Volume 6, Issue 7, July – 2021 International Journal of Innovative Science and Research Technology

ISSN No:-2456-2165

Reward System and Employee Performance in the Oil

and Gas Industry in Rivers State
OBIAGA, JOHNSON CHINEDU (PhD)
Lecturer, Edwin Clark University

And

ITAKPE, SOLOMON OSIGBEMHE (MSc)

Abstract:- The study examines reward system and employee engagement; fair and adequate reward system
employee performance in the oil and gas industry in have come to the fore as a competitive tool for attracting
Rivers State. The objectives include: to examine the skilled employees (Walter, Bamidele, Emmanuel,
influence of bonuses on employee productivity; to Nwanneke & Benedict, 2019). In fact, globalization has put
analyze the relationship between compensation and enormous pressure on business organizations to be creative,
employee productivity; and to determine the influence of innovative and proactive to survive in the turbulent business
promotion on employee productivity in oil and gas environment (Ezigbo, 2011). This implies that organizations
industry in Rivers State. The questionnaire was adopted need skillful and motivated workforce to remain in this ever-
as the research instrument to elicit the needed data from changing and ever-competitive business environment
243 respondents. The descriptive statistics and Pearson’s (James, Olasunkanmi & Mumen, 2017). Skillful and
correlation analysis were employed to carry out the data motivated workforce can be achieved through proper
analysis. The results indicate that there is a significant employee reward system, undoubtedly, the most important
relationship between bonuses and productivity, aspect of human resources management (Armstrong, 2005;
compensation and productivity, promotion and Ermias, 2017). This factor is widely recognized by
productivity in the oil and gas industry in Rivers State. international oil companies (IOCs).
Based on the findings, the study recommends that
reward framework of oil and gas firms should be IOCs have established investment dominance in the
planned with the end goal that employees are qualified Nigerian oil and gas industry, resulting in alteration of
for some percentage of profit earned by the firm as a employee demography and labor supply in the local market
method for improving productivity amongst workers, (Babalola, Dogon-daji & Saka, 2012). Acknowledging the
improving dependability and guaranteeing worker fact that employees have included boundary biases towards
devotedness to performing allotted task. As a method policies on human resources, developing uniform and
for guaranteeing cohesiveness among employees, efficient reward strategies for hiring and motivating
hardworking employees that meet targets should be culturally diverse employees have become a daunting task to
promoted promptly to increase employee productivity. managers of IOCs in Nigeria (Ogunyemi et al., 2015). The
Employees in oil and gas firms should not be paid fix pay employment of foreigners in the Nigerian oil and gas
rates as it could bring about a high pace of lateness and industry has been productive owing to constant workers’
hesitance of worker within a group to put in more than strikes attributable to discriminatory reward structure to
average performance. It should be a basic salary plus local employee, which contributes to low employee job
additional bonuses and compensations. This would satisfaction (Mordi, 2015; Salawu, Hassan & Adefeso,
enhance innovativeness and the craving to acquire new 2013; Uma, Obidke, Eboh & Ogbonna, 2013). The
knowledge among worker. implementation of reward structure that contributes to
increasing employee performance – productivity and job
Keywords:- Reward System, Employee Performance, satisfaction is inevitable of organization want to remain
Bonuses, Compensation, Promotion. competitive and stay in business (Kingsley, 2016).

I. INTRODUCTION Agwu (2013) defines rewards as the benefits that an

individual receives from performing a job, rendering a
Human resources remain the foundation for service, or discharging an obligation. The major incentive
organizations to achieve competitive advantage and succeed for performing a job, or rendering a service, or carrying out
in a competitive and dynamic business environment. To an obligation is pay, and many employers of labor offer
achieve these set targets, organizations have to employ, wages and salary as part of a pay package (Agwu, 2013).
train, and retain skilled workforce (Edirisooriya, 2014). In This package usually includes health insurance, bonuses,
this current world of globalization, where organizations loans, cars, subsidized meals, options on profit sharing,
have to compete for skilled workers from different countries amongst others (Walter et al, 2019). Organizations use
and in an environment where international laws regulate reward system as a channel to motivate employee toward

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Volume 6, Issue 7, July – 2021 International Journal of Innovative Science and Research Technology
ISSN No:-2456-2165
achieving a predetermined goal (Nkechi & Okezie, 2013). has incredible advantages and high potential to spur laborers
This means that reward structure is a veritable tool to attract to put in their best in any given oblition (Condly et al.
skilled employees, and keep them motivated to increase 2003).
their performance level.
Several theoretical postulations have been used to Pattanayak (2005) highlighted various types of
uncover the motivational factors entrenched in motivation programs extending from money related
organizations’ reward system (Mordi, 2015). Herzberg et al incentives to substantial non-financial incentives and
(1957) differentiated between intrinsic and extrinsic impalpable non-money related incentives. Pattanayak (2005)
rewards. Herzberg et al. argued that intrinsic rewards such adumbrated immediate and aberrant remuneration
as achievement, recognition, and advancement motivate the (commission, reward, benefit sharing, travel costs and
employee more than extrinsic rewards such as work retirement plans) as the mainstays of financial incentives
environment, salary, job security, etc (Nkechi & Okezie, while treats, grants and knickknacks as proof of tangible
2013). According to Zhou et al (2009) the philosophy of non-financial incentives, and social rewards and errand
intrinsic rewards emanated from the term “utilitarianism” related he connected with intangible non-money related
which means that the behavior of an individual can be rewards (Falola, Ibidunni & Olokundum, 2014).
motivated. Thus, extrinsic rewards can be used to enhance
employee performance (Zhou et al, 2009) Contrary to Studies have large evidence of the impact of reward
utilitarianism” is the term “Romanticism”, which suggests system on employee performance. However, the vast
that intrinsic rewards boost employee creativity and majority of the works referred to above were regardless
innovativeness (Mordi, 2015). carried out outside of Nigeria apart from the study of Agwu
(2013) that considers the role of culture in figuring out what
Mathis and Jackson (2009) linked performance with persuades an employee, accordingly one could state there is
job efficiency and effectiveness resulting to quality and a research gap in the literature that addresses the issue of
quantifiable output. Thao and Hwang (2012) define employee reward framework and employees performance
employee performance as the timely completion of a task by concerning our geological area and furthermore having as a
an employee based on the acceptable standard of operations main priority the uniqueness of the oil and gas industry in
while making use of organization resources within the work Nigeria. It is because of this gap that the study tries to
environment. Aguinis (2009) argued that employee address the connection between worker reward framework
performance is about the behavior of the employee and not and employee performance in the oil and gas industry in
necessarily the output. Employee behavior as Aguinis Rivers State.
(2009) suggested is the conviction that an employee has to
contributing to the organization’s overall goal. Employee 1.1 Statement of the Problem
performance to a large extent is influenced by motivation, Nigeria is a developing country with over 80 percent
knowledge on the job procedure, and experience (Thao & of its revenue coming from the oil sector. Oil companies
Hwang, 2012). But this work sees employee performance is have been working from time to time to ensure they
enhanced by rewards or incentive. Carison (2006) argued contribute to sustaining the growth of their contributions to
that employee performance is influence by leadership, the economy. These oil companies required skilled
empowerment, and organizational culture; alongside side employees to remain in the organizations with full
incentives, and motivation. commitment. This entails employees must be satisfied in
terms of their job and rewards. However, job satisfaction of
Incentive gives a medium through which organizations a workforce that is demographically diverse has remained
can inspire their workers to improve their productivity. inconsistent in the world over (Berg, 2012; Bockerman &
Researchers like Pouliakas (2008), Pinar (2008), and Ilmakunnas, 2012). Finding from previous research works in
Arnolds and Venter (2007) have all completed study into Nigeria showed that approximately between 70 percent and
money related and non-financial incentives and how they 82 percent of employees recognized job dissatisfaction is a
influence employee and organizational performance. serious problem confronting employee performance in the
Motivation programs are set up by organizations to oil and gas sector in Nigeria (Ajayi & Abimbola, 2013;
remunerate and repay extraordinary performance (Schiller, Agwu, 2013). The major challenge is the low output in oil
1996). These incentives could come in monetary or non- production in Nigeria. Additionally, one major problem was
money related structures; however, its goal is to urge the that international oil companies (IOC) managers have
employee to show more endeavors in any task assigned to restricted knowledge on the relationship between employee
them. Incentives are powerful motivators that cause productivity, job satisfaction, commitment, engagement and
employee to carry on with a specific goal in mind on some intrinsic, extrinsic rewards after controlling for gender and
day activities as hard as could be possible under any nationality of oil workers.
prevailing circumstances. However, it is important that
motivating factors are designed to generate performance As a result of global competitiveness organizations are
from the employees and help retain the most skillful and left with no option than to evaluate the performance of their
performing workers (Arnold, 2013). Organizations must employees to serve the interest of stakeholders effectively.
guarantee they utilize the best incentives to get the necessary The cardinal goal of organization is to remain in business
outcome from their workers. Incentives are instrumental and stay competitive by constantly improving performance.
driver towards employee inspiration and performance as it By extension, organization’s success is determined by the

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performance of its employees. For oil firms to remain 1.4 Research Hypotheses
competitive, they have to increase output. This has The study formulated the following hypotheses:
pressured oil firms to set targets for employees and reward H01: Bonuses do not influence employee productivity in the
them for every target met; making organizational oil and gas industry in Rivers State.
performance to be a function of employee performance. But H02: Compensation has no effect on employee productivity
employee performance remains a function of the reward in the oil and gas industry in Rivers State.
system application by the organization. Organizations that H03: Promotion does not retard employee productivity in the
have succeeded to effectively manage their reward system oil and gas industry in Rivers State.
end up with motivated workforce. Motivated employees
have high morale, the right attitude and are committed to II. LITERATURE REVIEW
achieving organization goals.
This section attempted to provide insight on what has
However, while oil firms are struggling to sustain been done and what is yet to be done in the research area.
competitiveness by demanding high performance as Literature review is the summarizing, paraphrasing and or
employee contribution, some oil companies have neglected commenting on the works of other scholars concerning the
the need to strike an equitable balance between employee research phenomenon. It establishes the bases for data
performances an organizational performance in terms of collection and analysis. The main aim of this section was to
employee welfare. In several situations, those who are review related literature on the opinion of scholars relating
favored by management are rewarded over the better to the study. The section discusses the theoretical and
performing staff, which has resulted in the case of “Monkey empirical findings, concepts used and evaluation of the
dey work Baboon dey chop”. In a bid to achieve some of reviewed studies.
these almost impossible targets, some employees outstretch
their abilities; they break their back while working very Conceptual Framework
hard, others engage in unethical practices. These actions
have cost the oil sector so much. Oil firms drive employee Reward System
so hard and neglect to give them commensurate rewards. Human resource contributes to enhancing capacities of
Unfortunately, the misapplication of rewards sent wrong organizations to remain competitive (Edirisooriya, 2014). In
signals to employees; some workers already felt the reward return, organizations reward human resource. According to
system is a farce since employees are not rewarded base on Pitts (1995) reward is the benefit an individual receives for
their contribution and that has frustrated employees, discharging a responsibility or rendering a service.
demotivated them, lowered their morale, increase job Principally, organizations reward employees through the
dissatisfaction and reduced their productivity because their mechanism of reward framework that involves different
expectations were not met regardless of the huge efforts they packages. These packages usually include bonuses,
have put in an attempt to meet or surpass organizational subsidized meal, loan, health insurance, profit sharing,
targets. In spite of the fact that rewards have been proven to among others (Agusu, 2013). Reward framework plays an
be a mechanism used by organization to induce corporate important function in employee performance and evidence
performance, some oil companies still suffer high employee shows that proper designed reward systems have positive
turnover, incur high cost through recruitment and training. effect on employee productivity (Obicci, 2015). According
Over the years as a result of poor reward system, employees to Reham et al. (2010) reward entails the payment that an
have increasingly shown their dissatisfaction by displaying individual gets from a contractual arrangement.
negative attitude to work, which consequently result to poor
performance. Reward structure is vital to attracting skilled human
resources (Agwu, 2013). Employee reward system is how
1.2 Aims and Objectives of the Study employees are paid in accordance with the value of
This study examines the effect of reward system on contribution made to achieving the goals of the organization
employee performance in the oil and gas industry in Nigeria. (Torrington & Hall, 2009). Employee reward system is any
Specifically, the study intends to: institutionalized process within an organization that
a. Examine the nexus between bonuses and productivity in motivates, compensates workers for taking a specific
the oil and gas industry in Rivers State; responsibility or rendering a set of service (Agwu, 2003).
b. Analyze the relationship between compensation and These rewards may be immediate or delayed, cash or non-
productivity in the oil and gas industry in Rivers State; cash (Agwu, 2013). Reward system is the procedure for
c. Ascertain the effect of promotion on productivity in the ensuring that employees are rewarded in consonance with
oil and gas industry in Rivers State. their contribution and skills to the achievement of the
organization’s goals. This by implication means that reward
1.3 Research Questions system is organizational framework or mechanism that
The research questions below were raised to achieve makes things happen through reciprocity interactions
the objectives stated above; (Agwu, 2013).
a. To what extent do bonuses affect employee productivity?
b. Does compensation contribute to employee productivity? Reward system is broadly divided into two basic
c. Does promotion influence employee productivity in the groups namely: intrinsic rewards and extrinsic rewards
oil and gas industry in Rivers State? (Luthans, 2002; Edirisooriya, 2014). Extrinsic rewards are

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tangible or financial rewards. Extrinsic reward system provide and paying for employees’ performance (B0b,
commonly called financial or tangible reward is strictly 2011). This does not imply that it is restricted to financial
monetary in nature. Financial or extrinsic reward is incentive. It is also concerned with non-monetary incentive,
independent or outside of the work itself and there are which covers intrinsic and extrinsic aspect of rewards
people who are responsible for controlling its size and (Fubara, 2019). Compensation is an integral aspect of
whether or not it will be approved (Obicci, 2015). Extrinsic human resource management approach, which aimed at
rewards include such elements as pay, bonuses, promotion, improving organizational productivity (Armstrong, 2005).
fringe benefits, among others (Mahoney & Lederer, 2006; Compensation management deals with the design,
Agwu, 2013; Obicci, 2015). implementation and management of compensation
mechanism that is directed towards organizational
Intrinsic reward commonly known as non-financial improvement, and increasing employees’ performance. In
reward is a psychological reward that is given to an the opinion of Pearce (2010), compensation means putting
employee for performing a task well. It represents self- in place compensation structure where a more performing
confidence and experience. According to Abiola and Ajila employee is rewarded adequately and higher than average
(2004), intrinsic rewards include receiving appreciation, performing employee. Armstrong (2005) stressed the
positive recognition, and being treated with care. Allen et al. policies are formulated and implemented to ensure that
(2004) say that intrinsic reward includes status recognition, organizations reward hard working employees in line with
opportunities to use one’s abilities and skills. By these organizational values. Anyebe (2003) says that management
definitions on extrinsic and intrinsic rewards, it means that responsibility is to initiate policies to attract, satisfy and
reward includes all economic and psychological benefits retain talented and motivated employees. This is as a result
that organizations present their employees for using their of its high-level significance both to the workers and the
knowledge, capabilities, competence and skills to businesses (Ofurum, 2012).
performing organizational task.
Promotions
Dimension of Reward System Promotion is an astounding way of compensating
individuals; it is a way which organizations uses to
Bonuses acknowledge employees and let them realize that their
Bonus can be defined as the additional amount that is superb performances are being recognized, it is additionally
given to an employee for an extra job done or for spending a method of letting workers reach the pinnacle of their
additional time in executing an assignment that is official. A career. Promotion shows that employees are skillful as they
bonus can be used by organization to accomplish a task that move starting with one evaluation level then onto the next in
is not included in the official work plan. According to a similar movement, till they arrive at the pinnacle of their
Healthfield (2016) bonus pay is usually higher than the profession which is their own objective. A decent
salary base rate. The base rate of salary is normally performance appraisal guarantees that the correct people are
indicated in the employee offer letter and it is also filed in promoted (Yasmeen, Farooq & Asghar, 2013).
the employee record. In most case, the organization manager
can circulate the bonus plan or can be indicated in the Promotion implies moving of workers for an
contract agreement. occupation of lesser essentialness and compensation to a
career of higher importance and compensation dependent on
According to Bardot (2014) a bonus can be paid by the employee's past record of extraordinary performance and
installment to the employee or an employee can decline aptitude. It is the upward development of a worker in the
working extra hours to earn a bonus. Organizations can hierarchy of the organization, generally that prompts a more
decide to pay bonus to an individual, or a group of workers intricate duty and rank and an improved compensation
or to all the employees as a reward for previous job package. Promotion is the elevation of an employee to a
accomplishments. The primary reason for using bonus in higher position of work than the previous one (Wan,
organization is to influence the behavior of employees Sulaiman & Omar, 2012) as cited in (Watson, 2009).
towards achieving a set target of the organization. There are Promotional openings likewise may incorporate opportunity
options available to organizations and employees. Bonuses to seek after greatness, the option to settle on choices
can be financial or non-financial. The type of bonus comparable to work cycles and techniques, guarantee a
incentive can be decided by the management. However, harmony among work and family, and palatable
bonus can be paid immediately or delayed based on the compensation levels, just as opportunities for career
agreement between the employee and the employer (Bardot, advancement and professional success (Wan, Sulaiman &
2014). Omar, 2012). Job promotion and profession development
can meet the self-realization desire of employees. Promotion
Compensation openings and sufficient training offered by organization can
The process of compensation is derived from satisfy workers' need and decrease their turnover
compensation strategies and those include specific expectations.
arrangements which are designed by the organization that
employee is adequately compensated (Bob, 2011). Gallup, Rath and Clifton (2001) attest that promotions
Compensation entails measuring job values, paying for create an opportunity for an employee to discover additional
competence and skill, ensuring that employees’ benefits are potentials to increase the level of obligation, a feeling of

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accomplishment, and increase social status which is the of organization strategic goals (White & Druker, 2009;
ultimate aspiration of all employees. It is in fact a degree Armstrong & Taylor, 2014). Performance entails the degree
that an organization gives to its employees to hierarchical at which the goals set by an organization are achieved as
development and employment fulfillment. It is a piece of well as the level of efficiency in workplace based on a range
performance assessment measure where a worker is given a of measurement (Fubara, 2019). Generally, employee
chance to develop and improve as per their capacities, performance is measured by the rate of productivity,
abilities and work. Promotion frequently accompanies extra customer satisfaction index, level of goal achievement and
benefits, increment pay, official vehicles and houses, better attachment (Fubara, 2019). According to Putteril and Rohrer
workplaces and work condition, strengthening, moving from (2005), employee performance is measured by the units of
a lower grade level to a higher one, topping off an empty acceptable quality output produced by an employee within a
higher position, extra status and obligations. At the point particular time period. The quality output produced by an
when workers see that their commitments to meeting employee within with9in an equalized period determines the
organization goal additionally help meet their own success of an organization. This implies that employee
objectives in career development and statuses, they will productivity culminating into performance is the bedrock of
definitely expand their endeavors towards acknowledging for sustaining organization existence.
organizational goals (Caudill & Porter, 2014).
One of the most viable ways to increase organizational
Ibrahim, Mayendesifuna, Buteeme and Lubega (2013) profitability is to increase employee performance while at
stress that workers that think the use of promotion is the time ensuring that factors that affect profitability are put
adequate are bound to be locked in and experience in check. Employee performance improvement is not only
profession fulfillment perform better and thusly have a dependent on a well-organized and functioning reward
lower goal to leave the organization. Promotional system but on also on effective human resources strategy
opportunities correspond with workers’ commitment as that is built on recruiting and sustaining motivated
employees will in general stay in their organization workforce (Al-Ahmadi, 2009). The measures on which
whenever they see that they have better odds of being employee performance are evaluated are called criteria or
promoted. Furthermore, promotion can impact employee measures of evaluation (Ivancevich, 2008). There are
motivation and performance. To be sure, it is important for several criteria suggested to accurately evaluate employee
organization management ensure that the workers deserve performance (Opatha, 2010). According to Mathis and
the promotion and that the promotion is in accordance to Jackson (2006), managers obtain information or data on how
reward standard (the obvious components which directors employees perform their job in three forms. The trait-based
need more data about) or since they appreciate great information provides data on employee subjective character
performance; and this is the aftereffect of the promotion such as attitude, creativity or initiative (Opatha, 2010).
(Mathew, 2013) as cited in (Muhammad, Rizwan & Yasin, Behavior-based information concentrates on job evaluation
2012). and what is incorporated in the job itself (Mathis & Jackson,
2006). The result-based information focuses on the
Employee Performance outcomes produced by the employees in measurable terms.
By and large, the idea of performance implies the
objectives that establishments try to accomplish through Measures of Employee Performance
their workers (Al-Rabayah, 2003). It interfaces activities and Productivity
objectives by means of workers’ obligations inside David, Larcker and Brian (2013) opine that an
organizations. As such, it is the people's obligations and important channel to increase employee productivity is to
activities that their work comprises of, which ought to be increase employee efficiency. Productivity has significant
done in the correct manner taking into cognizance the influence on an organization’s long-term performance (Cole,
qualified employees’ capacities to do them (Bilan & 2013). The organization for Economic Corporation and
Fowowe, 2017). Employee’s performance can be Development (OECD) (2014) publication asserts that
characterized as performing various exercises and employees’ productivity is a prerequisite for improving
responsibilities that their work comprises of (Al-Rabayah, organizational performance. In line with the strategic project
2003). Most people spend huge pieces of their lives on of OECD (2014) employee productivity is measured by
looking for work fulfillment because of its positive value added output and value-added input wrapped in value
endeavors on their personal and professional lives (Bilan & added productivity measurement (VAPM) (Kassim,
Fowowe, 2017). It additionally prompts increased Anyanwu & Nwuche, 2017). According to Thomas (2013)
organizational and employees’ efficiency and advantage. In productivity is computed as output divided by input or
this way, it is so difficult to accomplish elevated levels of output to input ratio.
the drawn-out productivity except if the activity satisfaction
is there (Bilan & Fowowe, 2017). Input refers to something added to a system that
modified a process (Kassim, Anyanwu & Nwuche, 2017).
Performance is necessary yardstick measuring in Input may be advice, information, power consumption,
human resources management because it provides the basis stimulus, a factor of production such as labor, capital or any
for weighing both extrinsic and intrinsic rewards (Bilan & resource employed (Schreyer, 2013; Freeeman, 2013).
Fowowe, 2017). Employee performance, therefore, is the Output on the other hand refers to service or production
effort engaged employee directed towards the achievement units (Kassim, Anyanwu & Nwuche, 2017). In production,

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output denotes the number of goods produced within a given job satisfaction and employment performance and attempts
time period, and the cost of production (Freeman, 2013). to relate it to the general performance of commercial banks
Output can also be referred to as the number of sales made of Pakistan. For this reason, 200 representatives were
from customers’ visitation. This information is sometimes chosen and 165 duly completed polls were utilized for
connected to cost of production or service delivery (Kassim, measurable analysis. The consequences of this study
Anyanwu & Nwuche, 2017). Output can be viewed as the demonstrated that the arrangement of incentive is good, and
number clients completing service within a particular time that respondents concurred that rewards expanded workers
frame. performance. The finding was considered as an achievement
for understanding frameworks of remunerations and their
There are different definitions of productivity. Mali impact on general organizational performance, particularly
(2007) refers to productivity as a measure of how well in Eastern nations.
resources are assembled in an organization and how
efficiently they are utilized to achieve set organizational Aktar, Sachu and Ali (2012) led a comparable report
goals within a stipulated period. It entails achieving the that pointed toward analyzing the connection among
highest level of performance with the minimum expenditure rewards and workers performance just as to distinguish the
of resources (Mali, 2007). According to Fubara (2019) connection among extrinsic and intrinsic rewards. The
productivity is often measured as total output against total investigation investigated factors deciding extraneous and
input. Thus, employee productivity is seen as the inherent rewards and their effect on workers performance
relationship between labor output and labor input measured and activities to impact commercial banks for a thought of a
in units. The level of efficiency in the use of factor of more precise and an organized way to deal with recognize
production to produce goods and services is recognized as employees’ endeavors which thusly influence superior
productivity (Fubara, 2019). In the view of Nwanchukwu culture in commercial banks of Bangladesh. For the sack of
(2005) productivity is the effective integration of resources, gathering pertinent data, 200 surveys were circulated and
material and human to yield high outputs. A proper 180 were returned and utilized for measurable analysis to
definition of productivity includes three basic elements (a) test the speculations got from predictive theory. The t-test
output, (b) resources used, and (c) time. demonstrated that, there is a factual noteworthy connection
among extrinsic and intrinsic rewards on employee
Following from the above three elements, productivity performance, that is, a positive connection among
is the output emanating from a given committed resource remunerations and workers performance and an
input at a specific time (Fubara, 2019). In several seminars, exceptionally certain critical connection among extrinsic
conferences, symposia and workshops, the topic has been and intrinsic rewards, and because of this positive
how to improve the productivity of the Nigerian employees. relationship, banks of Bangladesh should continue utilizing
According to Beatson (2008), productivity is a necessary rewards in the event that they to expand their performance.
factor in social and economic development in it is the
standard of living determined. Low productivity results in Tausif (2012) directed an investigation on the effect of
high price. non-monetary awards on worker in instructive sector of
Pakistan. Organized survey was utilized to gather the
Corporate Culture information from the chose respondents. The author created
Dennison (2014) earnestly declared that corporate two contending hypotheses on the connection between non-
culture includes consistency, adaptivity, and inclusion. This budgetary rewards and worker’s performance. In the
means for organization to achieve its objectives, increase investigation t-test, regression and correlation analyses were
productivity should be seen as a corporate culture. As firms used to test speculations, regardless of whether non-
face genuine rivalry, they have to work sufficiently to budgetary rewards have positive relationship with worker
improve quality. Reward system has a vital to role to play in job satisfaction or negative relationship with job
organizational performance because it is the point of satisfaction. The autonomous variable of promotion, work
convergence between the employer and the employees. enhancement and independence and its effect on subordinate
Employees depend on wages and salaries. For managers, variable of employee performance were stated clearly.
remuneration decisions have impact on business overhead
and capacity to be competitive. Reward can be in form of Nnaji and Nnadozie (2015) investigated the impact of
cash or in form of non-financial incentives but it points to rewards on employee performance in selected banks in
“how much” organizations are willing to pay their Awka Ibom Metropolis. The principal objective of this
employees. Most organizations study the pay levels in the investigation is to decide if a relationship exists between
market before fixing their pay level. Work costs are a remuneration frameworks and employee performance. All
component of pay cost for particular employee and for all the more explicitly, the examination expects to address the
the employees (Dennison, 2014). connection between intrinsic (non-monetary) and extraneous
(money related) compensations on workers’ performance.
Empirical Review Discoveries: The experimental outcomes demonstrated the
Reward System and Employee Performance presence of a connection among remunerations and
Khan, Shahid and Nawab (2013) explored various employee performance and that there is a critical contrast on
variables deciding extraneous and intrinsic incentives using the impacts of intrinsic and extraneous compensations on
two-factor hypothesis and their effect on banking workers' employee performance.

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Agwu (2013) conducted a research to ascertain the examination was 6,060 staff from fifteen (15) deposit money
effect of fair reward system on job performance of banks (DMBs) purposively chosen from the five (5) states in
employees in Nigeria Agip Oil Company in Port Harcourt South-East Nigeria. The sample size of 546 was acquired
between 2011 and 2012. A sample of 36 respondents utilizing Godden's factual equation for ascertaining sample
involving 34 managers, 97 supervisors, 259 workmen was size from a finite populace. Relative stratified irregular
selected from a population using a stratified random sampling technique was utilized to ascertain the
sampling technique. The questionnaire was used as the proportionate sample size for the clusters. The
instrument for eliciting responses from the participants. The Questionnaire was utilized to gather information from the
results from the study indicated that approximately 82% of respondents in the wake of being approved by specialists
employees’ job satisfaction was influenced by fair reward from the industry and the scholarly community; out of the
system and reduced the rate of industrial action by 80%. The 546 duplicates of the questionnaires directed, 524 were
study recommended that periodic review of reward system returned and utilized for the study while 22 duplicates were
by the organization is inevitable to ensure fairness, maintain not returned. Information was gathered through essential
competitive pay rates and flexibility in the administration of and auxiliary sources. The hypotheses were tested utilizing
reward. Spearman correlation ordinal calculated regression and chi
square. After the investigation, the study uncovered that
Zakaria, Hussin, Noordin, Zakaria and Mohamed there was a positive connection between remuneration
(2011) carried a study to investigate the relationship structure and employee motivation; acknowledgment of
between reward system and employees’ performance in superb performance emphatically influenced employees’ job
Toyota. The questionnaire was used to obtain the needed satisfaction and promotion decidedly influenced employee’s
data from selected respondents. The results showed that dedication. In light of the discoveries, the investigation
there was no significant relationship between reward system suggested that human resources managers in each
and employee performance. Similarly, a study was organization particularly DMBs ought to guarantee that they
conducted by Ong and Teh (2011), to examine the create reward structures that can deal with the assorted
relationship between reward system and financial inspirational needs of their employees. DMBs ought to
performance of organization in Malaysia through the guarantee that they reasonably reward moral conduct and
distribution of questionnaire to selected companies. The exceptional performance. DMBs should make available
results revealed that there is no significant relationship assortment of promotional opportunities so as to get their
between reward system and age, and size of the companies. workforce focused on organizational goal.
However, it was reported that intrinsic rewards have positive
and significant relationship with organizations’ financial Payam, Akram, Majid and Seyed (2013) examined the
performance. connection between rewards and employee performance.
Here in this investigation, zeroing in on 77 completed
Aktar, Sachu and Ali (2012) conducted a study in surveys by various categories of employees from two
commercial banks in Bangladash to ascertain the correlation Malaysian travel industry organizations. There has been an
between reward and employees’ performance. The aim was endeavor to analyze the part of various reward sorts
also to identify the relationship between extrinsic and applying the Backward Multiple Regression strategy. In
intrinsic rewards. The questionnaire was the preferred general, the measurable outcomes show that albeit all
instrument for data collection. The result of the study reward kinds (including intrinsic and extrinsic rewards) have
showed that there was a significant relationship between an immediate positive relationship with employee
extrinsic and intrinsic rewards. In addition, it was observed performance dependent on the connection test, three sorts
that both extrinsic and intrinsic rewards have statistically (for example bonus, fringe benefits, and appreciation) lose
significant impact on employee work performance. their significance when they are considered in a more
thorough model including different rewards. Besides, the
Shahzadi and Farooqi (2014) attempted to investigate study shows that intrinsic rewards have more impressive
the relationship between reward system and employee consequences for employee’s performance than the extrinsic
performance in some public and private banks in Pakistan. rewards.
The questionnaire was used to obtain the needed
information from the participants while SPSS was used to Ashraf and Mohammad (2014) examined the function
aid the data analysis. The results revealed that reward of motivating forces on employee performance for the
system has positive effect on employee work performance. employees of the Jordanian the travel industry and travel
establishments. Statistical packages for social sciences
Udeze, Ugwu and Aku (2019) study the effect of (SPSS) program were utilized for graphic investigation.
remuneration management on employee performance in the With the end goal of this study, the sample was picked
Nigerian financial segment. In particular, the study tried to haphazardly and it comprised of 28 establishments found in
survey the idea of the connection between remuneration Amman. Concerning the respondents of the example, they
structure and worker motivation, look at how were 44 employees who got 44 surveys. 41 surveys were
acknowledgment of outstanding performance influences returned, which forms 93% of the sample. The fundamental
employee’s job satisfaction and explore the impact of discoveries demonstrate that there is a satisfactory degree of
promotion on employee’s responsibility. The study adopted incentives given to employee. Moral motivations, rewards,
the survey research design. The populace for the efficiency of remuneration framework and promotions are

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four elements found to affect employee performance in efficiency and better job execution. Accordingly, it is
Jordanian travel and the travel industry organization. critical to perceive which compensating systems lead to
Nonetheless, rewards positioned in the first of its effect on higher workers' productivity and to upgrade their
employee performance while promotion positioned in the performance. Thinking about the aftereffect of this
last spot. At long last, this investigation has confirmed investigation, it tends to be resolved that distinctive
further examination openings that could advance the persuading components like promotions and bonuses, and
understanding of motivations and employee performance at reasonable installment pay have noteworthy association with
the Jordanian travel and the travel industry organizations. better job performance (Oyebanju, 2009).

Walters, Bamidele, Ladoke, Emmanuel, Nwanneka Helena (2013) inspected the effect of performance
and Benedict (2019) study examined the impact of related compensation on workers utilizing a case study of
remuneration framework on employee performance in performance incentive scheme at the Motor Vehicle
chosen producing firms in the Littoral Region of Cameroon. Accident Fund in Namibia. The targets of the investigation
In particular, the examination evaluates how much benefit were to review the effect of the current MVA Fund
sharing influences worker commitment in assembling firm; Performance Incentive Reward Scheme on worker
determines the impact of flat-rate frameworks on employee motivation, employee performance and organizational
work esteems in assembling firms; and assesses the impact performance. The examination utilized questionnaire-based
of aggregate bargaining reward frameworks on worker data for the contextual investigation of PIBS in the MVA
cohesiveness in assembling firms. This exploration work is a Fund. 61 respondents partook in the overview. The sample
study which utilizes a sample of 538 employees drawn from contained 3 heads and 58 workers. The study instrument
a populace of 5146 representatives of ten chosen producing was the questionnaire. The aftereffect of the investigation
firms inside the Cameroon Littoral Region. The sample was uncovered that the impact of performance related
chosen by the utilization of the Cochran's formula for finite compensation on employee performance is high and the
populace test at a 95% certainty level. The significant fulfillment impact of legitimacy pay is regularly upheld by
wellspring of information utilized for the investigation was Performance Incentive reward Scheme.
primary data and the instrument utilized for information
assortment was questionnaire. The discoveries uncovered Edward (2013) explored the part of worker reward on
that, benefit sharing had an altogether beneficial outcome on work execution in Ghana. The destinations of the
employee commitment in assembling firms; flat-rate investigation were to decide if extra practices in Accra
frameworks had an essentially negative impact on worker Brewery Limited benefit the workers, to set up the
work esteems in assembling firms; and aggregate bargaining persuasive projects utilized by Accra Brewery Limited to
reward frameworks had a fundamentally sure effect on hold its workers and to learn if employee bonus has a
employee cohesiveness in assembling firms. The relationship with work performance in Accra Brewery. This
investigation presumed that there is a positive connection examination took a glance at the bonus practices in Accra
between remuneration frameworks and employee Brewery Limited (ABL) from the perspective of its
performance. This connection creates the avenue for employees and what job bonus plays in their job
employers to utilize reward framework as a spurring performance. A sample populace of thirty workers
component to adjust employee conduct towards productivity containing senior and junior level staff in the different
and viability. In view of the discoveries, it was suggested offices was utilized. Eight out of the thirty employees
among others that reward frameworks for assembling firms representing 26.67% were happy with the bonus practices of
ought to be structured with the end goal that employees are ABL. The investigation affirmed that absence of reward,
qualified for rates of benefit earned by the firm as a method work-life balance, absence of remunerations and
for improving productivity and encouraging cohesiveness appreciation and salary and compensation were more normal
among workers. The study further exhorted that employees purposes behind turnover among all employees. The
in manufacturing firms ought not to be paid fixed discoveries were that criticism on employee performance is
compensations as it could bring about a high pace of imperative to building trust in the bonus acts of the Brewery.
lateness and hesitance of workers within a group to place in Also, worker offer as revered in the vision articulation of the
anything over the performance of an average performer in Brewery must be maintained while management ought to be
the group. adaptable regarding bonus procedures.

Relationship between Bonuses and Employee Following the findings, the hypothesis beneath were
Performance detailed.
Employee performance can be supported by dealing H01: Bonuses do not influence employee productivity in the
with a substantial performance assessment, bonus and oil and gas industry in Rivers State.
reward framework (Bretz, et al., 1992). It ought to be
viewed as the measure of fringe benefits (or certain Relationship between Compensation and Employee
recompense) and rewards are differed among well- Performance
performing and frail performing workers. The incentive, The profoundly energetic employees build competitive
which is the aftereffect of workers' support with money or advantage for their organization and lead the organizations
different things, for example, rewards (for example vehicle to accomplish its targets (Rizwan and Ali, 2010). This
advance and installment increment), will prompt workers investigation inspected the effect of remuneration

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measurement on worker performance with exceptional employees’ commitment (Filipkowski & Johnson, 2008).
reference to profoundly motivated organizations. As Moreover, there is an immediate connection between job
indicated by (Hasbuan, 2003) job satisfaction influences the satisfaction components like compensation, promotions,
degree of employee performance which implies that colleagues, and the work condition itself and the
fulfillment got from work pronounced by worker is so good. performance of the employees (Blau & DeVaro, 2007).
Contentions have upheld five factors that have expands job
satisfaction such as position, age, monetary assurance and Promotion is a significant component of employee’s
impact, job satisfaction comprise of mental factor and social way of life and occupation, influencing other professional
factor (Blau & DeVaro, 2007). Compensation is the key training levels (Kosteas, 2009, Cobb-Clark, 2001; Blau &
assurance however experience awards in study demonstrate DeVaro, 2007; Francesconi, 2001) and can obviously affect
more complex and troublesome relationship. other employment angles like employment connection and
duties. For this situation, the organizations can apply
Reward is the most significant component to take out promotion as a remuneration factor for elite workers,
employee for paying their earnest attempts to produce new building up a consolation for them to do their manager
ideas to increase the organization performance both exertion. Also, promotion can impact the instrument of
budgetary and non-money related. Dewhurst et al. (2010) applying better endeavors, if employees put a significant
relationship of the director reward power is connected with effort on it (Francesconi, 2001). If not, the organizations
worker performance, greater productivity, fulfillment and would zero in on pay increment to remunerate high exertion
turnover and organization citizenship conduct. Deeprose and efficiency. In fact, the workers might merit the
(1994) says that inspiration of worker efficiency can be promotions since they make an increase in work services
upgrade to give powerful acknowledgment which can result like spending account or a greater office (the noticeable
in improved organizational performance. The whole components which managers need more information about)
responsibility of the organization is that the employee is or since they appreciate great performance; and this is the
roused to appraisal the performance of the employee with after-effect of the promotion (Kosteas, 2009).
adequate employee remuneration (Blau & DeVaro, 2007). H03: Promotion does not retard employee productivity in
the oil and gas industry in Rivers State.
Fubara (2019) analyzed the connection among pay and
employee performance of banks working in Port Harcourt. Theoretical Framework
Among the statement of the problem is the need to From the review of literature, employee performance
investigate how banks could use remuneration as a is a sequence influenced by extrinsic and intrinsic rewards.
technique to stay competitive in business by holding high Following from this, employee reward systems have been
performing staff. Especially at a time where there exist other argued to impact employee performance; although the
worthwhile businesses both locally and around the world fit impacts of employee rewards on employee performance are
for absorbing such staff, particularly with the continuous still not clear per se (Obicci, 2015). However, this
backing and backing programs pointed toward urging inconclusive argument surrounding the effects of reward
imaginative youthful personalities to turn into their own system on performance is blamed on the choice of employee
boos. It depended on this scenery that the reinforcement and motivation theory adopted at a time. In view of this, the
expectation theory was embraced as the hypothetical section provides a theoretical framework on which the study
establishment for the study. The study used a cross sectional is based upon care analysis of other theories on employee
review plan as the examination procedure as well-structure reward system.
questionnaire was disseminated to 149 staff of five chosen
banks and 120 were recovered from the field. The mean, The Social Exchange Theory
standard deviation and Pearson Product Correlation This theory provides a strong rationale for explaining
Coefficient were used to analyze the result of the study. employee performance (Saks, 2006). It explains the various
Discoveries from the exploration uncovered that pay relates levels of employee performances observed in different
decidedly and fundamentally with employee performance, places of work environment (Saks, 2006). The theory posits
as it has critical effect on job satisfaction, employee that employee feel obliged to put in their best possible way
productivity and worker effectiveness. Hence, it was when they are adequately rewarded and would to ensure
suggested that remuneration is a key instrument they respond positive to the organization’s gesture by
management can use to improve employee performance and putting addition time and efforts in the job they are assigned
it ought to be decidedly used. to do (Obicci, 2015). It further stressed that when repeated
It was on this note this research formulated the following meetings are hold it could be used to stir obligations and
hypothesis: positive contributions (Kumar & Swetha, 2011). The
H02: Compensation has no effect on employee productivity primary tenet of the theory is how the relationship that exists
in the oil and gas industry in Rivers State. between the parties leads to trust, loyalty, and mutual
commitments (Obicci, 2015). The rules tend to be reciprocal
Relationship between Promotions and Employee interdependence, so that the action of one party necessitates
Performance the action of the other party. For example, when an
A potential connection exists between work individual receives extrinsic or intrinsic rewards from an
vulnerability and goals to turnover; and furthermore, there is organization, he/she is motivated to reciprocal the rewards
a little negative relationship between job uncertainty and by contributing to the common goals of the organizations.

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The two-way relationship between the employee and The Expectancy Theory
employer is consistent with the description provided by The expectancy theory postulates that behavior and
Robbinson et al. (2004) on the employee-organization commitment of employee in an organization is determined
engagements. how much the employee feels that the goals set by them can
be achieved. This means that employees alter their behavior
The social exchange theory is used as the theoretical and commitment in organization to favor their course. The
foundation for the current study because employee theory underpins that performance management can be
commitment and involvement in contributing to the affected by future expectations of the employee (Guest,
realization of the goals of the organization is dependent on 2002). The most widely recognized theory of motivation
the reward they received as well as the weightage of the that has been used to examine motivation is the theory
reward (Obicci, 2015). It is stated that if organization do not propounded by Victor Vroom popularly called the
provide the appropriate rewards, there is high possibility that expectancy theory (Salaman et al, 2005). The theory
employees would tactically refuse to work. As mentioned by assumes that the propensity to perform a task is depended on
Kumar and Swetha (2011), the level of physical and mental the goal that is entrenched in the mind of the employee and
efforts that workers are willing to devote to the roles the degree of motivation received by the employee (Salaman
assigned to them at work places may depend the economic et al, 2005). The theory concentrates on the relationship
and psychological rewards receive from the organization. between performance and reward, reward and goal, and goal
The researchers have maintained that reward system affects and performance (Salaman et al, 2005). The Vroom
employee performance. Thus, the underpinning conceptual expectation theory therefore says that employee expectation
framework as shown in figure 2.1 is derived from the Social influences the behavior and the way individual would work
Exchange Theory upgraded by research findings on to contribute in achieving the organization’s goals.
employee reward system.
Appraisal of Reviewed Literature
The Goal Setting Theory This section reviewed theoretical and empirical
This theory assumes that the personal goal of an literature on the influence of rewards on employee’s
employee has significant effect in inspiring employee performance. The literature is replete with mixed evidence
performance (Guest, 2002). It encourages employees to set on how reward system affects employee productivity. The
goals and work towards achieving the goals, but in a social exchange theory posits that when employees receive
situation where these goals are not achieved, the goals rewards from organizations, they are engaged in to work,
should be adjusted and the employee should improve they feel obliged to put in their best possible to ensure the
performance to achieve the set goals (Guest, 2002). The occurrence of fair exchange by responding through higher
goal-setting theory was propounded by Edwin Locke in levels of engagement (Obicci, 2015). The theory further
1968. It assumes that employee personal goal plays a stressed that series of interactions between the parties
significant part in persuading him/her for unrivaled involved are used to stir obligations (Kumar & Swetha,
performance. Skills required include the capacity to draw in 2011). The basic tenet of the social exchange theory is that
workers to set common goal and get positive performance as relationship between parties evolved, it leads to trust,
feedback. Time and efforts will also need to be devoted to loyalty and mutual commitments in so far as the parties
providing important performance motivation incentives, involved abide by the stated ‘rules’ of exchange (Obicci,
overseeing measures, giving satisfactory resources, and 2015).
workplace training. It additionally advice that to drive the
organization to top performance level, managers and Empirical findings from Ajila (2004), Yousaf, Latif,
supervisors must ensure that human resources are given Aslam and Saddiqui (2014), Katua, Mukulu and Gachunga
adequate priority. The standard here is to promote human- (2014) and Aktar, Sachu and Ali (2012) revealed that
to-human relationship by offering personal support to every rewards have significant impact on employee performance.
single employee (Salaman et al, 2005). However, it was reported that extrinsic reward is more
significant in influencing employee productivity. On the
Employee performance as a concept is intended to contrary, Ajila (2004); and Njanja, Maina, Kibet and Kageni
accomplish results and it has a solid connection with the (2013) findings showed that extrinsic and intrinsic rewards,
predetermined objectives of an organization (Abbas & especially the use of physical cash does not have any
Yaqoob, 2009). Performance is the key factor that is used to influence on the performance of employee and this is
measure accomplished task, which has a significant because the opinion of employees on the effect of cash
association with the predetermined targets of the bonuses differs. In-between these findings, Nnaji and
organization (Sabir et al., 2012). According to this theory, Nnadozie (2015) reported that a significance difference
employees can accomplish a given task by making work exists on the effect of extrinsic and intrinsic effects on
environment appealing, palatable, and inspiring to workers employee performance. In addition, all the literatures,
(Sabir et al., 2012). How work is assigned, structured and expect the study conducted by Agwu (2013), which
carried out influence how individuals performed. In attempted to examine effect of fair reward system on job
addition, the level of experience, skills and organizational performance of employees in Nigeria Agip Oil Company in
support is pivotal to employee performance (Taiwo, 2009). Port Harcourt between 2011 and 2012, were conducted in
the banking sector and manufacturing sector with less
production risks and disasters. The concentration of research

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of this nature on other sector outside the oil and gas industry results from the study indicated that approximately 82% of
has created a research gas which needs to bridge. It is on this employees’ job satisfaction was influenced by fair reward
note that this study attempts to specifically identify the system and reduced the rate of industrial action by 80%. The
reward system in operation in the oil and gas industry in study recommended that periodic review of reward system
Nigeria and how the reward systems have influence by the organization is inevitable to ensure fairness, maintain
employees’ performance in the oil and gas industry in view competitive pay rates and flexibility in the administration of
of the sector’s contribution to the development of Nigeria. reward.

Agwu (2013) conducted a research to ascertain the Operational Framework

effect of fair reward system on job performance of The operational framework for the study is presented
employees in Nigeria Agip Oil Company in Port Harcourt graphically. The framework was derived from the
between 2011 and 2012. A sample of 36 respondents understanding developed from the review of relevant
involving 34 managers, 97 supervisors, 259 workmen was literature regarding the research topic. It is hypothesized that
selected from a population using a stratified random the dimensions of reward system have relationship with the
sampling technique. The questionnaire was used as the measures of employee performance. The operational
instrument for eliciting responses from the participants. The framework is thus presented in figure 2.1 as shown below.

Figure 2.1: Operational Framework on the relationship between reward system and employee performance in the oil and gas
industry in Nigeria
Source: Adopted from related literature review

III. METHODOLOGY (Denzin & Lincoln, 2011). The limitation of using

quantitative design is that it cannot be used to analyze
This section is used to provide detailed explanation on research that has to do with perceptions, opinions and
the methodological issues relating to the study. It discusses feelings of respondents. This is where the use of qualitative
the research design, the population of the study, the sample design is important and useful because it can be used to
and sampling technique. It also discussed the method of data analyze the feelings, perceptions and views or opinions of
collection and data analysis as well as the reliability and participants. A hybrid of qualitative and quantitative
validity of the research instrument. research is mixed design. The mixed design is used to cover
the weaknesses inherent in the qualitative and quantitative
Research Design designs by exploring their benefits (Ritchie, et al. 2012).
Research design is a roadmap the guide the collection Therefore, this study employs the mixed design to gain
and analysis of data in a research work (Baridam, 2007). multi-dimensional insight into the influence of reward
Basically, there are three types of research design, which system on employee performance by collecting qualitative
includes qualitative, quantitative and mixed design. The and quantitative data. Mixed design ensures the reliability
qualitative research design is used in gathering data that can and validity of the research is maximized through the
be measured or quantified while the quantitative design is triangulation of quantitative and qualitative data obtained
used in gathering quantifiable or numerical data. Both from the participants.
qualitative and quantitative designs have their advantages
and disadvantages. Quantitative research design is less bias, Population of the Study
has higher reliability and validity rating when compared to The population of a study refers to the entire group of
qualitative design. In research work, quantitative research is individuals, events and objects with common characteristics
faster in terms of data analysis than qualitative design that can be observed (Robson, 2002). The total population of

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this study comprises of 620 managers of Total Nigeria distribution of our questionnaire and oral interview. The
Limited, AGIP and Shell in Rivers State. descriptive statistics were used to analyze the response rate
Sample and Sampling Technique of the respondents while the Pearson’s Correlation was used
The sample included two hundred and forty-three to determine the level of association between the dependent
(243) selected top, middle and lower-level managers. A sum and independent variables in testing the hypotheses. Data
of 243 members, consequently, framed the sample size for was analyzed through the use of Statistical Package for
the investigation. The simple random inspecting strategy Social Sciences (SPSS).
was utilized to test respondents of the examination. The
basic irregular inspecting gives the respondents the The measuring instrument that was used in this
equivalent possibility of being sufficiently selected. The research is by means of a structured questionnaire, attached
respondents are 620 managers of Total Nigeria Limited, as Appendix 1.
AGIP and Shell in Rivers State. The sample size was
determined using the formula below. Using Taro Yamane Independent Variables
(1967) formula, a sample size of two hundred and forty- The independent variable in this study is reward
three (243) participants were selected from the population as system. It was assessed in three areas: bonuses,
shown below. compensation and promotions.

n = N . Bonuses: This is an independent variable in the study. It was

1+N(e)2 measured as the pay over and above the amount of pay
specified as a base salary or hourly rate of pay.
Where
n = Sample Size Compensation: This is an independent variable in the study.
N = Population, This is measured as the compensation structure put in place
e = expected error (5% = 0.05) where a more performing employee is rewarded adequately
and higher than average performing employee.
n = 620 .
1+620(0.05)2 Promotions: This is an independent variable in the study.
This is measured as the upward movement of an employee
n = 620 . in the hierarchy of the organization, usually that leads to a
1+620(0.0025) more elaborate responsibility and rank and an improved pay
package.
n = 620
1 +1.55 Dependent Variables
The dependent variable in this study is employee
n = 620 performance. The measure of employee performance
2.55 includes employee productivity.

n = 243 Employee Productivity: Productivity is measured as how

Minimum Sample Size = 243 well resources are assembled in an organization and how
efficiently they are utilized to achieve set organizational
Therefore, a sample of two hundred and forty-three goals within a stipulated period.
(243) individuals was used for the study. The simple random
sampling technique was used to distribute the questionnaire. Validity and Reliability
The simple random sampling gives the respondents the Hair et al. (2007: 8) characterized validity as "how
equal chance of being adequately selected. much a measure precisely produces to what it should", and
accordingly validity is has to do with how well a concept is
Method of Data Collection characterized by the measure(s). This investigation tends
The data used for this research is primary data. In address to content validity through the survey of literature
ensuring high validity of the primary data, questionnaire was and utilizing instruments portrayed in the procedure of data
employed. The copies of questionnaire were mainly analysis.
distributed to the different level managers of Total Nigeria
Limited, AGIP and Shell in Rivers State. The open-ended Reliability shows the degree to which a variable or set
questions were directed to those interviewed, while the of factors is steady in what it is planned to measure (Hair et
questionnaire was in form of open and close-ended al., 2007). It contrasts from validity in that it relates not to
questions with the 5-point Likert’s options of strongly agree what exactly ought to be estimated, yet rather to how it is
(5), agree (4), undecided (3), disagree (2) and strongly estimated. This study utilizes various items in all constructs
disagree (1). thus the internal consistency strategy is applied in the
current investigation. Fujun et al. (2007) said that the
Methods of Data Analysis Cronbach Alpha with adequate cutoff point 0.70 shows that
The descriptive statistics and Pearson’s Correlation all attributes are internally predictable and as a general
Coefficient were used to analyze the data generated from the guideline for depicting internal consistency utilizing

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Cronbach's Alpha is satisfactory among numerous scientists. The result in Table 2 represents the number of
The estimation scale for the factors in this investigation questionnaires that were distributed and the number of
depended on a 5-point Likert's scale extending from questionnaires that were retrieved Table 2 reveals that a total
"strongly agree" to "strongly disagree". Reliability insights 243 copies of the questionnaire were distributed and 220
demonstrate that the 'alpha estimation' of all items surpassed were duly filled and retrieved. The number of copies of the
suggested criterion of 0.70 for scale reliability and questionnaire that were duly filled and returned represents
consequently the tool was solid enough to gather the correct 90.5 percent of the total number of questionnaires that were
information as shown in the table 3.1 distributed. The number of copies of questionnaire returned
is adequate for the study. For the purpose of analysis, the
Table 1: Scale Reliability numbers of questionnaire retrieved would constitute 100
Variable Scale Cronbach's α percent.
Bonuses 5 0.78
Compensation 5 0.81 4.2 Data Analysis
Promotion 5 0.80
Productivity 5 0.82 Table 3: Response Rate on Respondents Gender
Corporate Culture 5 0.73 Valid Cumulative
Frequency Percent Percent Percent
IV. RESULTS AND DISCUSSION Valid Male 144 65.5 65.5 65.5
Female 76 34.5 34.5 100.0
The section is divided into three subsections and they Total 220 100.0
include: data presentation, data analysis and the discussion Source: Data Survey 2020
of the results.
Table 3 shows the proportion of male to female that
Presentation of Data participated in the study. A total of 144 male, which
represents 65.5 percent took part in the study. Of the total
Table 2: Response Rate on Instrument 220 respondents, 76 percent of them representing 34.5%
Questionnaire Frequency Percentage were female. The result indicates that more male than
Distributed 243 100 female participated in the study. This implies that males are
Collected 220 90.5 more gainfully employed in the firms used for the study
Source: Data Survey 2020 because every employee was given the equal chance of
being adequately represented.

Table 4: Educational Qualification of Respondents

Frequency Percent Valid Percent Cumulative Percent
Valid O/Level 10 4.5 4.5 4.5
OND 35 15.9 15.9 20.4
HND 44 20.0 20.0 40.4
B.Sc/B.Ed/B.A 84 38.2 38.2 78.6
M.Sc/MBA/M.A 30 13.6 13.6 92.2
Ph.D 5 2.3 2.3 94.5
Others 12 5.5 5.5 100.0
Total 220 100.0
Source: Data Survey 2020

Table 4 depicts the educational background of the respondents had PhD degrees while the remaining 12
participants. 10 participants which accounts for 4.5 percent respondents representing 5.5 percent had other
of the respondents had O/Level certificate. 35 of the qualifications. It could be seen from the Table 4.3 that more
participants which represent 15.9 percent had OND than 50 percent of the participants in the study have attained
certificate. 44 of the participants which represent 20 percent a reasonable level of literacy. This is importance of the
had HND certificate. 84 respondents out of the 220 educational background of the respondents is that it
respondents, which represent 38.2 percent had first degree contributes to the reliability and validity of the findings of
certificates. 30 participants representing 13.6 percent had the study.
M.sc/MBA/M.A degree. The Table also reports that five

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Table 5: Years of Working Experience of the Respondents
Frequency Percent Valid Percent Cumulative Percent
Valid 1 – 5 years 31 14.1 14.1 14.1
6 – 10 years 97 44.1 44.1 58.2
11 – 15 years 62 28.2 28.2 86.4
16 years and above 30 13.6 13.6 100.0
Total 220 100.0
Source: Data Survey 2020

Table 5 shows the years of working experience of productivity in the oil and gas industry by approximately
those who participated in the study. 31 persons accounting 67.1 percent.
for 14.1 percent have between 1 – 5 years working
experience. 97 participants accounting for 44.1 percent Table 8: Correlation between Promotions (PRM) and
have between 6 – 10 years working experience. Those who Productivity (PRO)
have worked between 11 – 15 years were 62 of the total PRM PRO
participants, which accounts for 28.2 percent. 30 persons PRM Pearson Correlation 1 .576**
accounting for 13.6 percent have between 16 years and over Sig. (2-tailed) .004
working experience. N 5 5
PRO Pearson Correlation .576** 1
Correlation Analysis Sig. (2-tailed) .004
N 5 5
Table 6: Correlation between Bonuses (BON) and **. Correlation is significant at the 0.01 level (2-tailed).
Productivity (PRO)
BON PRO The result in Table 8 shows the analysis of the
BON Pearson Correlation 1 .642* correlation result between promotions and productivity in
Sig. (2-tailed) .004 the oil and gas industry in Nigeria. The result of the Karl
N 5 5 Pearson correlation coefficient r = 0.576 shows a strong
PRO Pearson Correlation .642* 1 positive correlation between promotions and productivity in
Sig. (2-tailed) .004 the oil and gas industry in Nigeria. This means that oil and
N 5 5 gas companies in Nigeria have used promotions as a strategy
*. Correlation is significant at the 0.05 level (2-tailed). to increase employees’ productivity.

Table 9: Correlation between Corporate Culture (CC)

The result in Table 6 is the correlation analysis of and Reward System (RS)
bonuses and productivity. The result shows that there is a CC RS
strong positive correlation between bonuses and CC Pearson Correlation 1 .532**
productivity given that the correlation coefficient r = 0.642. Sig. (2-tailed) .000
This means that bonuses play important role in motivating N 5 5
employees to work more to achieve organizational goals. RS Pearson Correlation .532** 1
Sig. (2-tailed) .000
Table 7: Correlation between Compensation (COM) and N 5 5
Productivity (PRO) **. Correlation is significant at the 0.01 level (2-tailed).
COM PRO
COM Pearson Correlation 1 .671** The result in Table 9 depicts the Karl Pearson
Sig. (2-tailed) .003 correlation coefficient r = 0.532 shows that there a strong
N 5 5 positive correlation between corporate culture and reward
PRO Pearson Correlation .671** 1 system in the oil and gas industry in Nigeria. This means
Sig. (2-tailed) .003 that the corporate culture in the oil and gas industry in
N 5 5 Nigeria plays an important role in the reward structure of oil
**. Correlation is significant at the 0.01 level (2-tailed). and gas companies in Nigeria. The degree of association
between corporate culture and reward system is significant
in the oil and gas industry given that the probability value =
Table 7 shows the result of the correlation analysis 0.000 is less than the critical value = 0.05.
between compensation and productivity in the oil and gas
industry in Nigeria. The result of the correlation coefficient r
= 0.671 shows that there a strong positive correlation
between compensation and productivity in the oil and gas
industry in Nigeria. This means that the use of compensation
as a reward system contributes to increasing employee

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Volume 6, Issue 7, July – 2021 International Journal of Innovative Science and Research Technology
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Table 10: Correlation between Corporate Culture (CC) support the view held by Filipkowski and Johnson (2008)
and Employee Performance (EP) that promotions is a veritable tool for increasing employee
CC EP productivity in Nigerian oil and gas industry.
CC Pearson Correlation 1 .602**
Sig. (2-tailed) .001 Test of Hypotheses
N 5 5 This section tests the hypotheses stated in chapter one.
EP Pearson Correlation .602** 1 The probability of the correlation coefficients and the
Sig. (2-tailed) .001 critical value at 0.05 level of significance were compared to
N 5 5 either accept or reject the null hypotheses.
**. Correlation is significant at the 0.01 level (2-tailed).
Hypothesis One
Table 10 depicts the result of the Karl Pearson H01: Bonuses do not influence employee productivity in the
correlation coefficient between corporate culture and oil and gas industry in Rivers State.
employee performance. The coefficient of correlation r =
0.602 indicates that there a strong positive correlation The probability value shows that the correlation
between corporate culture and employee performance in the coefficient between bonuses and productivity is lower than
oil and gas industry in Nigeria. This means that the the critical value given that the calculated Pr = 0.004 is less
corporate culture plays a vital role in the performance of than the theoretical P-value = 0.05. This implies the
employees in the oil and gas companies in Nigeria. The rejection of the null hypothesis. Therefore, the study accepts
level of association between corporate culture and employee the alternative hypothesis which states that there is a
performance is significant in the oil and gas industry given significant relationship between bonuses and productivity in
that the probability value = 0.001 is less than the critical the oil and gas industry in Rivers State.
value = 0.05. The results imply that corporate culture
moderates significantly and strongly between reward system Hypothesis Two
and employee performance. H02: Compensation has no effect on employee productivity
in the oil and gas industry in Rivers State.
V. DISCUSSION OF THE RESULTS
The probability value shows that the correlation
The correlation coefficient and the probability value coefficient between compensation and productivity is lesser
show that there is a strong and significant relationship than the critical value given that the calculated Pr = 0.003 is
between bonuses and productivity in the oil and gas industry less than the theoretical P-value = 0.05. This implies the
in Rivers State. This means that the use of bonuses as a rejection of the null hypothesis, and acceptance of the
reward strategy in the oil and gas industry in Nigeria has alternate hypothesis, which states that there is a significant
overtime led to motivating employment to increase their relationship between compensation and productivity in the
level of productivity. This study supports the findings of oil and gas industry in Rivers State.
Helena (2013), who reports a positive relationship between
bonuses and employee performance. Similarly, Edward Hypothesis Three
(2013) carried a study to examine the impact of bonuses on H03: Promotion does not retard employee productivity in the
employee productivity and confirmed a positive relationship oil and gas industry in Rivers State.
exists between bonuses and employee performance.
The probability value shows that there is a significant
The results of the study indicate that there is a strong relationship between promotion and productivity in the oil
positive and significant relationship between compensation and gas industry in Rivers State given that the calculated Pr
and productivity in the oil and gas industry in Rivers State. = 0.004 is less than the theoretical P-value = 0.05. This
This means that employees’ productivity increases when implies that the research accepts the alternative hypothesis,
they are adequately compensated for a job well done. They which states that there is a significant relationship between
also feel satisfied to carry out and carry on the job. The promotion and productivity in the oil and gas industry in
findings in the study corroborate the findings of Fubara Rivers State.
(2019) who posit that compensation contributes to retaining
high performing employees because have job satisfaction. In VI. SUMMARY, CONCLUSION AND
turn, employees increase their level of productive energy to RECOMMENDATIONS
keep output higher and stable and make the organization
gain competitive edge. Summary
a. The study shows that there is a significant relationship
The study noticed that there is a significant between bonuses and productivity in the oil and gas
relationship promotion and productivity in the oil and gas industry in Rivers State.
industry in Rivers State. Filipkowski and Johnson (2008) b. The study result indicates that there is a significant
confirm that promotion results in employee feeling of job relationship between compensation and productivity in
security and this contributes to higher productivity. From the the oil and gas industry in Rivers State.
findings therefore, it means that the results of the study

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Volume 6, Issue 7, July – 2021 International Journal of Innovative Science and Research Technology
ISSN No:-2456-2165
c. The study noticed that there is a significant relationship For Further Studies
promotion and productivity in the oil and gas industry in The study recommends that further study should be
Rivers State. carried out to investigate the impact of reward system on
employee performance in the oil and gas industry in Nigeria
Conclusion using variables other than the ones used in this study.
Human resources are important resources of firms and
they comprise basic segment of vital accomplishment over a Contribution to Scholarship
wide range of organizations. Profoundly rewarded workers, The findings from this study have clearly revealed that
will in turn be exceptionally fulfilled well performing reward system is important to increasing employee
employees; they additionally will in general stay longer with productivity. The study contributes to knowledge as it shows
the organizations and that would lead to or increase that bonuses, compensations and promotions are vital
competitive advantage. Following the discoveries of this employee motivation strategies in the workplace. Human
study, positive connections have existed between employee resources managers by these findings should be able to
reward system and employee performance; thusly, the issue develop reward frameworks that fit the peculiarity of their
of remunerating workers utilizing every single imaginable work environments.
kind of remunerations matters so much and ought to never
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APPENDIX 1
QUESTIONNAIRE

SECTION A
Please tick [√] in the appropriate place
1. What is the name of your company? ………………………………………….
2. What is your gender?
a. Male [ ]
b. Female [ ]
3. What is your academic qualification?
a. O/Level [ ] b. OND [ ] c. HND [ ]
d. B.Sc/B.Ed [ ] e. Master/MBA [ ] f. PhD [ ]
g. Others please specify ………………………………..
4. What are your years of working experience?
a. 1 – 5 years [ ]
b. 6 – 10 years [ ]
c. 11 – 15 years [ ]
d. 16 years and above [ ]
5. What are the dimensions or types of reward system known to you?
a. Bonuses [ ]
b. Compensation [ ]
c. Promotions [ ]
d. Others, please specify …………………………………….

SECTION B: EMPLOYEE REWARD SYSTEM

Please tick [√] in the appropriate place, according to the scale given. Note: Strongly Agree SA = 5, Agree (A) = 4, Undecided
(U) = 3, Disagree (D) = 2, Strongly Disagree (SD) =1

1. To what extent do you agree or disagree to these statements?

S/N BONUSES SA A U D SD
1 Bonus is part of the employee reward system in my company
2 Bonuses contributes to increased employee productivity in my company

2. To what extent do you agree or disagree to these statements?

S/N COMPENSATION SA A U D SD
1 Compensation is an integral part of employee reward system in my company
2 Employees are adequately compensated and this increases employee productivity

3. To what extent do you agree or disagree to these statements?

S/N PROMOTIONS SA A U D SD
1 Promotion is a type of employee reward system in my company
2 Promotions are timely in my company; hence it leads to higher productivity.

SECTION C: EMPLOYEE PERFORMANCE

Please tick [√] in the appropriate place, according to the scale given. Note: Strongly Agree SA = 5, Agree (A) = 4, Undecided
(U) = 3, Disagree (D) = 2, Strongly Disagree (SD) =1

1. To what extent do you agree or disagree to these statements?

S/N PRODUCTIVITY SA A U D SD
1 My company measures employee performance by employee productivity
2 My company expects higher productivity when employees are reward
adequately
3 My company’s bonuses have positive effect on employee productivity
4 My company’s compensation has positive effect on employee productivity
5 My company’s promotions have positive effect on employee productivity

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