Reward economics and organisation: The issue of effectiveness

Abstract

The paper sets out to assess the relationship that exists between reward in an organization and
organizational effectiveness. Organizational effectiveness is defined in terms of profitability. Guinness
Nigeria Plc was taken as the case study. An instrument of questionnaire containing both open and
close ended questions was used to elicit information from both the management staff and employees of
Guinness Plc, Benin city, Nigeria on their perceived impact of reward structure on organizational
effectiveness. The study tested three main hypotheses with the use of chi-square technique. Our study
revealed that organizational effectiveness can be achieved to a great extent with solid reward structure
and that corporate reward policy influences individual employees’ behaviour. It was also found that
non-financial rewards, such as training and development, seminars, symposia and workshops can
enhance organizational effectiveness. However, the application of the coefficient of contingency test on
one of our chi-square analysis result indicated that there is a weak correlation between the
effectiveness and salary structure under investigation. This phenomenon results in a major break
through in our study in that it pin-points that organizational effectiveness can not be achieved only by
the organization’s reward structure. Thus, effectiveness is a variable of so many factors and individual
needs and goals are not always the same. This study therefore recommends that a piece rate system of
reward can be adopted to mechanically link pay to job performance.