The Impact of Reward System on Staff Performance : Case Study

Project – The Impact of Reward System on
Staff Performance: A Case Study of Tesco

Table of Contents
CHAPTER 1 – INTRODUCTION..................................................................................................1
Background of the study ........................................................................................................1
Research purpose....................................................................................................................2
Structure of chapters...............................................................................................................2
CHAPTER 2 - LITERATURE REVIEW.......................................................................................4
Concept of reward system and employee performance..........................................................4
Importance of rewards system................................................................................................5
Types of reward system..........................................................................................................5
Relationship between reward system and employee performance.........................................6
CHAPTER 3 - RESEARCH METHODOLOGY............................................................................9
CHAPTER 4 – DATA ANALYSIS..............................................................................................12
Themes of Questionnaire......................................................................................................14
CHAPTER 5 – DISCUSSION, RECOMMENDATIONS AND CONCLUSION.........................1
Discussion ..............................................................................................................................1
Recommendations ...............................................................................................................13
Conclusion ...........................................................................................................................15
Evaluation ............................................................................................................................15
REFERENCES..............................................................................................................................17
APPENDIX 1 ..................................................................................................................................1

CHAPTER 1 – INTRODUCTION
TITLE - “The Impact of Reward System on Staff Performance: A Case Study of Tesco
Background of the study
Paying employees for their work and productivity has been the main cornerstone of
business and industrial development for many years. In order to manage employee's
performance, financial rewards have always played an important role. But since last few years,
other components of compensation have developed in order to provide employers with more
scope of rewards and therefore, encourage employees. Performance can be defined as behaviour
that completes outcomes or results. Performance management affects the performance by
assisting individuals to determine what is meant by good performance and by offering the
information required to improve it. Reward management affects performance by rewarding and
recognizing good performance as well as by providing incentives to enhance the same.
Main purpose of this research study is to identify impact of various rewards on
employee’s performance and analyzing the effectiveness of current reward system, in
organization in raising employee’s performance. Rewards that the organizations apply to both
teams and individual performance are critical in understanding effectiveness of the company's
rewards strategy. Rewards and their purposes can be described as programs, systems and
practices that affect the actions of individuals. The employees working in an organization get
motivated by various kinds of rewards offered to them within a company. These rewards may
play a vital role in motivating or encouraging employees to improve their performance and
productivity. In this context, researcher selected Tesco, a leading supermarket chain in the UK.
The study will analyze impact of reward system on staff performance within Tesco along with a
brief discussion of how this system affects the overall functioning of company.
Rewards and performance are highly linked with each other as rewards support in
improving the performance of employees. High performance helps employees to earn different
rewards such as incentives, appraisals, etc. Therefore, Tesco highly focuses on offering unique
and innovative rewards to their employees for boosting their performance. Tesco is a British
multinational groceries and general merchandiser retail company with headquarters in
Hertfordshire, UK. Tesco is continuously expanding its market share and profit all over world
with the help of strong and motivated employees. Researcher will use various tools and
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techniques for identifying various types of reward systems and their impact on employee's
performance in Tesco.
Research purpose
Aim - “To examine the Impact of Reward System on Staff Performance: A Case Study of
Tesco”
Research Objectives:1. To identify the meaning of reward system2. To examine how TESCO measures or evaluates staff performance3. To determine the relationship between performance and rewards system in Tesco
Research questions
1. What is rewards system?
2. How TESCO measures or evaluates the staff performance?
3. What is the relationship between employee’s performance and rewards?
Significance and Rationale
Reward system is an essential approach used by each and every organization or business
in order to motivate the employees working in company. In order to understand this important
concept or approach, this topic is selected. The research study will assist in understanding
different types and areas of effective reward system. Researcher needs to develop a good
knowledge and understanding of rewards and its impact on performance of employees working
in the organization. There is huge information provided on internet related to this particular
subject and it was also a reason for selecting the topic.
Structure of chapters
Remembering the major aim or objective to complete project, researcher requires
developing an organized structure. A well designed structure helps in applying different tools,
concepts and approaches in order to identify the most appropriate results or outcomes from
research study. The research report is divided into various chapters as mentioned below -
Chapter 1 – Introduction
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This chapter of the report includes outline significance of rewards system in Tesco. The
researcher can give a summary about entire project and the topic of the research study. This part
also includes aim and objectives of the research study.
Chapter 2: Literature review
This is another key section that provides the detailed perception and finding out about
examination subject. In this section, a couple of subjects can made by the objectives of research
topic.
Chapter 3: Research Methodology
With assistance of this section, researcher can connect a couple of methods for obtaining
the most ideal plan and effective results of topic. In the present research study, researcher will
apply quantitative method for collecting required information.
Chapter 4: Data Analysis
In this part, researcher will identify and analyse the information with regard to the
objective to present results in such a way so as the analysis can be done without a lot of
complexions. With the help of this section, researcher will interpret information with relevant
data.
Chapter 5: Discussion, Conclusions, Recommendations and Critical evaluation
This is another part that assists in completing the research study. It is a last bit of the
paper in which researcher can collect the research study and give important proposal related to
the subject.
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CHAPTER 2 - LITERATURE REVIEW
This another important part of research project, literature review will provide various
studies by different authors on the topic of this project. There will be various themes included in
this chapter such as concept of reward system and employee’s performance, importance of
reward system, types of reward systems, etc. In the following section of literature review, the
researcher has integrated findings of various major research studies identical to the nature of
current research for attaining important information with regard to the major elements of
research study. Additional information or data was collected from various research papers,
scholarly articles, journals and reference books which are determining different methods for
rewarding the employees in order to improve their performance.
Concept of reward system and employee performance
Reward is an element that represents anything that the employees may value and that an
employee offers in exchange of his or her work and contribution in an organisation. The lack of
rewards in an organisation give rise to an unpleasant working environment which demotivate the
employees and also affect their performance negatively. This also influences employees to leave
their jobs or switch their employers for better opportunities. According to Adam and Epel
(2017), the reward system is used by both public and private sector to retain and motivate
employees. Main objective of this system is to retain skilled and experienced employees along
with attracting new talent for the organisation.
Nowadays, employees are not only attracted or motivated by financial rewards, they also
demand recognition, self-esteem and growth in terms of position. Therefore, rewards system was
introduced in order to support business human resource strategy. It supports the management to
avoid employee dissatisfaction and develop motivation among them to improve their
performance. Author states that the major impact of rewards is the increase in productivity of a
business due to the fact that employees are major strengths of each and every organization or
business. Therefore, highly motivated and dedicated employees play an important role in
increasing the profit of a firm and supports it to achieve organizational goals and objectives
(Ahmad and et.al, 2018).
Furthermore, it is observed that there is a strong relationship in between employee
performance and reward system in an organisation, author. Employees who are rewarded or
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appreciated for their contribution or work in a company also develop a healthy relationship with
the organisation. This relationship helps in retaining employees as well as attracting new
employees in company. An organisation such as Tesco can develop a strong workforce with the
help of this increased retention level. Hence, every organization can use an attractive reward
system in order to improve effectiveness, performance and profitability of the business.
Importance of rewards system
According to Adam, every company needs a strategic reward system for its employees
which cover the facets like 'Compensation', 'Benefits', 'Recognition' and 'Appreciation'. This
results in an effective reward system. Whereas, Cole stated that “When employees feel that their
efforts are appreciated, they feel motivated intrinsically and their passion towards work and
organisation grows.” On the other hand, Chen and et.al, (2017) said the organisation that
constantly provides rewards and recognise the efforts of its employees observe a very low
employee turnover ratio. Punjaisri and Wilson (2017) mentions whereas if a company consider
its employees robots and not humans and extracts everything out of them this would result in
very high employee turnover ratio. Dahlmann, Branicki and Brammer (2017) states in order to
increase performance of employees and to arise healthy competition amongst them, rewards
should be provided. The components of employee reward management in an organisation or
business the things which are use by the business in order to attract skilled employees in their
businesses. These elements include bonuses, salary, benefits, incentive pay and employee growth
or development opportunities. Rewards and performance are highly connected with each other as
rewards aid in rising the performance of employees. High performance assist employees to gain
various rewards such as incentives, appraisals, promotions etc. Therefore, Tesco highly focuses
on offering unique and innovative rewards to their employees for boosting their performance.
Tesco is a British multinational groceries and general merchandiser retail company with
headquarters in Hertfordshire, UK. Tesco is continuously growing its market share and profit all
around the world with the assistance of powerful and actuated employees. Researcher will use
different tools and methods for determining several sorts of reward systems and their effect on
employee's performance in Tesco. There are various importance of reward system in an
organisation, some main essential significance of an effective reward system in an organisation
or busniess are as described below -
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 Mutually helpful - A reward framework is gainful to the worker as well as to the
association. The representative will feel more propelled to work harder by having a
reward framework set up the worker will feel more dedicated to their work and their
efficiency will increment. An expansion in profitability will then profit the association.
In this way a reward framework is commonly useful to the representative and the
association.
 Motivation - A reward framework will rouse workers by achieving targets and
authoritative objectives in return for rewards. A reward framework is awesome at
spurring representatives yet they will likewise be propelled to substantiate themselves to
the association.
 Absenteeism - A reward framework will lessen non-appearance in the association.
Representatives like being compensated for an occupation well done and if there is a
reward framework set up, representatives will be less inclined to ring in wiped out and
not appearing for work. Additionally, by having a reward framework set up the workers
will be clearer about the objectives and objectives of the association as they will be
compensated when achieve certain objectives. So by having a reward framework as a
motivating human resources or employees, they will be more averse to be missing from
work.
 Loyalty - A reward framework will build the worker's devotion to the association. By a
reward framework being set up the representative feels esteemed by the association and
realizes that their assessment matters. In the event that a representative is content with the
reward framework, they will probably acknowledge work put and stay faithful to the
association
Types of reward system
There are mainly two types of reward systems i.e. Extrinsic and Intrinsic. Both of them
are necessary as one gives inner satisfaction while the other provides materialistic outer
satisfaction. According to Aslam and et.al., (2017) when employee’s tasks are defined and
incentive is attached to each task, it leads to extrinsic motivation and employees try to work hard
in order to get that extra income. Whereas, Kumari and Thapliyal (2017) stated that there are
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