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A study on the impact of rewards on employee motivation


“ Motivation is the art of acquiring people to make what you want them to make because they want to make it. ”

— Dwight D. Eisenhower

Like a small child being given a cocoa on standing foremost in his category or a large clinch for making something good like assisting person, or cleaning the topographic point after playing, wagess whether pecuniary or non-monetary can be important tools for the motive of employee and a positive measure towards the betterment of his public presentation an hiking his morale. Jack Zigon ( 1998 ) defines wagess as “ something than increases the frequence of an employee action ” .

It ‘s a common observation that most of us do n’t execute our undertakings wholly, non because they are hard but because of low involvement or motive to execute that undertaking. The desire or motive is necessary for the public presentation of an activity. Kleinginna and Kleinginna ( 1981a ) defines motive as, “ internal province or status that activates behavior and gives it way ; desire or want that energizes and directs goal-oriented behaviour ; influence of demands and desires on the strength and way of behaviour. ”


Gatlin, Rebecca ( 1997 ) , says that a good and attractive wages plan is necessary the employees in order to actuate them otherwise the unmotivated employees will non execute their undertakings decently and will finally impact the company in a negative manner i.e. lessening in profitableness. Organization ‘s public presentation is dependent on the employees who work for it, so in order to acquire the better and quality end product, wagess contribute a batch in this portion, so it is indispensable for organisation ‘s directors to do effectual and attractive wages plans to actuate their employees, Deeprose ( 1994 ) .

Gregory P. Smith, writer of book ‘Dynamic Ways to Reward, Energize & A ; Motivate Your Teams ‘ , provinces in his book that honoring and acknowledging the work of the employees makes them happy, supply them occupation security and they contribute more towards the organisation.

Edward E. Lawler III ( 2003 ) , “ With the right combination of wages system patterns, people will be motivated to stand out, and those who do stand out will be motivated to remain because they will be extremely rewarded. This is the foundation of the virtuous spiral, in which both sides win and create success for each other ” .

In Pakistan human resource sections are seen merely in those organisations where engineering is strictly applicable or which are extremely knowledge organisations. The telecommunication sector of Pakistan has shown enormous growing in recent old ages and its all because of utilizing up to day of the month engineering and the acceptance of competitory and advanced human resource patterns. Becker and Huselid ( 1998 ) supports that for holding the competitory advantage for any concern Human resource is basic beginning to acquire it.

The organisations in the telecommunication sector of Pakistan are the constructions that provide their services supported by the human resources. The most of import factor in the bringing of the best quality service is the motive of the employees ; on the single degree every bit good as on the group degree. In today ‘s universe of competition to present best service in order to fulfill clients it has become really hard ; in fact organisations take it as a challenge to actuate employees in order to acquire best end product from them. The telecommunication sector of Pakistan plays a powerful function in its economic system. Excellent professional services delivered by the employees of the telecom sector of Pakistan can make a positive and ageless image in the eyes of their clients.

Several surveies show that wagess have a immense impact on the occupation satisfaction and motive of the employees. Beer ( 1984 ) says that for top direction it is the top most duty to develop a strong positive relationship between the organisation and its employees in order to transport out the uninterrupted demands of both i.e. organisations and employees. Organizations want their employees to follow the organisation ‘s regulations and ordinances i.e. work harmonizing to the criterions that are being set for them, and as a consequence of it employees want from the organisation good working environment, good wage, good behaviour, occupation security, deputation of authorization. For organisations understanding to cover with these outlooks of employees is required.

Nel ( 2001 ) , argues that those employees that are motivated and are to the full cognizant of the organisations ends, that provide the organisations benefit, will deviate their all difficult work and devotedness towards those ends.

Harmonizing to Flynn ( 1998 ) , that these yearss organisations understand the great additions derived by associating wagess whether pecuniary or non pecuniary to their concern scheme. The telecommunication sector of Pakistan is offering several benefits and wagess to its employees ; so that employees feel motivated and remain satisfied with their occupations and better their public presentation in order to accomplish organisational ends.


The basic aim for transporting out this research is to mensurate the impact of wagess in the most fast turning sector of Pakistan i.e. Telecommunication sector Pakistan on the motive of its employees.


The significance for transporting out this research is that whether the employees in the telecommunication sector of Pakistan are satisfied with their organisational wages system or non. And which reward type they appreciate the most whether the pecuniary wagess or the non pecuniary wagess.

Reappraisal of Literature


Jack Zigon ( 1998 ) defines wagess as “ something than increases the frequence of an employee action ” .

In order to handling the employees of the organisation right, honoring them decently is one of the of import constituents. Organization which is turning healthier provides its employees the chance to turn and thrive. In today ‘s extremely concern competitory environment win-win relationship is of import that forms the right intervention of employees by the organisations. Strategy of honoring employees when public presentation is non good can non predominate for long, therefore honoring for good public presentation encourages employees to go on their public presentation and better their accomplishments and cognition twenty-four hours by twenty-four hours to lend positively towards organisation, Edward E. Lawler III ( 2003 ) .

ACCEL squad development says that for improved and better end product from the employees rewards act as ‘catalyst ‘ . Wagess are portion of the organisation and direction should pay exceptional attending towards them ; wagess should be speedy, important, related to public presentation, compatible with occupation measuring and irrevokable. Wagess should be given reasonably, if there is some factor of unrealistic distribution of wagess like giving publicity of the favouritism footing, it will hold a negative impact on the motive of the remainder of the employees.

Searle, John G. ( 1990 ) , acquiring the satisfaction of the employees over the wagess that are being offered to them id a hard undertaking, organisation has to larn to pull off those things which creates feeling of dissatisfaction among employees ; Employee ‘s satisfaction towards reward in comparing of what he expected and how much he received secondly is comparing his wagess with other people of same occupations in the organisation, overrating his ain public presentation as comparison to his co-workers. So wagess should be designed in full justness by the direction of what they are taking from employee and what they are giving to him for his input, and they should be to the full defined to the employees so that there may non stay any opportunity of misconception. This plays of import function in making feeling of satisfaction or dissatisfaction.

Cameron & A ; Pierce ( 1977 ) , states that every concern usage wagess like salary, publicity, and other types of fillips to promote employees towards high degree of public presentations.

Types of Wagess

Harmonizing to Syedain ( 1995 ) , there are two schools of idea for wagess at the workplace, one is to state THANK YOU in any manner, verbal, non-verbal, via certification etc other is to give a concrete wagess that create an impact.

There are two types of wagess pecuniary wagess and non-monetary wagess. Employee wages plans design requires a balance between pecuniary wagess andA non-monetary rewardsA to supply inducements and benefits to the employees.

Monetary wagess

Marcia Moore, M.S.S.W. ( 2010 ) , says that pecuniary wagess are those wagess that are being given by the organisation in the signifier of hard currency, or through check or some other manner of fiscal dealing for accomplishing the gross revenues ends, supplying best quality, supplying outstanding public presentation in a hard state of affairs or presenting a undertaking study in the best manner.

Gratton ( 2004 ) , states that “ motive is determined by both pecuniary and non-monetary factors, money has come to play an overly of import function in our thought about the causes of behaviour. In most companies really limited clip and attempt are spent on sing non-monetary beginnings of motive. ”

Money is an of import factor in actuating people as we live in a money motivated universe. Harmonizing to Peter Drucker ( 1974 ) , “ there is non one scintilla of grounds for the allege turning off from material wagess. Antimaterialism is a myth, no affair how much it is extolled. ” Monetary wagess have so much importance that if no proper attending is paid to them or disregarding them will move as demotivator. He farther says, “ Economic inducements are going rights instead than wagess. ”

ACCEL squad development argues that pecuniary wagess can non be remunerated by the non-monetary wagess ( human dealingss ) . Celebrated companies like Microsoft, IBM are to some degree a consequence of pecuniary motive. Financially honoring employees ‘ additions their motive degrees, which consequences in addition in the end product, making more net incomes and those net incomes should be circulated back to the employees who are really responsible for it.

Non-Monetary Wagess

Marcia Moore, M.S.S.W. , A ( 2010 ) , non-monetary awards includes certification, a word of thanks from supervisor or director, flexible agendas, a twenty-four hours off, recognition of birthdays, and free tiffins or dinners to observe squad work success.

Pfeffer ( 1998 ) , “ Peoples do work for money – but they work even more for significance in their livesaˆ¦ Companies that ignore this fact are basically corrupting their employees and will pay the monetary value in a deficiency of trueness and committedness ” .

Sherry Ryan ( Training Specialist, Weyerhaeuser Company ) , says that non-monetary wagess play of import function in bettering employee public presentation. Using proper attractive and communicative method of non-monetary wagess leaves a positive impact on the employees and improves employees ‘ public presentations in different dimensions. Such types of awards are cheap to give to employees but worth a batch when employees receive them.

Bob Nelson ( 2004 ) , stating thank you to your employees or appreciating their public presentations when something good is done, is highly of import factor that should be recognized by the directors. Harmonizing to him 78 % employees said that they feel more motivated and happy when their director appreciates them.

Harmonizing to research conducted by, Allen and Helms ‘ ( 2002 ) , looks of grasp and congratulations by the directors give employees encouragement. American Society for Training and Development ‘s ( ASTD ) research proves that non-monetary awards work as an of import factor for maintaining clasp of top acting employees.


Motivation is derived from a Latin word, ‘movere ‘ , which means to travel.

The writer of book ‘Motivation, beliefs, and organisational transmutation ‘ ( 1999 ) , Dr.A Green and Butkus ( 1999 ) , says that motive is derived from a word “ motivate ” , which means to travel, push or persuade to move for fulfilling a demand. Further motive can be explained as moving of such forces within a individual that cause a stimulation of attempt, way and end way.

‘Motivation ‘ is the entire engagement of a individual in his undertakings to transport out with dedication, devotedness, felicity, exhilarations, and voluntarily, Mol ( 1992 ) .

Theories on Motivation

There are two categories of theory of motive ;

Contented Theories: Content besides called as demand theories of motive fundamentally emphasis on internal factors of an person that strengthen and gives the way to the behaviour.

Maslow ‘s Hierarchy of demands:

Abraham Maslow ( 1943, 1954 ) , unsated demands creates demotivation, there are following demands that must be satisfied, these are called as ‘deficiency demands ‘ . As these demands are fulfilled the individual is satisfied and travel towards growing and ego realization.

Physiological demands: These are the basic demands for illustration nutrient, H2O, air, and all other things that are necessary for the endurance. In order to heighten workplace motive by accomplishing the mark of carry throughing the demands of employee give proper interruptions for tiffin, and offer such salary to employees that enable them to purchase basic demands of life. Provide ample interruptions for tiffin andA convalescence and payA wages that allow workers toA buy life ‘s necessities.

Security demands: it includes security sing the physical environment, populating in a safe country, medical insurance, occupation security. These demands can merely be fulfilled by giving all these securities to employees.

Belongingness needs: it includes friendly relationship ‘s trust and satisfaction, experiencing right in a group, giving and having attention and love. It can be achieved by bring forthing a feeling of credence.

Esteem needs: It includes acknowledgment, attending, societal position, achievement, self-respect. It can be achieved by acknowledging the accomplishments of the employee, by delegating them some undertakings, make them experience of import and valued plus for organisation.

Self-actualization demands: it includes one ‘s ain potency, originative capablenesss etc, it can be achieved by offering challenging and meaningful work assignments which enable invention, creativeness, and advancement harmonizing to long-run ends.

Alderfer ‘s ERG Theory:

The Alderfer ‘s ERG theory ( 1969 ) , is an extension of Maslow ‘s theory of demands. He suggested that demands can be divided into three constituents ; being ( similar to physiological demands and security demands ) , relatedness ( similar to belongingness demands and respect demands ) and growing ( similar to self-actualization ) .

It differs from Maslow hierarchy of demands theory in a manner that harmonizing to Alderfers it may go on that more than one demand may be motivated at the same clip, lower incentives is non necessary to be A significantly fulfilled before traveling towards higher incentives, the order of demands may differ from individual to individual, there is a ‘frustration- arrested development rule ‘ and harmonizing to it if high order demand is frustrated a individual may regress to increase the satisfaction of a lower demand which appears easier to fulfill.

Frederick Herzberg ‘s Motivator hygiene theory:

Herzberg ‘s incentive hygiene theory ( 1959 ) , is closely related to Maslow ‘s theory but it is more closely related to how to actuate persons at their workplace. Harmonizing to him persons are influenced by two sets of factors ;

Hygiene factors: These are said to be lower degree of demands by Herzberg.

Incentive factors: These are said to high degree of demands by Herzberg.

Harmonizing to him run intoing hygiene factors will non actuate persons to set their attempt or to better their public presentation, it will merely assist them from being acquiring dissatisfied, but if motivator factors will be combined with this it will assist persons to actuate.

McClelland ‘s Learned needs theory: get

McClelland ‘s theory provinces that persons learn demands from their civilization and life experiences. There are three basic demands of an person ;

Need for association ( n Aff ) : It is the demand of set uping societal relationships with the people, communities, acquiring accepted by them.

Need for power ( n Pow ) : It is divided in two parts, desire to command one ‘s environment and 2nd to act upon others.

Need for accomplishment ( n Ach ) : It involves the aspiration to take answerability, set ambitious ends and acquire feedback of their public presentation.

McClelland states that a individual has full strong capableness in any one of the above classs, therefore it has prospective to motivated people that leads to satisfaction. Management should understand these demands of the persons and so construction their occupations to fulfill them. Those who have high n Aff such people perform good in client service occupations or where client interaction is involved. Those who have high Ns Pow direction should supply them the chance to pull off others. Those who have high n Ach such people should be given disputing but accomplishable ends.

Procedure Theories: These theories of motive focal point on known human determination behaviours for the account if motive. These theories determine that how an person ‘s behaviour can be energized, maintained in willed and self directed cognitive procedure.

Victor Vroom ‘s Expectancy Theory:

Victor Vroom ( 1964 ) , theory is based on three beliefs ;

Valence: is the extend of the expected results of an person are attractive or unattractive.

Anticipation: is the extend to which employees believe that they are giving adequate attempt that they will accomplish the mark of given degree of public presentation.

Instrumentality: is the degree to which employees believe that accomplishing a given public presentation degree consequence in the signifier of certain wages.

Motivation = Valence x Expectancy ( Instrumentality )

If even one of these is zero the employee will hold non motive for the undertaking, so directors guarantee addition in attempt will better public presentation and improved public presentation will ensue in high wagess.

The theory says employees have different ends to accomplish and can be motivated if they believe that ; there exists a positive correlativity between attempts and public presentation, good public presentation will ensue in a wages, and this wages will fulfill an of import demand, and the want for fulfilling that demand is powerful plenty to do attempt valuable.

Equity Theory:

Equity theory was first clip developed by John Stacey Adams in 1963. Persons in the society make comparing of their attempts ( inputs ) and wagess ( end products ) that they get. The equity sing the wagess influences the degree of motive of persons a batch. Equity exists when persons identify that the ratio between there attempts and wagess is similar to whom they are comparing.

Individual ‘s Rewards ( end product ) / Individual ‘s Efforts ( Input ) = Other individual ‘s Rewards ( end product ) / Other individual ‘s Efforts ( Input )

Similarly unfairness occurs when there is difference in ratio in comparing to others. Inequity has two types ;

Under-Reward: this type occurs when an single starts believing that he is seting more attempts as comparison to others, but having the same wagess that others are acquiring for comparatively less attempt.

Over-Reward: this type occurs when an single starts believing that his equity ratio is higher other persons. Therefore acquiring more wagess by seting less attempts.

Under-Rewarded person may acquire actuate to make more work to run into his public presentation degree while on the other manus he may acquire dis-hearted from this. Over-Reward single start seting less attempts as he may presume that he is acquiring much more wagess from small attempt. For directors equity theory provinces that wagess should be just to all employees.

Gary Latham and Edwin Locke ‘s end puting theory:

E. Locke and G. Latham ( 1990 ) , states that ends are of import factors in impacting the behaviours and motive degrees of employees. Motivated behaviour of employees can be achieved by puting ambitious ends for them that normally involve the quantitative marks. Such ends of public presentation are more good than those in which you merely state, ‘you did a great occupation, good done ‘ . Researchs have shown that disputing ends are more motivational than any other ends that are easy accomplishable. The more the dedicated is employee the more he will set his attempt to accomplish those ends. Researchers show that persons that perform in end puting have additions end committedness. If an person has high self-efficiency he will react more positively to accomplish ends instead than those who are low-efficient.

B.F. Skinner ‘s Reinforcement Theory:

In Reinforcement theory B.F. Skinner ( 1957 ) , considered a motive theory along with larning theory. The theory province that motivated behaviour is the result of reinforces which are really the end points from the behaviour that cause it more likely to happen once more. It further says that it is indispensable to mensurate the effects of behaviour instead than to understand cognitive or processes motive. Such behaviour that was antecedently rewarded will be continued in future as good from an person instead than that behaviour which was non rewarded or for which he was being punished. The theory suggests to directors that they can manage the behaviour alterations by reinforce desired behaviours and penalize unsought behaviours.

Need for motive

The satisfaction or the dissatisfaction degrees of an employee are straight relative to his good or bad public presentation. Employee dissatisfaction may take to hapless public presentation. Petcharak ( 2004 ) , it is the duty of the human resource direction of the organisation that employee may non dissatisfy from his occupation, so HR direction should take stairss to actuate employees otherwise employees will non execute up to expected criterions of the organisation. Cheng ( 1995 ) , says that it is one of the larges test challenge for service supplying organisations to actuate their employees in order to fulfill their clients. The HR section ‘s major undertaking is to develop schemes to actuate its employees.

Human capital instead than fiscal capital plays a important function in run intoing the ends of the organisation. It is the duty of the top executives to actuate the employees of the organisation. Human capital is the basic beginning of competitory advandage for any service supplying organisation these yearss. Organizations which really pay attending towards the motive of its employees assures its success, Dale Carnige ( 1985 ) . This shows that employees who are motivated are best for the organisations to achieve its ends, it is the responsibility of directors and supervisors to actuate them, Roberts ( 2005 ) .

Harmonizing to La Motta ( 1995 ) , motivational rousing causes an employee ‘s involvement to finish its undertaking, achieve all those ends that are being set for him. Different people are motivated by different ways, one thing that is making motive to one individual might non make to other, because there is difference in motive degrees of every person.

Baron ( 1983 ) , agrees with Maslow ‘s hierarchy of demands, that there are some natural factors of motive that if provided to an person will actuate him like security demands, esteem demands and self realization demands.

Importance of Rewards and Motivation

Searle, John G. ( 1990 ) , A wagess are fundamentally to actuate the behaviours of employees towards their work. Wagess should be given as a consequence to effectual public presentation. Following are some conditions that are necessary for the creative activity of motive among employees ;

Employees must hold religion that their effectual public presentation will certainly be appreciated and rewarded.

The wagess that will be being offered by direction are attractive.

The believe of employees that their attempt is truly lending worthwhile to achieve the organisation ‘s ends.

Organizations must pay attending towards the Monetary every bit good as Non-Monetary wagess, because the balanced combination of both creates motive. An person ‘s ends and organisation ‘s ends are independent ends that are linked by the work motive. Persons provide their services to organisations to achieve organisation ‘s ends in order to run into their personal ends. So, we can state that an person ‘s ends are straight relative to the organisational ends.

Robert ( 2005 ) , while analyzing the Baron ‘s work ( 1983 ) studies that motive non merely can act upon the public presentation but the public presentation can besides be influenced by wagess, i.e. direct wagess to true public presentation. ‘Total wages system ‘ is the system in which wages and other wagess are given to the employees on the footing of their public presentation. Therefore, ‘total wages system ‘ is one of the of import component, Wilson ( 1994 ) .

Mosley, Megginson, Pietri ( 2001 ) , reports that the there are three degrees of employee motive ;

Behavior: the way of those behaviours of an employee that he selects to execute.

Attempt: the degree of willingness of an employee to set their attempt on their work.

Continuity: the degree of willingness to work irrespective of hard state of affairss.

In Pakistan telecommunication sector is confronting large alterations for last few old ages, non merely their clients are increasing but besides the services are increasing. They reported from a research conducted by them that employees in telecommunication sector give more importance to pay and publicity than preparation, and wage and publicity gives a positive impact on their occupation satisfaction and motive, . Kashif u Rehman et al. , ( 2007 ) .

Theoretical Model

Problem Statement

Hypothesis # 1:

There is a positive relationship between wagess and motive in the employees of Telecommunication sector of Pakistan.


Wagess are things that boost some one ‘s morale to make something ; it is observed in our day-to-day life that whenever an person or a squad is being given wages for their good work the motive of the employee additions to make more good work in order to acquire more wagess.

Hypothesis # 2:

Monetary wagess cause more employee motive than the non-monetary wagess in the telecommunication sector of Pakistan.


Reward in the signifier of money attracts people more instead than any other wages in signifier of merely grasp or a certificated. This hypothesis will prove that whether it is true or non in the telecom sector of Pakistan.

Hypothesis # 3:

There are important differences in effects of biological variables on employee work motive in the telecom sector of Pakistan.


This research hypothesis will happen replies to such inquiries as ;

Who were more motivated male or female?

Which age group people were more motivated?

Who were more motivated new or old employees?

Married people had more motive towards work or unmarried?

Gross saless people are more motivated as comparison to rest of the people at different appellations?

Research Methodology

Tool for informations aggregation

The tool for informations aggregation for this research is study. And for the intent of making studies mail questionnaire is designed. This method of informations aggregation is chosen because it has geographical flexibleness, easy sample handiness, saves clip, and cost, namelessness and respondent convenience to answer.

Design of Questionnaire

The research questionnaire consists of three parts ;

Part I: It consists of personal information of the topic, such as gender, age, appellation, working experience, matrimonial position and instruction.

Part II: It is designed for the aggregation of informations about the independent variable i.e. Rewards ( Monetary Rewards/Non- Monetary Rewards ) .

Part III: It is designed for the aggregation of informations about the dependant variable i.e. employee motive.

Unit of measurements of observation

The units of observation are the employees of different companies of telecom sector of Pakistan ;







World Call


Pakistan telecommunication Limited

The sample includes all classs of employees.

Sample Size

The sample size for informations aggregation is 1000.

Time Dimension

This survey is a transverse sectional survey.

Scale / Scoring of questionnaire

Te Likert graduated table is used for the aggregation of informations. Likert graduated table is fundamentally a 5-point graduated table which consists from 5 to 1.

For positive statements hiting is ;

Strongly Agree = 5

Agree = 4

Neutral = 3

Disagree = 2

Strongly Disagree = 1

For positive statements hiting is ;

Strongly Agree = 1

Agree = 2

Neutral = 3

Disagree = 4

Strongly Disagree = 5


Questionnaire will be spread out among the employees of telecommunication sector of Pakistan via mail questionnaire in their workplace. Instruction manuals and grantee of confidentiality of the personal information will be ensured.

Datas analysis

For the descriptive analysis SPSS ( Statistical Package for Social Sciences ) version 16 or merely Microsoft Excel 2010 will be used.

For happening out the correlativity between the Rewards ( independent variable ) and employee motive ( dependent variable ) Pearson Correlation Coefficient will be used.

For happening out the correlativity between the Financial Rewards and employee motive ; and Non-Financial Rewards and employee motive Pearson Correlation Coefficient will be used.

For the analysis of the differences in employees work motive based on the personal features ( biographical ) ANOVA will be used which is used to mensurate the important differences between the discrepancies.

Expected Consequences

The assorted researches that have been carried out in assorted sector in different states of the universe reports that wagess have a positive impact on employee motive.

In 1997, Carolyn Wiley compared the consequence of antecedently held four studies that were conducted on motive of employees in twelvemonth 1946, twelvemonth 1980, twelvemonth 1986 and twelvemonth 1992.

The study that was conducted in 1992 resulted that in today ‘s universe employees are motivated by pecuniary wagess. Employees chosen ‘salary ‘ as the top most motivative component. The research said that wage is a pecuniary wages with a natural influence.


Low response rate

Low completion rate

Can non catch verbal behaviour

Can non utilize drawn-out questionnaire

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