The impact of reward systems on employee performance in selected hotels in Cape Town

Abstract

Employee reward systems in the hotel and hospitality industry have attracted the attention of academic, policy and practitioners, yet little has been done to review the reward system for improved motivation and performance. Despite the gap in the literature on the importance and the impact of reward on employee performance, understanding of the relationship with other employment variables are essential step to addressing employee reward discord. This study examines hotel and hospitality employee’s perceptions of the employee reward system to understand their impact on employee performance in selected hotels in Cape Town. The examination includes the assessment of the relationships between rewards and variables such as employee performance, employee attraction and lastly, employee retention. This study utilised the quantitative research method to collect data through self-administered structured questionnaires distributed to 180 employees currently working at the selected 3-to-5-star hotels in Cape Town (South Africa). Both purposive and convenience sampling were used to choose the respondents in the study. A total of 180 questionnaires were sent out and 136 completed questionnaires were received, generating a response rate of 75,55%. The researcher analysed the feedback from respondents using descriptive statistics (frequency tables, mean and chi-square tests) and correlation analyses. This was achieved using the Statistical Package for Social Sciences (SPSS) version 24. Positive associations were found between variables. The results of this study revealed the lack of diversity in the provision of rewards inside the selected hotels. The majority of hotels favors financial rewards over non-financial rewards. The study concluded that non-financial and financial rewards are vital for both improved employee motivation and changed behaviour in the job performance; but also contributes greatly to the attraction and retention. The study recommended that hotel managers should consider, reward system review to address the identified impact on employee motivation and job performance.