THE IMPACT OF REWARDS AND BENEFITS ON ORGANISATIONAL PERFORMANCE: EVIDENCE FROM THE SAUDI ARABIA BANKING INDUSTRY

Abstract

ABSTRACT Among the major challenges of a business remains how to effectively and efficiently manage human capital. A critical part of this management challenge is employee reward systems and how it impacts organisational performance. While this phenomenon has received significant attention in the literature, how it affects a particular industry in Saudi Arabia has received limited traction. This study examines the impacts of employee rewards and benefits on organisational performance in the Kingdom of Saudi Arabia (KSA) banking sector. This study is underpinned by four human resource management theories-expectancy, reinforcement, agency, and equity. The positivist paradigm research design was adopted, with the use of secondary data extracted from the annual reports and financial statements of five selected banks quoted on the Saudi Stock Exchange Market(Tadawul). Descriptive statistics, trend analysis, Pearson Correlation, and Multiple Linear Regression were used to analyse the data collected for the study. Results showed that staff remuneration package seems higher in the organisations with a fewer number of employees, and lower in organisations with a higher number of employees. Employees tend to stay longer in organisations with better remuneration package, unlike where the remuneration package is not encouraging. The organisations with few employees tend to perform better than their competitors with a higher number of employees. The higher the pay, the better the performance, vice-versa. Retirement benefits do not motivate employees to perform better at work. Furthermore, allowances inspire employees to perform better, thereby enhancing organisational performance. Based on these findings, conclusions were drawn and recommendations were made at the end of the study.