This research focuses on a particular case study within Marks and Spencer, a major UK superstore to understand the impact of rewards, incentives and performance appraisal on employee motivation and performance. Marks and Spencer is a leading name in retailing within the UK. The company maintains that the rewards package given to its employees is flexible, competitive, focused on superior results and is aimed to support personal choices of personal lifestyles. The elements of the reward packages of the company include fixed and competitive pay rates, variable performance related pay and a wide range of other benefits (marksandspencer.com, 2006).
In this study we prepare a detailed questionnaire to understand the impact of these benefits, payment and reward systems on employees and we also determine whether these rewards actually help in improving motivation and how this would relate to improved company performance. Marks and Spencer has boasted of 73% employee retention over 2004-2005 and retention may be considered as an important indicator of employee satisfaction and motivation (MarksandSpencer.com, 2006). Questionnaires are distributed to employees of Marks and Spencer to determine whether rewards systems given to them have a positive impact on their motivation and performance levels and aid them in heir decision to work for one company for a long period of time. The participants are employees of Marks and Spencer working in customer service divisions and 100 completed questionnaires are obtained and the data compiled are analysed for employee motivation and satisfaction levels that provide an indication of the employee retention level within a company. Marks and Spencer claims a high percentage of employee retention. The questionnaires are aimed to determine employee expectations, rewards given, job satisfaction, employee motivation, years of service and performance levels.
Companies use different means of rewarding employees and Brody et al (2001) discuss merit pay plans used by companies to motivate and reward employees. The theory of motivation would highlight that rewards and reinforcement for individual accomplishments should produce positive results although there may also be negative outcomes (Brody et al, 2001). Brody et al suggest in their study that when individuals are involved in hiring and merit allocation for employees, their prior commitments have significant effects on rewards allocated to the employees. This shows that a manager's personal involvement with employees can lead to increased merit allocation and rewards. This study highlights the factors that determine merit allocation and rewards which may not be completely dependent on employee performance and also large depends on interpersonal relationships within the workplace.
Rewards could be largely based on performance ratings and it would be important to understand how employees perceive these ratings of their performance. Smith and Rupp (2004) state that a major purpose of having performance appraisals of employees is to determine individual merit which in turn help in determining whether merit pay or benefits would be given to