2. Aim

The main aim of this work is critical examination of implication of reward system and pay for performance on productivity of organisations and empirically testing it in project management setting specifically in construction firms of UK.

3. Objectives

Precise objectives of this study are:

• To analyse the nature of pay for performance and reward system on productivity of construction firms.

 

• To identify the implications of both, pay for performance and reward system in project management environment of construction firms.

 

• To theoretically and empirically validate the association between pay for performance and reward system in construction sector of UK.

 

4. Introduction

In most of the project oriented organisations, employee and employer relation is considered as an exchange process. Employee gives its skills and aptitudes as an input and receives various pays or rewards from the employer (Brynjolfsson and McAfee, 2012). From employee view point, pay is an important aspect as it affects its living status and standard. Other reward and compensations include bonus, healthcare, etc. that serves the wellbeing of employees (Van De Voorde et al., 2012). In contrast, employer perceive both pay and reward in two ways; as a major business cost that requires attention and as an investment that should be organized to utilize behaviours and skills of the employees that impact productivity of organisation (Shields et al., 2015).

The fact that reward system enhances organisational productivity has grown and seen in the early research work.  According to Drucker (2013), employees that are happy are more productive. On the other hand, pay for performance is also associated with the productive performance of firms. Hartmann and Slapni?ar's (2012) research work highlights the importance of understanding and setting pay for employees to achieve organisational goals. Little attention is paid on this area. Pay and rewards are two drivers of organisational productivity.  It tends to increase commitment and encourage employee relation which in turn enhances firms’ performance (Hon, 2012). Moreover, conflicts in firm usually rise because of employees deprived feelings towards their rewards and pay for their performance. So, in this regard significance of pays and reward system cannot be neglected (Sauermann and Stephan, 2013). Pay for performance and reward system are helpful in maintaining and retaining productive performance of firms.

Construction industry of UK is a leading sector of the economy. This sector is of importance as it serves in strengthening the economy of the country. Construction industry works in a project management environment (Butcher and Sheehan, 2010). Productive performance of project has always been a significant issue. The role played by construction projects cannot be inflated, among that includes designing, pre-constructing, procuring, and other constructing activities. Yet the success of all the activities rely on performance of employee which is boosted by their pay and rewards (Gadde and Dubois, 2010). The important task of any construction project is to fulfil employee needs to attain productive performance. So, this study aims to identify the implication for pay for performance and reward system, by which a firm can achieve productive performance.

5. Relevance

The study of this nature is of immense importance, as it explains the benefits that help organisational existence and continuous survival in the competitive environment. Organisational manager or Project manager or its HRM department will get benefits from the study, by aiding in selecting and designing suitable pay scales and reward system. Likewise, this will highlight the cost and benefit of such system connected with operations of organisation, which will help in avoidance of organisational conflicts (Drucker, 2013; Hartmann and Slapni?ar, 2012). Additionally, this work will elucidate whether, pay and rewards system impact and enhance the productive activities of the organisation which will help firms to take decisions on pay related aspects. Academically, this study will be significant, as it utilises various up to date literature review that will be helpful for future studies. Study on such matters enhances the knowledge of the researcher on aspects like pay for performance, compensation, reward system, profitable performance and productivity of project oriented companies especially construction companies.

6 Approach

To fulfil the aim of underlying study, the researcher has aimed at relying on secondary data. The secondary information will