AbstractGrowing levels of regulations by national governments, worldwide consolidation of firms and increasing customer expectations have made the global financial services industry very competitive (Tomasic 2011; Walter 2009). To motivate superior employee performance and drive aggressive deposit mobilisation in order to maximise profit, several financial services institutions are reported to be making extensive use of individual performance-related pay (IPRP) schemes as a reward strategy (Maycock, Auluck and Puplampu 2017). This research identifies and compares the mechanisms guiding the use of IPRP schemes within three Ghanaian financial services institutions, assessing whether culture and socio-economic context have an influence on its implementation.
A multi-method qualitative research approach was adopted for this study. Data was drawn from publicly available data, corporate policy statements and multi-level, semi-structured interviews conducted with Human Resource Managers (N=6), Line Managers (N=28) and Lower-Level Employees (78) across three Ghanaian financial services institutions and key officials of the Ghanaian Ministry of Employment and Labour Relations (MELR) and the Fair Wages and Salaries Commission (FWSC).
Thematic analysis of the findings revealed eight general characteristics that define the mechanisms guiding the use of IPRP within the organisations under study: 1) IPRP policy implementation and its use is far more advanced within the Ghanaian private sector than in the public sector; 2) the mechanisms guiding the practice of IPRP within the case examples under study are comparable to those of Western countries; 3) HR is the custodian of the IPRP system; 4) line managers are noted as the principal connections between IPRP policy development, use and implementation; 5) employees expressed a preference for avoiding uncertainty. They also acknowledged that the negative impact of IPRP on their well-being was due to shortfalls in their organisations’ IPRP policies and the high level of uncertainty within the Ghanaian socio-economic context; 6) there is no legal and regulatory framework for Ghanaian financial institutions regarding the use of IPRP; 7) customers and depositors are the focus of the Bank of Ghana’s (BoG) business operation stipulations for Ghanaian financial services institutions. There are no stipulations regarding the employees of these institutions; 8) as a marketing strategy, more females are used in the sales and marketing team to convince potential customers (i.e. men) more easily.
This qualitative study was limited to participants within the three Ghanaian financial services institutions selected for this study. The key focus was on the financial services sector because it is in this sector that IPRP has been embraced with fervour, due to the perceived need to engender more commercially aware behaviour among employees in an increasingly competitive industry – a need with which IPRP is assumed to be consistent (Bambrough 2016; Maycock 2009). Hence, while the results can be generalised to Ghana and financial services, they may not be generalisable to other sectors and countries characterised by different cultures and contexts. However, the approach adopted to find these results can be applied to a wide variety of situations, therefore allowing the examination of external validity.
This research contributes significantly to the current literature on IPRP by providing a more in-depth understanding of how the unique Ghanaian cultural and socio-economic context shapes IPRP practice and the impact it has on employees within these organisations. To boost organisational productivity while fostering employee well-being and productivity, the study developed an IPRP framework. The framework stresses the importance of considering both the external and employee drivers of IPRP implementation for the Ghanaian ‘uncertainty avoidance’ culture and uncertain socioeconomic context, rather than adopting Western IPRP frameworks for implementation and use.
|Date of Award||2018|
|Supervisor||Eno Maycock (Supervisor), Randhir Auluck (Supervisor) & Harjit Sekhon (Supervisor)|
- Individual Performance-related Pay
- Financial Services
- Human Resources and Employee Well-being