Rewarding System and Employee Performance in Uganda’s Downstream Oil and Gas Sector

Abstract

This study investigated the effects of the rewarding system on employees’ performance in the Downstream oil and Gas sector especially in the not so big petroleum Stations of Uganda, that is Mogas, Oryx and Gaz. The problem of the study was the poor rewarding system which resulted in rampant voluntary resignations of middle staff and support stuff. The trend of resignation had proven that the stations could not ably retain her stuff for more than two years. The objectives of the study were to assess the impact of financial rewards and non-financial rewards on employee performance in the downstream Oil and Gas sector of Uganda. The study was based on Guest Model Theory of (1997) and the Herzberg’s Two-Factor theory where it was noted that employees are always seeking for equity and fairness between what they bring into the organization and what they get out in terms of rewards against the perceived inputs and rewards given to other employees. The research design was cross-sectional and was analyzed both qualitatively and quantitatively. Collection of data was done using the Questionnaires. The study population was 150 employees of which a sample of 108 elements was selected using simple random sampling out of which 100 respondents attended to the research which accounted for 92.6% response rate. The researcher used a Statistical package for social sciences (SPSS) version 19 to analyze collected data. The Cronbach’s coefficient Alpha technique was used to assess relationship between the two variables and the regression analysis technique was employed to assess the magnitude of the relationship. The findings of the study revealed that both financial and non-financial rewards have got a significant effect on employee performance. The study recommended that downstream oil and gas companies needed to increase on the salaries offered to staff and to broaden on the non-financial rewards offered to staff especially the other benefits offered for example housing allowance, transport and that staff are given option to choose their medical insurance service provider instead of offering them one option or none at all. Management should also ensure that Bonus payment is equitably distributed among staff and that this reward policy is communicated to all staff within the organization. Future studies can be carried out on the effectiveness of the process of designing and implementation of these rewards.