A Study Of Employee Reward System On The Performance Of Mongolian ERDENET Mining Corporation

Reward system is an important tool that management uses to channel employee's motivation in desired ways such as better functionality and further improve company performance.The purpose of this study was to examine the impact of reward systems on organisational performance in Erdenet mining company in Mongolia.The study was guided by the following specific objectives:(1)to determine the reward systems currently used in Erdenet mining company,(2)to determine employees view of reward system used by Erdenet mining company,(3)to assess the effect of extrinsic rewards(remuneration,bonus,salary and promotion)in organization performance and(4)to assess the effect of intrinsic rewards(praise and recognition)on organization performance in Erdenet mining company.The study used descriptive research design which incorporated both quantitative and qualitative approaches.The study surveyed 168 employees from Erdenet mining company,using self administered questionnaire.It also interviewed selected employees.The data was analyzed with use of descriptive statistics(SPSS and excel)and data presented as frequency distribution tables.In this study Herzberg's two factor theory was selected as the guiding theory because the two factors relate directly to intrinsic and extrinsic factors.The theory suggested that people have two sets of needs.Their needs as animals to avoid pain.Their needs as humans to grow psychologically,Herzberg's study consisted of a series of interviews that sought to elicit responses to the questions.The two types of reward system have mixed results in terms of their effect on employee and overall organisational performance.The findings of this study showed that the Erdenet mining company offer both extrinsic(salary,bonus and promotion)and intrinsic(praise,recognition and genuine appreciation)rewards to their employees.However,the results found that employees were not satisfied with the current reward packages and salary level was viewed to be too low and did not reflect cost of living in Mongolia.The study further indicated the intrinsic(non financial)rewards were not satisfactory to employees.The study also found that when,both financial and non financial rewards are present at workplace,employees are motivated and so their job performance is improved and those efforts are reflected in the overall organisation performance.In absence of adequate reward,workers would tend to express their displeasure through poor performance and non-committed to their jobs.The study further highlighted that appropriate and consistent rewards to employees not only raise their motivation to work harder but also improves overall organization performance.