LSC UoS: Impact of Reward Systems on Employee Motivation at H&M

This research report investigates the impact of organizational reward systems on employee motivation and attitude towards work, focusing on a case study of H&M. It examines the types of reward systems used by H&M, their impact on worker motivation, and the challenges faced while improving employee motivation. The research employs a quantitative approach, relying on secondary data and various research methodologies to ensure validity and reliability. The literature review explores different types of reward systems, their influence on motivation and attitude, and potential challenges. The report also details the research methodology, including research philosophy, approach, design, sampling, data collection, analysis, ethical considerations, and a time plan. Ultimately, the study aims to identify the role of reward systems in enhancing employee motivation and productivity within the fashion industry, specifically at H&M.

Research Methodology
(To determine the impact of organisational reward system
on workers’ motivation and attitude towards work within a
fashion industry)
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ABSTRACT
This research report is based on the topic “To identify the role of organisational reward system in
improving motivation and attitude of employees towards the work”. Reward is designed to
appreciate the efforts of employees towards their job and attainment of company’s goals. It is
being identify that employee motivation and productivity level are based on the bonus and perks
they are receiving. It is very important for organisation to satisfy their employee in both
monetary and non monetary manner so that they worker for the organisation for longer time
duration. The literature part of this research is based on secondary data. This investigation is also
supported by the various research methodologies and the type of data that is gathered in this is
quantitative so that validity and reliability can be maintained properly. The investigation
supports the assumption that is being well development the basis of reward system.
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Table of Contents
ABSTRACT....................................................................................................................................2
1. INTRODUCTION.......................................................................................................................5
1.1 Background of the chosen topic............................................................................................5
1.2 Problem statements................................................................................................................5
1.3 Purpose of the research..........................................................................................................5
1.4 Value of this research............................................................................................................6
1.5 Research aim..........................................................................................................................6
1.6 Research objectives...............................................................................................................6
1.7 Research question..................................................................................................................6
2. LITERATURE REVIEW............................................................................................................7
What are the different types of reward system used by H&M?..................................................7
Explain the impact of reward system on workers’ motivation and attitude towards work?........8
What are the challenges that could face by H&M while improving motivation and attitude of
their workers?..............................................................................................................................8
3. RESEARCH METHODOLOGY..............................................................................................10
3.0 Introduction..........................................................................................................................10
3.1 Research philosophy............................................................................................................10
3.2 Research approached...........................................................................................................10
3.3 Research design...................................................................................................................10
3.4 Research strategy.................................................................................................................10
3.5 Population sampling............................................................................................................11
3.6 Data collection.....................................................................................................................11
3.7 Data analysis........................................................................................................................11
3.8 Ethical considerations..........................................................................................................11
3.9 Reliability and validity........................................................................................................11
3.10 Time plan (Gantt chart).....................................................................................................12
4. CONCLUSION..........................................................................................................................13
5. REFERENCES..........................................................................................................................14
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1. INTRODUCTION
1.1 Background of the chosen topic
Reward system is a recognition program which helps in acknowledging those employees
whose performance is best and contributes towards the goals set by the organisations. In simple
terms it is an apperception which is given in the form of perks or bonuses. It is very important to
reward employee because it help in motivating the staff towards their performance and
productivity. It is well said that employee will work more productively when they know their job
or efforts will be appreciated by company. It also helps to built trusts and enhances more
engagement of employee with their higher authority. In recent time to motivate employee reward
giving is the best approach than that of punishments (Suifan, Abdallah and Al Janini, 2018).
Researcher has selected this topic so that they can identify the level of motivation enhancing
when companies adopted the strategy of reward system. To know this the brand that is chosen is
H&M. It stands for Hennes and Mauritz AB. H&M is a multinational Swedish brand which was
founded in 1947. The founder of the brand is Erling Persson and it's headquarter is in Stockholm,
Sweden. It is one of the fast fashion clothing brand which manufacture clothes for men, women,
kids. Company operates in more than 74 countries and over 5000 stores are their which operates
worldwide.
1.2 Problem statements
The main problem statement of the selected topic is that companies are not able to form the
reward strategy according to the needs and wants of employee which creates problem for them.
If there is no effective approach towards reward giving them this will demotivated employees as
they feel that the perks they are receiving does not match with the requirement or efforts that
they made toward their work. The other problem that will be faced by brands is that their
performance and productivity level will also hinder and this will affect their profit margin. These
were the issue which will be faced if reward strategies do not match with employee jobs
(Berberoglu, 2018).
1.3 Purpose of the research
This major purpose to conduct this investigation is to know the impact of reward system in
an organisation so that detail understanding can be made about the aim. So that aims and
objectives can be attain in appropriate manner. The selected study will also helps in knowing the
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challenges company could faced if their approaches is not matched with employee wants. This
investigation will also covers the impact of reward system in improving staff motivation and
productivity and will also insight about the benefit brands can obtained if proper analysis can be
made between the requirement of staff and reward strategy (Perkins and Jones, 2020).
1.4 Value of this research
The current investigation holds a great value because it aims in gaining more insight
about the study on reward strategy on employee and impact of this on motivational level in staff.
This research would also grateful for different stakeholders like investigator and scholar who
could use this as secondary source to gain more skills and knowledge in their own personality.
1.5 Research aim
To identify the role of organisational reward system in improving motivation and attitude
of employees towards the work: A study on H&M.
1.6 Research objectives
 To identify the types of reward system used by H&M
 To determine the impact of reward system on workers’ motivation and attitude towards
work
 To examine the challenges that could face by H&M while improving motivation and
attitude of their workers
1.7 Research question
1) What are the different types of reward system used by H&M?
2) Explain the impact of reward system on workers’ motivation and attitude towards work?
3) What are the challenges that could face by H&M while improving motivation and
attitude of their workers?
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2. LITERATURE REVIEW
Literature review is that section in whole report that contain past publish information
about the topic chosen. This part helps the researcher to gain detailed information about the study
so that it can be used in their investigation for accomplishing aim and objective in accurate way.
Literature review also helps in identifying the gap between past investigation and present
investigation. The information that is gathered in this section is collected from various secondary
sources which are books, magazine, articles, newspaper, online site and many others.
What are the different types of reward system used by H&M?
As per the view of (Vaishnavi, Suresh and Dutta, 2019), reward system means appreciating
employee’s performance by providing them monetary and non monetary perks to them. Reward
cab be of two types that is extrinsic as well as intrinsic. The employee of H&M are being
rewards on the basis of performance. So the reward system which is adopted by them is
Performance related pay. There are various types of performance reward system that they use
which are:
Piecework Schemes: In this approach the employees are being paid extra on the basis of
each extra unit of output they manufactured or produced. This is one of the oldest scheme which
is acquired by the business. This reward system is used in that area of brand which deals in
manufacturing of clothes and their performance can easily be measured in units. The major
benefit that is obtained by H&M by implementing this monetary reward is that employees are
measured on fair basis.
Individual performance related scheme: In this system employee either receive bonus or
enhance in their basic salary. They are being evaluated by their manger who measures the
performance of individual subordinate. Here standard performances are being set and on that
basis actual performance is evaluated. The major advantage of this approach is that staffs are not
evaluated on the basis of group or team efforts.
Commissions: This reward system is designed by H&M for their sale persons. Here
remuneration is being paid to the sale staff on the basis of percent of total sale made by them in a
year or quarter. This system motivates the sale person to enhance their sale so that they can be
pay higher (Kohls, and et. al, 2018).
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H&M reward system or program works in equal and fair manner which help them to motivate
their staff and improve their performance.
Explain the impact of reward system on workers’ motivation and attitude towards work?
According to (Liebowitz, 2019), there is a positive relationship between reward systems on
worker motivation if the strategies of reward program are designed in right manner according to
the types of department or job they are working in. If the reward scheme is equal and fair than
the attitude an behaviour of employee will be good and positive towards the company goals and
objectives. The impacts of reward system on workers are:
Increase in motivation level: If the employee reward program is based as per the
requirement of employee than they will fell happy which assist in increasing their motivation
level. If there is high morale of the staff then they will work towards improving their
performance so that they can get more perks which will satisfied their needs and wants. As
happier the employee is higher will be productivity and organisation will produced more product
and also satisfy their client. The sale margin of organisation will also rise which in turn helps
them in earn more revenue which they can distribute among their employee on the basis of
efforts they made.
Positive work attitude: Another impact of reward system is that if it is fair and is based on
the need than the attitude of workers will be good towards the organisations and employees.
Their will be less chance of conflict and grievance. The relationship between the higher authority
and subordinated will also be great. There will be less communication gap which will help in
greater engagement and interaction among both. They will be less chaos within the workplace as
well the working surrounding will be positive and less stress full (Aboelmaged, 2018).
Another impact of reward system within the organisation is increase in trust, more productivity,
effective management, good communication, sharing of information in right direction etc.
What are the challenges that could face by H&M while improving motivation and attitude of
their workers?
As per the view of (Gope, Elia and Passiante, 2018), there were many challenges that are
being faced by H&M while they are adopting various strategies that could improve the
motivation and attitude of the employee towards their job. Some of the problems that are
encounter by them are:
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Uncertain environment: In today era business world is so dynamic that it keeps on
changing frequently which creates problem as employee motivation level and behaviour towards
the work also become challenging. The technology, customer taste and preferences and even the
needs of employee keeps turning which create problem For H&M as they need to design new
approaches or strategy for ever uncertainty. Changing expectation of the workforce and fulfilling
them according to their desire. As well as employees who are working also depends upon various
cultures, region, caste and many others. So they need to keep in mind all the factors and they
develop approach is very toughest challenge for them.
Low self confidence: Another problem that is encounter by H&M is the confidence level of
the workforce. Some employee in the organisation has low confidence among them which is
problematic as it affects their productivity and attitude towards the company. Their willingness
to complete task is so low that they behave negative which affect the company’s performance.
Lacking of self confidence unable the staff to built good work relation which affects their
attitude is negative direction.
Achievement anxiety: There are some employees in the company which have
achievement anxiety. They like to take punishment rather than been recognised. This
achievement anxiety in themselves impact their attitude and motivation. Anxious staffs are less
interested in their work and less enthusiasm in themselves (Zhao, 2018).
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3. RESEARCH METHODOLOGY
3.0 Introduction
Research methodology can be defined as a systematic process of identifying, analysing and
interpreting the gathered information in appropriate manner so that aim and objective can be
tested accurately. This section is used by the researcher so that proper validity and reliability of
the information can be maintained (Kumar, 2018). There are various steps involve in research
methodology which are discussed with the help of onion framework:
3.1 Research philosophy
Research philosophy is the first layer which can be defined as a set of belief and
principles which tell about the kind of data that is need to be gathered. Research philosophy are
of two types that is positivism and Interpretivism. Investigator would be selected Positivism
philosophy because they want to quantitative data in numerical form.
3.2 Research approached
This is the next layer which tests the hypothesis and theories. They are of two kinds that is:
Deductive and inductive approach. As per the present study deductive approach will be chosen
because data is in numbers and also existing theories need to be test (Walseth, Engebretsen and
Elvebakk, 2018).
3.3 Research design
Descriptive, experimental and exploratory are the forms of research design. In the present
research descriptive research design is selected because it will help in gathering and analysis the
factual data in quantitative manner. This is beneficially as it helps in collecting information in
numbers and in very short time duration.
3.4 Research strategy
Research strategy is another layer which is very important as it helps in obtaining
information from the applicant. There are different types of research strategy some of them are
survey, systematic literature review, experimental, case study, action research and many more.
According to the topic the strategy that will gonna use is survey because it helps in gathering
quantitative information from large group of people in shorter time duration (Eftekhari, 2019).
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3.5 Population sampling
Sampling is the method that is used to select the participants so that right choice can be
made from the whole population. Probability and non probability are the two kinds of sampling
technique. In current investigation probability sampling will be chosen and in that random
sampling technique will be used to choose the applicant in equal and fair manner. The sample
size for the current study will be 30 employees of H&M (Lohr, 2019).
3.6 Data collection
Data collection is the technique of gathering information from the various sources. They
are divided into two parts that is primary source and secondary source. In present research topic
primary source of data collection tool would be selected so that first hand data can be obtained.
This is also beneficially as fresh information will be get which helps in testing the hypothesis in
accurate manner and validity can be maintained. The research instrument that is used is
Questionnaire (Zhou and et. al, 2018).
3.7 Data analysis
Data analysis is that part of research methodology which actually measures the gathered
data. The kinds of data analysis tools are frequency distribution and thematic. According to the
collected data frequency distribution analysis will be used because it will helps in evaluating
quantitative data short time and quickly.
3.8 Ethical considerations
It is very important for the investigator to follow the ethics while gathering and completing
the research report. This is vital because it helps researcher to collect information in such a
manner so nobody felling or sentiments cannot be hurt. There are certain norms that need to be
followed and as per the present investigation the beliefs are honesty, integrity, openness,
transparency and many more (Coltart and et. al, 2018).
3.9 Reliability and validity
Investigation would conduct the present research with high relevance as well as validity.
The current report is reliable as data is collected by making questionnaire so that data can be
provided from large respondent. The close ended questions are formed in systematic manner.
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3.10 Time plan (Gantt chart)
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