Chapter 5shodhganga.inflibnet.ac.in/bitstream/10603/37433/11/11_chapter 5.pdf · • Axis Bank pays...
Transcript of Chapter 5shodhganga.inflibnet.ac.in/bitstream/10603/37433/11/11_chapter 5.pdf · • Axis Bank pays...
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Chapter 5
171
Chapter 5 Comparative Study on Impact of Reward System on
Performance
5.1 Performance Dimensions
5.2 Level of performance
5.3 Impact of Reward System on Performance
5.4 Evaluation of Current Reward System
5.5 Analysis and Interpretation
5.6 Test of Hypotheses
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Chapter 5 Comparative Study on Impact of Reward System on Performance
Much research on prevailing reward system has found that the reward would
positively be associated with employee’s performance. Consistently with this
reasoning, an attempt was made to find how different components of reward
system can influence employee performance . Also , focus is been given to reveal
how the Banks under study are aligning their awards to motivate their employees
and secure higher work performance from them .
• Employees Performance is taken as a dependant variable in the study to
explore the impact of Reward on it . In analyzing performance dimensions of
employees , eminence is been given to Management philosophy with regard
to performance standards & work motivation of employees . High
performance standards and high work motivation in employees depict the
prominent performance level of employees in organization.
• Reward System is taken as an independent variable in this study with an
objective to determine and explore its impact on performance. The Reward
system involves the Financial as well as Non- Financial Rewards & Benefits
offered to employees .There are different dimensions of Financial and Non-
Financial rewards but with the objective of maintaining consistency and
reliability in Research these variables have been defined in advance . In the
scope of Financial Rewards , two variables have been taken as Fixed pay and
Variable pay . Similarly , in the span of Non- Financial Rewards , five
variables have been defined as recognition , praise , achievement ,
responsibility and personal growth . These variables have been taken as per
their relevance in the Reward System . These variables cover the important
ways with which employees are been rewarded by Organization for the work
and efforts . An attempt is been made to study these variables in detail in both
the Organizations to get a clear implication of the Reward.
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Impact of Reward System
Figure . 5.1
5.1 PERFORMANCE DIMENSIONS
The Performance Dimensions Framework is designed to build capacity for
effective management of organizational , team and individual performance. The
Framework is used to assist managers and teams to analyze :
• The level to which the individuals are apparent and decided about
expectations in terms of outputs, behavior & processes.
• The extent to which the individuals analyze and assess
performance, feedback is sought, exchanged and acted upon.
• Motivational factors that impact upon performance – both intrinsic
and extrinsic aspects.
Financial Rewards
A. Fixed Pay
B. Variable Pay
Non – Financial Rewards
A. Recognition
B. Praise
C. Achievement
D. Responsibility
E. Personal Growth
Performance
A. Work Standards
B. Work Motivation
C. Goal Achievement
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• The working environment and culture and the extent to which staff,
managers and employees support each other to achieve desired outcomes.
• The capacity and confidence (including skills, knowledge and expertise) of
individuals to perform to the standards expected.
• The Organization Philosophy with regard to work standards and the tools
used for enhancing the work performance of employees.
• The extent to which the performance appraisal system functions well and
is accepted as toll of improvement and Learning.
• The working environment that helps employees to work with motivation &
confidence and leads to attainment of individual and Organizational Goals.
• The extent to which the expected performance and its standards are
communicated to employees and similarly and clearly understood by
employees .
• The level upto which organization takes the initiative of organizing
training for enhancing skills and abilities of employees with an objective
to attain the desired outcomes.
This aspect was explored through Primary & Secondary source to get a deep
insight on the performance dimensions and its implications . For the collection of
Primary information , Interview was conducted with HR Manager & Executives
and Branch Head of Both the Banks . The key findings observed and information
gathered from both sources is mentioned her in :-
ICICI Bank
• ICICI Bank has systematic and ongoing process to monitor and evaluate
the performance of employees against the predetermined targets with an
objective to ensure organizational effectiveness.
• Focus is given on planning the development levels of all employees as per
competency mapping.
• Bank has defined system of providing opportunities of promotion to
employees based on performance ratings.
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• The Rewards of employees are aligned with the performance levels to
motivate employees.
• Performance appraisal is an ongoing process in Bank and it follows the
techniques of Rank & Yank Strategy , Management by Objective ,
Performance Appraisal Form , 360 Degree Feedback & Performance
Appraisal Interview, Self Appraisal , Appraisal Based on Achieved Results
, Behavioural Method etc.
• Employee performance is linked to the bank’s performance. This helps in
achieving the organizational goal and creates a performance culture in the
bank.
• The Employees at Bank were found to be satisfied with the Performance
Management system prevailing in Bank and feel motivated with the
transparent system.
• Managers at ICICI Bank provide regular & timely feedback and guides
employees in setting of Realistic & Attainable Goals .
AXIS Bank
• Axis Bank Initiate & institutionalize globally competitive HR practices. Bank
has a performance-driven culture and is an exciting workplace providing a
learning organization for employees .
• Bank has a open culture and has a positive image in mind of youth .
• The bank has also been on a hiring spree and focuses on developing and
retaining the talent by aligning the personal goals of employees with
organizational goals.
• Axis Bank pays special attention to training its staff and often reminds people
that the bank is actually in the branches where there is a customer interface .
• Axis Bank has a well –structured performance-linked scheme for all
employees across grades and functions.
• There is a well established standard of work for all employees which helps in
making the efforts of employees to be used for best productive purpose.
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• The Performance appraisal system was found transparent where in focus been
given by Managers for taking corrective actions to get the best results for the
Organization.
5.2 LEVEL OF PERFORMANCE
To study the level of performance in both the banks , a detailed study was
conducted through questionnaire & HR Interview method. There was a line of
difference found between the performance level of both the Banks. Also, a focus
is been given to highlight the measures taken from time to time to enhance the
skill level of employee to increase their Job Quality & accomplishment .
The performance of employees in both the banks were found satisfactory wherein
the ICICI Bank Employees exhibited higher performance norms and level as
compared to AXIS Bank.
The different aspects were highlighted in questionnaire to understand the
performance levels in banks. A Comparative evaluation was done with an
objective to assess the satisfaction of employees with regard to performance levels
. The analysis of the findings of research have been highlighted by the way of
charts and figures to get a clear idea on performance level of employees in both
the Banks . The important concepts expressed in performance dimensions have
been covered in the research analysis to validate the findings and serve the real
purpose of conducting this research . These important highlighted areas include
the work measurement standards, performance evaluation system, working
conditions and environment , team work & Goal accomplishment and motivation
from managers to promote excellent work performance from employees . The data
was collected through five point Likert questionnaire ranging from Strongly
disagree to Strongly agree . On the basis of all these points , employees views and
satisfaction level have been recorded in questionnaire and the comparison charts
have accordingly been presented in this study .
• Clear Work Measurement Standards :- An analysis was done to get an
insight regarding the standards maintained in the Banks regarding the
measurement of work performance . 64 % of the Employees of ICICI
Bank had mentioned their extreme level satisfaction with Work
Measurement Standards
work standards available in their Bank
level of satisfaction
noticed in the response of
were found extremely satisfied with work measurement standards
depicting their strong agreement
level of satisfaction
strong belief about clear work standards prevailin
Clear Work Measurement Standards in Banks
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Bank had mentioned their extreme level satisfaction with Work
Measurement Standards by showing their strong agreement to the clear
work standards available in their Bank and 36 % of employees have high
level of satisfaction as they agree to this view . A slight differences was
noticed in the response of AXIS Bank employees as 60 % employ
were found extremely satisfied with work measurement standards
depicting their strong agreement and 37 % employees have rated high
level of satisfaction by showing agreement and around 3 % don’t have a
strong belief about clear work standards prevailing in their Bank.
Clear Work Measurement Standards in Banks
Figure . 5.2
Strongly Agree
64%
Agree
36%
ICICI Bank
Strongly Agree
60%
Agree
37%
Uncertain
3%
AXIS Bank
Bank had mentioned their extreme level satisfaction with Work
by showing their strong agreement to the clear
and 36 % of employees have high
A slight differences was
60 % employees
were found extremely satisfied with work measurement standards
and 37 % employees have rated high
and around 3 % don’t have a
AXIS Bank
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• Performance Evaluation System :- The fairness and transparency of
performance appraisal system leads a level of motivation in talented
employees as it provides an opportunity to grow based on higher
performance . Similarly, Management commitment and philosophy of
Performance Management highlights the level of employees performance
in these Organizations. A defined management philosophy of performance
management and the performance evaluation system promotes employees
performance and ensures accomplishment of goals by contributing a high
level of work performance from all employees . This aspect was studied
through Questionnaire & Interview method and it was found that in ICICI
Bank 36 % employees were extremely satisfied with performance
management system of Bank . On the other side in AXIS Bank , 27 %
were extremely satisfied. Also , 8 % employees of ICICI Bank have
reflected their dissatisfaction on this point but a higher level of
dissatisfaction was found in the employees of AXIS Bank as around 7 %
employees of AXIS Bank were found dissatisfied with regard to
performance evaluation system in their Bank and 3% employees were
found as extremely dissatisfied .
Strongly Agree
36%
Agree
44%
Uncertain
12%
Disagree
8% ICICI Bank
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Performance Evaluation System in Banks
Figure 5.3
• Working Conditions and Environment :-Level of performance of any
organization is affected by the kind of working environment provided to
employees . A conducive and healthy working environment motivates the
employees on one hand and result in higher performance on the other
hand. A visionary management sets in an favorable working environment
for employees to get the maximum contribution from them . A healthy
environment is not only the need of the employees yet it is vital for an
organization to grow. The zeal and motivation level of employees get
enhanced with a working environment wherein the employees can
contribute to their best level. The research findings outline that 72 % of
employees of ICICI Bank were found happy and satisfied with the
working environment in their Bank as compared to AXIS Bank where 65
% employees were found satisfied and happy.
Strongly
Agree
27%
Agree
56%
Uncertain
7%
Disagree
7%
Strongly
Disagree
3% AXIS Bank
180
Working Conditions and Environment
Figure . 5.4
• Team Working & Goal Accomplishment :- The performance level is
highlighted as per the task accomplishment of the Organization and the
extent to which the employees are able to set and achieve realistic goals. A
high performance driven organization sets in elevated goals for their
employees to get the best productivity from them. The goal directed
Strongly
Agree
48%
Agree
24%
Uncertain
20%
Disagree
8% ICICI Bank
Strongly
Agree
34%
Agree
31%
Uncertain
26%
Disagree
5%
Strongly
Disagree
4% AXIS Bank
181
efforts are more focused on ensuring the attainment of organizational
commitments and targets and leads in profitability for employees and
Organization . The findings of research highlight that 80 % of employees
of ICICI Bank were found satisfied with the Goal achievement and found
accomplishing the tasks as per their roles . Also, around 77% of AXIS
Bank employees were found satisfied with task and Goal achievement. On
the other side , around 16 % employees each of ICICI Bank and AXIS
Bank were found dissatisfied with the Goal accomplishment and team
support in their Banks.
Team Work and Goal Accomplishment
Figure 5.5.
Strongly Agree
44%
Agree
36%
Uncertain
4%
Disagree
16%
ICICI Bank
Strongly
Agree
30%
Agree
47%
Uncertain
7%
Disagree
15%
Strongly
Disagree
1%
AXIS Bank
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• Motivation From Managers :- Continuous Feedback and guidance from
Managers help in motivating employees and ensure higher performance
level in the Organization . A motivated employee remains more committed
to Job and exhibit higher participation in all tasks . A Manager having the
zeal to utilize the full potential of the employees in the organization
ensures all steps to keep the employees motivated . Incessant support from
Managers , regular and opportune advice , clarity of task allocated can help
an employee to have faith in Management & Managers and will surely
motivate the employees for superior involvement and work delivery . The
findings of research reveal that around 92 % employees of ICICI Bank
were found motivated and committed to their roles and Jobs on the basis of
Motivation received from Managers . However in AXIS Bank , 72 %
employees were found motivated and committed to their tasks and Roles.
Strongly Agree
56%
Agree
36%
Strongly
Disagree
8%ICICI Bank
183
Motivation from Managers
Figure 5.6
5.3 IMPACT OF REWARD SYSTEM ON PERFORMANCE
The research is carried on with an important objective of analyzing and
understanding the Impact of Reward System on Performance . This area is been
explored through questionnaire cum Interview method and an attempt is been
made to do a comparative analysis of two Banks under study . Employees of
both the Banks have agreed that reward system have positive impact on
motivation and employees performance. The key highlights that came in front
after a comparative analysis are mentioned as under :
• Reward System Constitutes Financial and Non- Financial Rewards :
Reward System is a composite term that inculcates Financial and Non-
Financial Rewards . A combination of these two are offered in varying units to
employees for the services rendered by them in any Organization . At first step
to understand the effect of Reward system on employees performance , an
attempt was made to know the opinion of employees with regard to their
understanding about Reward System . The research conduced in the two
Banks found that around 72 % employees of ICICI Bank were in agreement
that the Reward system constitutes Financial and Non- Financial Rewards in
Strongly
Agree
38%
Agree
34%
Uncertain
13%
Disagree
12%
Strongly
Disagree
3%AXIS Bank
184
their Bank and in AXIS Bank employees also the similar kind of opinion was
found .
Reward System Constitutes Financial and Non- Financial Rewards
Figure 5.6
• Financial Rewards increase Employee Motivation : All set of employees
give significance to Rewards that help in satisfaction of their individual needs
. Some employees feel more motivated with the Financial Rewards while for
some only praise may be a reason of motivation . An attempt was made to get
an insight into the agreement level of employees with the strong belief that
Strongly Agree
44%
Agree
28%
Disagree
28%
ICICI Bank
Strongly Agree
46%
Agree
26%
Uncertain
2%
Disagree
26%
AXIS Bank
185
Financial Rewards increase employee motivation . The resuts concluded by
research proved the findings as per the strong belief as around 96 %
employees of ICICI Bank were found in agreement that Financial Rewards
increase motivation. Also, in AXIS Bank around 92 % employees have
mentioned the Financial Rewards as the reason behind employees motivation.
Financial Rewards increase Employee Motivation
Figure 5.7
Strongly Agree
51%Agree
45%
Disagree
4% ICICI Bank
Strongly Agree
68%
Agree
24%
Uncertain
8% AXIS Bank
186
• Non- Financial Rewards increase Employee Motivation : The results of the
research for finding the opinion of employees for the belief that Non Financial
Rewards increase Employee Motivation revealed positive response from the
employees of two Banks under study . The findings showcased that ICICI
Bank employees were found more motivated with the Non- Financial Rewards
in comparison to AXIS Bank employees . 88 % of AXIS Bank employees
have mentioned that Non – Financial Rewards increase employees motivation
and around 96 % of ICICI Bank employees have expressed their motivation
with Non – Financial Benefits.
Non- Financial Rewards increase Employee Motivation
Figure 5.8
Strongly
Agree
64%
Agree
32%
Uncertain
4%
ICICI Bank
Strongly Agree
64%
Agree
24%
Uncertain
8%
Disagree
4% AXIS Bank
187
• Satisfaction with Financial Rewards have positive impact on employee
performance : The research found that financial rewards motivate employees
and also it has been found that satisfaction with these rewards impacts
employees performance in a positive manner. This research highlighted the
same by recording the opinion of employees of ICICI and AXIS Bank .
Employees response of 5 point Likert scale found that around 88 % of ICICI
Bank employees strongly agree to the fact that Financial Rewards positively
impact employees performance . Also the response of AXIS Bank employees
was found positive in this regard as around 80 % employees strongly agree
with positive impact of Financial Rewards on employees performance .
Financial Rewards have positive impact on employee performance
Figure 5.9
Strongly Agree
80%
Agree
16%
Uncertain
4% AXIS Bank
Strongly Agree
88%
Agree
12%
ICICI Bank
188
• Satisfaction with Non - Financial Rewards have positive impact on employee
performance. : It was found that employees satisfied with Non – Financial Rewards
perform better in terms of tasks allocated . The Non- Financial Rewards are immense
in scope and employees satisfaction with even a single component of can go ahead in
delivering improved task performance. Although employees give more significance
to Financial Rewards as compared to Non- Financial Rewards , but some
components provide same level of satisfaction as provided by Financial Rewards . In
ICICI Bank the response was found more positive for Non – Financial Rewards as
compared to AXIS Bank . Also , around 2 % of the employees of AXIS Bank were
found in disagreement with this thought .
Non- Financial have positive impact on employee performance
Figure 5.10
Strongly Agree
60%
Agree
40%
ICICI Bank
Strongly Agree
55%
Agree
35%
Uncertain
8%
Disagree
2% AXIS Bank
189
• Rewards based on Good Work performance have a positive impact on
employees performance : Organizations offer diverse set of rewards to different
employees as per the performance delivered by them . Likewise, the employees with
high performance results are offered enormous rewards as compared to employees
with low performance levels. It is important to understand the belief of employees
that if rewards are offered to employees on the basis of their good work whether it
will impact their performance in a positive direction . The response of Bank
employees on this notion reveled that around 96 % of ICICI Bank employees were
found satisfied with the thought that if Rewards are aligned with work performance it
positively impact employees performance and in AXIS Bank around 84 % of
employees were found satisfied with this thought.
Impact of Reward Based on performance
Figure 5.11
Strongly
Agree
64%
Agree
32%
Uncertain
4% ICICI Bank
Strongly
Agree
56%
Agree
28%
Uncertain
16%
AXIS Bank
190
5.4 EVALUATION OF CURRENT REWARD SYSTEM
An attempt was made to find out the reward system prevailing in both the banks .
Data for current Reward system prevailing in banks was collected through
Primary & Secondary source . Primary data was collected through questionnaire
and Interview with HR & key executives . Secondary data was gathered through
Company website , News articles and Annual Financial Reports for the year 2012
-13 . As per the information collected it was found that Current Reward system in
ICICI Bank is more motivating and as per Industry trends in comparison to AXIS
Bank .
• Basis of Rewards : ICICI Bank follows a conservative and comprehensive
approach towards Rewards Management. Adequate attention is paid to the
goal sheets to ensure a balance of financial goals with non-financial goals. On
the Other hand Axis Bank Follows an approach of Aspire – Act – Achieve .
Axis Bank Careers not only offers attractive packages, but also provides
comfort and satisfaction to its employees.
• Compensation : In ICICI Bank the total compensation is a prudent mix of
fixed pay and variable pay. The variable pay is higher at senior levels and
lower at junior levels. While in AXIS Bank Compensation is structured in
terms of fixed pay, variable pay and employee stock options (for selective
employees), with the last two being strongly contingent on employee
performance.
• Established Policy for Reward & Compensation:- ICICI Bank is
committed to adoption of fair employment practices and upholds the
principle that advancement is based on talent and performance and there is a
commitment to equal opportunity. No single business or functional leader
determines the compensation structure and the compensation policy is
approved by the Board Governance and Ethics committee. The AXIS Bank's
performance management and compensation philosophies are structured to
support the achievement of the Bank's on-going business objectives by
rewarding achievement of objectives linked directly to its strategic business
priorities. To highlight the current reward system prevailing in these two
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banks it is important to understand whether there is any established policy for
offering Reward and Compensation to its employees . In the absence of
defined policy , Reward management can not reveal optimum benefits for the
organization . The results found that AXIS Bank employees were more
satisfied and agreed that their Bank has defined policy of Reward &
Compensation as around 92% employees agreed as compared to ICICI Bank
where in 85 % employees had agreed that their Bank has defined policy of
Reward.
Policy for Reward & Compensation
Figure 5.12
Strongly Agree
69%
Agree
16%
Uncertain
4%
Disagree
10%
Strongly
Disagree
1%ICICI Bank
Strongly Agree
88%
Agree
4%
Uncertain
4%Disagree
4% AXIS Bank
192
• Compensation and Benefits are aligned with work Performance : - The
alignment of Compensation and Benefits with work performance helps in
motivating employees to deliver best performance outcomes . Ans an effective
reward system will ensure this alignment to the maximum level for ensuring
maximum profits for the organization . The study of this aspect in the Banks
presented that 72 % of ICICI Bank employees have agreed that the
compensation & benefits offered to them are aligned with their performance
and similarly around 71 % of AXS Bank Employees have agreed to this
thought.
Compensation and Benefits aligned with work Performance
Figure 5.13
Strongly
Agree
28%
Agree
44%
Uncertain
12%
Disagree
12%
Strongly
Disagree
4%
ICICI Bank
Strongly Agree
19%
Agree
52%
Uncertain
13%
Disagree
9%
Strongly
Disagree
7%
AXIS Bank
193
• Financial Benefits : ICICI bank is more towards ESOP-Employee Stock Option
Plans and Early Retirement benefits and the Bank follows a conservative approach to
cash bonus payouts. The quantum of bonus for an employee does not exceed 60% of
base salary and is paid on an annual basis. While AXIS Bank offers the benefits of
bonus and various other benefits where in bonus amount paid as per the "Payment of
Bonus Act, ex-gratia bonus, performance-linked bonuses or any other incentives paid
to employees. However the response of employees obtained through five point Likert
questionnaire signified that around 70 % ICICI were found satisfied with Financial
Benefits offered to employees and around 64 % AXIS Bank employees were found
satisfied with Financial Benefits offered to them by bank.
Financial Benefits
Figure 5.14
Strongly
Agree
52%Agree
20%
Uncertain
4%
Disagree
16%
Strongly
Disagree
8%
ICICI Bank
Strongly
Agree
48%
Agree
16%
Uncertain
8%
Disagree
20%
Strongly
Disagree
8%
AXIS Bank
194
• Opportunities of Promotion and Salary Increment : Under the gamut of
Non- Financial Rewards , employees attach value to the opportunities offered
to them by Organization for Promotion and simultaneously increment in their
salary ( component of Financial Reward ) . If employees are offered this
opportunity their commitment level remains high with the organization and it
coordinates in delivering and contributing the desired results . The findings of
the research in this direction is that around 72 % of ICICI Bank employees
have agreed that on basis of their performance in Banks they receive
opportunities of promotion and also increments in their salary . Around 66%
of AXIS Bank employees have also agreed to the same. A high level of
promotion and salary increment opportunities received by employees reflects
the performance level of employees in these two Banks and simultaneously
highlight the prevailing trend of reward in these two Organizations.
Strongly
Agree
48%
Agree
24%
Disagree
20%
Strongly
Disagree
8%
ICICI Bank
195
Opportunities of Promotion and Salary Increment
Figure 5.15
• Opportunities of Personal Growth and Career Enhancement : ICICI bank
views and values human resource as a key source of competitive advantage.
Consequently the development and management of human capital is an
essential element of their strategy and an important management activity. On
the other side , Axis Bank provides a plethora of opportunities for employees
to acquire and hone their skills not only in a specific domain but across diverse
functions, divisions, products and services to ensure holistic development. The
learning is "experiential" in nature- an endeavor not related to job related skills
and competencies alone. Focus at AXIS Bank is on building leadership
capabilities early by creating self-awareness through personal growth &
outbound/ experiential learning programs. The response exhibit that around
96% employees of ICICI Bank are satisfied with the opportunities given to
them related to Personal growth and 93% of AXIS Bank employees agree
with career enhancement & growth opportunities available for them in their
Bank.
Strongly Agree
40%
Agree
26%
Uncertain
11%
Disagree
16%
Strongly
Disagree
7%
AXIS Bank
196
Opportunities of Personal Growth and Career Enhancement
Figure 5.16
• Opportunities for participating in decision making ;- ICICI Bank
specifically empower employees and provide complete authority to them to
handle their job roles. Apart from employee participation ,ICICI Bank has
staff space on the intranet where employees can participate in collaborative
activities such as- contributing documents, engaging in discussions and
posting or answering queries leading towards better cooperation. Similarly,
Management at Axis Bank believe strongly in fostering an inclusive
Strongly
Agree
44%
Agree
52%
Uncertain
4% ICICI Bank
Strongly
Agree
41%
Agree
52%
Uncertain
3%
Disagree
1%
Strongly
Disagree
3%AXIS Bank
197
environment where every individual's unique perspective, background and
experiences are valued and recognized. They encourage the variety of
thoughts and perspectives that reflect the diversity of their markets, customers
and workforces . In context to this regard around 68 % employees agree that
they get opportunities to participate in decision making whereas this
percentage is little less in ICICI Bank as 64 % employees of ICICI Bank agree
.
Opportunities for participating in decision making
Figure 5.17
Strongly Agree
16%
Agree
48%
Uncertain
16%
Disagree
16%
Strongly
Disagree
4%
ICICI Bank
Strongly
Agree
24%
Agree
44%
Uncertain
16%
Disagree
16%
AXIS Bank
198
• Motivation from Managers :- ICICI Bank takes employee development
seriously and create an environment in which one can perform to the best of
their abilities. The Bank believes that the key to success will be the ability to
maintain business efficiency and culture and motivate and expand its pool of
skilled and experienced professionals, by creating an environment that offers
growth, learning, excitement, comfortable working conditions and competitive
remuneration . Also, Axis Bank, today, is one of the most valued private
sector banking organizations in India. The Bank is committed towards
providing the best of working environments and a workplace where one can
define and achieve one's career objectives. At one sight the employees of both
the banks agree to the motivation they receive from Managers but there is a
difference in satisfaction to a large extent as in ICICI Bank around 92% are
satisfied with this whereas in AXIS Bank only 72 % employees are satisfied .
Strongly
Agree
56%
Agree
36%
Strongly
Disagree
8%ICICI Bank
199
Motivation from Managers
Figure 5.18
• Training and Workshops :- ICICI Bank has continued to lay great emphasis
on human resource development, to make its employees attain global
standards in productivity, thereby maximizing value creation for its
stakeholders .ICICI Bank has a strong performance driven culture and
leadership development programme that builds new talent to help meet long-
term objectives and continuously perform at the best. Axis Bank believe that
people are primary source of competitiveness and sustainability. Axis Bank
strives to create a culture which is conducive towards proactive learning and
superior performance, without losing focus on their corporate values. As per
analysis around 96% of ICICI Bank employees are satisfied with the kind of
Trainings and Workshops organized in their Banks from time to time whereas
in AXIS Bank only 86 % employees are satisfied.
Strongly
Agree
38%
Agree
34%
Uncertain
13%
Disagree
12%
Strongly
Disagree
3%
AXIS Bank
200
Training and Workshops
Figure 5.19
• Praise and Recognition for work : In ICICI Bank the efforts and
contributions of employees are acknowledged by Management and given
Recognition from time to time. Axis Bank prides itself as a young and vibrant
organization and recognizes its employees as its greatest assets. The Bank
ensure that people are well rewarded for high level of performance,
exceptional contribution, exemplary behavior and making a difference to the
Bank's success. It has been observed that around 73% of ICICI Bank
Strongly
Agree
72%
Agree
24%
Disagree
4%
ICICI Bank
Strongly
Agree
67%
Agree
19%
Uncertain
12%
Disagree
2% AXIS Bank
201
employees agree that they get recognition for their work and 69 % of AXIS
Bank employees agree .
Praise and Recognition
Figure 5.20
Strongly
Agree
36%
Agree
37%
Uncertain
20%
Disagree
7%
ICICI Bank
Strongly
Agree
26%
Agree
43%
Uncertain
24%
Disagree
7%
AXIS Bank
202
5.5 ANALYSIS AND INTERPRETATION
Questionnaire cum interview method was used for collection of data. In order to
establish the reliability of the instrument, a pilot study was carried out on a sample of
twenty (20) staff of ICICI and AXIS Bank using a test-retest method. In confirming
the validities of the instrument, face and content validities were ensured by discussion
of experts .
For conducting the research five point Likert Questionnaire was used . A Likert scale
is a type of psychometric response scale often used in questionnaires and is the most
widely used scale in survey research. When responding to a Likert questionnaire item,
respondents specify their level of agreement to a statement. The scale is named after
Rensis Likert, who published a report describing its use (Likert, 1932).
1. Strongly disagree 2. Disagree 3. Neither agree nor disagree 4. Agree 5. Strongly agree
After the questionnaire was completed, each item was analyzed separately and item
responses were summed to create a score for a group of items.
The study was conducted on the representation basis & sample units were selected
randomly. Sample size comprised of 150 employees in Supervising Staff (Managerial
Grade ) from different Branches of ICICI Bank in Rajasthan & 150 employees in
Supervising Staff ( Managerial Grade ) from different Branches of AXIS Bank in
Rajasthan . Secondary data were collected from Books , Journals , Articles ,
Magazines, Annual Policy and information collected through Internet and survey of
company’s literature related to Company Policies , Future Plans to form the
theoretical backdrop of the study.
Data collected from Questionnaire and interview schedules was categorized and
tabulated and analyzed with the help of various statistical measures. In the process of
analysis, relationships or differences supporting or conflicting with original
203
hypotheses were checked and interpreted on tests of significance to determine the
validity to indicate any conclusions.
Both descriptive and inferential statistics were used to analyze the data. The
descriptive statistics utilized in this study are based on frequency tables to provide
information on key demographic variables, as well as the means and standard
deviations for the responses on the rewards and performance dimensions.
Inferential statistics were used to draw conclusions about the reliability and
generalization of the findings. In order to test the research hypotheses, the
inferential tests used include the Pearson Product-Moment Correlation
Coefficient, and T Test . The statistical tools were aligned with the objectives of
the research and were used because they were relevant to data collected.
Software package for statistical analysis ( SPSS) was utilized for the computation
of descriptive statistics, Pearson correlation coefficients, and the t-test.
Conclusions were drawn from the statistics.
Descriptive Analysis
• Demographic Profile
The demographic profile of respondents were compared between the two Banks
and the results are represented through Frequency Tables and Charts. There was a
slight difference in the demographic profile of the samples of both the Banks
under study as mentioned :
204
Fig. 5.21
Frequency Table of Demographic Profile of Both the Banks (N=150)
AXIS BANK ICICI BANK
S.No Socio-personal traits Frequency (%) S.No Socio-personal traits Frequency
(%)
1
Age (years)
18-25 yrs
26 -35 yrs
36-45 Years
45 yrs and Above
36 %
35 %
26 %
3 %
1
Age (years)
18-25 yrs
26 -35 yrs
36-45 Years
45 yrs and Above
32 %
40 %
24 %
4 %
2
Gender :
Male
Female
72 %
28 % 2
Gender :
Male
Female
68 %
32 %
3
Educational
Qualification:
Graduate
Post-Graduate
42 %
58 %
3
Educational
Qualification:
Graduate
Post-Graduate
44 %
56 %
4
Service Experience (yrs)
1-5 Yrs
5-10 Yrs
10-15 Yrs
15-20 yrs
20 + yrs
64%
22 %
12 %
5 %
2 %
4
Service Experience
(yrs)
1-5 Yrs
5-10 Yrs
10-15 Yrs
15-20 yrs
20 + yrs
52 %
20 %
16 %
8 %
4 %
5
Marital Status :
Married
Unmarried
51%
49% 5
Marital Status :
Married
Unmarried
46 %
54 %
6
Profile :
Officer
Specialist
Management
52 %
30 %
18 % 6
Profile :
Officer
Specialist
Management
56 %
28 %
16 %
205
• Age :-In AXIS Bank around 36% of the respondents were in age group of 18-
25 years , 35 % in the age group of 26-35 years , 26 % in the age group of 36-
45 years and just 3 % in the age group of 45 and above. Similarly In ICICI
Bank around 32% of the respondents were in age group of 18-25 years , 40 %
in the age group of 26-35 years , 24% in the age group of 36-45 years and just
4 % in the age group of 45 and above.
Age in Years
Figure 5.22
18-25 yrs
36%
26 -35 yrs
35%
36-45 Years
26%
45 yrs and
Above
3%
AXIS Bank
18-25 yrs
32%
26 -35 yrs
40%
36-45 Years
24%
45 yrs and
Above
4%AXIS Bank
206
• Gender :- 72 % of the respondents in AXIS Bank were Male as compared to
68 % in ICICI Bank . Also, the ratio of Female respondents in AXIS Bank was
28 % as comparison with 32 % in ICICI Bank.
Gender
Figure 5.23
Male
72%
Female
28%
AXIS Bank
Male
68%
Female
32%
ICICI Bank
207
• Educational Qualification :- In AXIS Bank the ratio of Graduate employees
is 42 % as compared to 44 % in ICICI Bank . However the employees
qualification in AXIS Bank is higher as the ratio of Post Graduates is 58 %
which is higher than the ratio of Post graduates in ICICI Bank which is 56 % .
Educational Qualification
Figure 5.24
Graduate
42%
Postgraduate
58%
AXIS Bank
Graduate
44%
Postgraduate
56%
ICICI Bank
208
• Service Experience :- There was a slight difference found in the samples of
both the Banks with reference to the experience in Industry . However in
AXIS Bank maximum employees were found with the experience between 1-5
years and ICICI Bank has higher ratio of experienced employees . As in ICICI
Bank 28 % sample were found having experience above 10 years in
comparison to AXIS Bank as it has the ratio of 18 % employees with
experience of more than 10 Years.
Service Experience
Figure 5.25
1-5 Years
61%
5-10 Years
21%
10-15 Years
11%
15-20 Years
5%
20+ Years
2% AXIS Bank
1-5 Years
52%5-10 Years
20%
10-15 Years
16%
15-20 Years
8%
20+ Years
4%ICICI Bank
209
• Marital Status :- AXIS Bank noticed a higher ratio of Married employees
i.e. 51 % and similarly ICICI Bank noticed a higher ratio of Unmarried
employees i.e. 54%.
Marital Status
Figure 5.26
Married
51%
Unmarried
49%
AXIS Bank
Married
46%Unmarried
54%
ICICI Bank
210
• Job Profile :- The Samples studied in both the Banks were of different Job
profile of Supervising staff ( Managerial Cadre ) . Amongst the sample studied
, AXIS Bank employees profile were higher in ratio of specialist i.e. 30 % and
Management i.e. 18 % , whereas , ICICI Bank had higher ratio of officer
profile i.e. 56 % .
Job Profile
Figure 5.27
Officer
52%Specialist
30%
Management
18%
AXIS Bank
Officer
56%Specialist
28%
Management
16%
ICICI Bank
211
• Reward & Performance Dimensions
Descriptive statistics were used to depict and review the performance of the
respondents in a study. The descriptive statistics utilized in this study are means
and standard deviations . The mean is a measure of central tendency, and provides
an arithmetic average for the distribution of scores. The standard deviation, on the
other hand, is a measure of variability which is calculated as the square root of the
variance (Leary, 2004).
Variables ICICI Bank AXIS Bank T
Test Mean Standard
Deviation
Mean Standard
Deviation
Employee’s
Performance
4.64 0.48161 4.56
0.5614 0.8828
Financial
Reward
3.84 1.40984 3.76667
1.30778
0.4675
Recognition 3.8 1.09911 3.68
1.09495
0.9473
Praise 4
0.94123
3.87333
0.88459
1.2014
Achievement 4.2
0.63457
4.04
0.87378
1.8146
Responsibility 3.56
1.06488
3.76
0.99448
1.6811
Personal
Growth
4.4
0.56758
4.28
0.81199
1.4835
Managers
Motivation
4.32 1.08881 3.926
6
1.11184
3.113
Descriptive Statistics
Figure 5.28
212
An analysis was made to study the Impact of Reward System on employees
performance on the basis of various statistical tools namely mean and standard
deviation . T-test have been applied for the analysis of various aspects of reward
system, which are directly extracted from the questionnaire . The extent of
agreement of employees of ICICI Bank & AXIS Bank on Reward System has
been measured with the various aspects such as, Financial Reward , Recognition ,
Praise , Achievement , Responsibility, Personal Growth and Motivation from
Mangers . Also the level of employees performance in the employees of both the
Banks under study i.e , ICICI Bank & AXIS Bank has been measured. T-test has
been applied to examine the difference in the extent of agreement between ICICI
Bank & AXIS Bank employees & the following conclusions were drawn as
mentioned :
• Employee’s Performance : The result of the test reveals that the difference in
mean score turns out insignificant in case of Employee’s Performance .
Although the level of employees performance is higher in ICICI Bank as
compared to AXIS Bank.
• Financial Reward : The result revealed that, higher percentage of ICICI Bank
employees agree with the Financial Rewards offered to them but there is no
significant difference in the opinion of employees of ICICI and AXIS Bank.
Thus it has been found that the level of agreement concerning 'Financial
Reward ' is same in case of employees of ICICI and AXIS Bank.
• Recognition : The result of the test reveals that there is no significant
difference in mean score of employees of ICICI and AXIS Bank with regard
to Recognition given to them in Banks on the basis of their performance.
• Praise : The result of the test reveals that there is no significant difference in
case of opinion of ICICI and AXIS Bank employees . Employees of both the
Banks agree that they receive praise from their Managers for their contribution
in different field and their efforts are acknowledged by Management .
• Achievement : t-value turns insignificant in the case of employees agreement
of both the Banks in case of their goal achievement .
• Responsibility : No significant difference has been found regarding various
aspects of opportunities given to employees of both the banks in the way of
213
participation in decision making and other responsibilities . However , it was
found that AXIS Bank employees agreement in this regard was found higher
than the agreement of ICICI Bank employees.
• Personal Growth : The result found that no significant difference exists
between the employees of ICICI and AXIS Bank regarding various aspects of
training and development which indicates that employees feel same level of
satisfaction in their organization.
• Managers Motivation : The result of the test reveals that the difference in
mean score is significant at 0.05 levels in case of Motivation from Manager’s
side in both the Banks . Thus the level of agreement for this concerning '
Manager’s Motivation ' is more in case of ICICI Bank than that of the
employees of AXIS Bank.
Inferential Analysis
Inferential statistics were used to draw conclusions about the consistency and
universal application of the findings. In order to test the research hypotheses, the
inferential tests used include the Pearson Product-Moment Correlation Coefficient
and t-test . The Pearson Product-Moment Correlation Coefficient is a statistic that
indicates the degree to which two variables are related to one another. The sign of
a correlation coefficient (+ or -) indicates the direction of the relationship between
–1.00 and +1.00. Variables may be positively or negatively correlated. A positive
correlation indicates a direct, positive relationship between two variables. A
negative correlation, on the other hand, indicates an inverse, negative relationship
between two variables (Leary, 2004). For the purposes of this study, the Pearson
Product-Moment Correlation Coefficient was used to determine the relationship
between the different dimensions of the reward system and employee performance
.
214
Interpretation of Strength of Correlation Coefficient
Value of Coefficient Relationship between Variables
0.00-0.30 Very Low Relationship
0.30 – 0.50 Low Relationship
0.50-0.70 High Relationship
0.70-1.00 Very High Relationship
Figure 5.29
Relationship Between Financial Reward and Employee Performance
Variable ICICI Bank AXIS Bank
Pearson
Correlation(
r)
Level of
Significance(
p)
Pearson
Correlation
( r)
Level of
Significance
( p)
Financial
Reward
0.86 0.000 0.68 0.000
** Correlation is Significant at the 0.01 level ( 2-tailed )
Figure . 5.30
• ICICI Bank : The value of R is 0.86 and indicates that there is a strong positive
correlation, which means that increase in Financial Reward will increase the
employees performance (and vice versa). The value of R2, the coefficient of
determination, is 0.74.
• AXIS Bank : The value of R is 0.68 highlighting a moderate positive correlation
between the reward system and employee performance . It means there is a
inclination for increase in Reward system to impact on increasing the employees
performance (and vice versa).The value of R2, the coefficient of determination, is
0.46.
215
Relationship Between Non - Financial Reward and Employee Performance
Variable ICICI Bank AXIS Bank
Pearson
Correlation(
r)
Level of
Significan
ce ( p )
Pearson
Correlati
on( r)
Level of
Significanc
e ( p )
Recognition 0.78. 0.000 0.49 0.000
Praise 0.8 0.000 0.63. 0.000
Achievement 0.63 0.000 0.38. 0.000
Responsibility 0.87. 0.000 0.68. 0.000
Personal
Growth
0.68. 0.000 0.43. 0.000
** Correlation is Significant at the 0.01 level ( 2-tailed )
Figure. 5.31
ICICI Bank
• Recognition : The value of R is 0.78 which highlights a strong positive
correlation between Recognition & employees performance . The value of R2, the
coefficient of determination, is 0.61.A high opportunity of recognition to
employees will result in increased performance at the end of employee.
• Praise : The value of R is 0.8 exhibiting a strong positive correlation between
Praise and employee performance . It means that if employees are given praise
and appreciation for their work there will be a similar increase in employees
performance (and vice versa). The value of R2, the coefficient of determination, is
0.64.
• Achievement : The value of R is 0.63 highlighting a moderate positive correlation
between providing a feeling of achievement to employees and their performance
level. This positive correlation explains that if an organization provides an
environment of achievement for its employees there is a higher possibility of
216
increase in employees performance (and vice versa). The value of R2, the
coefficient of determination, is 0.4.
• Responsibility : The value of R is 0.87 which confirm a strong positive
correlation between opportunities of increased responsibility and employees
performance . The value of R2, the coefficient of determination, is 0.76.This
strong positive relationship depicts that employees attach greater relevance to the
responsibility delegated to them . If high responsibility task will be allocated to
employees it will ensure high level of commitment for work completion ensuring
an excellent level of performance from employees.
• Personal Growth : The value of R is 0.68 that clarify a moderate positive
correlation between opportunities of personal growth and employees performance.
This positive relationship explains that if employees receive higher opportunities
of learning and personal growth their performance level will increase high (and
vice versa). The value of R2, the coefficient of determination, is 0.46.
AXIS Bank:
• Recognition : The value of R is 0.49 highlighting a positive correlation between
recognition received by employees in their organization and employees
performance. The value of R2, the coefficient of determination, is 0.24. The
recognition offered to employees will positively impact employees performance in
Organization .
• Praise : The value of R is 0.63 that exhibits a moderate positive correlation
between appreciation and praise received by employees and their performance
level in the organization. The value of R2, the coefficient of determination, is 0.4.
• Achievement : The value of R is 0.38 which reflects a positive correlation
between achievement opportunities received by employees and the performance
level of employees . The value of R2, the coefficient of determination, is 0.14. A
feeling of achievement will increase the level of enthusiasm and motivation of
employees resulting in high performance commitment and delivery .
• Responsibility : The value of R is 0.68 exhibiting a moderate positive correlation
between responsibility assigned to employee and their performance . This positive
217
relationship explains that if an employee receive higher responsibility tasks the
performance level is expected to increase at a higher level (and vice versa). The
value of R2, the coefficient of determination, is 0.46.
• Personal Growth : The value of R is 0.43 which show a positive correlation
between opportunities of personal growth given to an employee and its
performance level in the organization . The value of R2, the coefficient of
determination, is 0.18. The higher the growth opportunities offered to employees ,
higher will be the performance execution at the level of employee .
5.6 TEST OF HYPOTHESES
The study presented in this research is part of a larger research project aimed at
identifying the best practices for rewarding employees for an enhanced performance.
An attempt was made to study the impact of reward system on employees
performance in Private sector Bank . For ensuring validity and soundness of research
, Rewards were defined and categorized into two sphere of Financial Reward and
Non- Financial Reward . In the begging of the research the components of these two
areas were defined like Fixed and variable pay under Financial Reward and Praise ,
Recognition , Achievement , Responsibility and Personal Growth under Non –
Financial Rewards . These aspects were covered in detail while conducting the
research . Focus during the entire research was given to understand the impact of all
these components on the performance of employees and the results have been
concluded on the basis of these impacts in the employees of ICICI Bank and AXIS
Bank .The study was conducted to test the mentioned hypotheses :
“ There is a positive impact of reward system on performance of employees in
private sector banks.”
In order to test this hypothesis, the Pearson Product Moment Correlation was used.
This test was conducted to find the relationship between Reward system and
employees performance . Each component of Reward system was studied and tested
to find its impact on employees performance . The findings of the research have been
highlighted in the previous sections and the results of hypothesis testing are presented
218
on the basis of the findings displayed there . From calculations and indications the
result is found significant in both the Private Banks under study i.e ICICI Bank &
AXIS Bank. . All the components of Financial and Non Financial Rewards have
positive impact on the employees performance but the intensity is different for all the
components and the results are varying in ICICI Bank and AXIS Bank . Looking into
all the aspects and positive results of research , the hypothesis is accepted. Hence,
there exists a positive relationship between Reward System and employee
performance in Private sector Banks. That is when there is an increase in reward like
Financial and Non- Financial Rewards given to employees, there is also a
corresponding increase in employees performance.
219
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