Intrinsic Reward and Organization Performance at Vihiga County Government, Kenya

-Due to the prevailing cut-throat competition in the global economy, organizations spend much of its resources to enhance their performance. To enhance employees’ performance, they need to be provided with both financial and non-financial reward. This study therefore looked at the effect of intrinsic reward on organization performance in Vihiga county government, Kenya. The study specific objectives were: To examine the effect of trust on organization performance in Vihiga county government, Kenya; To find out the effect of recognition on organization performance in Vihiga county government, Kenya; and To establish the effect of promotion on organization performance in Vihiga county government, Kenya. The researcher employed a descriptive survey research design. The population of the study consisted of nine departments in the county government. Specifically, the study targeted 2, 819 employees out of which 350 employees were sampled. The researcher collected data using questionnaires. The Pearson Product Moment Correlation Coefficient and simple linear regression were used to estimate the influence of intrinsic reward on organization performance of county government in Vihiga County. The study found out that promotion had the highest effect on organization performance followed by trust and recognition. The study also revealed that promotion, trust and recognition accounted for 29.8%, 22.2 and 18.2% respectively of the variability in organization performance. Intrinsic reward also had a positive and significant effect on organization performance and accounted for 28.7% of the variability in organization performance. The study therefore recommended that organization that wishes to register an increase in organization performance should provide their employees with intrinsic reward packages mainly promotion, trust and recognition. I. BACKGROUND OF THE STUDY ut throat competition in the global economy has made most of the organizations to spend their internal and external resources to enhance performance. Organizations that wish to be competitive must utilize their internal resources that entail employees, physical and financial resources. According to Armstrong (2010), employees are the most valuable resources in an organization for enhanced performance. Armstrong (2010) depicts that employees‟ motivation through reward is very key in an organization. Currently, organizations are relying on intrinsic rewards to enhance organization performance instead of extrinsic reward because they have proved to be a strategic component of developing employees‟ capabilities and improving their commitment and attitude towards superior organization performance. Studies conducted have given mixed research findings on effect of intrinsic reward on organization performance. A study conducted by Nduro (2012) on the effect of nonfinancial reward on job performance posits that superior job performance is as a result of provision of non-financial rewards to employees. Khan, Waqas and Muncer (2017) observed that intrinsic rewards highly affect employees‟ job performance in the Courier Companies of City Faisalabad, Pakistan. Smith, Joubert and Karodia (2015) study on impact of extrinsic and intrinsic rewards on motivation of employees in a Medical Devices Company in South Africa found out that there is a significant and positive relationship between reward and motivation in an organization and employees reported that they are motivated more by intrinsic reward than extrinsic reward. Kikoito (2014) study on influence of reward systems and organizations performance in Banking Industry in Tanzania opined that intrinsic rewards such as employees‟ recognition and praise results into employees‟ motivation and improved work performance. Obicci (2015) studied influence of extrinsic and intrinsic rewards on engagement of employees in public sector of Uganda and observed that there exists a progressive and significant relationship between intrinsic and extrinsic rewards on employees‟ engagement. The study will be anchored on two theories namely social exchange theory and expectancy theory. Social exchange theory postulated by Blau (1964) states that interactions are dependent on another person‟s action. The theory suggests that negative behaviors an employee has is as a result of bad treatment accorded to them in the work environment. This theory will inform the study variables in that organizations with a conducive climate of trust, recognizes employees, promote employees based on merit and exhibit good leadership results in good relationship that in the long run can results in employee‟s performance. Expectancy theory as theorized by Vroom (1964). Expectancy theory postulates that an outcome of one variable results to an outcome in the other. From the expectancy point of view, giving employees‟ intrinsic reward results to expectation of increase in organization performance. The study will rely on this theory to link the relationship been intrinsic reward and organization performance. The researcher conceptualized that organization that giving employees‟ intrinsic reward can result to organization performance. This means that intrinsic reward influences the outcome which is organization performance. Analysis of the studies conducted on the study variables have brought up study gaps in terms of the study areas and the C International Journal of Research and Innovation in Social Science (IJRISS) |Volume III, Issue XI, November 2019|ISSN 2454-6186 www.rsisinternational. org Page 511 dependent variables used thus the current study will be conducted in a different study area, that is Vihiga County and use organization performance instead of employee‟s performance and employee‟s satisfaction. Vihiga County is one of the 47 Kenyan counties found in western part of Kenya. The Kenyan counties have experienced a mirage of challenges since the devolution in Kenya in the year 2013 which have contributed significantly to reduced performance in the county governments. Vihiga County especially has had a reduced performance due to stalled projects and poor level of service delivery which have been occasioned with inability of the county to implement various intrinsic reward programs which have resulted to frequent industrial disputes, disharmony in remuneration and lack of promotional opportunities (CPSM Report, 2017). Vihiga county government has been chosen in this case because from the analysis of the auditor general reports and the controller of budget, issues of the county performance have been brought out. The performance issues can be linked to inadequate intrinsic reward offered by the organization. On this basis, the researcher examined the effect of intrinsic reward on organization performance of Vihiga County Government. 1.1.1 Intrinsic Reward A reward is any form of material or immaterial services or goodies and employees receive in monetary or non-monetary terms in the cause of their relationship (Malhotra et al., 2007). Aimal et al., (2015) and Shanks (2007) classified rewards into intrinsic and extrinsic rewards. Intrinsic rewards are nonmonetary benefits received by the employees in terms of promotion, recognition, trust, status and responsibility while extrinsic rewards are those monetary benefits received by employees in the cause of their working like bonuses, salaries, allowances and performance related pay. Different authors view intrinsic reward differently. According to Richard, Ryan and Deci (2010), intrinsic reward refers to those rewards inherent within the job itself or within an employee while Farooqui & Nagendra (2014) posits that intrinsic rewards are subjective ingredients that elaborate the feelings an employee has towards work and its importance. They categorize intrinsic rewards as trust, recognition, achievement and employees‟‟ ability. Shanks, (2007) observes that intrinsic reward fulfils employees‟ intrinsic factors like giving them a challenging task, giving them a higher rank and involving them in decision making process. Praise and recognition have been found to be the most efficient intrinsic reward that enhances employees‟ performance (Bosco, 2014). Shanks (2007) further states that intrinsic reward increases one‟s self esteem leading to job accomplishment. Intrinsic reward can be derived from the job itself like meaningful work, achievement and challenge or from the task itself like responsibility, variety, self-direction and ability (Aimalet.al, 2015). In this study, intrinsic reward element employed will be trust, recognition and promotion. 1.1. 2 Organizational Performance Organization performance is a measure of how well an organization achieves its set objectives. Johnston et al.(2004) opined that there are two type of performance that is financial and operational performance. financial indicators of performance includes: return on investment, improvement in profit and sales margin, growth in market share while operational performance indicators included customer loyalty, innovation, quality products, environmental responsibility, efficiency and effectiveness, regulatory compliance and improvement in product design (Inayatullah, Narain and Singh, 2012). This study adopted operational performance indicators in terms of: projects completion rates and service delivery levels. Zulu and Chileshe (2008) defined a project as a temporary undertaking of creating a unique product or service within a defined timeframe and budget to produce identifiable deliverables. Project completion is the ability to deliver the target project output within the stipulate time (Enshassi, Mohamed and Abushaban, 2009). High level of service quality provision can results to customer satisfaction and loyalty therefore resulting to long-term profitability. Organizations that provide quality services to their clients are more competitive (Zeithal and Bitmer, 2000, Gronroos and Ravald, 2011). The study used operational performance indicators to measu