Evaluation of Reward Policy at Selected Export Company Kalutara District, Sri Lanka

Abstract

This case study evaluates the effectiveness of the reward policy at Selected Export Company: Kalutara District, Sri Lanka focusing on its impact on employee motivation, productivity and company performance. Despite having a structured reward system that includes monetary and non-monetary benefits, concerns about fairness and equity in reward distribution persist, particularly among factory workers. Many employees in production roles feel undervalued compared to management and clerical staff, leading to dissatisfaction and reduced morale. The study applies key motivational theories, including Maslow’s Hierarchy of Needs, Herzberg’s Two-Factor Theory and Expectancy Theory, to assess the gaps in the current reward system. Using a qualitative research approach, data was collected through interviews, focus group discussions, document analysis, and observations. Findings indicate that while basic salaries, incentives, and well-being benefits exist, disparities in working conditions, recognition, and career growth opportunities contribute to employee dissatisfaction. Additionally, seasonal salary fluctuations and restrictive loan repayment policies further escalate the issue. To address these, recommendations include revising loan repayment policies, increasing basic salaries, improving working conditions, and incorporating employee feedback in reward decisions. A well-structured and fair reward policy is crucial for employee retention, engagement, and organizational success. Without timely interventions, the selected export Company risks high labour turnover, reduced commitment, and reputational damage. Regular policy reviews and updates are essential to align rewards with employee needs and market trends. This case study provides HR professionals with practical insights to refine and improve reward systems, ensuring that they are fair, motivating and productive.