Effect of Rewards and Recognition on Labor Productivity in the Private Sector of the Ghanaian Economy a Moderating Effect of Organisational Values

Effect of Rewards and Recognition on Labor Productivity in the Private Sector of the Ghanaian Economy a Moderating Effect of Organisational Values

Samuel Acheampong

Akenten Appiah-Menkah University of Skills Training and Entrepreneurial Development, Kumasi, Ghana

DOI: https://dx.doi.org/10.47772/IJRISS.2025.905000466

Received: 06 May 2025; Accepted: 11 May 2025; Published: 23 June 2025

ABSTRACT

Purpose – The core objective of this research is to assess the influence of Rewards and employee Recognition on labor productivity of the hospitality industry in the private sector in the Ashanti Region of Ghana and the moderating effect of Organizational values.

Design/Methodology/Approach – The study considered the employees of the private sector of the hospitality industry in the Ashanti region of Ghana as its population, where a sample size of 376 respondents aided in responding to the questionnaire instrument using the simple random probabilistic sampling technique. The researcher used the Ordinary Least Squares (OLS) approach using SPSS (v.20) and Microsoft Excel.

Findings – The study concludes that, though reward and employee recognition have a direct positive significant effect on labor productivity, organizational values fairly moderate the influence of reward and employee recognition on labor productivity.

Practical Implications – Management of the hospitality industry in the private sector should regularly review their reward systems, and this should involve the employees to achieve smooth implementation and equity. Employee Recognition and adherence to flexible organizational values should be highly considered by the management of organizations.

Originality/Value – With a focus on the moderation role of organizational values on the relationship between reward and labor productivity, viz a vi, employee recognition and labor productivity, this paper is novel in investigating the organizational values and their influence on labor motivation and output. The paper adds up to the scanty knowledge in human related investigations on what cause productivity to adjust upwards in the hospitality industry of the private sector of the Ghanaian economy.

Key Words: Reward, Employee Recognition, Organizational values, and Labor Productivity.

INTRODUCTION

Understanding the intricacies of human behavior and motivation is crucial in creating an optimal work environment, particularly in the private sector. Recognizing the unique personalities, motivational drivers, and workplace dynamics that influence employee behavior can inform strategies to boost workforce motivation and productivity (Burchell & Tumawu, 2014). By acknowledging these factors, organizations can develop targeted policies and interventions to enhance employee engagement, job satisfaction, and overall performance. Similar study was made by Kamble (2014), the effect of reward and recognition on labor productivity in some steel companies in India. The study found that “labor productivity plays an important role in any organization as employees are only responsible for the start-to-end process of any business 1activity”. Hence, labor productivity being greater maximizes absolute organizational goal attainment. However, Reward and recognition were well-thought-out as vital in firms and could negatively affect productivity if not handled strategically (Almaamari & Alaswad, 2021).

Employee performance plays a vital role in driving business success and development. It is a key criterion for evaluating organizational efficiency and outcomes (Rahaman et al., 2022). To achieve better business outcomes, organizations must invest in enhancing employee job performance (Almaamari & Alaswad, 2021). Given the significant impact of employee performance on organizational success, businesses need to identify the factors that contribute to employee performance. Employee job performance is a benchmark for measuring a company’s overall productivity and organizational performance (Mefi & Asoba, 2020). Employees are a valuable asset to organizations, as they help achieve business goals through their performance. By developing competitive advantages, employees enable businesses to thrive in a competitive market and thus need many measures for them to achieve their assigned goals in the firm (Asoba et al., 2021; Mefi & Asoba, 2021).

Several previous studies including (Burchell & Tumawu, 2014; Rahaman et al 2021; Hoedoafia, 2019; Gorenak & Suzana, 2012; Kamble, 2014; Bonsu & Kusi, 2014) on similar phenomenon agree with the researcher that the problem associated with the private sector is mainly incumbent on the fact that, rewards and recognition are inadequate, of which the Ghanaian economy is of no exemption. On close observation, the causes of the problem in the Ghanaian private sector were that, Management perceives reward and recognition as an additional cost which may not yield positive feedback; Employees sometimes take advantage of rewards and recognition and tend to feel reluctant to do what is expected; Employees may be “swollen-headed” when recognized; No or inadequate mechanism for reward and recognition system is instituted to ensure parity, equity and equality; and finally, Management perceives reward and recognition as something which could trigger organization conflict among employees and or the hierarchy of the firm.

Previous work done especially (Adam, 2024; Mensah & Appietu, 2025; and Sarpong, Yun-Fei & Coffie,2019) will relate to the study in terms of its contribution to labor productivity. However, none of the papers sought to assess whether organizational values could have a moderating effect on the effects of reward and employee recognition on labor productivity. Arguably, reward and recognition could be the outcome of proper human resource management, which could trigger employee output. The novelty in this research is the moderation of organizational values on the influence of rewards and recognition on labor productivity. Previous researchers did not consider how rewards and recognition could be improvised to become part and parcel of the governance of the private corporate world, with an emphasis on not considering the rewards and recognition on its cost factor and basis. As stated by Burchell and Tumawu (2014), “earlier studies of the motivation in Ghana have been exclusively concerned with compensation, job satisfaction, incentives, and monetary rewards in general”.

This paper seeks:

1. To find the effect of employee recognition on labor productivity.
2. To find the impact of rewards on performance.
3. To assess the moderating impact of organizational values on the correlation between employee recognition and employee productivity.
4. To assess the moderating influence of organizational values in the correlation between reward and employee productivity.

The remainder of the paper begins with the theoretical review of relevant literature and hypotheses development. This is closely followed by the research methodology and data analysis. Finally, there is a discussion of results with implications, limitations, and future research direction.

LITERATURE REVIEW AND HYPOTHESIS DEVELOPMENT

Rewards

As cited in Aniket (2014), it is hypothesized that a reward is something released to an employee or group who has achieved a pre-planned objective. The establishment of programs by a firm to persuade employees and reward Employee performance individually and/or at group levels denotes Employee reward schemes. “The extrinsic and intrinsic rewarding system on employee motivation was studied. The study contributed to identifying the employee motivational factors in the selected company and to reducing the current labor turnover ratio by identifying the factors which motivate the current workforce” (Sadamali & Jayawardena, 2020).

Another similar study was conducted by Ngwa (2019) that considered the consequences of an incentive scheme on employee output. In the research, the unit of employee commitment was measured concerning profit sharing. To start with, because reward systems are contingent on the circumstances of each firm, it remains exciting when probing the influence of reward schemes on employee performance in service organizations. Workers’ responsibilities are often repetitive with comparatively minor regard to innovation and creativity. It is very imperative for research executed in this fashion to determine the most correct reward system for service corporations.

The function of rewards in encouraging origination has gained substantial consideration in philosophy about practice (Darmak, 2017). It is well established that rewards have a positive effect on stimulating innovation. Nonetheless, this correlation is multifaceted since dissimilar kinds of rewards are well-matched for innumerable varieties and phases of innovation. To add to this, an optional opinion challenges the function of rewards in stimulating innovation. Investigation clarifies the magnificent role reward plays in the motivation of workers of a firm as it generates a convincing notch of enthusiasm among employees, hence prominent in the improvement of innovative principles within the firm. But, affiliating rewards to innovation is not an up-front task. Additionally, because of the reality of a large number of reward schemes, the study, through a thorough literature analysis, depicts that dissimilar kinds of rewards are connected to the myriad phases of innovation.

H1 Reward has a direct positive effect on employee productivity.

Employee Recognition

As cited in Amoatemaa and Kyeremeh (2016), it is hypothesized that Employee recognition is recognized as extremely operative in motivational mechanisms, which has noteworthy optimistic control on worker contentment, performance, and overall organizational performance (Rahim & Duad, 2013). From a viewpoint of Freeman (1978), once effective recognition is delivered at the workplace, a favorable working atmosphere is created to arouse the workforce in developing commitment to work and excel in their performance. Extremely inspired workforces prevail to be a viable merit for a firm since their work output aids a business to realize its objectives and firm strategy as well as attain progress (Imran, Ahmad, Nisar & Ahmad, 2014).

Erbasi and Arat (2012) conversely, a demoralized atmosphere has been recognized to yield lackadaisical employees who find it awkward to exercise their expertise, a defect of originality, and not entirely dedicated to the magnitude a firm requires. Non-financial prizes, which include recognition, have been linked to have progressive link to employee job contentment and organizational performance. According to Imran, Ahmad, Nisar & Ahmad (2014), “satisfied employees have a positive attitude towards organization and their jobs, thereby increasing the quality and quantity of employee performance”.

Schechter, Thompson, and Bussin (2015) posited that, because of the deficiency of monetary rewards in inducing extraordinary performance, Employee recognition plans have grown into more prevalent and recognized in most firms. It has been held that financial incentives just influence workforces momentarily. In the same way, Silverman (2004) denoted that, although money is vastly cherished and workers will strive and stretch to acquire it, its effect on intrinsic motivation is narrow. Depending on monetary rewards as a motivating mechanism is likewise being acknowledged to induce employees to heed to whatever will produce an instantaneous incentive rather than generating novel methodologies, identify colleagues as rivals in antagonism, shred of arrogance related to work, and identify the reward as privileges (Zobal, 1999). Compelling a general view of rewards, Thumbran (2010) has stated that, “offering nonfinancial rewards to potential and existing employees would be both relevant and beneficial to business, and this would enable businesses to better strategize in terms of the value offered to employees. He added that employee recognition allows individuals to know and understand that their work is valued and appreciated, provides a sense of ownership and belongingness, improves morale, enhances loyalty, and increases the employee retention rate in the organization.

H2. Employee recognition has a direct positive effect on labor productivity.

Organizational Values

The researcher perused the major journals available but could not find a related study for review. It was based on this gap that the researcher felt motivated to bring novelty by filling this vacuum through researching whether there exists some moderating effect of organizational values on the relationship between reward and labor productivity, and employee recognition and labor productivity.

H3. Organizational values positively moderate the relationship between rewards and labor productivity.

H4 Organizational values positively moderate the relationship between employee recognition and labor productivity.

The conceptual framework is labeled below as Fig. 1.

Figure 1. Conceptual Framework

Source(s): Author’s work

RESEARCH METHODOLOGY

Firms and Respondents’ Background

The data collection took four (4) weeks in April 2022. It also adopted a survey research approach as samples of the population were drawn and inferences were made for the entire study. A structured questionnaire was used as a data collection instrument.

The population of this study comprises six thousand five hundred employees in the private hospitality industry in the Ashanti Region of the Republic of Ghana. The study employed simple random probability sampling to select respondents, ensuring that every member of the population had an equal chance of being selected. This approach aligns with the methodological framework suggested by Patten and Newhart (2017), which emphasizes the importance of random sampling in achieving a representative and unbiased sample. Out of the population, using the Miller and Brewer (2003) sample size proportion calculation labeled below, the sample size used for the study is three hundred and seventy-six (376).

Figure 2 shows Miller and Brewer’s (2003) formula for calculating a sample size for a study

As presented in Table 1, respondents’ frequencies and their percentages are shown.

Table 1. Firms and Respondents’ Background

Source(s): Author’ Fieldwork

Reliability Survey

The research survey had questionnaires to assess the influence of Rewards, Employee Recognition, and Organizational Values on Labor Productivity. As shown in Table 2, a Reliability test was run for all the questionnaire items, and all shown values are greater than .5. This shows that the variables and their items are reliable and could help the researcher in achieving a good outcome.

Table 2: Reliability test

Survey Questionnaire

Main Variables

Three main explanatory variables were used for this study, which include Rewards as an independent variable, employee recognition as an independent variable, organizational values as a moderator, and labor productivity as a dependent variable. As adopted from Kamble (2014), reward is essentially a physical item, which could include money, luxury, travel, and several others, given to an employee to induce performance. Recognition is a responsive showcase of indebtedness to a person or a group’s efforts, which can be concrete or intangible. Questionnaires of Amoatemaa and Kyeremeh (2016) were adopted for this Employee Recognition variable. As adopted from Košir and Gorenak (2012), Organizational values are the sets of beliefs and the intrinsic nature of behavioral output anticipated in a given firm.  Labor Productivity is the general output attained against the target set by superiors. Almaamari and Alaswad (2021) were adopted as an instrument to syphon responses from the sample on the variable of Labor Productivity.

Control Variables

The impact of the control variables, which include age range, gender, qualification, marital status, years of experience, and religion, was also assessed and adopted from Kamble (2014).

Correlation Analysis

The highest correlation score was .544, indicating there was no high correlation among any two variables studied.

Table 3. Correlation Analysis

**p value significant at 1% (0.01)

*p value significant at 5% (0.05)

RESULTS

The control variables used for the analysis, as depicted in the table below labeled as Table 4, were Gender, Age range, Qualification, Status, Religion, and Years of Experience. Only the age range and qualification showed a negative regression in all the models. It depicts that there is a negative influence of age and qualification on labor productivity across all the models.

From Figure 1, the models shown in the table all the hypotheses made have p-values which are less than .01. This depicts that the models are significant and could help us realize the objective of this study.

From Model 3, the interaction between Reward and Organizational Values showed a positive and significant effect on Labor productivity. The interaction between Employee Recognition and Organizational thought was low but showed a positive and significant effect on labor productivity. From the analysis presented in Table 3, all the hypotheses (H1 to H4) for the study were confirmed.

Table 4. Regression Analysis

**P-value significant at 1% (0.01)

*P-value significant at 5% (0.05)

t-values are in parentheses

DISCUSSION OF RESULTS

Reward (RW→LP)

To start with, the researcher hypothesized that Reward has a direct positive and significant effect on labor productivity (H1), which was verified by the analysis above labelled as Table 3. In model 1, the R-squared value of .469 shows the percentage of 46.9 variation in the dependent variable, which is Labor productivity, that is attributable to the Independent Variables in the model. A coefficient value of .585 shows that a 58.5 % increase in labor productivity is from a result of 1 change in reward systems. Reward is significant in intensifying labor productivity. “The extrinsic and intrinsic rewarding system on employee motivation was studied. The study contributed to identifying the employee motivational factors in the selected company and to reducing the current labor turnover ratio by identifying the factors which motivate the current workforce” (Sadamali & Jayawardena, 2020).

Employee Recognition (ER→LP)

The researcher hypothesized that, Employee recognition has a direct positive effect on labor productivity (H2), which has been verified and shown to be significant as its p value is less than .01. From Table 3, which shows the regression analysis, in model 2, ER had a coefficient (B=.368 and t= 7.798). This means that a 36.8% increase in labor productivity is attributable to a 1-unit increment in the Employee recognition variable. It also shows an R-squared value of .544, which shows that a 54.4% increase in labor productivity is related to the positive change in the model. According to Amoatemaa and Kyeremeh (2016), it is hypothesized that Employee recognition is known as an extremely effective motivational mechanism, which has noteworthy optimistic control on worker contentment, performance, and overall organizational performance.

Organizational Values (RW x OV→LP)

Moreover, the researcher hypothesized that Organizational values positively moderate the relationship between employee recognition and labor productivity (H3), which has been verified by the Regression Analysis given in Table 3 to be significant. In model 3, the interaction term of RW x OV shows a coefficient value (B=059, t=5.803). This predicts that a 5.9% increase in labor productivity would be attributed to a unit increase in the interaction term. The researcher has come to believe that, reward system should integrate the organizational values as it could influence the reward to be made as a value in the hotel.

(ER x OV→LP)

Last but not least, the researcher hypothesized that Organizational values positively moderate the relationship between rewards and labor productivity (H4), which has been verified by the regression analysis shown above. This interaction term had the least positive coefficient (B .002 and t = .030) in the regression analysis. The analysis proved that this interaction term is significant as it shows a significant value less than 0.01. In model 4, the R-squared value shown is .583. Some advanced studies in a similar phenomenon led by Kaye and Jordan-Evans (2009) have also hypothesized that some personalities even recognize the prominence of a decent counterpart between organizational and personal values to be more significant at the expense of the revenue they acquire.

CONCLUSION AND CONTRIBUTION

The study concludes that, though reward and employee recognition have a direct positive significant effect on labor productivity, organizational values fairly moderate the influence of reward and employee recognition on labor productivity. Hence, firms in achieving the full prospects in labor motivation must adopt the values of the organization in the formulation and implementation of reward and employee recognition programs.

Theoretical Implications and Contribution

McGregor’s Theory X and Y

This study is reviewed concerning the theories of X and Y propounded by Douglas McGregor (1906 –1964). McGregor, in his Theory X, believed that human beings have an inherent dislike for work and will avoid it if possible, and thus, strict control, threats of punishment could be used to put adequate effort in place to achieve organizational objectives. This theory failed to consider the human relations aspect of management. McGregor further investigated labor productivity and again found out that restrictive control and the threats of punishment are not the only means for inducing employees but employees will exercise efficient and effective self-direction and control on work if influenced by rewards and proper employee recognition mechanisms. This is the position of McGregor’s Theory Y.

The study has contributed to knowledge by categorically stressing that reward and employee recognition should be fundamental to labor productivity. The study has also moderated the effect of Organizational values on reward and employee recognition towards labor productivity. This moderation has denoted the need to integrate organizational values into reward systems and employee recognition.

Transactional Leadership Theory

The implementation of effective reward and recognition programs can have significant theoretical implications, particularly when considered through the lens of transactional leadership. Transactional leadership, as described by Bass (1985), involves leaders motivating followers through the use of rewards and punishments. In the context of reward and recognition programs, transactional leadership can play a crucial role in shaping the design and delivery of these programs. By leveraging the principles of transactional leadership, organizations can create reward and recognition programs that are tailored to the specific needs and motivations of their employees.

One key theoretical implication of implementing effective reward and recognition programs is the reinforcement of desired behaviors and performance. According to the principles of operant conditioning (Skinner, 1953), behavior that is followed by a rewarding consequence is more likely to be repeated. In the context of reward and recognition programs, this means that employees who receive rewards and recognition for their contributions are more likely to repeat those behaviors in the future. This can create a positive feedback loop, where employees are motivated to continue performing at high levels to receive rewards and recognition.

Value-Based Leadership Theory

The Value-Based Leadership Theory (VBLT) posits that leaders’ values and behaviors play a crucial role in shaping organizational culture and influencing employee behavior (Bass & Steidlmeier, 1999). In the context of reward and recognition, VBLT suggests that organizational values can moderate the effectiveness of these programs in improving labor productivity. Specifically, when organizational values emphasize fairness, transparency, and employee well-being, reward and recognition programs are more likely to be perceived as legitimate and motivating, leading to increased labor productivity.

The moderation effect of organizational values on reward and recognition can be attributed to the concept of “values alignment” (Kotter & Heskett, 1992). When organizational values align with the values and needs of employees, reward and recognition programs are more likely to resonate with employees and motivate them to increase their productivity. Conversely, when organizational values are misaligned with employee values, reward and recognition programs may be perceived as insincere or manipulative, leading to decreased motivation and productivity.

Managerial Implications and Contributions

Results obtained did point out that the private sector hospitality industry seeking to influence their employees to intensify labor productivity is likely to engage in the integration of organizational values in reward and recognition schemes of the firms. This study has confirmed that there is a positive relationship in its hypotheses, as shown above in Table 3.

Management of organizations should regularly review their reward systems, and this should involve the employees to achieve smooth implementation and equity. Employee Recognition and adherence to flexible organizational values should be highly considered by the management of organizations.

Limitations and Future Research Suggestions

The study adopted a subjective measurement of each key construct, instead of an objective approach, and this is highly likely to have a biased response, especially in measuring labor productivity. Future researchers should consider that effectively.

The study failed to address issues of contingency appropriately. There should be a categorical representation of each of the constructs, and it should be situational. Future researchers in the phenomenon are recommended to explore the following trajectories:

1. Adoption of the Social Desirability Responses as part of the ordinal variable for the subject to ascertain the study’s findings.
2. A study that covers the private sector of the entire Ghanaian economy.
3. How could the private sector be boosted enough to lessen the burden that public entities have on employing unemployed graduates?

To increase the robustness of the results, further studies could employ revealed preferences, building on the insights gained from this stated preference-based survey.

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