170

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

172

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.

173

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

174

• 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.

175

• 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.

176

• 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

177

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

178

• 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

179

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

182

• 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

191

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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