THE RELATIONSHIP BETWEEN REWARDS, RECOGNITION

AND MOTIVATION AT AN INSURANCE COMPANY

IN THE WESTERN CAPE

by

ROSHAN LEVINA ROBERTS

Submitted in partial fulfilment of the requirements for the degree of

MAGISTER COMMERCI

in the

DEPARTMENT OF INDUSTRIAL PSYCHOLOGY

at the

UNIVERSITY OF THE WESTERN CAPE

SUPERVISOR: KARL HESLOP

NOVEMBER 2005

ABSTRACT

Increasingly, organisations are realising that they have to establish an equitable

balance between the employees contribution to the organisation and the

organisations contribution to the employee. Establishing this balance is one of the

main reasons to reward and recognise employees. Organisations that follow a strategic

approach to creating this balance focus on the three main components of a reward

system, which includes, compensation, benefits and recognition (Deeprose, 1994).

Studies that have been conducted on the topic indicates that the most common

problem in organisations today is that they miss the important component of

recognition, which is the low-cost, high-return ingredient to a well-balanced reward

system. A key focus of recognition is to make employees feel appreciated and valued

(Sarvadi, 2005). Research has proven that employees who get recognised tend to have

higher self-esteem, more confidence, more willingness to take on new challenges and

more eagerness to be innovative (Mason, 2001). The aim of this study is to investigate

whether rewards and recognition has an impact on employee motivation. A

biographical and Work Motivation Questionnaire was administered to respondents

(De Beer, 1987). The sample group (N= 184) consists of male and female employees

on post-grade levels 5 to 12. The results of the research indicated that there is a

positive relationship between rewards, recognition and motivation. The results also

revealed that women, and employees from non-white racial backgrounds experienced

lower levels of rewards, recognition and motivation. Future research on the latter

issues could yield interesting insights into the different factors that motivate

employees.

i

Notwithstanding the insights derived from the current research, results need to be

interpreted with caution since a convenience sample was used, thereby restricting the

generalisability to the wider population.

ii

DECLARATION

The researcher hereby declares that the thesis, The relationship between

rewards, recognition and motivation at an Insurance Company in the Western

Cape, is her own work and that all sources that have been referred to and

quoted have been indicated and acknowledged with complete references.

__________________________

ROSHAN LEVINA ROBERTS

iii

ACKNOWLEDGEMENTS

I wish to extend my sincere appreciation and gratitude to the people who supported

me and provided the necessary encouragement to see the research to the end.

To my manager and colleagues in the Training and Development Department and the

human resources managers who supported and provided their time to assist with the

research study.

To the staff and colleagues in the Operations business unit, who so willingly

participated in the study, and provided the necessary data, without which the study

would not have been possible.

To my partner, my parents, family and friends who encouraged and believed in me.

To my supervisor, Karl Heslop for guidance and his willingness to share his

experience and knowledge.

Lastly to my creator, for bestowing the necessary courage, good health and mental

ability to complete the study.

iv

TABLE OF CONTENTS

PAGE

Abstract i

Declaration iii

Acknowledgements iv

Table of contents v

List of Tables x

List of Figures xi

CHAPTER ONE

1.1 Introduction 1

1.2 Problem Statement 5

1.3 Aims of the Research 6

1.4 Objectives of the Study 7

1.5 Hypotheses 7

1.6 Limitations of the Study 8

1.7 Overview of the Chapters 8

CHAPTER TWO

LITERATURE REVIEW

2.1 Introduction 10

2.2 Motivation and Job Performance 13

2.3 The Content Theories of Motivation 15

2.3.1 The Needs Hierarchy Theory of Maslow 15

2.3.2 Aldefers ERG Theory of Motivation 18

v

2.3.3 Douglas Halls Age Theory of Motivation 21

2.3.4 Herzbergs Two-Factor Theory of Motivation 22

2.3.5 The Expectancy theory of Motivation 24

2.3.6 Skinners Behavioural Science Theory of Motivation 24

2.4 Job Performance and Motivation 26

2.5 Total Rewards Management 27

2.5.1 The Elements of a Total Rewards Programme 29

2.5.2 Intrinsic vs Extrinsic Rewards 32

2.5.3 Financial Rewards Programmes Compensation 33

and Benefits

2.5.4 Money as a Motivator 35

2.5.5 Non-Financial Recognition Programmes 38

2.5.5.1 Characteristics of Non-Financial 42

Recognition Programmes

2.5.6 Types of Total Rewards Programmes 43

2.5.7 Guidelines for Implementing a Total 46

Rewards Programme

2.5.8 Benefits of Total Rewards Programmes 47

2.5.9 Work-Life Balance 50

2.5.10 Performance Management 53

2.5.10.1 Alignment of Performance Goals to 55

Organisational Goals

2.5.11 Previous Research 57

2.6 Conclusion 60

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CHAPTER THREE

RESEARCH METHODOLOGY

3.1 Population and Sample 61

3.2 Sample Characteristics 63

3.3 Data Gathering Instrument 70

3.3.1 Biographical Questionnaire 70

3.3.2 Work Satisfaction and Motivation Questionnaire 70

3.3.2.1 Nine Dimensions of the Questionnaire 71

3.3.2.2 Questionnaire Structure 72

3.3.2.3 Reliability and Validity of the Questionnaire 72

3.4 Procedure Followed to Gather Data 74

3.5 Statement of the Hypotheses 75

3.6 Statistical Techniques 76

3.6.1 Data Analysis 76

3.6.2 Statistical Analyses 76

3.6.2.1 Descriptive Statistics 77

3.6.2.2 Inferential Statistics 77

3.6.2.2.1 The Pearson Product-Moment 78

Correlation Coefficient

3.6.2.2.2 Multiple Regression Analysis 78

3.6.2.2.3 Analysis of Variance 79

3.6.2.2.4 Scheffes Multiple Comparison 79

Procedure

vii

CHAPTER FOUR

PRESENTATION OF RESULTS

4.1 Introduction 81

4.2 Descriptive Statistics 82

4.2.1 Biographical Characteristics 83

4.3 Results of the Work Motivation and Satisfaction Questionnaire 91

4.3.1 Inferential Statistics 92

4.3.1.1 Correlation 93

4.3.1.2 Multiple Regression Analysis 96

4.3.1.3 Analysis of Variance (ANOVA) 98

4.4 Conclusion 108

CHAPTER FIVE

DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS

5.1 Introduction 109

5.2 Descriptive Statistics 110

5.3 Inferential Statistics 112

5.3.1 Discussion of Findings 112

5.3.1.1 General Findings on all ten sub-dimensions of the 112

Questionnaire

5.3.1.2 The relationship between rewards, recognition 114

and work motivation and satisfaction

5.3.1.3 Differences in rewards and recognition and 118

work motivation and satisfaction based

on gender

viii

5.3.1.4 Differences in rewards and recognition and 120

work motivation and satisfaction based on age

and marital status

5.3.1.5 Differences in rewards and recognition and 122

work motivation and satisfaction based

on tenure

5.4 Limitations of the Study 123

5.5 Recommendations for Future Research 124

5.6 Conclusion and Recommendations 126

5.7 Summary 129

REFERENCE LIST 119

APPENDIX 1: COVER LETTER 125

APPENDIX 2: BIOGRAPHICAL QUESTIONNAIRE 126

APPENDIX 3: WORK SATISFACTION AND 128

MOTIVATION QUESTIONNAIRE

LIST OF TABLES

LIST OF FIGURES

ix

LIST OF TABLES

TABLE PAGE

4.1 Descriptive statistics for the dimensions of work motivation 91

and satisfaction

4.2 Dimension correlation with work motivation and Satisfaction 93

4.3 The relationship between rewards, recognition and work 95

motivation and satisfaction

4.4 Stepwise Regression: Dependent variable 97

(Work motivation and satisfaction)

4.5 ANOVA: Differences in rewards and recognition and 98

work motivation and satisfaction based on gender

4.6 ANOVA: Differences in rewards and recognition and 99

work motivation and satisfaction based on home language

4.7 ANOVA: Differences in rewards and recognition and 100

work motivation and satisfaction based on marital status

4.8 ANOVA: Differences in rewards and recognition and 101