In an increasingly competitive society as we have today, organisations that are passionate about their visions and missions are constantly adapting their strategies to attract, motivate and retain competent persons. An efficient reward system seems to be the best way to go about it. Reward is an organisational obligation to the employees to compensate for their contribution towards the attainment of organisational goals (Nwokocha, 2016; Saleem, 2011). Many researchers have argued that reward is the greatest source of motivation to the employees (Tsede & Kutin, 2013; Karami, Dolatabadi, & Rajaeepour, 2013; Nwokocha, 2016). It is known that everyone needs motivation to function effectively and efficiently. According to Armstrong (2010), reward is a form of recognition of a person’s contribution. This recognition, which can be tangible or non-tangible, is on the basis of the job that such individuals do, level of their performance, competence or skill (contingent or variable pay), or for their services in the job (service-related pay) (Nwokocha, 2016). It is in view of this that an organisational reward system has to be well broadened to capture the contributions at a diverse level. The essence of this reward is such that employees can enhance the quality of their work (Mujtaba & Shuaib, 2010). In the views of Karami et al. (2013), there are three reasons why organisations should consistently give rewards. Firstly, with a good reward system, the organisation attracts employees with the necessary competence and qualifications; secondly, the reward that is given to employees instead of service compensation is a medium to get a response from the previous performance; and thirdly, reward is a motivational tool for future performance. This implies that with reward, an organisation gets the best persons for the job and enhances the commitment of the employees.

In organisations, employees are adequately informed about their roles through the job description. This job description can include, for example, responsibilities, skills and job input that relates to the specific jobs which are expected to accurately reflect a comprehensive scope expedient for employees’ success in the organisation (Jacobson, Trojanowski, & Dewa, 2012). Mader-Clark (2013) noted that job description communicates an organisation’s expectation reflecting clear-cut goals. Besides, PEC can be interpreted to be similar to organisational goals (Shen, 2004). The soft goal is an example of an organisational goal that clearly explains the nature of PEC. Fekete and Rozenberg (2014) and Kang and Shen (2016) explained soft goals as work attitude and behaviour, individual performance, experience, leadership skills, interpersonal skills and customer service quality.

Furthermore, while defining performance evaluation, Seniwoliba (2014) explained it to be an evaluation process where quantitative scores are assigned to a certain employee’s performance based on predetermined criteria. The criteria are borne out of the understanding of the relative connections they have with organisational performance. Inspiring the implementation of PEC among employees can be a positive move for an organisation for its potency to encourage employees to behave in the desired way that suits the expectations of the organisation for success. From another perspective PEC describes the common beliefs of employees accompanied by a greater degree of agreement and compliance (Saturno, Palmer, & Gascón, 1999). When an employee has a trait or displays a behaviour naturally that favours or disfavours organisational goals, a point of confluence between the employee and employer can positively or negatively alter the future relationship between both sides. This remains one out of many reasons why criteria are needed to be clear, with both sides agreeing to it for performance evaluation.

According to Duraisingam and Skinner (2005), PEC is to be correctly identified by organisations. Also, the employees need to perceive these criteria as being relevant and applicable to their daily tasks, acceptable and fair and mutually agreed between management and employees. Participation of employees in the development of these criteria aids their perception in that it fosters cooperation between the managers and the employees, thereby preventing any future conflicts between them (Islam & Rasad, 2006). Objectivity is one characteristic of a fair performance evaluation which is to be based on behaviours regarding some functions that are under the control of the employees (Çelik, 2014). Communication is key here. Just as communicating the result of an evaluation process to employees is important, so is the communication of PEC. As noted by Erdogan (2000), this is the duty of an employing organisation. As a fair process, these criteria are to be understood by the employees prior to the evaluation period (Erdogan, 2000). And as a matter of preference, what makes up the PEC, indicate importance and what is absent, indicate unimportance (Islam & Rasad, 2006).

Organisations that thrive in a very competitive market do consider having committed employees as part of their human resources so as to achieve their set goals and objectives (Milgo, Namusonge, Kanali, & Makokha, 2014). Being seen as a necessary part of the organisation creates a psychological relationship between the organisation and the employees, whereby the employees see themselves as part of a team working towards the success of the organisation (Brenda & Onuoha, 2016; Khan et al., 2014). For both the employing organisation and the employees, it has been related to valuable outcomes that can bring about increased feelings of belonging, security, efficacy, greater career advancement, increased compensation and increased intrinsic rewards for the employees (Azeem, 2010). Its antecedents include several variables such as job satisfaction, motivation, participative decision-making, organisational support, financial reward, communication, promotion prospects and leadership (Lok & Crawford, 2004; Salami, 2008). Coupled with this, it has been noted to be dependent on some demographic variables such as age, organisational tenure and education (Elizur & Koslowsky, 2001).

One of the most widely accepted definitions of OC is given by Allen and Meyer (1990). They defined OC as affective (which means employees devote themselves to actions because of the desire to achieve goals in favour of their organisation), continuance (which means being calculative as an employee before taking a decision to leave an organisation - an ability that creates an awareness), and normative (which is the costs that employees would have to obtain if the decision to leave an organisation is inevitable). As noted by Nehmeh (2009), OC is what sustains employees to stay in the organisation for a long tenure, makes them understand the goals and work assiduously towards meeting the targets. According to Irefin and Mechanic (2014), individuals who are less committed, are more interested in their personal success than the organisational success; in effect, they do not put their heart into the job and an opportunity elsewhere would result in their quitting their job. On the other hand, committed employees will see themselves as a part of the organisation and remain loyal to it (Permarupan, Al-Mamun, Saufi, & Zainol, 2013). They see the success of the organisation as theirs too and any danger to the organisation is considered as a threat to them too (Irefin & Mechanic, 2014). So OC can be seen as the extent to which the employees see themselves as part of the organisational values and missions and are committed to achieving them.

In the list of decisions that an average organisation makes, one of the top priorities need to be the reward system. On one side, human resources in an organisation must be paid for their work. Meanwhile, from a general point of view, it must be stated that work is not an end in itself, rather a means that gives individuals the opportunity to acquire the resources needed to enjoy their time away from the job (Wrzesniewski, McCauley, Rozin, & Schwartz, 1997) Realistically, work is essential, nevertheless, the acquired resources can be money which is associated with employees’ perception of their work. The perception may be just to be present at work regularly during the working hours, carry out the necessary tasks and get paid at the end of the month. This primarily gives employees the opportunity to afford their basic needs, go on vacations and be at leisure. On another side, employees would not only settle for a salary as they are also interested in promotion, advancement, fringe benefits, to mention a few (Dewhurst, Guthridge, & Mohr, 2009). Correctly rewarding employees can direct them to achieve the goals of the organisation which may have an indirect influence on the quality of services delivered to the customers (Asaari, Desa, & Subramaniam, 2019).

It is observed by Paulsen (2002) that an organisation can be a group of coordinated people working as a team to achieve a set of goals - especially the soft goals, which precisely explain the nature of PEC as noted previously. In order to meet these soft goals, amongst other requirements, an important one is building a team who knows the nature of the tasks to be carried out and can get them done with the appropriate behaviours for organisational performance.

In the public sector, as claimed by Verbeeten (2008), there are many managers at different levels who have multiple goals and this can complicate the criteria applied to the administration of rewards to employees. For employees’ sake, the public sector has to be consistent with clear operating goals. According to Van der Hoek, Groeneveld and Kuipers (2018), having clear operating goals can help employees in knowing the expectations of the organisation and behave in a way that will make the goals achievable. In principle, when managers come to a decision that a team is needed to achieve a set of goals, each member of this team should have a strong feeling that their behaviours will be rewarded by the criteria accepted by the management. This can prompt the exhibition of behaviours to central goals and encourage not just the freedom in how these goals are achieved but also in offering rewards appropriate to it.

While at the point of hiring new employees, organisations look for some specific behaviours that are core ingredients to achieve the organisational performance. By rewarding these behaviours, new or incumbent employees are routinely reminded of the goals of the organisation and how to achieve them. By so doing, these behaviours become criteria to evaluate the employees.

The relationship between reward and PEC was clearly understood when viewed under the lens of Skinner’s theory. According to the theorists, Luthans and Kreitner (1985), four behaviourally oriented strategies were proposed by Skinner to shape employees’ behaviours. They are positive reinforcement, negative reinforcement, punishment and extinction (Luthans & Kreitner, 1985). This study focuses on the first, which is positive reinforcement. It was said that behavior reinforced by a reward is likely to be repeated (Scott & Cogburn, 2017). For instance, an employee who is rewarded for punctuality or innovation at the workplace will put more effort into this behaviour. One of the main functions of performance evaluation is that it describes the behaviour that is desired, coupled with an observation of employees’ true behaviour (Šišinački, Dobiš, & Šišinački, 2017).

In other words, when organisations create the appropriate climate of organisational support such as rewards, they reinforce these desired behaviours among employees. Failure of an organisation to identify, design and roll out a reward system will automatically and purposely reinforce undesirable behaviour among employees. The effectiveness of PEC depends on how just, well and fair organisations reward their employees. The reason for an employee to have low ratings in performance may be because of the poor reward system of the organisation. In the following sequence, this study proposes the following hypthesis:

While a myriad of studies have shown a strong correlation between an organisational rewarding system and OC (Eisenberger & Stinglhamber, 2011; Malhotra, Budhwar, & Prowse, 2007; Mabaso & Dlamini, 2018; Milgo et al., 2014; Nazir et al., 2016), there has been no comprehensive study that proves otherwise. Korir and Kipkebut (2016) examined the effect of reward management on employees’ commitment in the universities. The study found that financial reward management practices collectively have a significant effect on OC. While examining the effect of reward practices on employee commitment, Okinyi (2015) assessed the reward policies put in place by faith-based health organisations to enhance employees’ commitment and also examined the effect of intrinsic rewards on employees’ commitment in the organisation. It was revealed that there is a strong relationship, and the better the practice, the more committed employees will be to the organisation. Similarly, Brenda and Onuoha (2016), while examining the relationship between dimensions of reward management strategies (pay structures and employee benefits) and the indicators of OC (affective and continuance commitment), the findings showed a positive relationship between reward management strategies and OC. It was concluded that the implementation of pay structures and employee benefits significantly enhances OC (affective and continuance commitment). Ahmed, Ismail, Amin, Ramzan and Khan (2012) and Smyth and Zimba (2019) describe reward to organisational support and employees always try to give their best in the form of commitment to return this support.

However, in this section, this study intends to understand how the Social Exchange Theory (SET) is applied in this relationship. Previously, this theory has been used in health care (Guo, Guo, Fang, & Vogel, 2017; Nazir, Qun, Hui, & Shafi, 2018), social psychology (Chernyak-Hai & Rabenu, 2018; Wikhamn & Hall, 2012), business (Jeong & Oh, 2017), and marriages (Sabatelli, Lee, & Ripoll-Núñez, 2018), to mention a few. Its main foundation emphasised on the assumption that purposive actors engage and nurture relationships according to the belief that rewards will be beneficial (Zafirovski, 2005). The exchange relationship between two or more actors, which can be a worker and an organisation, is the core concern of SET. An exchange takes place within an environment where there are interaction, allowing actors to manage resources that are valued by other actors (Molm, Takahashi, & Peterson, 2000; Nunkoo, 2016). In addition, in the exchange for criteria such as innovativeness, communication or reliability in service delivery, employees anticipate organisational support such as rewards. Similarly, organisations expect employees to perform with desirable results in exchange for rewards. According to Lin, Chiu and Liu (2019), SET puts forward that provision for reward should be done appropriately to enhance performance. This stems from the fact that as employees gain the support of their employing organisation, they feel obligated to embrace the norm of reciprocity for this support by ensuring that they become a better performer for effective organisational performance (Tokay & Eyupoglu, 2018). Quite plainly, an organisationally committed employee is expected to be a better performer (Al Zefeiti & Mohamad, 2017).

Employees are the human resources that evaluates the favourable and unfavourable factors in the organisation before taking action. For example, the voluntary exchange of symbolic resources takes place when employees understand that there are benefits attached, according to Hsu, Yin and Huang (2017). This is the norm of reciprocity, and as affirmed by Sungu, Weng and Kitule (2019), it plays a significant role in strengthening the social framework. According to Brown and Roloff (2015), organisational support will strengthen an employee’s belief that the organisation recognises and rewards increased performance. More so, favourable opportunities for rewards serve to communicate a positive valuation of employees’ contributions. This enables employees to interpret the organisational value and become committed to it.

On the authority of SET theorists, it has been proposed that a reward brings forth greater commitment from employees, which has a positive effect on their future engagement toward organisational goals (Tsai & Kang, 2019). Reward systems exist with a specific long-run objective to motivate employees to work towards the achievement of organisational goals (Abbah, 2014; Anku, Amewugah, & Glover, 2018). This is possible when the reward system has brought about commitment in the employees. In the study of Osemeke (2016), it was identified that OC is greatly influenced by the type of reward that the employees receive. Also, employees’ commitment to their organisation is enhanced by the use of a profit-sharing arrangement (Long, 2000; Osemeke, 2016), which is a system with the intent of returning to the employees a share of the fruits of their collective labour (Coyle-Shapiro, Morrow, Richardson, & Dunn, 2002).

By utilising SET to examine the relationship between reward and OC, the evidence shows that better understanding is obtained with regard to the reason why employees increase their OC with a good reward practice. A social exchange relationship suggests obligation and rights on the organisation and its employees (Liu, Loi, & Ngo, 2018). The employing organisation should offer rewards to its employees, in exchange for their commitment. Based on this premise, this study proposes the following hypothesis:

The primary data used in this study was gathered via administration of a structured questionnaire. This questionnaire was administered to LG employees in two states in Nigeria. Local government workers represent a part of the workforce under the Nigerian public service sector. Several studies that have been carried out to examine the public sector have also used LG employees as respondents of their surveys (Sam-Okere & Agbeniga, 2014). There are six states in the Southwest region of Nigeria. A multistage sampling technique was used in the process of selecting the states used for this survey. Two out of the six states were selected, namely Ekiti State and Osun State. Ekiti state has 16 LGs while Osun State has 30 LGs. In Ekiti state the three biggest LGs were selected with a total population of 2471 employees and in Osun State the seven largest LGs were selected with a total population of 1951 employees. At the time this study was carried out, as released by the Director of Personnel Management of the 10 LGs, the total population was 4422. For this population size, according to Krejcie and Morgan (1970), 354 is suitable at ±5% precision level and 95% confidence level. A stratified sampling technique was adopted to select the employees to participate in the survey. There are nine departments in the LGs in the two states used for this study and they are administration and general services, budget and planning, finance and supply, agriculture and food security, works, water and environmental sanitation, town and regional planning, social and community development, and primary health care. Each department of the LG formed a stratum. To have a robust result, 600 copies of questionnaires were administered in the 10 LGs and 525 copies were collected from the field of survey. The respondents were at ease with the objectives of the study due to the simplicity of each item of the questionnaire. The respondents were offered gifts worth 2 USD each to motivate them to voluntarily respond to the items of the questionnaire. The questionnaire had a cover page on which they were informed of the researchers’ strict adherence to the rules of confidentiality and anonymity. No one was forced to attempt the questionnaire and anyone who was no longer interested to continue the survey was allowed to opt out.

The questionnaire that was used for this study was designed according to the literature review of this study. All the constructs in the questionnaire were measured using existing scales. The reward items were adapted from the study of Kassabgy, Boraie and Schmidt (2001), OC from the study of Meyer and Allen (1997) and PEC from the study of Othman (2014). Also, some items were edited to suit the tonality of this study. In OC items ‘organisation’ was replaced with ‘LG’. For example, ‘The setting of our Local Government is comfortable’. For PEC, the initial construct was, for example, ‘Job Knowledge’ and it was reconstructed to be ‘I am evaluated based on Job knowledge’. The items for reward were not edited and they were used just as it was adapted. All the items were on a Likert scale ranging from strongly agree (1) to strongly disagree (5). The questions in the questionnaire were sectioned into two. The first section of the questionnaire contained all the items related to reward, PEC and OC variables, and they were mixed. No identification of sections for each variable was done so as to avoid common method variance. The second section contained the demographic variables. It was placed as the second section so as to avoid social desirability response since it contains some personal information needed for this study. After data were collected, they were transferred to an SPSS spreadsheet and from inspections, there were no extreme figures. Afterwards, the Mahalanobis distance was calculated through SPSS to identify multivariate outliers and from inspections three (3) values were observed to be lower than the p-value (p < 0.001). These three (3) responses were completely removed from the dataset, leaving 522 responses for the study’s analysis. The descriptive information for the demographic variables as shown in Table 1 reveal that more than half of the respondents are female (52.3%) while the respondents in the age group of 41 - 50 years (36.4%) are above one third. The respondents with 11–15 years length of service are 28.5%. The majority are Bachelor’s degree holders (52.7%).

The existing items for each of the variables of the study were subjected to principal factor analyses to ascertain if the items loaded appropriately. Based on the result, items that had a factor loading above 0.40 are retained and Table 2 presents the reliability for these retained items, which are all acceptable. Common method bias was checked through Harman’s single-factor test. The single factor accounted for 20.1%, which invariably accounts for a minority of the variance in the model of this study.

Table 3 presents the descriptive information on the perception of the employees concerning the criteria their employing organisation base their performance evaluation on. Analysis of the mean scores of PEC shows that employees perceived all the criteria to be important as they agreed to being evaluated on their bases. However, reliability (mean = 1.95, SD = 0.77), behaviours (mean = 2.01, SD = 0.92) and work management (mean = 2.08, SD = 0.86) had the highest scores, respectively.

While this study was carried out, the researchers were faced with some limitations which include the characteristics of the respondents in the population and the sample size. The pool of the respondents was drawn from employees in LG with a small sample size. Coupled with this is the problem of common method bias. The items of the questionnaire used for the survey of this study were mixed and the collected data was self-reported. However, the research design was cross-sectional. We suggest that future studies can use a longitudinal or experimental design to get a better result.