This research intends to derive a relation between reward management on turnover of the employees and their performance. Quantitative research has been conducted in this case. A survey with the employees has been performed in the research. Based on this research, it has been found that effective reward management policy plays a vital role in reducing the attrition rate of the employees.
Chapter 1: Introduction
The management of reward system can be considered as one of the most crucial yet problematic part of human resources management (HRM) within any organisation (Storey, 2014). Though reward management process is a highly demanding facet of HRM, it is also a controversial and complex aspect in terms of the debates and assumptions that have surrounded the drivers of work behaviour and human motivation (Storey, 2014). Due to the rapid increase in competition and scarcity of sufficient skills, the attraction as well as retention of adequately skilled employees has been emerged as a major challenge for business organisations. Terera and Ngirande (2014) have explained that the process of attracting, retaining and motivating employees for the desired profit generation of any organisation required novel reward system that can efficiently satisfy employees. On the other hand, the current financial crisis has increased debates against the process of rewarding employees within organisation. Strong criticism, financial downfall as well as new regulations have enforced the management of various organisations to restructure or freeze the reward and bonus structure. Focusing on these arguments, the further research process is based on analysing the effect and importance of reward management in the turnover intention and retention of employees in any organisation. The research is also targeted to evaluate the effect of reward management in terms of influence the performance of workforce. In order to test the impact of reward management on the performance and turnover of the workforce, the case of Suning Commerce Group would be evaluated. Suning Commerce Group is a renowned Chinese retail brand that has started becoming a popular retail brand worldwide. The brand employs approximately 8364 employees, which promotes significant employees strength. It would be interesting to evaluate the current reward management strategies of Suning Commerce Group and if the reward strategies help improving the employee turnover situation.
1.1 Background of the Research
Reward is one of the most important elements to increase the motivational level of employees in terms of providing their best efforts to generate efficient and innovative solutions for organisational challenges (Cerasoli et al., 2014). This process is also targeted to improvise the performances of organisations in a non-financial as well as financial manner. Aguinis et al., (2013) have described that the process of rewarding employees is one of the major component for efficiently manage human resources of any organisation. A number of motivational theories, such as Vroom’s Expectancy Theory, Lawler’s Discrepancy Theory etc., have demonstrated that rewards and the satisfaction generated through it possess high potential to simulate desired employee performance and commitment while discouraging unfavourable behaviours such as absenteeism, turnover etc. As per Dewhurst et al., (2012), employees tend to provide their maximum potential when organisations initiate a trustworthy relationship with the employees through reward management.
There are various other factors that also affect the loyalty and performances of employees such as training and development processes, employment relationship, job security along with the overall reward management policies.