Management’s perceptions of effective employee reward systems at selected five-star hotels in the Cape Town central business district

Ethical Clearance number: FOBREC639

Companies seek to maintain a competitive advantage in the marketplace. One of the means to achieve competitive advantage is to employ people who are motivated to perform their duties to the best of their abilities. Motivational programmes and practices should therefore form part of a company’s human resource strategy. Rewards are among the many ways of motivating employees to act in accordance with organisational goals. This study explores management’s perceptions of effective reward systems for employees at selected five-star hotels in the Cape Town central business district (CBD).

An exploratory research design was adopted, customary in cases where the problem must be defined more precisely before an approach can be developed. The study made use of semi-structured interviews to collect qualitative data on rewards systems in the selected five-star hotels in line with the research objectives. Fourteen interviews with managers working in five-star hotels were conducted. The non-probability sampling method of purposive and convenience sampling was applied to select participants working in top management in the administrative departments of the hotels. Analysis of the interview data was guided by Creswell’s six-step methodology, in terms of which the interviews were initially recorded, transcribed and presented in narrative form.

The findings of the study indicated that five-star hotels use extrinsic reward systems (commission, salary increase, cash, shopping vouchers, provident fund, bonus) and intrinsic reward systems (appreciation/praise, training, birthday gifts/presents, recognition, employee of the month, complimentary stay, positive feedback from superiors, mentoring, meal voucher, delegation). The study revealed that employees prefer extrinsic to intrinsic rewards. 

The study revealed that the rewards system attracts, keeps and motivates employees to perform consistently at optimal levels. The absence of a rewards system leads to demoralised employees, poor performance, low productivity, staff turnover, and negative attitudes and behaviour. According to results of the study, the researcher recommends that managers implement balanced and effective rewards, both intrinsic and extrinsic, as employees are the most precious asset of an organisation. Hotel establishments should also invest in educating their employees to improve their work environments. This is to ensure that employees value non-financial rewards as much as they value financial rewards.