.

7.References:

Armstrong, Brown and Reilly, (20011), Increasing the effectiveness of reward management: an incentive-based approach, human relations, 33(1), 106-120

Azasu, S., (2009). Rewards and performance of Swedish real estate firms, Compensation & Benefits Review, 41(4): 19-28

Berg, B. (2009). Qualitative research methods for the social sciences (4th ed.). Boston: Pearson Education

Chandran M (2004). Educational research: contemporary issues and practical approaches. London continuum

Cole, S. (2006). Information and empowerment: The keys to achieving sustainable tourism. Journal of Sustainable Tourism, 14(6), 629-644.

Collins, H. (2010) “Creative Research: The Theory and Practice of Research for the Creative Industries” AVA Publications, p.38

Daft, R.L. and D. Marcic, 2011. Understanding Management. 7th Edn., South-Western Cengage Learning, USA

Daniel Johnnie (2012) Sampling Essentials Practical Guidelines for making Sampling Choices, Sage, London

Furtado, F. Aquino, G. & Meira, S. (2009). Incentive Systems in Software Organizations, ICSEA 2009 – The Fourth International Conference on Software Engineering Advances. Porto, Portugal. September 2009

Garrido, J. M., Perez, P. and Anton C. (2005), “Determinants of Sales Manager Job Satisfaction: An Analysis of Spanish Industrial Firms”, The International Journal of Human Resource Management, 1934-1954.

GHAURI, P.  & GRONHAUG, K.  2005. Research Methods in Business  Studies,  Harlow,  FT/Prentice Hall

Jinyevu, A (2013). Is there a Relationship between Employees Satisfaction and their Performance? the Case of Teachers in Tanzania Government-Owned Schools

Khan, I., Shahid, M., Nawab, S. and Wali, S.S., (2013). Influence of intrinsic and extrinsic rewards on employee performance: The banking sector of Pakistan. Academic Research International, 4(1), p.282

Lawler, E.E. (2003). Treat people right. San Francisco: Jossey-Bass Inc. McGraw- Hill Irwin.

Mahamuda, M. P., (2011). “Factors affecting employees job satisfaction of pharmaceutical sector”, Australian journal of Business and Management Research; vol.1, no. 9(113-123), Dec.2011.

Malhotra, N. K. (2004). Marketing Research: An applied orientation (4th edition). Upper Saddle River: Prentice Hall.

Richards, K. (2003). Qualitative Inquiry in TESOL. Basingstoke: Palgrave Macmillan

Saunders, M., Lewis, P. & Thornhill, A. (2009) Research Methods for business students. 5th ed. London: Pearson Education Limited. Gill, J. and Johnson, P. (1997) Research Methods for Managers. London: Paul Chapman

Snape, D., & Spencer, L. (2003). The foundations of qualitative research In J. Richie & J. Lewis (Eds.), Qualitative Research Practice (pp. 1-23). Los Angeles: Sage.

Wan-Yih, W. &Htaik, S. (2011). The Impacts of Perceived Organizational Support, Job Satisfaction, and Aorganizational Commitment on Job Performance in Hotel Industry. The 11th International DSI and the 16th APDSI Joint Meeting, Taipei, Taiwan, 12 – 16.

Wilson, B. T. (2003) Innovative reward systems for the changing work place. New York: McGraw Hill.

WILSON, J.  2010.  Essentials of business  research:  a  guide  to  doing  your  research  project,  SAGE Publication

8.Appendix

Appendix 1 : Job performance questionnaire

Cover Letter

Dear Participant,

My name is Neha Singh and I am currently pursuing MRES business and conducting research in the area of my study. The research topic is Rewards System influence employee performance in hospitality industry. The research will include Intrinsic and Extrinsic factor that influence employee performance. The research will help the organization to improve or to understand the rewards system and its impact om employee performance. The information provided my you be treated with high confidentiality and your name will not take in research. Kindly take some time out to complete the questionnaire.

Job Performance Questionnaire

Kindly respond to the following questions by ticking in the appropriate box ()

What is your gender?

Male (  )      Female (  )

What is your highest level of education?

      High School (  )  College (  )  University (  ) Masters (  ) Other ( )

Employment Level

Senior Employee (  ) Middle Level Employee ( ) General Employee  ( )

How long you been working in this organization?

       _____________________

Employee performance and Intrinsic Reward.

Strongly Disagree

Somewhat Disagree

Neither Disagree or Agree

Somewhat Agree

Strongly Agree

5

The management trust your performance capability

6

The management trust on your performance increase your performance

7

Your work is appreciated.

8

Your performance increase as your work appreciated

Employee performance and extrinsic reward

Strongly Disagree

Somewhat Disagree

Neither Disagree or Agree

Somewhat Agree

Strongly Agree

9

Salary is based on job category.

10

Increase in your salary would increase your performance

11

High salary is a way to increase performance would you recommend that to management

12

The annual bonus you receive based on your performance 

13

Your performance increase for expectation of bonus

Employee performance

Strongly Disagree

Somewhat Disagree

Neither Disagree or Agree

Somewhat Agree

Strongly Agree

14

You been held responsible to achieve target in particular time frame.

15

There are negative and positive outcome for poor performance.

Appendix 2: Data Entry Shell (SPSS Screenshot)

Appendix 3 : Response from Participant in data entry (SPSS Screenshot)

.