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1.1 General Introduction

Organisations are formed with the goal of effectively utilising various available human and non-human resources to achieve a specific goal. Among these resources is human capital,

which is widely regarded as the most valuable asset an organisation can employ to gain a competitive edge and achieve its goals, hence the necessity for human resource management to maintain optimum productivity and organisational survival.

Human resources have been identified as an organization’s most valuable asset. Its strategic approach emphasised a “tight fit” between individual needs, rights, ambitions, and goals inside the organisation, making compensation a central issue in the lives of emerging students, scholars, and HRM practitioners worldwide.

Because it grew from the core approach or organisational connection, the birth of human resource management posed a significant threat to traditional personnel management and industrial relations.

It is an asset that should be invested in if long-term dedication and good performance in an organisation are desired. As organisations attempt to achieve one or more objectives through the effective use of human capital, employees strive to attain personal goals (objectives) while working for the organisation.

A reward system is a tool used to promote staff productivity. It attempts to attract and retain suitable people, encourages excellent management-employee relationships and commitment, and reduces tension and conflict as it deals with all forms of ultimate returns, tangible service, and good relationship mechanisms.

Furthermore, the majority of industrial conflicts occur because employees believe their benefits are being refused or are about to be rejected, therefore the importance of the pay system is to create a suitable platform for equity and fairness. This creates a difficult environment and increases staff productivity.

Compensation develops organisational integrity, policies, processes, and practises capable of boosting organisational output. Employee and organisational performance development can be improved by understanding and controlling reward and compensation within an agreed framework, established goals, standards, and competency criteria.

Because petrol (crude oil) is Nigeria’s main source of income and the country’s economic strength, the petroleum sector plays a significant or leading role in its development.

The importance of the petroleum industry in structuring the capital market, refining crude oil for local use, providing employment for both indigenous and foreigners, and marketing crude oil and petroleum products cannot be overstated.

However, the industry’s performance is heavily dependent on its human resources expertise, which is the most significant asset of any organisation. Every manager at every level faces the difficult problem of constructing an appropriate reward and compensation system that incorporates both organisational goals and individual requirements, resulting in a motivated workforce and increased production.

As a result, the purpose of this research is to investigate the reward and compensation system and its impact on worker efficiency in the petroleum industry (using Total Plc as a case study). The industry has shown to be one of the most valued in the Nigerian economy, and its productivity is inextricably linked to its rewards and compensation structure, either directly or indirectly.

The study, on the other hand, investigates the impact of reward and compensation, system on organisational productivity, the foundation of good reward and compensation structure, employees’ expectations at different levels, and how the compensation structure is based on individual(s) performance or job requirements of employees.

As a result, the researcher tends to bring the attention of the organization’s Board of Directors (BOD) and management to the need for an effective and efficient reward and pay system capable of enhancing employee performance and increasing organisational productivity.

1.2 Statement of the Problem

Some organisations over the years have viewed employees as an additional cost as well as a liability to their operations, and as a result, do not remunerate them appropriately, and where it is more appropriate, the compensation is not commensurate with the efforts and skills that workers put into the organization’s activities.

Instead of focusing on how employees will be compensated appropriately, some organisations focus on other resources, such as materials, machines, and money. The emphasis is on how to improve the manufacturing process, with little or no regard for human contributions.

As a result, many organisations have been unable to meet their objectives. Organisational success is heavily dependent on how much attention is paid to its employees’ reward schemes.

In light of this, the study tries to learn how an organization’s reward and compensation structure affects employee performance as well as the overall performance of the organisation.

1.3 Objectives of The Study

The primary goal of this research is to investigate and assess the impact (if any) of reward and pay systems on employee productivity in an organisation. As a result, the specific goals are as follows:

Draw management’s attention to employee compensation that is prompt, timely, and adequate.

Examine the available compensation package and its impact on employee and organisational performance.

Determine the necessity for management to establish a pleasant working environment by offering both physical and psychological incentives to motivate people to perform harder to achieve organisational goals.

Encourage an effective reward and compensation policy that is geared towards enhancing organisational productivity.

1.4 Significance of the Research

The significance of this study cannot be overstated because it will be of great benefit to managers or human resource departments of organisations in terms of identifying effective reward and compensation, system, it cost and benefit on organisational operations, harmonising employees and organisational interests to avoid sub-optimality, and so on.

Furthermore, the study resolves the debate over whether an efficient reward and compensation system adds value to organisational operations, allowing organisations to adopt a profitable stance on whether or not to compensate personnel.

This research, as a result of an acceptable review of diverse current literature, is a source of material for postgraduate and undergraduate students, as well as researchers, who may like to conduct further research on the issue in the future.

The researcher was exposed to many practical issues on human resource, reward and compensation system, and the respective relationship that exists between effective reward and compensation system, productivity customer patronage,

as well as organisation productivity and profitability. Furthermore, the study provided an opportunity for the researcher to analyse materials such as text books, journals, annual reports, and so on that would not have occurred to him otherwise.

Finally, the study acts as a pre-national diploma in management from Kaduna Polytechnic Kaduna.

1.5 Research Questions

What are the advantages of timely remuneration for employees in the organisation?

How does a compensation package effect an employee’s performance in an organisation?

How does a conducive working environment motivate employees to work towards organisational goals?

How can employers motivate their employees?


H0: There is no meaningful effect of a compensation and reward system on an organization’s performance.

H1: The compensation and reward system has a substantial impact on an organization’s success.

1.6 Scope of The Study

The purpose of this research is to examine the impact of an organization’s reward and compensation system on employee productivity. Although the reward and compensation system is just one of the many tools used to ensure effective human resource management, the study is solely concerned with reward and compensation, its system, and its impact on enhancing organisational productivity and profit ability.

Furthermore, research is being conducted to investigate the influence of Total Nigeria Plc Kaduna’s reward and compensation system on staff productivity. As a result, the study does not cover every organisation in the petroleum industry, nor does it cover every branch of Total Nigeria Plc, save Total Nigeria Plc, Kaduna South.

1.7 Limitations of The Study

A study project of this sort, however, is unpleasant due to several issues that limit the researcher’s abilities, particularly in Nigeria, where many organisations refuse to reveal real information about their organisation to researchers.

The researcher found it difficult to obtain significant data about the organization’s incentive and policy, but must make do with the minimal information provided. Nonetheless, the research effort was effectively covered based on the researcher’s accessible material, though it is difficult to claim ultimate perfection, therefore the topic is open for additional evaluation and inquiry.

1.8 Definition of Terms

Compensation: All forms of financial return, tangible services, and benefits received by an employee as part of an employment relationship are considered compensation.

Industry: A group of businesses that produce similar products (i.e. goods and services).

Productivity is defined as the output unit / labour input into the manufacturing process given the amount of available technology.

Management is the process of organising, staffing, leading, directing, coordinating, and regulating available resources in order to achieve a specific goal.

The cor-faced of a job connection is the reward. A reward system is an organization’s integrated policies, processes, and practises for paying its personnel based on their contribution, competence, and market worth.

Employee remuneration is the cash compensation for his or her performance in the organisation.

Motivation: The inner urges that excite, direct, and sustain an individual’s behaviour towards the achievement of organisational goals.

Research: Is a method of arriving at a reliable solution to business and management problems by the methodical collecting, analysis, and interpretation of data.

Pay Structure: A structure for controlling base pay progression over time for the benefit of employees.

Policy: The guiding principles that govern an organization’s operation and activities.

Job analysis is the process of gathering thorough information about jobs, according to Raymond etal (2004).

position Description: Defines the goal of the position, where it fits in the organisational structure, the content within which the job holder functions, and the primary accountability of the job holder. The employee’s primary responsibility.

Job Enlargement: This is the act of integrating previously fragmented tasks into one job in order to bring greater autonomy and responsibility to a job, and it is based on the job characteristic approach and maximising the interest and challenges of work.

Job evaluation is a methodical procedure for determining the relative work of jobs within an organisation.

incentive Strategy: It is a statement of the organization’s goal for how its incentive policies and processes should be designed to fulfil business requirements.

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