International Academic Journal of Human Resource and Business Administration | Volume 1, Issue 5, pp.

36-54

EFFECT OF REWARD ON EMPLOYEE ENGAGEMENT

AND COMMITMENT AT RIFT VALLEY BOTTLERS
COMPANY

Koskey Abraham Kimutai

Master of Science in Human Resource Management, Jomo Kenyatta University of

Agriculture and Technology, Kenya
Dr. William Sakataka (Ph.D)

Lecturer, School of Human Resource Development, Jomo Kenyatta University of

Agriculture and Technology, Kenya

©2015

International Academic Journal of Human Resource and Business Administration (IAJHRBA) |

ISSN 2518-2374

Received: 1st November 2015

Accepted: 7th November 2015

Full Length Research

Available Online at: http://www.iajournals.org/articles/iajhrba_v1_i5_36_54.pdf

Citation: Koskey, A. K. & Sakataka, W. (2015). Effect of reward on employee

engagement and commitment at Rift Valley Bottlers Company. International Academic
Journal of Human Resource and Business Administration, 1 (5), 36-54

International Academic Journals

www.iajournals.org | Open Access | Peer Review | Online Journal Publishers

36 | P a g e
 International Academic Journal of Human Resource and Business Administration | Volume 1, Issue 5, pp. 36-54

ABSTRACT questionnaires and the data collected was

both quantitative and qualitative. After the
One way that has been lauded for enhancing
data collection, questionnaires were checked
employee engagement is the use of rewards.
for completeness and data were coded for
In any organization, it is important to put in
easy input. Percentages, means and standard
place an effective reward system that would
deviation and frequencies were used to
cater for the needs of its human resource.
facilitate easy analysis and understanding of
The reward system offered in different
the data. Several factors contributed to
companies may come in various and
employees’ engagement and commitment at
concrete forms. These may either be
the place of work. However, the contribution
monetary or non-monetary, tangible or
of these factors varied in strength and appeal
intangible, physical or psychological, and
to workers. Promotion opportunities, health
are offered to the employees as
benefits, job relevant training and interaction
compensation for the productive work they
with colleague workers freely have the
execute. It is with argument in mind that the
strongest contribution to engagement and
study sought to find out empirically the
commitment at Rift Valley Bottlers
possible effects of reward on employee
Company. Since career development is
engagement and commitment, at Rift Valley
crucial for retaining staff, the company
Bottlers Company in Eldoret Town. The
should invest in staff training. However,
objectives of the study were: to find out the
opportunities for upward mobility should be
effects of pay programmes on engagement
identified or created to enable employees
and commitment of employees at Rift
take up higher roles to utilize gained skills.
Valley Bottlers; to investigate the effects of
In addition, job-rotation should be
employee benefits on engagement and
encouraged and where no openings for
commitment of employees at Rift Valley
promotion exist, then job-enrichment should
Bottlers; to determine whether non-financial
be pursued by the employer. Rift Valley
rewards affects employee engagement and
Bottlers should undertake remuneration
commitment at Rift Valley Bottlers. The
survey. Based on the findings of the survey,
study adopted a descriptive survey design to
the company should review the
investigate the effect of reward on employ
remuneration of employees with the view of
engagement in Rift Valley Bottlers
raising workers’ engagement and
Company. The target population of the study
commitment levels; and Studies of
consisted of the staff from key departments
employee engagement should be replicated
such as: the Human Resources Department,
in other industries.
Finance Department, Production
Department, Sales and Marketing Key Words: direct financial benefits,
Department and Distribution Department. engagement and commitment, indirect
The research instruments that were used in financial benefits, non- financial benefits
this study for data collection were
International Academic Journals
www.iajournals.org | Open Access | Peer Review | Online Journal Publishers

37 | P a g e
 International Academic Journal of Human Resource and Business Administration | Volume 1, Issue 5, pp. 36-54

INTRODUCTION
Reward refers to everything the employee perceives to be of value resulting from the
employment relationship and includes all types of rewards, direct and indirect, as well as
intrinsic and extrinsic. The typical components of reward which make up the levers employers
can resort to in order to motivate, engage and retain staff are, pay, benefits, learning and
developments, and working environment (Armstrong, 2006). Reward is born as a means to help
businesses to satisfy their most important needs which are to attract, retain, motivate and engage
staff, not just by means of salary increases, golden handcuffs and the like, but in a more effective
way capable of producing long-lasting results. The aim of reward therefore, is to maximize the
positive impact that a wide range of rewards can have on motivation, job engagement,
organizational commitments and job satisfaction (Manus and Graham, 2003). Cascio (2010)
reports that there are three major changes in company philosophies concerning pay and benefits
including increased willingness to reduce the size of workforce; to outsource jobs and to restrict
pay to control costs of wages/salaries and benefits, less concern with pay position relative to
competitors but rather with what the company can afford, and implementation of programs to
encourage and reward performance, thereby making pay more variable. Employees need to be
encouraged to ‘go above and beyond’ standard job-task descriptions by showing support,
distributing fair and consistent reward that take into account the changing needs of employees,
and ensuring that they understand that the incentive system can be to their advantage if they
engage in discretionary service behaviours (Payne and Weber, 2006).
Rewards steps beyond the perimeters of compensation, remuneration and benefits terminology
where emphasis is placed on pay and other settlements which carry a monetary value to a new
almost anything could be construed to mean a return to employees for exhibiting desirable
behaviour, from a cash bonus or health care benefit to employee involvement in decision
making, increased role responsibility, autonomy, access to more interesting work and other
factors relating to the nature of work itself and environment in which it is carried out. A reward
system is the world's greatest management tool (Rehman, Khan & Lashari, 2010). If an
organization rewards a certain employee behavior whether good or bad, that is what the
organization will get more of (Nelson & Peter, 2005). Every organization has some form of
reward system. For instance people correspond positively to verbal praise and praise in the right
moment creates loyalty and affinity (Ngala & Odebero, 2009).
According to a UNDP report (2006), Reward and incentive systems are therefore fundamental in
developing capacities and translating developed capacities into better motivation and
engagements. The paper argues that, a reward and engagement based policy which involve some
monetary component would attract Management talent by providing rewards that motivates a
larger group of people. These rewards can be given in various forms which include profit sharing
schemes, stock options and recognition programs among others. Lusthaus (2002) says that profit

International Academic Journals

www.iajournals.org | Open Access | Peer Review | Online Journal Publishers

38 | P a g e
 International Academic Journal of Human Resource and Business Administration | Volume 1, Issue 5, pp. 36-54

sharing is a strategy of creating a pool of monies to be disbursed to employees by taking a stated

percentage of a company's profit. The idea behind this scheme is to reward employees for their
contributions to a company's achieved profit objective.
Employees who are engaged in their work and committed to their organizations give companies
crucial competitive advantages including higher productivity and lower employee turnover.
Thus, according to Vance (2006) it is not surprising that organizations of all sizes and types have
invested substantially in policies and practices that foster engagement and commitment in their
workforces. Though different organizations define engagement differently, some common
themes emerge. These themes include employees’ satisfaction with their work and pride in their
employer, the extent to which people enjoy and believe in what they do for work and the
perception that their employer values what they bring to the table. The greater an employee’s
engagement, the more likely he or she is to “go the extra mile” and deliver excellent on-the-job
performance. In addition, engaged employees may be more likely to commit to staying with their
current organization. Clearly, engagement and commitment can potentially translate into
valuable business results for an organization (Vance, 2006).
Mutunga (2009) did a research on the factors that contribute to the level of employee
engagement in the telecommunication industry in Kenya at Rift Valley Bottlers Kenya. It was
concluded that several factors contribute to engagement but, salary and benefits was the largest
contributor. Wambugu (2010) conducted a study on the relationship between employee
commitment and job performance at the Kenya Institute of Surveying and Mapping. Mwangi
(2011) carried out a research on the utilization of emotional intelligence and transformational
leadership for employee engagement in public universities in Kenya. The results established that
emotional intelligence impacts employee engagement significantly through the competencies in
self awareness, social awareness, self management and social management. Maluti, Warentho, &
Shiundu, (2011) carried out a study on the impact of employee commitment on retention in state
financial corporations in Kenya. The results indicated that there was no significant impact of
employee commitment on employee retention. Kamau (2012) carried out a research on the
factors that influence organizational commitment of employees at Kenya plant health
inspectorate Service Corporation. From the findings, the significant factors influencing
organizational commitment in Kenya Plant Health Inspectorate service were education, duration
of service and job category.
STATEMENT OF THE PROBLEM
Numerous surveys and experience of HR professionals have shown that while employees are
concerned about how to earn more pay and enjoy attractive conditions of service, employers on
the other hand would be striving to cut costs so as to post impressive profit at the end of the
accounting period (Milkovitch and Newman, 2004).Meanwhile, studies have shown that
provision of rewards has been resulting in employees' increased interest in the job, enthusiasm
International Academic Journals
www.iajournals.org | Open Access | Peer Review | Online Journal Publishers

39 | P a g e
 International Academic Journal of Human Resource and Business Administration | Volume 1, Issue 5, pp. 36-54

and increased productivity at work and absence of motivators has been the other way round
(Mathis & John, 2003). Over recent years, the concept of employee engagement has gained
tremendous impetus in the industry, yet the academic community has been slow and late in
studying it, leading to a lack of research. Rigorous tests of the theory underlying the topic is thus
limited (Macey & Schneider, 2008). Most of the existing practitioner literature, although
voluminous, is opinion based, with employee engagement linking only to its positive
consequences. Evidence-based research with theoretical underpinnings is meagre, and thus, little
research validates the claims that consulting firms and operators make (Shuck & Wollard, 2010).
How well an organization rewards its workers in order to achieve their mission and vision is of
paramount concern. This was the case with Rift Valley Bottlers Limited Eldoret. Records from
the company showed that no scientific research had been conducted in the company in relation to
effects of rewards on employee engagement despite the fact that there was a high turnover ratio,
reduced morale at work, productivity not at its best, absenteeism being the order of the day,
threats for holding demonstrations or strikes being prevalent. It is to this effect that this study
endeavoured to find out empirically the possible effects of reward on employee engagement and
commitment, at Rift Valley Bottlers Company in Eldoret Town.
GENERAL OBJECTIVE
The study's main objective is to investigate the effect of rewards on employee engagement and
commitment at Rift Valley Bottlers, Kenya.
SPECIFIC OBJECTIVES
1. To find out the effects of direct financial benefit on engagement and commitment of
employees at Rift Valley Bottlers.
2. To investigate the effects of indirect financial benefits on engagement and commitment
of employees at Rift Valley Bottlers.
3. To determine whether non-financial rewards affect employee engagement and
commitment at Rift Valley Bottlers.

LITERATURE REVIEW
Social Exchange Theory
One of the most famous theories related to employee engagement is social exchange theory
(SET). SET explains responsibilities are created through interactions and between parties who
are in state of collective interdependence. Basic principle of SET is relationship develop
overtime in to expectation, trustworthy and mutual commitment as long as both parties accepted
by some rules of exchange. The rules of exchange involve mutuality rules so that the movements
of one party would lead to reaction by the second party. Let’s suppose, when employees are
given by economic and other resources from their employers, they feel appreciative to respond in
kind and recompense employers. This is identifying as employee engagement of two way
International Academic Journals
www.iajournals.org | Open Access | Peer Review | Online Journal Publishers

40 | P a g e
 International Academic Journal of Human Resource and Business Administration | Volume 1, Issue 5, pp. 36-54

relationship between employee and employers. One way is from the side of employees to repay
their employers through level of job engagement. That is employees will engage in their jobs
according to organization objectives and in response they will get benefits or resources from
employers. Organizations should bring employees fully in to their job characters or roles and
allocate higher amount of physical, cognition and emotional resources. It is a philosophical
method for employees to reply to employer actions. It is most difficult for employees to change
their level of performance; therefore, employees would exchange their engagement for benefits
and resources given by organization.
Social exchange theory shows why employees become engage and disengage with their jobs and
employers. When organization provides resources to their employees, they feel appreciative to
repay the employers with excessive level of engagement. According to Kahn’s definition,
employee feels thankful and keeps themselves more intensely in to job role performance as
compensation they receive from their employers (Saks, 2006). It increases the trustworthiness
and trusting relationship. Consequently, employees with higher level of engagement are likely to
be in good quality relations with their organizations and would likely to report positive behavior
and objectives towards employers. On the other hand, when employers become unsuccessful to
provide these benefits or resources to workforce, they are more likely to disengage to their job
roles. Consequently, the extent to cognitive, emotional and physical resources that an employee
need for performance is contingent on economic and socio-emotional resources received from
employers (Saks, 2006, p.603). The literature explained the importance of employee job
engagement. According to Xanthopoulou et al (2007), the organizational productivity depends
upon employee happiness or wellbeing. When wellbeing is positive and operationalize, it would
have a positive impact on employee engagement that enable employee to perform according to
organizational standards and objectives. Social exchange theory was used to explain how
responsibilities created through interactions between parties, who are in state of collective
interdependence, accept some form of exchange, are engaged and committed in an organization.
The interdependence here was the relationship between the employer and the employee, and,
how they accept the three forms of exchange under study.
Burnout Theory of Engagement
Another model of employee engagement theory came from burnout literature which explains, “It
is the positive antithesis of burnout while burnout involves erosion of engagement with one’s
job” (Maslach & Leiter, 2000). They further explained six areas of work life that are clue to
engagement and burnout. Workload, control, rewards and recognition, community and social
support, perceived fairness and values. They explained further that job engagement is connected
with a sustainable workload, feelings of choice and control, appropriate recognition and reward,
a supportive work community, fairness and justice and meaningful and valued work. May et al
(2004, cited in Kular et al), supports Maslach (2001) and stated that, the concept of meaningful

International Academic Journals

www.iajournals.org | Open Access | Peer Review | Online Journal Publishers

41 | P a g e
 International Academic Journal of Human Resource and Business Administration | Volume 1, Issue 5, pp. 36-54

and valued work is connected with employee engagement and therefore, it is necessary to study
the idea of meaning. Employees view about meaning regarding job place are connected to their
engagement level and performance. Normally employees seek meaning from their job and until
employees attempt to give them a meaningful environment. According to the research outcomes
many employees practice a greater search of meaning in their jobs than in their daily life. The
reason might be because they spend more time in jobs than other activities of their lives.
According to (Kular et al., 2008) for higher level of employee engagement with their jobs, there
should be some purpose that associates employees to an passionate and expressive level so they
can promote their particular and individual objective (Kular et al, 2008), However, both Kans
and Maslach models indicates psychological conditions that these are important for employee
engagement but not fully explicated why employees will reply to these conditions with changing
degree of engagement. Given that burnout theory is strongly related to healthy outcomes in an
organisation, the theory was used to possible consequences of burnout against engagement and
commitment.
CONCEPTUAL FRAMEWORK
Independent Variables Dependent variables

Direct financial benefits

-base pay
-supplementary pay
-variable pay
-share ownership
Engagement and Commitment
Indirect financial benefits
-Low turnover
- Personal, security and health
-Job-status, seniority related
-minimal absenteeism
benefits
-Family friendly benefits -higher job performance
-good will benefits
-safety/efficiency
Non- Financial benefits
-opportunities to air views -pride in the organisation
-proud of achievement
-basic necessities for the job -loyalty
-interaction with colleagues
-quality of work life

Figure 1: Conceptual framework

Source: Self conceptualization by the Researcher (2015)

International Academic Journals

www.iajournals.org | Open Access | Peer Review | Online Journal Publishers

42 | P a g e
 International Academic Journal of Human Resource and Business Administration | Volume 1, Issue 5, pp. 36-54

In this research, as the conceptual framework showed, there were two variables under
investigation. The independent variable was reward while the dependent variable was
engagement. For purposes of this study, the constructs considered for reward were direct
financial benefits, indirect financial benefits and non financial benefits. The constructs
considered for the dependent variable included: low employee turnover, minimal absenteeism,
high job performance, and job satisfaction.
Direct financial benefits
The subject of reward is vast and continually evolving, in short it has been described as a ‘bundle
of returns offered in exchange for a cluster of employee contributions’ (Bloom and Milkovich
1996). This is a rather loose definition and shades little light on what form ‘returns’ might take or
what contribution employees might make to reap such returns. Usefully, the definition does,
however, capture the multiplicity of returns and that possible employees’ contribution can be
numerous and eclectic.
Examples include competitive salaries, pay raises, merit bonuses, and such indirect forms of
payment as compensatory time off (Mahaney and Lederer 2006: 43). Firms are able to improve
worker productivity by paying workers a wage premium- a wage that is above the wage paid by
other firms for comparable labor. A wage premium may enhance productivity by improving
nutrition, boosting morale, encouraging greater commitment to firm goals, reducing quits and the
disruption caused by turnover, attracting higher quality workers and inspiring workers to put
forth greater effort (Goldsmith, Veum and Darity 2000: 352). As a result, people are attracted to
well-paying jobs, extend extra effort to perform the activities that bring them more pay, and
become agitated if their pay is threatened or decreased (Stajkovic and Luthans 2001: 581).
Financial rewards are used to show that the company is serious about valuing team contributions
to quality. The monetary rewards consist of a cash bonus allocated to each team member. The
team bonus would be given separately from the salary. On the other hand, team rewards must be
used in ways that avoid destroying employees’ intrinsic motivation to do their job. The need for
continuous improvement requires employees to be innovators; devising novel solutions that
improve a work process or that delight the customer. The use of extrinsic rewards that are tightly
linked to team performance may teach team members to become money hungry and undermine
their intrinsic interest in the work itself (Balkin and Dolan 1997).
Extrinsic rewards can be monetary or non monetary. The monetary is usually a variable
compensation separated from the salary. It is received as a consequence for extra ordinary
performance or as an encouragement and it be either individually based or group based. The
conditions to obtain this reward should be set in advance and the performance needs to be
measureable. For a reward system to be ideally motivational the reward should satisfy a number
of criteria: It should have value, should be large enough to have some impact, should be

International Academic Journals

www.iajournals.org | Open Access | Peer Review | Online Journal Publishers

43 | P a g e
 International Academic Journal of Human Resource and Business Administration | Volume 1, Issue 5, pp. 36-54

understandable, be timely, the effect should be durable, and should also be cost efficient
(Merchant, 2007).
According to Lawler, (2003) if the compensation system is designed to distribute rewards in
relation to differences in performance, it is essential that the organization implement a PA
system. This will enable the managers identify the good performers and reward them or those
employees who have potential for growth and future development.Performance Appraisal would
not work if linked to a reward and remuneration system that employees do not trust or support
(Stockley,2009). Employees will only support the reward system if constant reviews are made
periodically in their favor and if they are involved in setting goals for performance pays such as
commissions and bonuses and when pay policies are communicated openly. This will boost their
morale and will always look forward to work and deliver selflessly to the organization.
Merchant (2007) argues that people value money and therefore making money an important form
of reward. Monetary reward systems can be classified into three main categories, performance
based salary increases, short-term incentive plans, and long-term incentive plans. The latter two
rewards are common on managerial levels and are often linked to performance during a specific
time period. The first one is often considered to be the greatest motivational factor of them all.
He further states that each and every organization gives salary increase to employees’ at all
organizational levels. This is normally a small portion of an employee's salary, but has a
significant value due to its long-term perspective. Short term incentives in some form are
however commonly used in organizations.
Merchant, (2007); Ngala & Odebero, (2009) argues that a cash bonus is usually based on
performance measured on a time period of one year or less. Why a company primarily uses a
variable pay is to differentiate it among the employees, so that the most successful employees
will be rewarded. They further argue that, by recognizing the employee's contributions to the
company it makes it easier for the organization to encourage excellent performance. They further
argue that employees appreciate the possibility of receiving a reward for their performance.
Using a variable pay can also be an advantage for the company in terms of risk-sharing. This
means that the expense for compensation vanes more with company performance when the
compensation is partly variable, making the cost lower when no profit is made and when there is
as profit this can be shared with the employees.
Rewards based on performance measures over time periods larger than one year are long term
incentive rewards. By using this, a company can reward employees for their outstanding work
performance to maximize the firm's long-term value (Kreitner & Kinicki, 2008; Dawler,
Andrews, & Bucklew, 2008). This also works to attract and retain key talented persons. A very
popular type of long-term incentive is some form of a restricted stock plan. This reward in shares
is given as a bonus to the employee; however, they can only be sold after certain time period.
After for instance one year, the employee will be able to sell one fifth of the shares, after two

International Academic Journals

www.iajournals.org | Open Access | Peer Review | Online Journal Publishers

44 | P a g e
 International Academic Journal of Human Resource and Business Administration | Volume 1, Issue 5, pp. 36-54

years he or she will be able to sell two-fifths and after three years three-fifths etc.This is a way to
retain competence within the company, not to motivate employees, since if they choose to end
their employment before the fifth year; they will lose the remaining parts. Some firms take this
even further by withdrawing the shares you already received.
Over and above base pay further decisions may be made concerning supplementary payments
attributable to skill, or performance, for example, overtime, danger or dirt money, shift
premiums, bonuses or commissions. Dominant reward terminology refers to supplementary
payments which are consolidated into base payments as forms of contingent pay and those that
are non-consolidated as elements of base pay (Armstrong 2002).
Indirect Financial Benefits
Doyle (2010) on the contrary proposes that there are types of employee benefits provided by the
company but the employer is not required to offer them and likewise the employee is not entitled
to receive them. They are offered at the discretion of the employer and covered in labour
agreement. They vary from one organization to the other. These may include hazard pay, health
care, maternity, paternity and adoption leave, paid holidays, pay raise, severance pay, sick leave,
termination, vacation leave, work breaks and meal breaks.
Gale (2002) suggests that employees who are injured or become ill in the job are covered by the
organization compensation laws. Subsequently, the employers should possess workers
compensation insurance. The benefits include payment for lost wages and medical bills. These
are paid in portion, normally two- thirds of salary. The organization should also have sponsored
disability program. It should provide additional disability coverage. Donata (2011) proposes that
some organizations have social security disability. However, one must have worked in jobs
covered by social security.
Wright (2004) prefers to consider these benefits in four distinct groupings: Personal, security and
health benefits: for example, pension sick pay, life cover, medical insurance and loans; Job-status
or seniority related benefit: for example company car, holiday leave, sabbaticals; Family friendly
benefits: for example, child care facilities, nursery vouchers, enhanced maternity
/paternity/parental leave arrangements; Social or ‘goodwill’ or life style benefits: foe example,
subsidized canteen, gym/ sports facilities, discounts, and dry cleaning. He further alludes that
benefits can be voluntary, affording employees the choice whether to ‘opt in’ and use them
according to their personal needs and their financial positions. Should employees elect to
purchase benefits such as child care vouchers, circle-to-work scheme loan, life cover or pension
contributions, arrangements tend to be set for deductions to occur at source. This can attract tax
advantages for the employees.
Wright, (2004) argues that flexible benefits schemes or ‘cafeteria benefits’ so named because of
the choices presented to employees have been around for a number of years however not

International Academic Journals

www.iajournals.org | Open Access | Peer Review | Online Journal Publishers

45 | P a g e
 International Academic Journal of Human Resource and Business Administration | Volume 1, Issue 5, pp. 36-54

prevalent. He says that the basic premise of a flexible scheme is that, employees can spend up to
a point limit of a cash total, purchasing benefits from a defined menu. Cafeteria schemes may
comprise fixed(inflexible, core) benefits and flexible ones (so called ‘core plus’ scheme) offer
complete freedom of choice to the maximum cash value/points value. In other schemes pre-
packaged sets of benefits may be on offer to employees; these schemes are referred to as
modularised benefits.
Most firms implementing TQM have traditionally relied heavily on intrinsic rewards. For
example, it is common for them to reward employees for their quality efforts with certificates,
letters of appreciation, or merchandise, often in conjunction with celebrations like luncheons or
special quality-related events. It is also typical for them to have some sort of system for
employees to make quality improvement suggestions (Allen and Kilmann 2001b). Some firms
have changed their performance appraisal systems to focus on developing employees to get
better in the future. Quality accomplishments are even considered in the promotion decision.
Rewards that involve things other than money or pay-related issues often invoke feelings of
accomplishment of self-worth from employees who have done a quality job (Allen and Kilmann
2001).
Firms are most likely to initiate team based programs when they are trying to attain some
corporate objectives, such as quality enhancement (Magjuka and Baldwin 1991). Intrinsic
rewards are used to provide recognition to a team for making a quality contribution. Team
members may be awarded a plaque at an awards dinner to celebrate their success. Tokens of
appreciation such as jackets, hats, or shirts with the team’s name on it may be given in
recognition for meeting a quality goal. These intrinsic rewards help reinforce team identity and
esprit de corps. In addition, intrinsic rewards can be very reinforcing to team members because
these rewards can be consumed immediately, unlike extrinsic rewards that are likely to be used
to pay off debts or be put in the bank for future use (Balkin and Dolan 1997).
Non financial
According to Brown and Armstrong, (1999) Reward can also be non financial or relational. For
example, praise, thanks, opportunities to develop skills and recognition awards such as
‘employee of the month/year’, ‘going the extra mile’. Awards are often publicly acknowledged
ceremonies and/or company newsletters and notice boards thus communicating to the wider
workforce the employee behaviour the organisation values and is prepared to reward. Non
financial also include the general quality of working life (QWL). For example, the work
environment, flexibility, work-life balance, managerial style/ attitude, job-role autonomy and
responsibility plus opportunities for employee involvement and employee voice; collectively this
may be termed the work ‘experience’ Perkins and White (2008).
According to Milsome (2001), non-financial recognition has a variety of schemes from the range
of informal, impromptu and formal structured based. This includes sending thanks to the
International Academic Journals
www.iajournals.org | Open Access | Peer Review | Online Journal Publishers

46 | P a g e
 International Academic Journal of Human Resource and Business Administration | Volume 1, Issue 5, pp. 36-54

employees or writing formally to record their thanks to recognize employee(s); An appreciation

in public meeting regarding the efforts; Appreciating in organizational newsletter or at special
dinner gathering; declaring Employee of the month or year; Holidays tour and travelling and
Meal for the individual and his/her partner and home appliances or domestic goods.
McAdams (1995) says recognition programmes involve rewards of both kinds i.e.monetary as
well as non-monetary nature. Modes of recognition may consist of socialreinforcers, such as
making mention in the company newsletter; plaques or letters ofcommendation; travel prizes; or
extra time off, and even the verbal appreciation privately or publically etc. These findings are in
line with the findings of Brun and Dugas (2008)who contend that, for the beneficiary,
recognition represents a reward experienced primarilyat the symbolic level; however, it may also
envisage emotional, practical or, financial valueto any extent.
McAdams (1995) joins the chorus of Serino (2002) and Stajkovic and Luthans (2003) which
claims that non-cash recognition awards are not only more motivating but arealso economical
compared to cash incentives. In his research on some 600 firms, McAdamsfound that cash
incentives, no doubt, enhanced sales performance by 13% but only throughadditional 12% cost.
In contrast, non-financial recognition based rewards alsoenhanced sales performance to the same
level but against cost of only 4 percent. Jeffrey& Schaffer (2007) had almost similar conclusions
out of their research who found thatnon-financial recognition based rewards are not only
motivationally superior to cashrewards but also, from the employer perspective, they are
favoured since the employerdoes not need to pay out any cash, which is a scarce resource in most
organizations. Not only is non-cash recognition costeffective,it's a crucial piece of keeping
employees engaged.
Saunderson (2004) identifies the essential nature of employee recognition as a vectorof
motivation, a component of meaningful work, an agent of personal development, andcentre for
workplace mental health. Research findings of Brun et al. (2003)show that dearth of sense of
recognition among the workforce in the organizations signalsrisk of psychological distress and,
in the result, an antagonism towards the management.Evans (2001) says that managerial
recognition of the employee performance is one of themost salient sources of employee
engagement and mobilization and plays cardinal role inorganizational change and continuity
towards success.
RESEARCH METHODOLOGY
Research Design
The study adopted a descriptive survey design to investigate the effect of reward on employ
engagement and commitment in Rift Valley Bottlers Company. This type of design is quite
appropriate for gathering information, summarizing, presenting and interpreting for the purpose
of clarification (Orodho, 2002).

International Academic Journals

www.iajournals.org | Open Access | Peer Review | Online Journal Publishers

47 | P a g e
 International Academic Journal of Human Resource and Business Administration | Volume 1, Issue 5, pp. 36-54

Population
The target population of the study shall consist of the staff of the Human Resources Department,
Finance Department, Production Department, Sales and Marketing Department and Distribution
Department. Human Resource Department comprised 5 staff members, Finance department
comprised 10 staff members, Production department comprised 20 staff members, Operations
department comprised 35 staff members and sales and marketing department comprised 70 staff
members, falling under different job groups. The study population was therefore 140 employees
falling under different job groups
A sample size of 30% respondents; equivalent to 38 members of staff in the five departments
was randomly selected to participate in the study. This number was considered sufficient since it
was above the recommended 30% which is generally regarded the minimum sample size. A
simple random sampling method within each department was employed so as to give each staff a
chance to participate in the study
Data collection
The research instrument used in this study for data collection was the questionnaires. A
questionnaire was chosen because it was less expensive and did not consume a lot of time. This
method was also selected with due consideration to the busy schedule of most of the respondents,
the questionnaire allowed respondents to complete them at their convenient time
The researcher obtained an introduction letter from Jomo Kenyatta University of Agriculture and
Technology. Thereafter, the researcher obtained consent from the RVBL to administer the
questionnaires. The researcher visited each of the sampled departments and personally
administered the questionnaires. The respondents were guided on how to respond to the
questions and were assured of confidentiality of all the information they gave. They were then
given the questionnaires to fill and return within seven days.
A scholarly study has to show evidence for accuracy, generalizability and replication. These are
the issues of validity and reliability of the study. The researcher established the reliability of the
research instruments before proceeding to the field to collect data. The questionnaire was
administered to the senior managers who were not involved in the final study. This was done to
determine whether the instrument yield the data needed, identify the problems that the
participants might encounter in responding to the items and to find out if items were clear or
ambiguous.
During the pre-test, respondents were asked to complete the questionnaire. The researcher
corrected and re-administered the questionnaire to the same respondents after two weeks. The
results for the pre-test and post test studies were tested for reliability using the Cranach’s alpha
Coefficient (∂). If all of the questions exceed the conventional recommended cut-off of 70, then
it is reliable to be used to collect data (Nunnally, 1978).
International Academic Journals
www.iajournals.org | Open Access | Peer Review | Online Journal Publishers

48 | P a g e
 International Academic Journal of Human Resource and Business Administration | Volume 1, Issue 5, pp. 36-54

Data Analysis and presentation

Data which was collected from the field was coded and cleaned to remove outliers or missing
valuables and categorized manually according to the questionnaire items using frequency
distribution tables and percentages. Simple descriptive statistics were used as they had an
advantage over more complex statistics since they could easily be understood especially when
making results known by a variety of readers.
The coded data was then transferred to the computer sheet and processed using the Statistical
Package for Social Sciences (SPSS) version 11.5.
Frequency tables, bar graphs and pie charts were used to analyze the quantitative data. The
responses to open ended (qualitative data) in form of phrases and words were organized followed
by creating categories, themes and patterns related to research questions. This was analyzed and
reported by descriptive narrative.
RESEARCH RESULTS
Direct Financial Drivers on Employee Engagement and Commitment
Assessment of the extent to which various factors stimulate levels of engagement and
commitment of employees at Rift Valley Bottlers Company Limited was done using a five-point
Likert scale.
From the findings it was observed that the mean were constant at 12.67 because the respondents
were the same. The standard deviation ranged from 5.50-12.66 showing that, the variables were
significantly different thus could be analysed. The results portray thatpromotion opportunities to
a very large extent 66.79% influences the level of engagement of employees. Salary 23.68%,
Satisfactory salary 31.58%, Promotion opportunities, Basis of payment 34.21%, Predictable
salary increase 21.05%, Shares ownership schemes, had the level of influence of 2.64 % on level
of engagement by employees. The findings of this study are a true reflection of the studies
conducted by Mottaz 1985, Mahaney and Lederer 2006, who argued that pay elements include
salary, promotions, pay rises, merit bonuses, and predictable salary increment. However, the
findings differ significantly from studies done by Marchant (2007), Ngala&Odebero (2009), who
posits that Cash bonuses are the leading driver of employee engagement and commitment. The
findings too differ greatly with Goldsmith, Veum & Darity (2000), who argued that for
employees to put more effort, reduce turnover, and be attracted to stay at the organisation, a
wage premium was key. Indirect financial Benefits to Employee Engagement and commitment
From the findings, it was observed that the mean were constant at 9.5 because the respondents
were the same. The standard deviation ranged from 2.08-11.79 showing that, the variables were
significantly different thus could be analysed. The study reveals high level of employee
engagement at Rift Valley Bottlers Limited. This is demonstrated by results which point out that

International Academic Journals

www.iajournals.org | Open Access | Peer Review | Online Journal Publishers

49 | P a g e
 International Academic Journal of Human Resource and Business Administration | Volume 1, Issue 5, pp. 36-54

health benefits offered by Rift Valley Bottlers (28.95%) engaged employees to a very large
extent. To a large extent (76.32%), educational benefits engaged the employees.42.11% which
was a moderate extent of the respondents said that, retirement benefits engaged them in the
company. A similar percentage (42.11%) said too that family benefits offered at the company
engaged them at the company. This finding is in agreement with studies done by Doyle, 2010,
Gale (20002), Wright (2004) and Donata (2011), which hold that benefits can be grouped into
three categories. That is, Personal, security and health. They agree that benefits invoke feeling
of accomplishments of self-worth and hence likely to stay on in companies that offer better
benefits. However, from the literature reviewed, no study had been made to show which benefit
engaged employee the most. But from the above finding it is clear that, health benefits are the
leading indirect financial benefit that engages employees the most in Rift Valley Bottling
Company.
Learning and Development on Employees’ Engagement
From the findings, it was observed that the mean were constant at 9.5 because the respondents
were the same. The standard deviation ranged from 3-11.96 showing that, the variables were
significantly different thus could be analysed. From the study learning component driver of
employee engagement at Rift Valley Bottlers Company Limited as the Training on the relevant
skills. This was demonstrated by results which pointed out that only training opportunities on the
relevant skills offered by Rift Valley Bottlers Company (50.00 %) engaged employees to large
extent. By a large extent regular training (28.95%) and to a smaller extent promotion within the
next two years made employees to be engaged and committed in the company. The findings of
this study are a true reflection of the social exchange theory. The theory adduces that,
‘movement by of one party would lead to a reaction by the second party.’ When employers
allocate more physical, cognitive and emotional to employees, they will reciprocate or reply to
employer’s actions.
Non-Financial Benefits and Employees’ Engagement
From the findings, it was observed that the mean were constant at 9.5 because the respondents
were the same. The standard deviation ranged from 3-11.96 showing that, the variables were
significantly different thus could be analysed. The results depicted above show that there is a
high level of employee engagement at Rift Valley Bottlers Company Limited as per environment
drivers. The results demonstrated that to the very large extent, interaction with colleagues at
(50.00%) contributed the most in terms of engaging and committing the employees in the
company. Opportunities to air views freely to a large extent (47.37%), moderately, 47.37%
adequate space and to a small extent union activities at 52.63% influenced employees to be
engaged and committed at the company. The findings of this study are a true reflection of the
studies conducted by Saks (2006), who explained that, the organisational productivity and
employee job engagement depended upon employee happiness and well being at the work place.
International Academic Journals
www.iajournals.org | Open Access | Peer Review | Online Journal Publishers

50 | P a g e
 International Academic Journal of Human Resource and Business Administration | Volume 1, Issue 5, pp. 36-54

Kahn adds that employees feels happy and keeps themselves more intensely in the job due to the
work environment they are working in. The finding too resonates with Xanthopoulou (2009),
who found out that, the well being of employees is positive and has a positive effect on employee
engagement as it enables to perform according to organisational standards.
CONCLUSIONS
This study aimed at establishing the effect of rewards on employee engagement at Rift Valley
Bottlers Company. The study focused on three engagement and commitment drivers. That was:
direct financial benefits, indirect final benefits and non financial benefits. The findings of the
study revealed that research, several factors contribute to employees’ engagement and
commitment at the place of work. However, the contribution of these factors varies in strength
and appeal to workers. Promotion opportunities, was identified as the leading direct financial
driver in employee engagement. Health benefits, job relevant training and interaction with fellow
workers freely, had the strongest contribution to engagement and commitment at Rift Valley
Bottlers Company. This finding has a strategic implication for human resource managers and
scholars. This is in agreement with Kahn’s three psychological condition theories which explain
the positive link between core self-evaluations and employee engagement. According to Kahn
(1990), employee engagement develops when three psychological conditions are satisfied:
psychological meaningfulness, psychological safety, and psychological availability.
Psychological meaningfulness referring to the positive ‘sense of return on investments of self in
role performance’. It concerns the belief that work is worthwhile and meaningful enough to add
value and significance to accomplishments at work. When employees believe that their work or
roles are significant and fit to the goals and values of the self or the organization, they may bring
themselves into this work, showing engagement (Brown &Leigh, 1996; Czarnowsky,2008;
Harter, Schmidt, & Hayes, 2002; Fredrickson, 1998; Maslach et al., 2001).
RECOMMENDATIONS
Based on the findings of the study, the following recommendations are proposed:
How organisation pay portrays their stance on reward and is in many ways a more strategic
decision than how much to pay. Methods of pay progression at Rift Valley Bottlers Company
should be informed by a clear notion of organisation value and strategic imperatives such that the
‘right’ individuals are recognized and rewarded for the ‘right’ behaviours. Where pay
progression is concerned, sometimes pragmatic decisions, underscored by the lack of resources
and expertise to design and manage more elaborate pay progression drives organisation to apply
blanket solutions such as automatic annual increments linked to employee service across-the-
board percentage pay increases. For some organisations the stakeholders involved in the
particular employment relationship annual service- related increments and unified pay awards
may signify equity, parity and transparency and therefore may be viewed more positively than

International Academic Journals

www.iajournals.org | Open Access | Peer Review | Online Journal Publishers

51 | P a g e
 International Academic Journal of Human Resource and Business Administration | Volume 1, Issue 5, pp. 36-54

other means of salary progression. However, at RVB a new pay structure should focus on
rewarding individual contribution and satisfactory performance tied into a new appraisal scheme.
Further recommended is Performance related pay (PRP). PRP links individual pay progression
with employee performance. The promise of reward contingent and performance will incentivise
employees to perform optimally thus raising individual performance and leading to improved
levels of engagement. Within a PRP scheme, employee performance is typically assessed against
pre-set targets or objectives. Often appraisal time, although a separate review meeting could be
used to determine a PRP increase. PRP payments may be consolidated into base pay or paid as a
bonus (variable pay).
On learning and development, the organisation may identify discernible skills or blocks of skills
and arrange this in hierarchy to indicate skill levels and attach skills based pay. This provides
employees with a direct link between their pay progressions and the skills they have acquired
and use effectively. This will enhance satisfaction and thus engagement.
Team rewards involves linking pay increases to an assessment of performance at team rather
than individual level. Team based pay at RVB, should be designed to reinforce collaborative
working and team results. Pay for the achievement of team objectives or targets can be
distributed as a fixed sum to all team members or calculated as a percentage of base salary. This
encourages high performing, well rewarded members of a team to stay on and remain together.
REFERENCES
Allen R.S., & Helms M.M., (2001). Reward Practices and Organizational Performance”
Compensation &Benefits Review, 33, 74-80.
Allen, R.S., & Kilmann, R.H. (2001a). The Role of the Reward System for a Quality
Management Based Strategy, Journal of Organizational Change
Management, 14 (2), 10- 127.
Armstrong, M.(2006) A Hand Book of Human Resource Management Practice, 10th edition
London: Kogan Page
Barclays Bank of Kenya Limited, (2013). http://www. Barclays Bank of Kenya.co.ke,
accessed on 28th April 2013
Best, R. G., Stapleton, L. M., & Downey, R. G. (2005). Core self-evaluations and job
burnout: the test of alternative models. Journal of Occupational Health
Psychology, 10, 441-451.SS
Burke, R. J., &Cooper, C.L. (2004).Leading in turbulent times. Oxford, UK: Blackwell
Publishing.
Evans, R. (2001), The Human Side of School Change; Reform, Resistance, and the Real- life
Problems of Innovation, San Francisco, CA: Jossey-Bass.

International Academic Journals

www.iajournals.org | Open Access | Peer Review | Online Journal Publishers

52 | P a g e
 International Academic Journal of Human Resource and Business Administration | Volume 1, Issue 5, pp. 36-54

Erez, A., & Judge, T. A. (2001). Relationship of core self-evaluations to goal setting,
motivation, and performance. Journal of Applied Psychology, 86, 1270-
1279.
Jeffrey, S.A., and Schaffer, V. (2007), The Motivational Properties of Tangible Incentives,
Compensation and Benefits Review, May-June, 44-50.
Kahn, W. A. (1990). Psychological conditions of personal engagement and disengagement
at work. Academy of Management Journal, 33, 692-724.
Kahn, W. A. (1992). To be full there: psychological presence at work. Human Relations,
45, 321-349.
Kahn, W.A. (1990), Psychological conditions of personal engagement and disengagement
at work. Academy of Management Journal, Vol. 33, pp. 692-724.
Kerr, J. and Slocum, J. W. (1987). Managing Corporate Culture Trough Reward System,
Academy of Management Executive, Prentice Hall.
Kohn, A. (1993b), Punished by Rewards, Boston, MA: Houghton-Mif?in.
Kular, S., Gatenby, M., Rees, C., Soane, E., & Truss, K. (2008). Employee engagement: A
literature review. Unpublished manuscript, Kingston Business School,
Kingston University, Surrey, UK.
Kular, S., Gatenby, M., Rees, C., Soane, E., & Truss, K. (2008). Employee engagement: A
literature review. Unpublished manuscript, Kingston Business School,
Kingston University, Surrey, UK.
Lawler.(2003). Treat People Right. San Francisco: Jossey. Bassinc.
Magjuka R. J & Baldwin T.T. (1991). Team-Based Employee Involvement Programs: Effects
of Design and Administration, Personnel Psychology, 44 (4), 793-812.
Mahaney, R. C.& Lederer, A.L. (2006). The Effect of Intrinsic and Extrinsic Rewards for
Developers on Information Systems Project Success, Project Management
Journal, 37 (4), 42-54.
Maluti, L. V., Warentho, T. O., & Shiundu, J. O. (2011). Impact of Employee Commitment
on Retention in State Financial Corporations in Kenya. International
Journal of Business and Public Management Vol. 2(2): 30-38
Mottaz, C. J. (1985). The Relative Importance of Intrinsic and Extrinsic Rewards as
Determinants of Work Satisfaction, The Sociological Quarterly, 26 (3),
365-385.
Mutunga, C. N. (2009). Factors that contribute to the level of employee engagement in the
telecommunication industry in Kenya: a case study of Rift Valley Bottlers
Kenya. Unpublished MBA Research Project, University of Nairobi
Mwangi, C. I., (2011). Utilization of Emotional Intelligence and Transformational
Leadership for Employee Engagement in Public Universities in Kenya
Unpublished MBA Research Project, Jomo Kenyatta University of
Agriculture and Technology
International Academic Journals
www.iajournals.org | Open Access | Peer Review | Online Journal Publishers

53 | P a g e
 International Academic Journal of Human Resource and Business Administration | Volume 1, Issue 5, pp. 36-54

Orodho, J.A, & Kombo D.K. (2002). Research Methods. Kenyatta University Institute of
Open Learning. Nairobi.
Reward Systems (2008). Koala Consulting and Training: Retrieved February 24,2012, from
http://www.koalacat.comiarchive/O 16RewardSystems.
Saks, M. A. (2006). Antecedents and consequences of employee engagement. Journal of
Managerial Psychology, 21, 610-619.
Saunderson, R. (2004), Survey Findings of the Effectiveness of Employee Recognition in
the Public Sector, Public Personnel Management, 33, 3, 255-276.
Serino, B. (2002), Non-cash Awards Boost Sales Compensation Plans, Workspan, 45, 8, 4-
27
Society for Human Resource Management (2006).SHRMSpecialExpertisePanels2006
trends report. Alexandria, VA: Author.
Shuck, B., & Wollard, K. (2010). Employee engagement and HRD: A seminal review of the
foundations. Human Resources Development Review, 9, 89-110.
Stajkovic, A.D., and Luthans, F. (2003), Behavioral Management and Task Performance in
Organizations: Conceptual Background, Meta-analysis, and Test of
Alternative Models, Personnel Psychology, 56, 155-194.
Vance, R. J. (2006). Employee Engagement and Commitment: A guide to understanding,
measuring and increasing engagement in your organization, SHRM
Foundation’s Effective Practice Guidelines, SHRM Foundation
Wambugu, J. K. (2010). Relationship between employee commitment and job performance: A
study of the Kenya Institute of Surveying and Mapping (K.I.S.M). Unpublished
MBA Research Project, University of Nairobi
Wruck, K. &Jensen M.C. (1998). The Two Key Principles Behind Effective TQM
Programs, European Financial Management, 4 (3), 401-424.
Xanthopoulou, D. Bakker, A. B., Demerouti, E., & Schaufeli, W. B. (2007). The role of personal
resources in the job demands–resources model International Journal of Stress
Management 14, 121-141.

International Academic Journals

www.iajournals.org | Open Access | Peer Review | Online Journal Publishers

54 | P a g e