The biggest challenge facing organizations in service industry today is that of customer retention. Loyalty/reward programmes have been promoted as the ultimate strategic solution towards customer retention by some industry experts, while the others question its influential potential as a customer retention strategy. The primary purpose of this research was to establish whether loyalty/reward programmes, as one of the main contributing Customer Relationship Management (CRM) factors, are either simply a fad or actually a fab solution! Subsequently, the research focused on the evaluation of the three most noted and influential CRM components in current literature and concluded that service quality and customer contact rated higher than loyalty/reward programmes with what should be considered the ultimate critic, namely the customer, or rather 60 of them.

The biggest challenge facing organizations in service industry today is that of customer retention. Loyalty/reward programmes have been promoted as the ultimate strategic solution towards customer retention by some industry experts, while the others question its influential potential as a customer retention strategy. The primary purpose of this research was to establish whether loyalty/reward programmes, as one of the main contributing Customer Relationship Management (CRM) factors, are either simply a fad or actually a fab solution! Subsequently, the research focused on the evaluation of the three most noted and influential CRM components in current literature and concluded that service quality and customer contact rated higher than loyalty/reward programmes with what should be considered the ultimate critic, namely the customer, or rather 60 of them.

Given the current economic climate, organisations and their management teams are faced with many decisions. Cost cutting policies, restructuring decisions and downsizing decisions are under consideration before implementation. Furthermore, these decisions and policies may have a negative effect on employees and could sway motivation, loyalty, morale, attitudes and views of employees.This research considers the impact of the reward systems and programmes, monetary and non-monetary rewards, as a means of motivating employees to achieve organisations identified strategic objectives. Many organisations face the dilemma around what the ideal reward programme should be in order to increase employee motivation and at the same time achieve the organisational objectives. The purpose of this research was to discover whether a well-designed reward programme would result in the motivation of employees.A questionnaire was developed using reward categories from the WorldatWork Total Reward Model and the Towers Perrin Total Rewards Effectiveness Blueprint. This was administered to a sample of past and present MBA students from a Johannesburg based business school in order to elicit responses around the aspects of their individual reward preferences and their organisations reward preferences. Data was gathered to understand the preferences between the various monetary and non-monetary reward categories and elements. The sample group of 180 respondents participated through a self-administered on-line survey. Statistical analysis was conducted on the data which involved both descriptive and inferential statistics.The results of the survey indicated that both organisations and employees recommend financial benefits as being the most important reward category. However, there was more of a preference from employees for career development, coaching/mentoring and work life balance than there was from the organisations. Furthermore it is evident from the results that organisations are utilising a combination of both monetary and non-monetary rewards, as a share of the reward package in relation to the varying needs of the labour force. Given the current economic climate, there is a major case for providing more value on non-monetary rewards to motivate employees, given the cost pressures faced by organisations. Although monetary rewards were rated as being the most important, there is an opportunity to combine them with non-monetary rewards and presented to an individual as a reward package.The reward approach can only be maximised by organisations if they understand the needs of employees based on the understanding of employee preferences; the dynamic nature of the work force and the potential impact on external factors. It is recommended that a new reward framework be designed to incorporate the reward preferences and expectations of both the employee and the organisation whilst taking into account the effect of the external environment, the job design and the link between the expectations from the organisation and the individual. / Dissertation (MBA)--University of Pretoria, 2012. / Gordon Institute of Business Science (GIBS) / unrestricted