Background of the Study
Micro Finance Institutions (MFIs) are considered a major source of finance for the poor in the fight against poverty in many countries. Microfinance refers to the process of providing loans, insurance, savings, money transfers among other banking services to the poor living in rural and urban areas. The institutions accept deposits on a day –to-day basis, give small amounts of money which are on short-term basis to low income households and often use collateral substitutes
Reward systems according to Sziligyi (2003) are outcomes or events in the organization that satisfy work related needs. Rewards systems are much more than just bonus plans and stock options but while they often include intrinsic incentives, they also include extrinsic types like promotions, non- monetary bonuses, vacation holidays or simple “thank you” from a manager. Since productivity is a result of high morale, it is however imperative on managers to reward employees when they hit organizational targets and stretched standards set by the organization. A properly administered system of rewards has the capacity not only to improve incentives for quality workmanship and staff performance but also strategically attract skilled employees to join the organization whereas the reverse may lead to unproductive performance and even to a high incidence of staff turnover.With regards to the various steps of performance appraisal under rewards systems, it is evident that employees and supervisors would come into terms with goals and policy framework of the organization and develop personalized non-salaried based rewards that correlate with the specific objectives (Wilson, 2004).
Motivation according to Luthans (2003), is the management process influencing behavior of knowledge on what make people think. It contributes to the process of stimulating people to act and achieve specific goals. As motivation concern, reward system is an important tool for management use as the channel of employees’ motivation. Currently, the reward programs are implementing either in public or private sectors. It was clearly stated that employees’ effort is increased when rewards are offered (Vroom, 1964). In a reward program, large amount of money are spent. The reason behind these, hopefully it will increase employees’ motivation. As pointed by Cameron and Pierce (2006), an effective reward system requires an experimental attitude; continual fine-tuning of the system; input from people within the system and ongoing evaluation of the effectiveness of the system. Danish and Usman (2010) suggested that effective reward system leads to increased satisfaction for employees; recognition of accomplishments; a desire to attain high standards; a means to achieve personal and social goals; high productivity and feeling of competence and freedom.
When employees are rewarded, they get work done. Employers get more of the behaviour they reward, not what they assume they will automatically get from employees. Effective reward systems should always focus on the positive reinforcement. Positive reinforcement encourages the desired behaviour in organizations. This encourages employees to take positive actions leading to rewards. Reward programs should be properly designed in the organization so as to reinforce positive behaviour which leads to performance (Torrington ; Hall, 2006).
Even with the best strategy in place and appropriate organizational architecture, an organization will be effective only if it members are motivated to perform at a high level. The types of motivation are intrinsic and extrinsic. “Intrinsic motivation is a psychological force that determines the direction of a person’s behaviour as a result of challenging or interesting work, giving autonomy to work, designed scope to develop skills, abilities, opportunity to develop and grow, etc. Extrinsic is also psychological force that determines behavioural change as a result of tangible and intangible benefit such as salary, fringe benefit and special awards” (Gareth ; Jennifer, 2003)
Reward systems are very crucial for an organization (Maund, 2001). Rewards include systems, programs and practices that influence the actions of people. The purpose of reward systems is to provide a systematic way to deliver positive consequences. Fundamental purpose is to provide positive consequences for contributions to desired performance. Reward systems are the mechanisms that make this happen. They can include awards and other forms of recognition, promotions, reassignments, non-monetary bonuses like vacations or a simple thank you.
It is a fact that success in every organization depends on the quality of its human resources both skilled and unskilled labour which is perhaps the most intangible aspect of the organization, hence the most important. All these things plants, machinery and financing cannot generate income without manpower. Studies have shown that in today’s competitive business environment, success is increasingly a function of effective human resources management (Ahindo, 2008). It is therefore necessary to have a workforce that is motivated to yield high performance and productivity towards achieving the organizational goals and objectives.
Irrespective of the industry within which an organization operates, the concept of motivation cannot be looked down upon. With this regard banking being a service industry and therefore having direct contact with customers, the presence or absence of employees’ motivation can have immediate telling effect on the customer thus either delighting the customer or otherwise) which eventually results in customer retention and profitability. The critical workforce management challenges of the immediate future driven by corporate re-engineering and restructuring efforts, loyalty concerns and fierce competition for key talents are closely linked to the emerging issues of employees’ commitment and productivity (Bandura 2000).
Motivation approaches definitely satisfy the needs of the employees and in return, the employee repays it through their hard work. Identifying the needs and answering it is the most basic approach of every organization to earn the commitment of the employees (Chughtai, 2008). With a well-motivated workforce, an employee’s performance can be manifested on the organizational effectiveness, which allows the individuals to focus on the development of their work, in terms of behaviour, skills and knowledge, ethics and effectiveness. It has been noted that motivation tends to energize the workforce which can result in their expected job performance.
Generally, the reward system is accompanied by several actions both from the viewpoint of the corporation and the individual. It is led to tensions for the corporation. First under similar conditions people intend to refer to the corporations which provide the highest rewards. Thus corporations can attract employees who have competency and qualification by offering rewards. Second, the reward that is given to employees in lieu of service compensation is a tool for receiving feedback from previous performance and third, rewards can be used as a motivational tool to improve future performance. Hence, it seems that the reward system should be effective and efficient so that such actions are realized in the corporation and this system should be designed in a way that creates maximum return both for the corporation and the individual (Karami, 2003). Paying attention to the principal needs of the individual and enjoying fair reward distribution inside and outside of the corporation are among the major principles in any reward system (Otieno, 2006). The reward system is one of the basic scopes of human resource management performance and service compensation management as one of the scopes of this task undertakes to design and execute employees’ wage and benefits systems.
Managers should try to build a suitable value – based corporation and use it as an important goal for short – term and long – term goal of management (Kamau, 2007). Change in management has taught us many points including that managers should not only focus on production (service) increase but also they should think how to choose suitable people for the corporation’s success. If employees are given a suitable reward for their ethical behavior and a fair wage for their performance, the manager has the chance to bind his/her employees to ethical act. In addition to conformation of employees’ perception, characteristics such as fairness of the reward and wage system are regarded as legal standards in any country to provide their needs (Mujtaba, 2010). In the event that corporations reward the customer’s intimacy and satisfaction, they are more probably prepared to regulate and change behavior in order to establish a good relation with customers and satisfy their needs (Nyaribo, 2006). One of the important characteristics of human resources managers regarding employees’ perception is to make a good relation among all managers and employees which guarantees the success of the corporation. An appropriate reward system for all employees and sellers as a part of performance management plan can be resulted in increasing of efficiency and productivity at the workplace. Performance management is a secure way for assessment which conforms the corporation’s activity to mission, perspectives and purposes and harmonizes them.
Rafiki Microfinance Bank limited is a microfinance institution in Kenya. It is a subsidiary of Chase Bank Kenya Limited. It was founded in 2009, registered in 2010 and started its operations in 2011 in the Kenyan market. It is regulated by CBK. It started with two branches in 2011; today it has 18 branches all over Kenya. Rafiki Microfinance Bank focuses to widen financial access in the microfinance sector through multiple delivery channels and is distinctively positioned to empower communities that they operate in to come out of poverty and live in dignity and for businesses, Rafiki Microfinance Bank enable them to upscale thereby creating wealth and generating employment opportunities to many. The bulk of Rafiki Bank Kenya clients are engaged in commercial activity of a retail nature, with a reasonable number engaged in service businesses, agriculture and manufacturing. The rural/urban mix is 69/31, with growth increasingly coming from the rural clients. Urban-based clients have made a rapid transition from business loans to consumer loans, much more than the rural based ones. In recent days, there has been a rise in increased demand for training and business development services among these clients, a factor that Rafiki Bank Kenya is beginning to seriously address.
Statement of the Problem
Research has shown that the impact of rewards on employee motivation varies from individual to individual, and that some individuals respond more to extrinsic rewards (Delery, 2008) whilst others respond better to intrinsic rewards (Dienerand Biswas-Diener, 2012). Most employees like to work in organizations with a much rewarding and recognize employee performance through the administration of rewards as appreciation and motivation for higher performance, thus, efforts expended on task will depend on the value of reward that will follow, (Porter, 2004). Rewards are an important component of any effective employee motivation which improves their performances. Rewarding good performance is a challenging task since most organisation don’t know of how well to reward employees and its impact on their motivation which improves performance. Yet it is one which is necessary to support improvements in performance (Milkovich and Newman 2008). It is important to establish a reward management system which clearly articulates the aims of the various reward elements, integrates them in a coherent way and tells employees what they can expect to receive and why.
Locally, studies on reward includes Njoroge (2012) who studied the relationship between reward systems and employee motivation amongst the civil service employees of the Kenyan Government, the results of the study showed that rewards given to civil servants affected the employee level of motivation and resulted in improved performance of the Ministry but not necessarily in individual employee performance in the public sector. Mutua (2011) also studied the relationship between reward management and employee motivation in a state cooperation; the National Hospital Insurance Fund. The findings of the study showed that as a state cooperation it followed the guidelines set by the public sector compensation regulations. The regulations did not provide for other forms of non-financial rewards, which resulted in significant levels of demotivation amongst staff at the National Hospital Insurance Fund. There is no study carried locally on the role of reward systems in employee motivation in Kenyan Deposit Taking Micro Finance institutions. It is in this light that the researcher aims to carrying out a research focusing on the role of reward management systems on employee motivation in Kenyan Deposit Taking Micro Finance institutions.
Objectives of the Study
General Objective
To determine the role of reward system in employee motivation in Kenyan microfinance institutions.
Specific Objectives
The study will be guided by the following research objectives:
i. To determine how motivation among employees of Kenyan deposit taking microfinance institutionsis gets affected by intrinsic reward
ii. To determine how motivation among employees of Kenyan deposit taking microfinance institutions gets affected by extrinsic reward
iii. To determine how motivation among employees of Kenyan deposit taking microfinance institutions gets affected by career development options
iv. To determine how motivation among employees of Kenyan deposit taking microfinance institutions gets affected by learning opportunities
Research Questions
In order for the study to fulfill the research objectives, the study will ask the following research questions:
i. How does motivation among employees of Kenyan deposit taking microfinance institutionsis get affected by intrinsic reward?
ii. How deoes motivation among employees of Kenyan deposit taking microfinance institutions get affected by extrinsic reward?
iii. How does motivation among employees of Kenyan deposit taking microfinance institutions get affected by career development options?
iv. How does motivation among employees of Kenyan deposit taking microfinance institutions get affected by learning opportunities?
Significance of the Study
The findings and recommendations of this study will be useful to Kenyan deposit taking microfinance institutions by enabling them to formulate and target their motivation and rewards activities effectively. The study will benefit the existing Kenyan deposit taking microfinance institutions underwriting challenges facing the institutions in motivating employees and how to address the problems. Managers of Kenyan deposit taking microfinance institutions will find the findings of this study useful in designing strategic plans to help their organizations improve the motivation of their employees.
By serving as a point of reference, knowledge seekers in the fields of economics, research methods, human resource management, and development studies will find this research study beneficial to them and to the researchers with research interests in rewards and employee motivation,..
Government and regulatory agencies will find the findings and recommendations of this study useful in formulating future human resource regulations, policies and laws that will aid in improving employee motivation in Kenyan organizations.
Scope of the Study
This study will seek to determine the opinions of all cadres of employees in Kenyan deposit taking microfinance institutions. The variables under the study would be intrinsic rewards, extrinsic rewards, career development and learning opportunities. A random sample of 43 employees was selected to represent a target population of 86 employees. The study was carried at Rafiki Kenya head office and Tom Mboya Branch in Nairobi. The study was carried out in year from June to August 2018.
2 THEORETICAL-METHODOGICAL PART
2.1 THEORIES OF MOTIVATION
2.1.1 Motivation Theory according to Maslow.
Among the known motivation theories the most recognised is this. Maslow states that there are five levels of needs of humans to be fulfilled and motivate them to perform in their work. According to Maslow (1943), hierarchy determined human needs. In ascending order Physiological Needs, Safety Needs, Social Needs, Esteem Needs and Self-actualization Needs. The basic needs according to the theory are physiological and safety needs like food, water, warmth, rest, security and safety. Esteem and social needs were classified under psychological needs such as intimate relationships with family and friends, stature and feeling of achievement.
2.1.2 The Herzberg’s Two-Factor Theory
Herzberg’s Motivator-Hygiene theory or the dual-factor theory was modified from Maslow’s theory. It was developed by psychologist Frederick Herzberg, who theorized that job satisfaction and job dissatisfaction act independently of each other. The theory states that there are certain factors in the workplace that cause job satisfaction, while a separate set of factors cause dissatisfaction. These job factors were classified by Herzberg into two broad categories, Hygiene Factors and Motivational Factors. It shows that beside extrinsic factor such as monetary rewards, intrinsic factors have emphasis in this theory. Intrinsic factors related to the job satisfaction, however, extrinsic factors related to the dissatisfaction. Factors such as policy, supervision, work conditions, relationship with peers, salary, personal life, relationship with subordinates, status, and job security (Ruthankoon ; Ogunlana, 2003) become the great focus of the Herzberg’s theory of motivation. According to Nel et al. (2001) the organizations should focus and give more attention to hygiene factors before introducing motivators in workplace.
In essence, there are more to a manager’s role in motivating employees other than compensation, good working conditions, and similar factors. Herzberg argued that for an employee to be truly motivated, the employee’s job has to be fully enriched where the employee has the opportunity for achievement and recognition, stimulation, responsibility, and advancement.
2.1.3 The Theory of Equity
Equity theory rests upon three main assumptions (Skiba and Rosenberg 2011). First, the theory holds that people develop beliefs about what constitutes a fair and equitable return for their contributions to their jobs. Second, the theory assumes that people tend to compare what they perceive to be the exchange they have with their employers. Third assumption is that when people believe that their own treatment is not equitable, relative to the exchange they perceive others to be making, they will be motivated to take actions they deem appropriate.
To further establish the causes of perceived and actual inequity in organizations, Fadil, et. al. (2005) stated that feelings of inequitable treatment tend to occur when “people believe they are not receiving fair returns for their efforts and other contributions.” The challenge therefore for organizations is to develop reward systems that are perceived to be fair and equitable and distributing the reward in accordance with employee beliefs about their own value to the organization.
2.3 Empirical Review
2.3.1 Intrinsic Rewards on Motivation
It is intangible benefit and includes the characteristics such as autonomy, feedback and decision making participation. The intrinsic reward system was created purposely to appreciate employees in form of self-esteem and related to their feeling of achievement and growth with organization. Intrinsic reward concerns with psychological development of employees (Williamson, Burnett & Bartol, 2009). Employees feel satisfied when they have accomplished something worth in work and orally appreciated by the organization.
Concerning the intrinsic rewards of motivation, the study on comparing the impact of financial and non-financial rewards towards organizational motivation Zani et al., (2011) found that the best way to motivate employees is to use non-financial incentive. It believed to have a significant intrinsic value to employees. This is supported by the study of Nandanwar, Surnis and Nandanwar (2010) which found that non-monetary rewards positively associate with employees motivation. A survey of IT professionals in United State of America found that most of the employees satisfied with intrinsic factors such as intellectual new challenge, creative problem solving and pride in their accomplishment (Pawlowski, Datta & Houston, 2005). In contrast, Hafiza et al., (2011) found that there was insignificant relationship between rewards and employee motivation. The factor of intrinsic rewards is less applicable in organizations to increase the work motivation.
Using a sample of 334 academician, Ismail (2007) study on rewards and job satisfaction within Malaysian Institutions of Higher Education revealed that monetary rewards insignificantly correlated with job satisfaction. A research study conducted by Chen et al., (2006) used expectancy theory to examine key factors that motivate business faculty to conduct research. The survey results, from 320 faculty members at 10 business schools in United State of America, shows that the faculty members who are not in permanent status tend to be motivated by extrinsic rewards, while permanent faculty members tends to be intrinsically motivated with respect to conducting research.
2.3.2 Extrinsic Rewards on Employee Motivation
Salary, bonus and allowance were three major features in extrinsic rewards (Tang, 2007). Salary is defines as base pay to employees either daily, weekly, monthly or yearly basis according to their job structure (Henderson, 2006). For example, salary will be paid based on qualification and work experience. Cash payment that receives by employees based on their performance was called as bonus. For example by achieving the targets sales, marketing executive was received monetary incentive (Lowery et al., 2002). Organizations provide rewards system to encourage their employees deliver good job performance. Therefore, effective rewards system may assist organization achieve the goals and increase in performance.
Further, Hafiza et al., (2011) revealed that there was a positive relationship between extrinsic rewards and employee motivation in non-profit organization of Pakistan. In contrast, there was insignificant relationship between extrinsic rewards and employee motivation in non-profit organization of Australia (Tippet & Kluvers, 2009). This is consistent with Deci, Koestner and Ryan (2004) which found that the extrinsic rewards had a significant negative effect on intrinsic motivation.
Another study performed by Baer, Oldham and Cummings (2003) showed that extrinsic rewards were positive for employees occupying simple tasks and negative for employees facing jobs that were complicated and challenging. A survey also shows that the employees were satisfied with extrinsic factors, for instance, working environment, their co-workers and the professional work climate, benefits, job securities and work hours (Pawlowski et al. 2005).
2.3.3 Career Development on Employee Motivation
Stones and Freeman (2010) list special training for career development and motivation undertaken by supervisors as: Career Planning and Development for Personnel. A career refers to all of the jobs that people hold during their working lives. Career planning is the process by which employees plan their career goals and paths. Career development refers to all of the technical and managerial skills employees acquire to achieve their career plans. Career advancement, which gives a picture of future opportunities in terms of promotion, is a motivating factor for performance and development of skills.
Career development and staff motivation are key strategic considerations for all organizations regardless of size, sector, market or profile.One of the most significant developments in the microfinance institutions in recent times is the increasing importance given to human resources. Torrington and HaII (2008) agree and point out that due to their use of labour intensive activities and increasing competition within the industry, financial services in general and micro finance institutions in particular have embarked on considerable investment in training. More and more attention is being paid to motivational aspects of human personality, particularly the need for self-esteem, group belonging and self-actualization. This new awakening of humanism and humanization all over the world has in fact enlarged the scope of applying principles of human resource management in the banking industry. The development of people, their competencies and the process of development of the total organization are the main concerns of human resource management (Pareek and Rao, 2008). Proper planning and management of human resources within the banking industry is essential to increase the capabilities, motivation and overall effectiveness of employees.
According to Armstrong (2007) motivation is goal-oriented behavior. Most employees are motivated when their expectations regarding goal attainment can be clearly liked to specific anticipated actions on part of management. Basically, motivation concerns “motives” and “needs”; and Beardwell, Holden and Claydon (2004) point out that motivation is increasingly seen by managers as a mechanism for improved performance through the development of positive attitudes in employees. That is why a lot of attention should be directed to the administration of reward systems and strategies within organizations, which greatly affect employees? “self-esteem” or “self-worth”.
2.3.4 Learning Opportunities on Employee Motivation
A learning opportunity is a strategic function of human capital management, where it focuses on developing overall employee competencies to overcome their daily work problems. This may lead to supporting the development and growth of an organization in the future (DeSimone, Warner &Harris, 2002). In the traditional management perspective, supervisors are given the important responsibility by an employer to identify the daily, routine and short-term employee deficiencies, as well as report such deficiencies to the top management. Top management will then identify the training requirements or training needs to overcome such employee deficiencies (Rodrígues & Gregory, 2005).
Organizations that have prioritized learning and development have found increases in employees’ job satisfaction, productivity, and profitability (Watkins ; Marsick, 2003). Watkins and Marsick (2003) suggested that the learning organization concept has distinct but interconnected dimensions, which are associated with people and structure. A learning organization is viewed as one that has capacity for integrating people and structure to move an organization in the direction of continuous learning and change. Motivation to introduce learning opportunities is one of the key concepts that improve performance. It can be described as trainees’ desire to use the knowledge and skills mastered in training or associated learning activities on the job.
Management role in learning and developing each employee and pooling all resources available is critical in motivation that leads to increased performance that maximizes profits (Achor, 2000). Training into Company Culture complement management’s critical role in creating a pleasant and satisfying environment for its employees where pride, education, self-improvement, leadership, and teamwork coexist. The incentives for employers to implement training are that the employees will be motivated hence increasing their productivity, research indicates that training improves employee attitudes and morale and leads to reduced absenteeism and staff turnover (Stewart 2000). Implementing training effectively provides an evident source of return on investment at the bottom line of a company.
2.5 METHODOLOGY
The research methodology that will be used, in the attempt to achieve the objectives of the study, will focus attention on research design, study population or target population, sample size, sampling techniques, data collection instruments, data collection procedure and data analysis procedures.
2.5.1 Research Design
Chandaran (2008), states that the research design is an understanding of conditions for collection and analysis of data in a way that combines their relationships with the research to the economy of procedures. A descriptive research design will be preferred in this study since it allows for analysis of different variables at the same time and enables the researcher to describe variables, situations and conditions (Erikand Marko, 2011). Descriptive research design was also chosen because it enables the researcher to generalise the findings to a larger population. This study therefore will be able to generalise the findings of all microfinance institutions in Kenya using a case study of Rafiki Kenya, where the context was the Kenya head office in Biashara Street and Tom Mboya branch in Tom Mboya street Nairobi.
2.5.2 Target Population
Target population is the specific population about which information is desired. 86 employees were the interest of the population that consisted of the management staffs at Rafiki Kenya head office and Tom Mboya street branch. Ngechu (2004), explains that a population is a well-defined set of people, services, elements, events and group of things or households that are being investigated. Population studies are more representative because everyone has an equal chance to be included in the final sample that is drawn according to Mugenda and Mugenda (2003). The researcher intended to generalize the results of the study hence as summarised below the researcher shows the characteristics of the population.

Table 1 Target Population
Category Population Frequency Percentage (%)
Top level management 9 10
Middle level management (loan officer) 26 30
Lower level management 51 60
Total 86 100
Source: Rafiki Kenya Bank (2018)
2.5.3 Sample Design
According to Erik and Marko (2011) sampling is the process of selecting a number of individuals for a study in such a way that the individual represents a larger group from which they are selected. From the above population, a sample of 50% of the respondents was selected from within each group in proportions that each group bears to the study population. Mugenda and Mugenda (2003) recommends that the sampling of at least 10% of the population should be represented thus the choice of 50% is considered a representative sample. This generates a sample of respondents, which the study sought information.
Stratified random sampling technique was used since the population of interest is not homogeneous and could be subdivided into groups or strata to obtain a representative sample. According to Gerrish and Lacey (2013) stratified random sampling produces estimates of the overall population parameters with greater precision and ensures a more representative sample is derived from a relatively homogeneous population. A random sample from each stratum was taken in a number proportional to the stratum’s size when compared to the population. This method was used since it reduces chances of bias and all items have an equal percentage of being selected.
Table 2 Sample of the Study
Category Population Frequency Sample Ratio Sample Size
Top level management 9 0.5 5
Middle level management (loan officer) 26 0.5 13
Lower level management 51 0.5 25
Total 86 0.5 43
Source: Researcher (2018)
2.5.4 Data Collection
The study utilized both secondary data from other sources and primary data collected using questionnaires to carry out the study. The questionnaire included structured and unstructured questions and was administered through drop and pick method to respondents who were the staffs and customers of the bank. The structured questions was used in an effort to conserve time and money as well as to facilitate in easier analysis as they were in an immediate usable form; while the unstructured questions were used so as to encourage the respondents to give an in-depth and felt response without feeling held back in revealing of any information. With unstructured questions, a respondent’s response may give an insight to his feelings, background, hidden motivation, interests and decisions and give as much information as possible without holding back. At the same time, with the use of structured questions, if the researcher is after information that he finds easier for administration purposes, he would use this method since the questionnaires and interviews are followed by alternative answers.
The secondary data sources was used whereby use of previous document or materials to support the data received from questionnaires and information from interview that were include newspapers, books and magazines available in the libraries were visited as well as information from the websites.
2.5.5 Pilot Test
The study carried out a pilot study to test reliability and validate of the questionnaire. The study selected a pilot group of 8 individuals from the target population at Rafiki Kenya to test the reliability of the research instrument. Cronbach’s alpha methodology, which is based on internal consistency, was used. Cronbach’s alpha measures the average of measurable items and its correlation Overall scales’ reliability of the present situation and the desirable situation was tested by Cronbach’s alpha, which should be above the acceptable level of 0.70 (Hair et al., 1998). This was in line with a qualitative research design methodology employed in this research project.
According to Berg and Gall (1989) validity is the degree by which the sample of test items represents the content the test is designed to measure. Content validity which was employed by this study is a measure of the degree to which data collected using a particular instrument represents a specific domain or content of a particular concept. Mugenda ; Mugenda 2003) contend that the usual procedure in assessing the content validity of a measure is to use a professional or expert in a particular field. The pilot study will enable the study to be familiar with research and its administration procedure as well as identifying items that required modification. The result helped the study to correct inconsistencies arising from the instruments, which ensured that they measure what is intended.
2.5.6 Data Processing and Analysis
Data collected will be quantitative in nature. The descriptive statistical tools will help the researcher to describe the data and determine the extent used. Analysis will be done quantitatively and qualitatively by use of descriptive statistics. This included frequency distributions, tables, percentages, mean mode, median etc. In addition, advance statistical techniques (inferential statistics) will also be considered.
Data analysis with the use of SPSS and Microsoft excel percentages, tabulations, means and other central tendencies. Tables will be used to summarize responses for further analysis and facilitate comparison. This will generate quantitative reports through tabulations, percentages, and measures of central tendency. Cooper and Schindler (2003) notes that the use of percentages is important for two reasons; first they simplify data by reducing all the numbers to range between 0 and 100. Second, they translate the data into standard form with a base of 100 for relative comparisons.
3 DATA ANALYSIS AND PRESENTATION
This chapter will show the interpretation and presentation of the findings obtained from the field. The chapter presents the background information of the respondents, findings of the analysis based on the objectives of the study .

4.1.1 Response Rate
From the figure below, it’s clear that the study targeted a sample size of 43 respondents from which 39 filled in and returned the questionnaires making a response rate of 90.7%. This response rate was satisfactory to make conclusions on the role of reward systems in employee motivation in Rafiki Bank Kenya. According to Mugenda and Mugenda (2003), a response rate of 50% is adequate for analysis and reporting; a rate of 60% is good and a response rate of 70% and over is excellent. Based on the assertion, the response rate was considered to excellent.

Chart 1 Response Rate

2.1.1 4.1.2 Reliability Analysis
From the table below, reliability analysis was subsequently done using Cronbach’s Alpha which measures the internal consistency by establishing if certain item within a scale measures the same construct. Reliability of the questionnaire was evaluated through Cronbach’s Alpha which measures the internal consistency. Cronbach’s alpha was calculated by application of SPSS for reliability analysis. The value of the alpha coefficient ranges from 0-1 and may be used to describe the reliability of factors extracted from dichotomous and or multi-point formatted questionnaires or scales.
A higher value shows a more reliable generated scale. Cooper ; Schindler (2008) has indicated 0.7 to be an acceptable reliability coefficient. In the above table extrinsic rewards had the highest reliability (?=0.845) followed by career development (?=0.841), intrinsic rewards had (? = 0.839) and learning opportunities had (?=0.736). This illustrates that all the four scales were reliable as their reliability values exceeded were above the prescribed threshold of 0.7.

Table 3 Reliability Analysis
Scale Cronbach’s Alpha Number of Items
Intrinsic 0.839 9
Extrinsic 0.845 9
Career Development 0.841 9
Learning Opportunities 0.736 4

2.2 4.2 Demographic Information
2.2.1 4.2.2 Gender of the respondents
From the figure below it is clear that the majority of the respondents as shown by 58.97% indicated that they were males whereas 41.03% of the respondents indicated that they were females, this is an indication that both genders were involved in finding out the role of reward systems in employee motivation at Rafiki Bank Kenya. The difference in gender was because males are more aggressive thus they are in a better position to offer loan facilities on behalf of microfinance institutions (Okello 2010).

Chart 2 Gender of the respondents

4.2.3 Age of the respondents
From the figure below on the age of the respondents, the study requested the respondents to indicate their age category, from the findings, it is clear that most of the respondents as shown by 38.46% indicated that they were aged between 30 to 39 years, 20.51% of the respondents indicated 40 to 49 years, whereas 10.26% of the respondents indicated they were aged 50-59 years, this is an indication that respondents were well distributed in term of their age. According to Kothari (2006), there is need to represent all age in the study to have the view of all generations at work Place

Graph 1 Age of the respondents

4.2.4 Level of Education of the Respondents
From the figure below on the academic qualification of the respondents, the study requested the respondents to indicate their academic qualification, from the findings, the study found that most of the respondents as shown by 53.85% indicated that they had degrees, 23.08% indicated they had a post graduate qualification, 17.95% indicated they had a diploma, whereas 5.13% of the respondents indicated they had high school education qualification. This is an indication that most respondents were educated and could give credible information. Kombo and Trump (2006) indicates that respondent level of indication determines the credibility of information they give to the study.

Graph 2 Level of Education of the Respondents

2.2.2 4.2.5 Respondents position in the organization
From the figure below on the respondents position in the organisation, the study requested the respondents to indicate their position in the organisation, from the findings, the study found that most of the respondents as shown by 53.85% indicated that they were clerks/ administrators, 17.95% indicated they were specialist, 12.82% indicated they were junior managers, 10.26 indicated they were executives whereas 5.13% of the respondents indicated they were senior executives. This is an indication that all the respondents were involved in the study. Kombo and Trump (2006) indicates that all the respondents in various positions should be involved in the study.

Graph 3 Respondents position in the organisation

2.2.3 4.2.6 Period of Working at Rafiki Kenya
From the figure below, the study requested the respondents to indicate their period of working at Rafiki Bank Kenya, from the findings, it is clear that most of the respondents as shown by 41.03% had worked for 3-5 years, 28.21% of the respondents indicated they had worked for 0-2 years, 15.38% had worked for 6-8 years, 10.26% had worked for 9-10 years whereas 5.13% of the respondents indicated they had worked for 11 years and above, this is an indication that respondents were in the organisation for a good period of time and thus understood the role of reward system on employee motivation . Nzuve (1999) found out that respondent period of service in an organization is necessary for him or her to have better understanding of the organization.

Graph 4 Period of Working at Rafiki Kenya

2.3 4.3 Effect of Rewards on Employee Motivation
2.3.1 4.3.1 Reward Category with the Greatest Impact to Motivate Employees
From the findings on the organisation regard to employee motivation, the study found that Career development management and coaching/mentoring is a great component of employee motivation as shown by mean of 3.74, explicit rewards is an important component as shown by the mean of 3.69, intrinsic reward is important as shown by mean of 3.62 while learning opportunities are important as shown by the mean of 3.46. According to Stones and Freeman (2010) career development and staff motivation are key strategic considerations for all organizations regardless of size, sector, market or profile.
Table 4 Reward Category with the Greatest Impact to Motivate Employees

? Unimportant ? Of little importance ? Neutral ? Important ?Very important Mean Standard Deviation
Intrinsic Rewards 2 5 9 13 10 3.62 0.11
Explicit Rewards 2 6 7 11 13 3.69 0.11
Career development management and coaching/mentoring 3 4 8 9 15 3.74 0.12
Learning opportunities 4 5 9 11 10 3.46 0.08

2.3.2 4.3.2: The Most Important Reward Structure
From the findings on the important of reward structure, the study found that a good work environment is important as shown by mean of 4.26, a good work performance recognition and involvement is important as shown by the mean of 4.10, organization benefits are important as shown by a mean 4.05, financial benefits are important as shown by mean of 3.92, career development management and coaching/mentoring is important as shown by a mean of 3.77 while learning opportunities are important as shown by the mean of 3.64. Chindanya (2011) found out that a good and conducive environment was an important form of intrinsic reward in an organisation.

Table 5 The Most Important Reward Structure
?Unimportant ? Of little importance ? Neutral ? Important ? Very important Mean Standard Deviation
Financial benefits 2 4 7 8 18 3.92 0.16
Organization benefits 1 3 6 12 17 4.05 0.17
Work performance recognition and involvement 1 2 6 13 17 4.10 0.18
Career development management and coaching/mentoring 2 5 8 9 15 3.77 0.12
Work environment 1 1 6 10 21 4.26 0.21
Learning opportunities 3 4 8 13 11 3.64 0.11
2.4 4.4 Intrinsic Rewards on Employee Motivation
2.4.1 4.4.1 Rate of Intrinsic rewards on Employee Motivation
From the findings on the impact of intrinsic benefits on employee motivation, the study found that a good work environment is important as shown by mean of 4.26, a good work performance recognition and involvement is important as shown by the mean of 4.10, organization benefits are important as shown by a mean 4.05, financial benefits are important as shown by mean of 3.92, career development management and coaching/mentoring is important as shown by a mean of 3.77 while learning opportunities are important as shown by the mean of 3.64. This was in agreement with Zani et al., (2011) who found that the best way to motivate employees is to use non-financial incentive as a form of reward.
Table 6 Rate of Intrinsic rewards on Employee Motivation
Unimportant ? Of little importance ? Neutral ? Important ? Very important ? Mean Standard Deviation
Employee appreciation 0 2 5 18 14 4.13 0.20
Job rotation 2 4 9 16 8 3.62 0.14
Recognition of meaningful work done 1 2 7 16 12 3.85 0.16
Degree of autonomy in performance of work 2 3 8 15 11 3.77 0.14
Sense of progression 1 3 8 17 10 3.82 0.16
Development of competence 2 3 8 14 12 3.79 0.14
Feeling well informed 1 3 7 11 17 4.03 0.16
Freedom to plan and work independently 2 4 8 10 15 3.82 0.13
Participation of goal setting 3 5 9 8 14 3.64 0.11

2.4.2 4.4.2 Reasons for organisations offering the intrinsic rewards to their employees
Majority of the respondents indicated that many organisations offer intrinsic reward to appreciate employees in form of self-esteem and appreciation for work done so that they fell satisfied for their achievement and growth of the organization. By offering intrinsic rewards the study found that the employees will be motivated hence they will be loyal and committed to the organisation hence increasing performance. This was in agreement with Ramdhani (2008) who found that there was positively significant relationship between intrinsic rewards and perceived productivity among academician and support staff in South Africa University
2.4.3 4.4.3 The measures to ensure there is a favourable working environment in the organisation for employees
Majority of the respondents indicated that to ensure there is a favourable working environment for employees in the organisation the management need to ensure they maintain effective communication among the employees since this ensures that the employees are able to participate effectively in policies concerning the organisation, majority of the respondents also indicated that the employees should be sometimes left to work on their own under minimal supervision since this ensures that they get an opportunity to grow and become responsible. Majority of employees also indicated that the working environment should recognise the needs of different employees’ cultures and be respectful of different cultural or religious practices of employees. Chindanya (2011) found out that the management needs to ensure they maintain effective communication among the employees to ensure there is a favourable working environment in the organisation for employees.
2.5 4.5 Extrinsic Rewards on Employee Motivation
2.5.1 4.5.1 Extrinsic Rewards importance on Employee Motivation
From the findings on the importance of extrinsic rewards on employee motivation, the study found that medical aid benefits is important as shown by a mean of 4.26, retirement benefits are important as shown by the mean of 4.21, good working environment is important as shown by a mean 4.08, job security and organisation’s closeness to amenities is important as shown by mean of 3.85, fuel benefit is important as shown by a mean of 3.72, parking availability is important as shown by a mean of 3.62, cell phone benefits are important as shown by a mean of 3.44 while eating and smoking facilities are not important as shown by a mean of 1.97. Hafiza et al., (2011) revealed that there was a positive relationship between extrinsic rewards and employee motivation in non-profit organization of Pakistan, hence they are important.
Table 7 Extrinsic Rewards importance on Employee Motivation
? Unimportant ? Of little importance ? Neutral ? Important ? Very important Mean Standard Deviation
Medical aid benefits 0 0 4 12 23 4.49 0.25
Retirement benefits 0 2 5 15 17 4.21 0.20
Cell phone benefits 3 6 9 13 8 3.44 0.09
Fuel benefits 2 4 8 14 11 3.72 0.13
Good working Environment 1 2 6 14 16 4.08 0.18
Job security 2 3 6 16 12 3.85 0.15
Organisations close to amenities 2 4 7 11 15 3.85 0.13
Eating and smoking facilities 16 13 6 3 1 1.97 0.17
Parking availability 2 6 10 8 13 3.62 0.11

2.5.2 4.5.2 Factors Considered in deciding the amount of Benefits to Give Employees
The study found out that the majority of the respondents indicated that employee’s level of education qualification affect the benefits given to employees; it was revealed that the employees with higher level of education received would receive more benefits than those with low education, the study also found that the employees who have been in the organisation for a long period would receive more benefits compared to those in the organisation for a short period. The study also found that the employees who deliver higher targets receive more benefits than those who don’t. Mwenebirinda (2012) acknowledges that employee performance can be enhanced by training that addresses identified weaknesses and that employee level of training and education affect their remuneration.
2.6 4.6 Career Development on Employee Motivation
2.6.1 4.6.1 Importance of Career Development on Employee Motivation
From the findings on the importance of career development factors concerning employee motivation, the study found that promotion and growth in the organization opportunity is important as shown by a mean of 4.10, succession planning is important as shown by the mean of 4.00, leadership training and job rotation are important as shown by a mean 3.90, mentorship programme is important as shown by mean of 3.67, clear career path is important as shown by a mean of 3.54, internships is important as shown by a mean of 3.51, secondment is important as shown by a mean of 3.46 while overseas assignments is important as shown by a mean of 3.28. Torrington and HaII (2008) agree and point out that due to their use of labour intensive activities and increasing competition within the industry, financial services in general and micro finance institutions in particular have embarked on considerable investment in training to motivate employees.
Table 8 Importance of Career Development on Employee Motivation
?Unimportant ? Of little importance ? Neutral ? Important ? Very important Mean Standard Deviation
Promotion and growth in the organization opportunity 2 3 4 10 20 4.10 0.19
Leadership training 2 4 7 9 17 3.90 0.15
Mentorship programmes 3 5 8 9 14 3.67 0.11
Internships 2 6 10 12 9 3.51 0.10
Secondment 4 5 9 11 10 3.46 0.08
Clear career path 2 5 9 11 11 3.54 0.10
Overseas assignments 5 4 11 8 10 3.28 0.08
Job rotation 3 5 4 8 19 3.90 0.17
Succession planning 2 4 5 9 19 4.00 0.17

2.6.2 4.6.2 How Career Development and Coaching Improve Performance of Organisation
The study found out that majority of the respondents indicated that career development and coaching facilitate the exploration of needs of the employees, motivates employees, improves employees desires, increases employees skills and thought processes to assist the individual in making real, lasting decisions hence increasing the employees of the employees. Torrington and HaII (2008) agree and point out that due to their use of labour intensive activities and increasing competition within the industry, financial services in general and micro finance institutions in particular have embarked on considerable investment in training to motivate employees.
2.7 4.7 Learning opportunities on Employee Motivation
2.7.1 4.7.1 Importance of learning opportunities on Employee Motivation
From the findings on the importance of learning opportunities factors concerning employee motivation, the study found that company in house training and development is important as shown by a mean of 4.15, full time/part time study reimbursement is important as shown by the mean of 4.03, scholarships are important as shown by the mean of 3.62 while overseas seminars/ conferences is important as shown by a mean of 3.54. Organizations that have prioritized learning and development have found increases in employees’ job satisfaction, productivity, and profitability (Watkins ; Marsick, 2003).
Table 9 Importance of learning opportunities on Employee Motivation
?Unimportant ? Of little importance ? Neutral ? Important ? Very important Mean Standard Deviation
Scholarships 2 4 8 13 11 3.62 0.12
Full time/part time study reimbursement 1 3 6 13 16 4.03 0.17
Company in house training and development 1 2 6 11 19 4.15 0.19
Overseas seminars/ conferences 2 5 11 12 9 3.54 0.11

2.7.2 4.7.2 Learning opportunities the organisations find easy to implement
The study found out that majority of the respondents indicated that the learning opportunities the organisation find easy to implement include, staff involvement and feedback since it help in employee motivation which is crucial to ensuring that quality factors are given appropriate consideration. Another training opportunity is training employees about the company culture since it creates a pleasant and satisfying environment for its employees where pride, education, self-improvement, leadership, and teamwork coexist. Another training opportunity the organisation find easy to implement is offering Scholarship programs to the employees since this will enable them further their skills hence improve performance. Rowden, (2005) found that staff involvement and feedback was one way of enforcing learning in organizations in order to motivate employees.
2.8 4.8 Regression Analysis
In this study, a multiple regression analysis was conducted to test the influence among predictor variables. The research used statistical package for social sciences (SPSS V 20) to code, enter and compute the measurements of the multiple regressions.
Correlation
From the table below, R is the correlation coefficient which shows the relationship between the study variables, from the findings shown in the table below there was a strong positive relationship between the study variables as shown by R 0.887 at 5% significance level. The Adjusted R squared is coefficient of determination which tells us the variation in the dependent variable due to changes in the independent variable, from the findings in the table below the value of adjusted R squared was 0.752 an indication that there was variation of 75% on employee motivation due to changes in learning opportunities, career development, intrinsic rewards and extrinsic rewards at 95% confidence interval . This is an indication that 75% of the changes in employee motivation could be accounted for by the independent variables.
Table 10 Regression Analysis Model Summary
Model R R Square Adjusted R Square Std. Error of the Estimate
1 .887 .787 .752 .26548
From the table below, the processed data, which is the population parameters, had a significance level of 2.6% which shows that the data is ideal for making a conclusion on the population’s parameter as the value of significance (p-value ) is less than 5%. The F critical at 5% level of significance, 4 d.f, 34 d.f was 2.65, while F computed was 3.524, since F calculated is greater than the F critical (value = 2.65), this shows that the overall model was significant.
Table 11 Analysis of Variance Table
Model Sum of Squares df Mean Square F Sig. Model
Regression 3.256 4 0.814
3.524
1
Residual 7.854 34 0.231
Total 11.11 38

From the regression equation below it was found that holding intrinsic rewards, extrinsic rewards, career development and learning opportunity to a constant zero, employee motivation will be 0.410, a unit increase in intrinsic strategies would lead to increase in employee motivation at Rafiki Bank Kenya by 0.316 units, a unit increase in extrinsic rewards would lead to increase in employee motivation at Rafiki Bank Kenya by 0.325 units, a unit increase in career development would lead to increase in employee motivation at Rafiki Bank Kenya by 0.397 units and a unit increase in learning opportunities would lead to increase in employee motivation at Rafiki Bank Kenya by 0.297 units. Overall career development had the greatest effect on employee motivation at Rafiki Bank Kenya, followed by extrinsic rewards, then intrinsic rewards while learning opportunities had the least effect on employee motivation at Rafiki Bank Kenya.
At 5% level of significance and 95% level of confidence, intrinsic rewards had a 0. 018 level of significance; extrinsic rewards had a 0.026 level of significance, career development had a 0.033 level of significance while learning opportunities 0.031 level of significance hence the most significant factor is intrinsic rewards. All the variables were significant (p