The effectiveness of outcomes based remuneration on FNB’s sales staff.

Abstract

This study emanated from the positive results observed in the FNB Branches where a new concept termed Outcomes Based Remuneration (OBR) was introduced to Branch Managers. As the concept was introduced to empower Branch Managers so that they could be entrepreneurial in the running of their branches as they would their own businesses, they were expected to be creative, innovative and to ‘think out of the box’. The Branch Managers were given particular hurdles which when achieved would allow them to share in the profit which was generated by the branch. In order to give this project a fair chance the best Managers were chosen to operate these models in the higher producing Branches. This worked well with many Managers creating their own income by elevating their Branches performances and most were operating their units as retail outlets scrutinising all -aspects of their activities. The objective of this study was to determine whether a similar styled remuneration system could be cascaded down to sales staff to increase the profitability of the organisation. An Outcomes Based Remuneration (OBR) is a form of payment awarded to an employee based on his outstanding performance. Performance payments are “once-off” payments made to staff in accordance with the company’s documented performance-based remuneration arrangement, based on agreed performance targets. A quantitative research method was selected for the proposed study. The rationale behind this selection was based on the following points:  The research was going to be conducted through paper based questionnaires which are easily accessible to bank employees. Quantitative research can also accommodate this situation as the questions are short, and to the point. The findings from the study have proven that Outcomes Based Remuneration plays a major role in motivating employees to work hard for their benefit as well as the benefit of their company. The study confirmed findings in other studies that employees are motivated by physiological needs, such as, good working conditions, salary increase, pay-for-performance, good relationship with other staff members, recognition, job security, being appreciated or being applauded by their supervisors for good performance, safe work environment and healthy environment led to employee satisfaction and therefore productivity. The recommendation arising from the study is that a full scale study incorporating all financial institutions from Kwazulu-Natal and other Provinces be conducted to achieve all-conclusive results.