Abstract
Reward system which consists of financial rewards and non-financial rewards has become essential to an organization in managing employees’ performance. Motivated employees can be a significant factor in organizational success. When employees are motivated to work at higher levels of productivity, the organization as a whole will run more efficiently and is more effective at reaching its goals. Literature review on the previous studies has proven that the reward system can motivate and subsequently increase employees’ performance. Reward system comes in many forms, for example, intrinsic rewards and extrinsic rewards. Thus, the organization must critically understand what types of reward system can motivate the employee to perform well in their job. The purpose of this research is to investigate the effects of the reward system in an organization on employee performance. The variable tested in this study includes salary, bonuses, appreciation and medical benefits. This study adopted a quantitative approach where 132 sets of questionnaires were distributed to the participants selected using convenience sampling. Data were then analyzed using SPSS software and a few analyses were carried out such as correlations analysis and regression analysis. The results show that all variables have a significant impact on employees’ performance. The results of this study can be used by the organization to improve its reward system and to ensure it could help in increasing the employees’ performance.
Highlights
Reward system is essential to the organization as it has become important in managing employee's performance
Four independent variables were employed to try to determine the effects of reward system on employee performance in the organization as it is compulsory benefits that they received for their performance in the organization
This research has provided an insight into the factor that affect reward systems on employee performance at McDonald's in Perlis and Penang
Summary
Reward system is essential to the organization as it has become important in managing employee's performance. Over the last 25 years, other elements in compensation have evolved to provide employers with a broad scope of reward, and it motivates the employees. The reward systems are directly and indirectly involved in the vision and mission of the organization that gives sense to the employee that a reward system will benefit both parties. A study conducted by Latham (2012) to motivate and keep the employees motivated is an essential part of human resources and management within organizations. Reward systems have a huge impact on organizations to retain and motivate the employees and as a result of achieving high levels of performance (Barber and Bretz, 2000). Organizations must develop programs such as reward systems to fulfil employees' needs and motivate them to work
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
