7. Effects of Rewards on Employee Motivation

7.1 Job Satisfaction

Job satisfaction defines as a feeling of fulfillment or enjoyment that a person derives from their job (Cole and Kelly 2011). Kreitner and Kinicki (2010) noted from an analysis of studies done on over 1000 workers, there was considerable positive attachment between motivation and job satisfaction. According to Robbins and Judge (2010), pay is noted as one of the major facets of job-satisfaction. Further states that the relationship between a salary and job satisfaction is rather interesting especially for those who live below the poverty mark in that pay correlates with their overall happiness and job satisfaction. 

According to Kinicki and Fugate (2012), a survey done on employees, showed that one of the main causes of job satisfaction is need fulfillment or the aspect of one’s job that is of great importance in their job satisfaction adding that compensation and benefits were some of the top choices mentioned by the employees. Apart from helping people in attaining their basic needs, money is also said to be instrumental in individuals attaining their higher-level need satisfaction (Luthans 2011). This is because employees view pay as a way of reflecting how managers view their contribution towards the organization. This is an indicator that pay is indeed one of the major factors which influence job satisfaction. Having a fair pay, fair benefits as well as fair promotion opportunities are some of the guidelines that organizations could use to enhance job satisfaction (Luthans 2011). Quick and Nelson (2013) also concede that pay is one of the job dimensions that are related to job satisfaction. 

Colquitt, et al., (2010) concur that pay satisfaction in reference to the feelings that employees have about their pay including if it’s what they feel they deserve, whether it is secure and adequate for both luxury and normal expenses tops the list of overall job satisfaction values. Further states, to get the pay satisfaction, many employees related to the content of a task that is being performed and related to Psychologist Frederick Herzberg’s content theory known as Herzberg’s Two Factor Theory (Robbins and Judge, 2010). Employees generally compare what they are paid in comparison with their colleagues and also based on their job duties. However Quick and Nelson (2013) point out that pay is just marginally relative to job satisfaction as it does not always follow that those who are well paid are automatically satisfied with their jobs.  

7.2 Alternative Rewards 

Luthans (2011) agrees that today, money is the most dominant of an organization’s reward system. This can be in the form of salaries, incentive pay and bonuses. Rewarding human beings in general with money, according to McShane and Von Glinow (2011) is among the oldest and most widely practiced applied performances. Further states that financial awards are what align goals of employees with those of the organization. According to Phillips and Gully (2012), pay-for-performance in form of money can be one powerful motivator as it determines how people are able to satisfy most of their wants and needs. Financial rewards can be in form of individual, team or organizational rewards (McShane and Von Glinow, 2011). 

Further authors acknowledge that money generates varying emotions mostly negative such as depression and anxiety, and further note many experts are of the opinion that because of its symbolic value today, money is a more important motivator than it was before. Moreover In view of this, while giving out financial rewards, money can influence emotions, and shape people’s self-concept since it is more than just a means of exchange between an employer and an employee. 

However, money is not the only motivator of good performance or the greatest for that matter as Andersen (2012) maintains. Further notes that other motivators such as independence and flexibility rewards. In addition, other alternative motivators to money are such as recognition, non- financial rewards and simple gestures of appreciation (Phillips and Gully, 2012). Others are such as benefits (welfare and health, paid time-off as well as retirement packages) and personal growth career development, training, work-life balance and performance management) which have proved to be effective on employee engagement (Kinicki and Fugate, 2012). According to Newstrom (2011), performance appraisals play a major role in an organization’s reward system. According to Bukusi, (2013, p. 99) “managing people is not just about pay rewards and benefits. It is more about developing people you need to run your organization’s business. Managing people is about developing HR to access the resources the leader knows they have and empowering them to do what they can to contribute to the success of the organization”. 

7.3 Application in the Workplace 

Study and researched on effects of rewards on employee motivation of 19 different banking employees in the banking sector of Pakistan. In this study each factor (Performance and Productivity, Employee Commitment and Retention, Job Satisfaction and Alternative Rewards) associates with the rewards of the employees and employee motivation of banking sector of Pakistan. Research found that effects of rewards and motivation factors have been used to motivate employees to a great extent. But refusal relationship between employee motivation and qualification of banks employees. Cleanly, change in reward offer will have same effect of change in employee work motivation and with higher level rewards. (Shafiq and Naseem, 2011).

7.4 List of References

Cole, G. and Kelly, P., 2011. Management Theory And Practice. 7th ed. Andover: Cengage Learning. 

Kreitner, R. and Kinicki, A., 2010. Organizational Behaviour. 9th ed. New York: McGraw-Hill Irwin Inc. 

Kinicki, A. and Fugate, M., 2012. Organizational Behavior: Key Concepts, Skills & Best Practices.  5th ed. New York: McGraw-Hill Irwin.

Luthans, F., 2011. Organizational Behaviour: An Evidence Based Approach. 12th ed. Boston: McGraw-Hill Companies Inc.

Robbins, S. and Judge, T., 2010. Essentials Of Organizational Behavior. 10th ed. Upper Saddle River, NJ: Prentice Hall.

Quick, J. and Nelson, D., 2013. Principles Of Organizational Behavior: Realities And Challenges. 8th ed. Andover: South-Western Cengage Learning. 

Colquitt, J., LePine, J. and Wesson, M., 2010. Organizational Behavior: Essentials For Improving Performance And Commitment. 1st ed. New York: McGraw-Hill Irwin.

McShane, S. and Von Glinow, M., 2011. Organizational Behaviour. 5th ed. New York: McGraw-Hill Irwin Inc. 

Phillips, J. and Gully, S., 2012. Organizational Behavior. Mason, OH: South-Western Cengage Learning.

Andersen, E., 2012. Leading So People Will Follow. 1st ed. San Francisco: Jossey-Bass.

Newstrom, J., 2011. Organizational Behavior: Human Behavior At Work. 13th ed. New York: McGraw-Hill/Irwin. 

Bukusu, A., 2013. How To Lead Corporate Transformation: How To Transform A Business Into A Market Leader. 13th ed. Nairobi, Kenya: Africa Amokai Agency.

Shafiq, M. and Naseem, M., 2011. Association between Reward and Employee Motivation: A Case Study Banking Sector of Pakistan. SSRN Electronic Journal, [online] Available at: <https://www.researchgate.net/publication/228214905_Association_between_Reward_and_Employee_Motivation_A_Case_Study_Banking_Sector_of_Pakistan> [Accessed 28 May 2020].