Clueless or efficient? : A Comparison of the Use of Reward Systems Between Sectors

Abstract This is a study about reward system, which essentially is a steering instrument that organizations can use in order to motivate the employees to work in the best interest for the organization, and hence the organization can affect the behavior of its employees. The purpose with this study is to see how companies in different sectors make use of a reward system in order to increase their effectiveness and efficiency. The aim is also to see to what extent organizations are linking the organizational goals with the individual goals that occur within an organization. A comparison between the sectors will be done in order to observe similarities as well as differences. As groundwork of this thesis theories regarding motivation and effectiveness and efficiency will be used. The research question is based on the purpose with this study and is stated as follows: “In what way are organizations using a reward system to motivate the employees to work in the best interest of the organization and reach organizational goals?” In order to answer our research question we have conducted a qualitative study. We have made two interviews with different companies within three different sectors, a total of six interviews. The sectors that we have chosen to focus on are the construction sector, the production sector and the service sector. The interviews were all face to face meetings in Umeå. The empirical findings have then been analysed by linking them to the theories used in our theoretical framework. The main conclusions we have made are that the construction sector follows traditions when it comes to a reward system. We could also see that companies within the service sector that provide their services to the construction sector are influenced by the construction companies in the way they make use of a reward system. These companies are focusing primarily on profitability and results when rewarding. Within the production sector the companies where working sufficient with the individual goals in order to stimulate motivation and in the end increase the effectiveness and efficiency. Based on our finding this is the sector that is working most satisfactorily with the individual goals that occur within an organization. Further, we could see dissimilarities between the two companies in the service sector, the way they make use of a reward system differs a lot, which we believe is based on the fact that one of the two companies did not have a lot of resources to put on rewards. Further we could conclude that the more developed reward system an organization has and considers it to be a steering instrument the more thoroughly developed will the groundwork for it be. Some similarities that we could see within all three sectors were that they all were using financial as well as non financial rewards and that the rewards were given to both individuals and to teams.