IMPACT OF REWARDS SYSTEM ON EMPLOYEE

PERFORMANCE IN GLOBAL IME BANK LIMITED: IN

REFERENCE TO KATHMANDU DISTRICT

Submitted By:

Bina Thakuri

A thesis submitted as a requirement for a Master’s degree in Business

Administration from the Faculty of Business Administration

IUKL

Kathmandu

February, 2025
 TABLE OF CONTENTS

TABLE OF CONTENTS..........................................................................................................ii
LIST OF TABLES....................................................................................................................iv
LIST OF FIGURES...................................................................................................................v
ABBREVIATIONS..................................................................................................................vi
CHAPTER I...............................................................................................................................1
INTRODUCTION.....................................................................................................................1
1.1 Background of the Study..................................................................................................1
1.2 Statement of the Problem.................................................................................................2
1.3 Objective of the Study.................................................................................................3
1.4 Research Question............................................................................................................3
1.5 Significant of the Study....................................................................................................4
1.6 Limitations of the study....................................................................................................4
CHAPTER II.............................................................................................................................5
LITERATURE REVIEW..........................................................................................................5
2.1 Theoretical Review...........................................................................................................5
2.1.1 Expectancy Theory........................................................................................................5
2.2 Empirical Review.............................................................................................................6
2.2 Research Gap....................................................................................................................9
2.4 Hypothesis Development...............................................................................................10
2.5 Theoretical framework...................................................................................................12
CHAPTER III..........................................................................................................................15
RESEARCH METHODOLOGY............................................................................................15
3.1 Research Design.............................................................................................................15
3.2 Population.......................................................................................................................16
3.3 Sampling techniques.......................................................................................................17
3.4 Data collection Method..................................................................................................18

ii
 3.5 Research Instrument.......................................................................................................18
3.6 Reliability of data...........................................................................................................18
3.6 Data Analysis.................................................................................................................19
REFERENCES........................................................................................................................21
APPENDICES.........................................................................................................................31

iii
 LIST OF TABLES

Table 2. 1: Recognition, career advancement and merit pay components of rewards system.
.................................................................................................................................................19

LIST OF FIGURES

Figure 2. 1 Theoretical Framework...................................................................................19

iv
 ABBREVIATIONS

ANOVA Analysis of Variance

eit Error term

GRP Graduate Research Project

Ltd Limited

MAX Maximum

MBA Master of Business Administration

MIN Minimum

SPSS Statistical Package of Social Science

Std. Deviation Standard Deviation

v
 CHAPTER I

INTRODUCTION

1.1 Background of the Study

Attracting, retaining, and inspiring employees to achieve shared corporate objectives

continues to be one of the most difficult tasks in today's dynamic, globalized, and
competitive world (Nnaji-Ihedinmah & Egbunike, 2015). In the course of their daily work,
employees in financial institutions must deal with both a variety of clients and a portion of
raw cash. Working with difficult clients calls for a higher standard of ethics and greater
accountability (Kithuka, 2015).

For a number of reasons, human resources are among an organization's most important
components. First, they play a key role in determining how an organization operates, as well
as in establishing its market positions and gaining market share. Therefore, when it comes to
luring and hiring skilled workers, businesses face a number of challenges that they must deal
with (Kolluru, 2021).

Human learning processes are heavily reliant on motivation (Filgona et al, 2020). Since
people make up the core of an organization, motivation is crucial to its success in the
organizational setting. Without motivation, people or employees are unable to perform their
jobs to the highest standard. Objectives of the organization cannot be met as a result.
Therefore, finding the answers to motivate employees becomes the goal of every
organization.

There are several ways to encourage employees to perform their duties more effectively.
Compensation is the main incentive that attracts a worker's attention and encourages him to
perform productively. It is a result of performance since employees are compensated based
on their performance. According to Pawirosumarto and Sarjana (2017), rewards encompass a
variety of non-monetary benefits in addition to money returns, such as accomplishments,
recognition, prestige, status, value, and status.

1
The growth of banking industry in Nepal has led to a new culture in the banking industry
regarding performance evaluation, incentive schemes, and pay administration. Employees
have been under constant pressure to admit mistakes resulting from the performance goals set
by their employers. Employees at banks have grown more active in restructuring their work
to boost their productivity with the use of technologies and management systems as a result
of feeling pressured by their bosses' frequent increases in targets. In an organizational setting,
the necessity of exerting more effort in order to expand market share led to challenges and
harshness.

1.2 Statement of the Problem

Employee performance is a key factor in determining the success of a firm in the banking
sector, which is a dynamic and competitive environment. Banks use a variety of incentive
programs to encourage excellent performance, improve job satisfaction, and match personal

aspirations with company objectives. According to Robbins et al. (2015), (I can’t

find this citation in the reference list.)I cannot these reward systems usually include both
intrinsic and extrinsic rewards, such as opportunities for professional advancement and
recognition, as well as money incentives. Banks looking to maximize their human resource
strategy and keep a competitive edge must comprehend how these compensation schemes
affect employee performance.

The connection between banking industry employee performance and reward schemes has
been the subject of recent research. To illustrate the importance of a comprehensive incentive
approach in improving employee outcomes, Beqiri (2021) conducted a study that looked at
the effect of total reward management on employee performance in commercial banks.
Similar to this, Siddiqui's (2011) study examined the connection between global banks'
employee performance and incentive management systems, highlighting the function that
motivation plays as a mediator in this relationship. These studies indicate that by increasing
motivation and job satisfaction, well-designed reward systems can have a significant impact
on employee performance.

2
However, how reward systems are designed and implemented determines how effective they
are. Poorly designed incentive management procedures may result in lower employee
performance, according to a 2019 study by Udeze, Ugwu, and Aku on the Nigerian banking
industry. This emphasizes the necessity of thoroughly thought-out reward schemes.
Additionally, Pratheepkanth's (2011) study on the Commercial Bank of Sri Lanka showed
that employee motivation is greatly influenced by both intrinsic and extrinsic rewards,
indicating that a well-balanced reward system is necessary for peak performance. In context
of Nepal, Pradhan (2022) concluded that reward systems (salary, bonus, promotion,
empowerment, achievement, appreciation) have positive correlation and impact of employee
performance of service sector institutions of Nepal. Extrinsic and intrinsic rewards are given
to employees by organizations to encourage them. Different workers have varied needs in
terms of rewards. Extrinsic and intrinsic rewards are undoubtedly related, and both are
crucial for boosting employee engagement and productivity.

Despite these realizations, there is still a dearth of thorough studies looking at the complex
effects of reward schemes on worker performance in the banking sector. There is a
knowledge gap regarding the comprehensive effects of multiple reward components across
diverse banking environments because existing research frequently concentrates on single
features of reward systems or is restricted to specific geographic contexts.

Therefore, by examining the overall effect of compensation schemes on employee

performance in the banking industry, this study seeks to close this gap. The research aims to
offer a comprehensive understanding of how various reward components enhance or
diminish employee performance by examining both monetary and non-monetary rewards.
The results should guide the creation of more successful incentive programs that raise worker
performance, motivation, and satisfaction—all of which will ultimately help financial
organizations succeed as a whole.

Now, you have removed all information related to the bank (sample and population)
compared to the previous report. My comments in CHECKED 4 were ignored. You need to
rewrite the following:

3
1. A brief explanation about the bank you have chosen.
2. The reason why you chose this bank for this study.

**You have to write it here, because in this Problem Statement, the researcher (you)
need to provide strong foundation and justify the need for the study.

4
1.3 Objective of the Study

The objective of this study was to examine the relationship between rewards system and
employees performance of Global IME Bank Ltd. Specifically, the study aims to fulfill the
following precise objectives:

 To analyze relationship between reward system (recognition, career advancement,

and merit pay) and the job performance of employees of Global IME Bank Ltd in
Kathmandu.
 To examine the impact of rewards systems (recognition, career advancement, and
merit pay) on job performance of employees of Global IME Bank Ltd in Kathmandu.

 ORGANIZE YOUR WORK! In CHECKED 4, I have already written RO1, RO2,

and RO3 for you. Why are you still using bullet points?"
 In Checked 4, I asked you to change 1.4.1 to RQ1 and so on to make your report
more organized, neat, and easier to understand.
 Even though this is just a proposal, if you do not make the changes now, your Paper
2 will definitely be even more disorganized, because I am sure that for Paper 2,
student normally will just copy everything from Paper 1. If it is not corrected now,
the mistakes will be remain.
 This is a research study, not just regular notes.

1.4 Research Question

Reward systems can be used as tools to increase employee productivity and obtain a
competitive edge in the market because, as many management scholars have previously
noted, they have a significant impact on employee performance, which in turn affects the

5
overall performance of the organization. The following inquiries are taken into account for
this research project based on the literature:

1.4.1 What are the major rewards (recognition, career advancement, and merit pay) that
influence the employees' performance in Global IME Bank Limited in Kathmandu?
1.4.2 Is there a relationship between recognition, career advancement, merit pay and job
performance of employees' in Global IME Bank Limited in Kathmandu?

COMMENT ABOUT RO and RQ

 Reread both your RO and RQ carefully. Does your RO1 answer the question
posed in RQ1? Does your RO2 answer the question posed in RQ2?

 RQ1 asks about the effect/influence of the IV on the DV, but your RO1 is about
identifying the relationship between the IV and DV rather than measuring its
effect(impact)/influence. They are not aligned. You MUST adjust RO1 to align
with RQ1, and do the same for RQ2 and RO2.

 In Checked 4, I asked you to change 1.4.1 to RQ1 and so on to make your report
more organized, neat, and easier to understand.
 Even though this is just a proposal, if you do not make the changes now, your Paper
2 will definitely be even more disorganized, because I am sure that for Paper 2,
student normally will just copy everything from Paper 1. If it is not corrected now,
the mistakes will be remain.
 This is a research study, not just regular notes.

1.5 Significant of the Study

Research academics and academicians, marketing professionals, and the management of

Global IME Bank Ltd are among the stakeholders who will gain from the study's

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conclusions. The results of this study can be used to affect the innovation process in banking
institutions in Nepal by the management of financial institutions. Market practitioners will
also gain insight from the findings regarding the use of product packaging to affect target
market segmentation. The results of this study will be found to be essential in the academic
setting by researchers and academics to support further research on factors impacting
consumer purchasing decisions.

1.6 Limitations of the study

The study will try to cover the rewards system that has an impact on employee’s
performance of global IME Bank Ltd in Kathmandu. But study has certain limitation. The
major limitation is inadequacy of time and data.

Further the study will face the following limitations.

 The study has been based on the respondents’ preferences and perception within
Kathmandu.
 The result and the interpretation have been completely rigid from the viewpoint of the
researcher
 Some results might be biased due to the wrong information provided by the
respondents
 This research has been based on questionnaire only; hence, limited information can
be gathered from the respondents as per developed questionnaire.

My comment for section 1.8 were ignored in CHECKED 4. In paper 2 you still
have to add section 1.8.

7
 CHAPTER II

LITERATURE REVIEW

2.1 Theoretical Review

2.1.1 Expectancy Theory

First proposed by Victor Vroom in 1964, expectation theory explains what motivates
workers in businesses. The expectation theory states that everyone's behavior is determined
by their cognitive expectations of the outcome. Employees will be motivated to perform well
within the framework of incentive programs and awards as long as they believe that their
efforts will result in the intended rewards. Walkington and Bernacki (2020) investigated the
applicability of expectancy theory using performance-based incentive systems as an example.
They came to the conclusion that as it will raise employee motivation and performance
expectations, it is advantageous to match interpersonal goals with organizational objectives
(Walkington & Bernacki, 2020).

2.1.2 Cognitive Evaluation Theory

A theory of cognitive evaluation that addressed both internal and extrinsic motivation was
created by Deci and Ryan (1985) (McLaughlin, 2015). The concept was created in response
to real-world research that shown the negative impact of extrinsic rewards on intrinsic drive.
Empirical research has shown that there is a correlation between intrinsic and extrinsic
motivation, despite previous literature claims to the contrary. The use of extrinsic motivation
is therefore thought to reduce intrinsic motivation (Meer, 2013).

2.2.3 The Equity Theory

Equity theory was first presented by Adams and Freedman in 1976. Determining whether the
resources received by the individuals in a relationship were distributed fairly was the main
goal of the theory. From an organizational perspective, comparing the outcomes with the
contributions of employees was based on the equity theory idea. As logical beings, workers

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use equity theory by contrasting the input-to-output ratios they receive with those of their
coworkers (Griffin & Moorhead, 2011).(11 YEARS OF RESEARC H-OUTDATED)

To put it another way, the main issue of organizational workforce employees in an

organizational context is the percentage of rewards received in relation to one another in
similar job positions. Thus, when an employee perceives that the outcome-input ratios in an
organization are fair, they will feel that justice has been served, which will motivate them to
work toward the achievement of the organization's objective.

2.2 Empirical Review

To ascertain the connection between intrinsic and extrinsic rewards, Aktar et al. (2012) (10
YEARS OF RESEARCH-OUTDATED) investigated the relationship between employee
performance and prizes. The study used frequency tables and graphs based on descriptive
statistics to present demographic trait data. Using both descriptive and inferential statistics on
the variables, the findings are examined. The surveys were provided to 200 commercial bank
workers, 180 of whom correctly completed them. Employee job performance is one of the
dependent variables that the results show a statistically significant relationship with, and all
independent variables have a positive impact on.

The impact of extrinsic and intrinsic rewards on employees' job performance was examined
by Khan et al. (2017). A descriptive research approach has been selected for the
investigation. Employees from TCS, OCS, Leopard, and Express Courier Services, including
field supervisors and couriers, were chosen at random to take part in the poll. The collected
data was processed using the statistical program SPSS in order to examine the study. The
study found a high correlation between extrinsic and intrinsic characteristics and employee
performance.

The effect of non-monetary perks on job satisfaction in Pakistani private companies was
assessed by Akbar, Riaz, and Arif (2018). A self-administered questionnaire with five
nominal and twelve Likert scale questions is used to collect data from a convenience sample
of 100 employees. SPSS is used to examine the data. The data is analyzed using regression

9
and correlation tests. The results show that a number of elements, such as recognition,
flexible work schedules, employee feedback, flexibility, opportunities for advancement,
empowerment, a competitive work environment, and personal incentive preferences, have a
favorable effect on workplace job satisfaction. Furthermore, it would be argued that
emphasizing the elements that have a favorable impact on job satisfaction would improve
employee performance and foster a positive work atmosphere, both of which would increase.

Ahmed and Shabbir (2017) looked on the relationship between Pakistani commercial banks'
incentive schemes and employee performance. It also determined how employee
performance is impacted by the rewards scheme. HBL, ABL, MCB, UBL, and BOP banks
provided a sample of 92 respondents from the districts of Lodhran, Vehari, and Khanewal in
south Punjab, Pakistan. The data was gathered using a standardized questionnaire using a
Likert scale. The study discovered that employee performance is significantly impacted by
both extrinsic (compensation, promotion, bonus, and financial incentive) and intrinsic (job
autonomy, recognition, career advancement, and the work itself) rewards.

The components of a comprehensive reward system were investigated by Gautam (2020).

More precisely, the connections between employee motivation and the elements of a
comprehensive reward system are investigated. Lastly, employee turnover intention was used
to examine the effect of reward system-derived employee motivation. This study was carried
out using a quantitative, descriptive-correlational research strategy. 200 people in various
roles across various banks provided primary data for each variable. Using a 5-point Likert
scale, the major responses to the variables were collected. Pearson correlation, descriptive
statistics, and regression analysis were used to evaluate the hypothesis. Conclusions were
drawn at five percent and one percent significance levels.

According to the survey, the main elements of an all-encompassing incentive system were
pay, benefits, career opportunities, work-life balance, performance recognition, and
empowerment. Employee motivation and these indicators were found to be strongly
positively correlated.Jeni et al. (2021) examined and assessed the ways in which the banking

10
sector's incentives program in Bangladesh contributes to the skill development of its
employees. The experimental phase of the project was conducted using quantitative research
methodology. Eighty people made up the sample size. To collect data, questionnaires were
given to respondents who worked as ban bankers. The questionnaire, which is used to award
individuals, consists of nine factors. Frequency tables and graphs based on descriptive
statistics were used in the study to display demographic factor data. The study discovered
that incentive programs, such as pay reviews, bonuses, benefits, promotions, recognition, and
chances for career and responsibility learning, had a big influence on how employees feel
about their jobs.

The effect of reward management tactics (promotion, pay, recognition, learning chances, and
career development opportunities) on employee satisfaction in Kathmandu Valley colleges
was investigated by Upadhyay and Adhikari (2021). Descriptive statistics and multiple
regression models are used to examine the data from a questionnaire survey that was
completed by 300 respondents from 30 different universities and campuses in the Kathmandu
Valley. Promotion, pay, recognition, learning chances, and career development opportunities
all showed positive and significant beta coefficients with employee happiness, indicating that
these factors positively affect employee satisfaction.

Nurul, Sabiroh, and Eliy (2021) looked into how an organization's reward system affected
worker performance. This study looked at a number of factors, including health benefits,
bonuses, appreciation, and merit pay. The convenience sample participants in this study,
which employed a quantitative methodology, were given 132 sets of questionnaires.
Following that, a number of studies, including regression and correlation analysis, were
performed on the data using SPSS software. The findings demonstrate that medical benefits,
bonuses, appreciation, and merit pay all significantly affect workers' performance.

Pradhan (2022) examined how Nepal's service-oriented institutions' employee performance

was affected by their reward systems. The views of 395 workers of service sector
organizations at the managerial, officer, and assistant levels about compensation, bonuses,

11
promotions, empowerment, accomplishment, gratitude, and employee performance are taken
into consideration. Spearman and Pearson Rho Multiple regression is used to examine how
reward systems affect employee performance, whereas correlation is used to determine the
relationship between incentive systems and employee performance. The study came to the
conclusion that incentive programs positively correlate with and affect employee
performance in Nepali service sector organizations.

The effect of the reward system on the performance of skilled employees in Vietnamese
commercial banks was investigated by Pham et al. in 2023. 330 Vietnamese bankers were
given a standardized questionnaire, from which we collected data. These data are analyzed
using the partial least square structural equation model, which incorporates factors related to
job satisfaction, employee performance, performance incentives, promotion opportunities,
and employee recognition programs.According to the study, an employee's performance is
significantly impacted by their chances for advancement. However, the performance of
Vietnamese commercial bank employees is unaffected by performance incentives and
recognition programs.

Benalayeifa and Okwuise (2024) evaluated the performance of employees and reward
packages offered by commercial banks in Delta State, Nigeria. They also calculated the
impact of bonuses, health insurance, and recognition on employee performance in these
commercial banks. The survey approach specifically made advantage of the cross-sectional
design. For the study, 355 bank workers from eight (8) significant commercial banks in Delta
State were chosen as samples. A total of 355 copies of the questionnaire were distributed in
order to gather data. Multiple regressions, the mean, and the standard deviation were used to
examine the collected data. The study found that employee performance at Delta's
commercial banks is significantly impacted by bonuses, health insurance, and recognition.

12
2.2 Research Gap

There is significant amount of literature on the rewards and employee motivation

from their managers in the global context and in Nepalese market including

Hospitality (this is not a proper noun, why put capital letter?)) sectors like

restaurants, H(???)otels, T(???)ravel agency( agencies: should be plural to

match others) and hospital (hospitals: should be plural to match others) etc.
(this is formal report should not use etc. Avoid using "etc." in formal writing—just list
the relevant examples.)) but very few researches on impact of reward system on employee
performance has been studied in Nepalese context in commercial bank.

 The above red-font paragraph has several grammatical and structural issues.
You need to make the necessary corrections.

A study conducted in Nigeria, looked at the effects of various reward schemes on worker
performance at Makurdi Banks in Benue State (Igbashangev, 2023). In terms of how much
these elements improve employee performance levels, the study found a positive significant
association between a number of parameters, including task autonomy, task engagement,
recognition, compensation, job security, and working circumstances. According to research
by Shields and colleagues (2015), the implementation of the reward system should be based
on the needs and preferences of the employees. While some employees could be looking for
non-monetary rewards like recognition, training, promotions, or greater responsibility, others
may feel that money incentives satisfy their needs. An efficient reward system should be
flexible and incorporate both monetary and non-monetary incentives in order to satisfy the
needs of each employee.

In Nepali context, Adhikari (2015) did a study titled "Factor Affecting Employee in
Hospitality Industry" to pinpoint important variables and indicators that have an impact on

13
Lumbini Tandori Restaurant employees' motivation. The study came to the conclusion that
non-financial perks, like those in the banking industry, are prioritized over financial benefits
and other fringe benefits. Pradhan (2022) examined how Nepal's service-oriented institutions'
employee performance was affected by their reward systems. The study revealed that
incentive programs positively correlate with and affect employee performance in Nepali
service sector organizations.

By performing a descriptive inquiry to look at the effects of the rewards system (recognition,
career advancement, and merit pay) on employees' performance at Global IME Bank Ltd.,
this study seeks to close this gap. The study will examine the relative significance of different
reward systems while taking into account theoretical frameworks and Nepal's distinct cultural
environment. The study's specific goals are to determine the primary incentives affecting
worker performance in the Nepalese banking sector within the framework of Global IME
Bank Ltd., evaluate the relative significance of these elements for Nepalese bank workers,
and investigate possible cultural effects on worker motivation in the Nepalese banking sector.

2.4 Hypothesis Development

a) Recognition and the performance of the employees

Public recognition, awards, praise, and certificates are examples of extrinsic motivation that
often boosts employee morale and job satisfaction. Bradler et al. (2016) used a field
experiment to experimentally investigate employee performance and recognition. According
to the study, future employees' performance improved when they received recognition.
Ndungu (2017) also came to the conclusion that employee performance is greatly impacted
by employee appreciation. According to Kaufman et al. (2013), employees who receive
recognition exhibit greater motivation and perseverance, better working relationships, higher

personal status, and closer ties to their organization. Conversely , Pham et al. (2023) I
can’t find Pham,2023 in the reference list, only 2024)??? You need to check

14
the reference. discover that the performance of Vietnamese commercial banks'
employees is unaffected by recognition programs.

H1 – There is a positive relationship between recognition and the performance of the

employees

b) Career advancement and the performance of the employees

Extrinsic benefits in the workplace that offer direction and methods for achieving
professional growth include career advancement, career development, job rotations, and
training initiatives. Promotional possibilities have a major impact on an employee's

performance at Vietnamese commercial banks, according to Pham et al. (2023)(I

can’t find Pham,2023 in the reference)??? You need to check the

reference. Career development was proven to have a significant impact on teachers' quality
of instruction by Bicaj and Treska (2015). Similar to this, Kakui (2016) investigated the
connection between public sector workers' performance and career advancement,
concentrating on the National Cereals and Produce Board. According to the study, employee
performance in the public sector is influenced by career development and advancement.

H2– There is a positive relationship between career advancement and the performance of the
employees

c) Merit pay and the performance of the employees

When workers do well, incentives or other forms of compensation are given. It is the
approach that corporations employ the most. Agburu (2017) asserted that merit pays are
extremely important and that rather than emphasizing acceptable wages, salaries and wages
should illustrate some justice. This is due to the fact that receiving a sufficient wage will
make them happy and improve their performance within the company. Additionally, a study
by Edirisooriya (2014) illustrated a high positive correlation between financial rewards like

15
salaries and wages and employee performance. In contrast, Pham et al. (2023) (I
can’t find in the reference) discover that financial compensation has little effect on
Vietnamese commercial banks' employees' performance.

H3– There is a positive relationship between merit pay and the performance of the
employees

2.5 Theoretical framework

In the actual world, rewarding exceptional performance levels is essential since it carries out
and controls employees' activities. Reward strategies genuinely ensure the amount and
addition of monetary and non-monetary incentives needed to draw in, keep, and inspire
highly and moderately skilled workers to improve the company. Even though some benefits
are monetary in nature, including competitive pay options and salary reductions, companies
can provide their employees with a range of financial benefits. Indeed, there are several
factors that can inspire workers. Thus, it is essential for managers to be able to inspire real
employees.

Numerous studies, like Dewhurst et al. (2009), came to the conclusion that both high and low
performers need an appropriate reward system to be motivated. This is due to the fact that
rewards serve as an incentive for low performers and raise job satisfaction among good
performers. Furthermore, Pradhan (2022) came to the conclusion that employee performance
in Nepali service sector institutions is positively correlated with and impacted by salary,
bonuses, promotions, empowerment, achievement, and praise. Furthermore, Gautam (2019)
proposed that the main elements of a comprehensive incentive system were pay, benefits,
work-life balance, career opportunities, performance recognition, and empowerment.

Following a thorough review of the literature, the conceptual model below is developed to
show how employee performance, recognition, career advancement and merit pay relate to
one another.

16
Concerning reward system, it consists of three elements: recognition, career advancement
and merit pay. The following chart shows how the variables in this study relate to one
another.:

Independent Variables Dependent Variables

Recognition Employees
Career Advancement Performance
Merit pay

Source: Gautam, P. (2019). Comprehensive reward system, employee motivation and

turnover intention: Evidence from Nepali banking industry. Quest Journal of
Management and Social Sciences, 1(2), 181-191.

Figure 2. 1 Theoretical Framework

Recognition

It is everyone's goal to be well-regarded at their workplace. When coworkers and other

company members acknowledge an individual's commitment to their work, the person feels
appreciated (Baer, Oldham, & Cummings, 2003). This is the process of verbally expressing
gratitude for an employee's performance. Formal "pat on the back" recognition can boost
employees' self-esteem and sense of fulfillment, which may lead to them putting in more
effort for the company (Khan et al. 2017).

Career Advancement

Promotions or more duties from your workplace are common ways for career advancement
to occur. One example of a promotion is moving from an associate or assistant role to a

17
regular job function. Advancement is acquiring new abilities that close the gap between one's
existing role and a desired promotion. According to Yang (2018), it may be challenging to
determine an organization's individual performance; nevertheless, if it is found that
employees are working exceptionally well, the firm can use bonuses and rewards programs to
inspire them. According to Ahmad et al. (2015), if workers are happy at work, it could lead
to motivation, which in turn creates consumer satisfaction. Rewards, therefore, serves as a
mechanism via which employee performance can be improved in an organizational setting
(Azar & Shafighi, 2019).

Merit Pay

It is a system of remuneration that rewards higher-performing employees with bonuses or

incentive payments. It speaks of performance-related compensation, which is usually used in
connection with government job reform or educational reform. Employees who effectively
complete their tasks in line with easy-to-measure criteria receive bonuses. The best method to
reward the workers you want to keep the most is through merit pay. Merit compensation
makes it evident that you value and honor the efforts and successes of your employees.

The most evident financial benefit that workers receive from their jobs is merit pay.
Depending on the nature of the work and the culture of the company, it is paid on a monthly,
weekly, or hourly basis. Commercial bank workers regard salary, compensation, and bonuses
as the most significant factors (Gautam, 2016).A company could develop a reasonable
payment schedule for the staff as payment for devoting their important time and effort to
achieving the organization's aim. A good salary motivates workers and has a significant
impact on job satisfaction.

Employees’ Performance

18
One of the study's dependent variables is employee performance. Three components make up
employee performance in the dependent variable: productivity, job quality, and task
accomplishment. According to Yang (2018), it may be challenging to determine an
organization's individual performance; nevertheless, if it is found that employees are working
exceptionally well, the firm can use bonuses and rewards programs to inspire them.
Furthermore, the degree to which an employee comprehends his work and job
responsibilities, the caliber of his output, and the degree to which he meets or surpasses
expectations are the main factors that influence his performance (Hermina & Yosepha,
2019).

CHAPTER III

RESEARCH METHODOLOGY

This chapter's objective is to provide an overview of the research approach and

methodologies. A structured, theoretical evaluation of the approaches that will be used in a
certain field of study is known as a methodology. This chapter will outline the design of the

19
study and offer a thorough explanation of the data collection and analytical methods that will
be applied to achieve the investigation's goals. A study could be misguided if it lacks a sound
methodology. Thus, this chapter will discuss the technique for this investigation in detail.
The precise procedures that will be followed to answer the research question and test each of
the hypotheses that are presented in chapter one will be fully explained in the research
methodology. A questionnaire will be utilized to collect data, and SPSS and Microsoft Excel
will be used for analysis.

3.1 Research Design

This study will be used descriptive and a causal-explanatory research design to address the
impact of reward system on employees’ performance in Global IME bank Ltd particularly in
the context of Kathmandu. To make fact-finding easier and collect sufficient data regarding
how employee performance is affected by recognition, career development, and merit pay, a
descriptive study approach will be used. Descriptive research, as a type of study, described a
population, situation, or phenomenon under investigation. This design will be involved the
systematic collection and presentation of data to provide a clear picture of a particular
situation. Descriptive statistics will be used to analyze variables such as recognition, career
advancement and merit pay, along with their impact on employees’ performance in Global
IME bank Ltd.

This study also employs a causal-explanatory research design to analyze the effect of rewards
on employees’ performance. The causal-explanatory research design helped determine the
cause-and-effect relationship between the dependent variable (employees’ performance) and
the independent variables (recognition, career advancement and merit pay).

3.2 Population

Ngechu (2004) defines the target population as a group of individuals, concepts, events,
elements, and phenomena that are being studied. According to Mugenda and Mugenda
(2013), population studies are more representative since every individual has an equal chance
of being included in the final sample that is drawn. The management and secretarial

20
personnel of the branch under inquiry in Kathmandu will be the study's target demographic.
Therefore, the total population under investigation will consist of 754 workers from Global
IME Bank Ltd.'s 25 branches

Table 3.1 The Distribution of the Target Population

S.N Branch Total Employees

1 Anamnagar Branch 15
2 Banasthali Branch 10
3 Baneshwor Branch 15
4 Chabahil branch 15
5 Chhetrapati Branch 10
6 Dhapasi Branch 10
7 Dillibazar Branch 19
8 Gongabu Branch 21
9 Gyaneshwor Branch 12
10 Gyaneshwor II Branch 7
11 Indra Chowk Branch 13
12 Kalanki Branch 17
13 Kamaladi Branch 21
14 Kantipath Branch 15
15 Kirtipur Branch 8
16 Koteshwor Branch 21
17 Kuleshor Branch 25
18 Kupondole Branch 12
19 Lagankhel Branch 9
20 Nakkhu Branch 7
21 New Road Branch 29
22 Panipokhari Branch 31
23 Sinamangal Branch 7
24 Sukedhara Branch 12
25 Sundhara Branch 10
26 Sundhara II Branch 8
27 Thamel Branch 19
28 Thankot Branch 6
29 Corporate office 350
Total 754

21
3.3 Sampling techniques

A subset of the population from which conclusions can be drawn to guide decisions about the
full population is referred to as sampling. A representative sample will be chosen for the
study using a straightforward random sampling procedure. To choose how many employees
will take part in the study, proportionate stratified random selection will also be used.
According to Mugenda & Mugenda (2013), a sample size of 10% of a large population is
sufficient, whereas a sample size of 30% of a small population is deemed sufficient.
Therefore, 227 employees, or 30% of the 754 employees, will make up the study's sample
size because 30% of the 754 employees are currently employed in Kathmandu. See table 3.2
for sample size.

Table 3.2 sample size determinations

S.N Branch Total Employees Sample Size Sample percentage

1 Anamnagar Branch 15
2 Banasthali Branch 10
3 Baneshwor Branch 15
4 Chabahil branch 15
5 Chhetrapati Branch 10
6 Dhapasi Branch 10
7 Dillibazar Branch 19
8 Gongabu Branch 21
9 Gyaneshwor Branch 12
10 Gyaneshwor II Branch 7
11 Indra Chowk Branch 13
12 Kalanki Branch 17
13 Kamaladi Branch 21
14 Kantipath Branch 15
15 Kirtipur Branch 8
16 Koteshwor Branch 21
17 Kuleshor Branch 25
18 Kupondole Branch 12
19 Lagankhel Branch 9
20 Nakkhu Branch 7
21 New Road Branch 29

22
 22 Panipokhari Branch 31
23 Sinamangal Branch 7
24 Sukedhara Branch 12
25 Sundhara Branch 10
26 Sundhara II Branch 8
27 Thamel Branch 19
28 Thankot Branch 6
29 Corporate office 350
Total 754 227 30% of Total Employees

These respondents will be selected using non random sampling and convenience sampling
methods. The respondents will be selected such that they are currently working in Global
IME Bank Ltd inside Kathmandu district.

3.4 Data collection Method

The researcher will use primary data collection method to gather respondents. Questionnaire
survey will be used to record these responses and shared via online platform to reach out
maximum respondents.

3.5 Research Instrument

Any tool that could be used to gather information for a study or research project is considered
a research instrument. It can also be used to measure and analyze the information gathered
for the study (Moyo, 2017). The research tool used to gather primary data for this study will
be a questionnaire. The questionnaire was selected by the researcher because it reveals and
sheds light on the opinions of the participants, who are the study's sample.

23
3.6 Reliability of data

The consistency of study outcomes across studies throughout time is measured by the
reliability of research instruments. Research instruments can be measured in a variety of

ways, however studies have mostly used Cronbash?( CHECK the spelling) alpha to

establish the consistency of the instruments based on internal consistency results. We'll use a

Cronbash ?( check the spelling) alpha value of 0.7.

3.6 Data Analysis

Microsoft Excel and SPSS will be utilized in this study's data analysis. Interviewee responses
will be accurately coded and input into the program. The data will be processed methodically
in order to guarantee correctness and consistency in order to meet the research objective.
Descriptive and inferential methods will be used to analyze the data. Frequency and
distribution, descriptive statistic, correlation and regression will be used for the presentation
of the analysis.

The data collected from the questionnaires will be systematically gathered, tabulated, and
analyzed using percentages. The responses from the respondents of the questionnaire will be
presented according to the question pattern in the columns of the table, with observed
frequencies. A quantitative method will be used, with the significance level set to 0.05. The
following statistical tools will be employed for data analysis.

Descriptive Analysis

Descriptive statistics will be used in the research to describe the key features of the collected
data. They will offer a broad summary of trends and metrics. Almost all quantitative
statistical studies will be based on descriptive statistics, which will be used to portray
quantitative data in an understandable manner. They will help simplify large amounts of data
in a logical and meaningful way. Descriptive statistical tools such as mean, median, standard

24
deviation, and the minimum and maximum values of the variables will be employed in this
research.

Here, the mean or average will likely be the most commonly used method for descriptive
statistics. To calculate the mean, all the values will be added together and divided by the
number of values. The median will represent the value located at the exact middle of the set
of values. The standard deviation will provide a detailed estimate of dispersion, indicating
the variation of values around the central tendency. It will illustrate the relationship between
the set of values and the mean of the sample.

Correlation Analysis

The correlation coefficient calculates how strongly and in which direction two variables are
related. The most common method is Pearson’s correlation coefficient (r), which is
calculated using the formula:

r=n∑XY−∑X∑Y
√(n∑X2−(∑X)2)(n∑Y2−(∑Y)2)

Where:

 X and Y are the two variables

 n is the number of observations
 ∑X is the sum of values in variable X
 ∑Y is the sum of values in variable Y
 ∑XY is the sum of the product of paired values
 ∑X2 is the sum of squared X values
 ∑Y2 is the sum of squared Y values

Regression Analysis

Regression analysis will be an effective statistical tool used to identify the relationship
between two or more factors that are subject to variation or change. It will help determine
which variables are more important to monitor, which elements can be disregarded, and how
these variables influence one another. This analysis will be particularly useful when the study
involves a dependent variable and one or more independent variables.

25
From the following research multiple linear regressions is able to provide the questions,
which deem the roles of several independent variables perform in reckoning variance in an
individual or single dependent variable . The equation of the multiple regressions is as follow

Y= a + b1x1 + b2x2….. + bnxn + ei, R 2

Where, Y=Dependent variable (Job performance) and

X=Independent variable

a = Constant

X1=Recognition

X2=Career Advancement

X3=Merit pay

For the purpose of this research, regression analysis is a predictive analysis for examining a
targeted dependent variable Y (Job performance) and independent variable x such as
recognition, career advancement, and merit pay. The coefficient of determination (R²)
specifies how much of the variation in the dependent variable Y(Job performance) is
characterized by a variation in the independent variable X. Error term(ei) is a residual
variable which is created when regression does not fully represent the actual relationship
between the independent variables(X) and the dependent variables(Y).

26
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 I only checked randomly, but I have reminded you to review every citation on each
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 COMMENT ABOUT REFERENCES

 I only checked randomly, but I have reminded you to review every citation on each
page. So, do not rely only on what I have highlighted. You should clearly identify
which references and citations are outdated because this is your own research. You also
must ensure that every citation exists and is correctly listed in the reference list with
accurate information…

APPENDICES

Questionnaire

IMPACT OF REWARD SYSTEM ON EMPLOYEE PERFORMANCE IN GLOBAL

IME BANK LIMITED: IN REFERENCE TO KATHMANDU DISTRICT

Dear Sir / Ma’am.

39
My name is Bina Thakuri, undertaking academic research to meet the partial requirement of
MBA degree from Infrastructure University Kuala Lumpur (IUKL). The present study is an
endeavor to examine the Impact of reward system on employee performance in Global IME
Bank Limited: in reference to Kathmandu district. The information provided by you will be
used only for acedemic research (MBA) and not for any commercial activity. Please spare a
few minutes from your valuable schedule and share your true feelings. The confidentiality of
the information provided will be ensured.

Section A: Demographic Variable

Q 1. Q 2. Age Group Q3. Educational Q4. Experience

Gender Level

Male 1 18-25 1 +2 or below 1 Less Than 5 Years 1

Female 2 25-40 Bachelors 2 5-10 years 2

2

40 and above Masters & above More than 10 3

3 3

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Section B: Independent Variable

Please indicate the level of agreement to the following statement and tick accordingly.

(1. S.D=Strongly Disagree, 2. D= Disagree, 3. N= Neutral, 4. A= Agree, 5. S.A=Strongly

Agree)

Q n.5 Recognition

Particulars 1 2 3 4 5

I receive adequate acknowledgment or

appreciation when i perform well.

I am satisfied with the reward and

recognition gained from my bank

In my bank public recognition (E.g.

Acknowledging performance in mass) is
practiced more as compared to private
recognition (one to one acknowledgment)

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Q no. 6 Career Advancement

Particulars 1 2 3 4 5

My bank makes first preference to

internal employees in fillings vacancies
for career advancement.

I am satisfied with my career

advancement opportunities in the bank.

Adequate training and workshops for

career advancement exist in my
organization.

Career advancement system of my bank is

satisfactory.

Q no. 7 Merits Pay

Particulars 1 2 3 4 5

Merit pay is distributed rightfully in my

bank

Merit pay has a positive effect on the

working atmosphere.

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Merit pay motivates me to perform well
in my job.

I am satisfied with the quality/quantity of

reward.

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Section C: Dependent Variable

Q no. 8 Employee Performances

Particulars 1 2 3 4 5

I want to work more for the bank

My productivity has increased.

I am completing my assigned task

efficiently.

Thank You.

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