Job satisfaction is directly related to lower absenteeism and lower employee turnover which in turn increases productivity. as a result, managers in various organizations have also devised incentive and reward systems to motivate employees to attend work regularly (Cole and Kleiner, 1992). Allan (1966:15) defines motivation as the “force that drives people to do things.” Organizational culture and reward systems affect performance as stated by Hannagan (2003:275):
Gibson (1995) points out that in contrast to organizations existing in the earlier part of the century that adopted highly leveraged incentive plans at 15 to 30% of the base pay as reward strategies, the organizational climate in the present has changed to one that focuses on strategic mission, capital conservation and small workforces, thereby placing more emphasis on other kinds of reward systems that are “more broad-based, including cash flow return on investment, economic value-added, and other nonfinancial measures.” New reward systems, which are distinctive, flexible and performance-driven are increasingly being adopted by organizations (Reilly, 2003).
Vroom’s expectancy theory (1964) is the dominant model in predicting whether rewards are likely to affect worker motivation and performance. His theory is based upon three salient beliefs (www.valuebasedmanagement.net):
(a) Valence: refers to the emotional outlook that people hold towards outcomes or rewards. Employee values to a certain extent, either intrinsic rewards such as satisfaction at his workplace or extrinsic rewards such as more salary, bonus or promotions, paid leave, etc and if management must motivate its employees properly, it must understand the rewards that the employee seeks.
(b) Expectancy: is the level of confidence that employees have in their abilities and the expectancies that they hold from their jobs, such as the kind of resources, training, and facilities that are available to help them do their jobs better. .