The interaction of rewards and organisational innovation at Samancor Cr, South Africa

Abstract

South Africa has been a leading player in the international ferroalloys industry for many years, particularly in the production of ferrochrome and ferromanganese (Commodities Research Unit (CRU), 2013). This position was largely due to historical endowments such as abundant mineral resources in the Bushveld Complex and the historically low cost of electricity in South Africa (Basson, Curr, & Gericke, 2007). Yet, changes in the competitive environment during the past few years now threaten the livelihood of this sector in South Africa, including that of one of its largest players, Samancor Cr. The “Cr” in the name being the chemical abbreviation for Chrome and referring to the production of both chromite ore and ferrochromium metal. In this ever-changing competitive environment, managers are realising that they need their employees to engage actively and creatively in their jobs in order to develop new ideas, services, processes and products. Although it is generally accepted that different job roles require different levels of creativity, most managers would argue that there is room for greater creativity at most levels in an organisation (Shalley & Gilson, 2004). It is also reasonable to argue that the foundation for organisational creativity lies in the creativity and innovation of the individuals within the organisation, which have been shown to be linked to the performance of the organisation (Nyström, 1990). Human resource practices and supervisor interaction generally tend to influence the extrinsic motivation of employees, and the impact of this on creativity can be positive or negative (Eisenberger & Cameron, 1996), complicating the role of a manager in today’s environment. With the aim of providing greater insight into this area, this study explored the relationship between rewards and organisational innovation at Samancor Chrome. This was accomplished by measuring individual perceptions of innovative activities and relating these back to factors that measure intrinsic motivation, the level of extrinsic motivation ii experienced and the perception of the level of innovativeness exhibited at an organisational level. The objective of this empirical study was to establish whether intrinsic motivations or extrinsic rewards have a greater influence in predicting creative and innovative activities on the individual level. The study also aimed to determe the role that the percieved level of organisational innovation has on individual creative activities. A quantitative study, using an electronic survey, was conducted withing Samancor Cr’s pool of management personnel. The first section of the survey measured the level of extrinsic rewards experienced by employees in the organisation, while the second section measured the level of intrinsic motivation exhibited by employees. The third part of the survey was a self-measure instrument of the number of innovative activities that employees engaged in, while the final section of the survey measured the perceived level of organisational innovation. The final sample of 251 participating employees was used to analyse the ability of intrinsic motivation, extrinsic rewards and the level of innovation at an organisational level to predict the creative activities of individuals within the company. These relationships were explored using exploratory factor analysis and multivariate linear regression. Overall, all three predictors showed a positive relationship with the level of innovative activities engaged in by employees. Of the three predictors, intrinsic motivation was found to be the most influential, with the level of innovative environment being approximately two thirds as influential. Extrinsic rewards were found to be an insignificant predictor of individual innovative activities, but evidence was found of an interaction between extrinsic rewards and the intrinsic motivation of employees. The findings lead to recommendations for future research and for managers. Researchers should endeavour to capture measures of individual personality traits to evaluate how extrinsic rewards are perceived and experienced differenty by individual. Implications for managers include investigating the use of a performance management system that iii enhances the influence of extrinsic rewards on individual creative activities, which in turn may lead to greater creativity and innovation in the firm.