Association between Reward and Employee Motivation: A case study Banking Sector of Pakistan
Malik Muhammad Shafiq *1 Mohammad Akram Naseem*2
This study examines the association between rewards and employee motivation in banking sector of Pakistan. The study is based on primary data and sample Size (N= 167) consisted of male and female employees of 19 different banks. Primary data collected by structured questionnaire by using sort of different approaches. Two different hypotheses was developed for the present study and was tested by applying Chi square Test and Regression Test. Significant value is 0.048 of Pearson Chi-square its mean there is association between salary and gender. The correlation between rewards and Employee Motivation is 0.546, which shows the positive relationship between reward and employee motivation. Regression Equation shows that when the reward is made on the basic of Employee point of view; Employee Motivation will increased by 0.527 .The results also showed that salary is much important factor for employee motivation as compared to other variable factors like promotion, job security, working condition, appreciation and other benefits. Keywords: Reward system, motivation, employee, banks
In Pakistan, there are two types banks.1- Government Banks ( National Banks of Pakistan and SBP others), 2- Commercial Banks like (MCB, Mezaan, Bank Alfalah , HBL, UBL,ABL etc). The commercial banks play important role in any country and also worldwide economy and their employees are the best sources of delivering good services to their customers. Excellent services provided and offered by employees can create a positive perception and ever lasting image in the eyes of banks’ customers. About-1 MBA, The university of Lahore (firstname.lastname@example.org, Cell # +923014925249) About -2 Assistant Professor, The University of Lahore ( email@example.com )
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The word “motivation” was originally derived from the Latin word “mover” which means “to move”.Physiological needs 2-Safety Needs 3-Social needs 4-Esteem needs 5. and to exert persistent effort in attaching a goal”. bonus. However.” We can says that pay and thing such as pension. such as accomplishment of goal or project. over time various researchers have attempted to have a more comprehensive definition of the word and motivation has been defined in different ways.Need for self-actualization . Abraham Maslow’s Need Hierarchy Theory (1943): Maslow’s theory on the hierarchy of needs is one of the most popular theories of motivation. The main objective of reward system is to attractive.A reward system is scheme a perform of HR management which provides increases of those individual or group who perform well in any organization. All employees of bank are very important but motivated employees are more productive and help to bank survive. 1. role or subject. one is extrinsic rewards (salary. most of them agree that it is a goal. All employees of any bank must believe effective performance will lead to certain rewards. status and promotion) second is intrinsic rewards (opportunity to completion. Roberts (2005) Organizations are under constant pressure to enhance and improve their performance and are realizing that relationship exists between organizational Performance and employee performance. health insurance. We can define motivation as “Internal and external factors that stimulate desire and energy in people to be continually interested in and committed to a job. commission. promotion that you get from being employed.Reward system is very important tool that all banks can use to strait employees motivation in different ways. Maslow (1943) stated that employees had five levels of needs and that human needs were in the form of a hierarchy ascending from the lowest to the highest. bonus. meaningful work and work kind condition). There are two types of reward system.com/abstract=1857663
. In other words. retain high performance employees.Motivation is key factor of employee.. salary. training. We can define of reward system as “reward system is formal or informal program used to recognize individual employee achievements. Motivation is psychological process that gives behavior purpose and direction.
Electronic copy available at: http://ssrn. banks give rewards to employees and rewards system seek to attract employees to joint the bank to keep than coming to work and also motivate them to perform to high level.directed Behavior . Basically all types of rewards motivate to employees to perform well by attracting with well designed compensate package by banks. skills.A good pay and interesting work are key to higher the employee motivation.
Rehman K. There is also positive correlation between reward recognition respectively and motivation.get maximum employees performance and satisfy legal standard see. Harpaz (1990) listed the three most motivating factors as: interesting work. Victoria Okojie (2009) described that effective and efficient reward program will increase the employee motivation of National Library of Nigeria. and Ahmed. S. Effective motivation increase employee productivity.Lindner (1998).B & Sufwan . pay and training have positive significant impact on job satisfaction of employee. Rutherford (2005) identifies that different factors are very important for better performance of any company but effective and efficient organization is depend upon the employees motivation. (2007) conduct a research on human resources strategies like promotion. James R. satisfaction.N. Also explain that mostly employees give less importance to training as compared to pay and promotion. If an organization designs reward system properly according to legal and other requirements then employees will be more motivated. This study show that a positive significant relationship between reward system and employee satisfaction. The aim of this study is identify main factors of employee motivation of banks Lahore. Ali. good wages and job security. This study tell us that highest motivation through interesting work and good wages. Employees of Uniliver Company were less motivated by less reward recognition. use sample size 80 employee for this study. M. They concluded that promotion. Motivation is factor which is influence on organization performance and effectiveness.U. Sample size is 25 employees of Pikon Research . Pakistan. R. (2009) conduct a study on Uniliver Company. Extension Center and Enterprise Center but response rate is 92% (23 employees).
Deeprose (1994) says that positive correlation between reward system and motivation and also described that effective reward system is very important for company because effective rewards can help to achieve the business objectives by attracting and retaining effective employees. Highly motivated
Electronic copy available at: http://ssrn. pay and training on job satisfaction. So that it is important for every management to understand that how organization influence the motivation of their individual employees. Payment(salary) factor is highly affect on employee satisfaction. Zaheer. conduct a descriptive survey topic “Understanding employee motivation”.com/abstract=1857663
Pakistan .In this research paper 100 questionnaires sent to National Library of Nigeria’s employees and responded rate 81%. Rewards and compensation systems motivate employees to give their maximum efforts towards assigned work.K. After careful study of literature review the conceptual Model is formulated to illustrate association employee motivation and reward programme. Motivated employees are more productive as compared to de-motivated employees. There is positive relationship between organization effectiveness and both employee motivation and employee performance but not more strong relationship between them.M. Compensation systems deliver other objectives such as legal compliance.U at el(2010) conduct a research on Commercial Banks of Kohaat . Pakistan.E & Ghafoor.employees will lead toward to highly productivity and performance is also increase . This study shows that there is positive statistical significant relationship between rewards and employee motivation among the commercial banks of Kohaat. S. labour cost control.And (NAL) employees are not awareness about reward programs. Khan. perceived fairness towards employees and enhancement of employee performance to achieve high level of productivity and customer satisfaction . Malik. Reward system is directly proportional to employee work motivation. Pakistan and response rate was 167 employees.M.
Salary Job security Promotion Working condition Appreciation
.M at el (2011) conduct a research by taking sample size 103 employees of Telecommunication companies and different banks of Punjab and discuss about employee motivation. There were 200 questionnaires distributed among employees of the different commercial banks of Kohaat. Happy employees are more productive rather than productive employees are happier.
Conceptual Frame Work
Here is given a conceptual frame work of reward system and motivation. employee performance and organizational effectiveness .U & Farooq.
biographical factors ((Gender. H1. Reliability and validity Basically reliability refers to the consistency or dependability of a measuring instrument.
Questionnaire consist two parts one is demographics variable factors and other part consist independent variables factors of motivation and rewards.240 questionnaire distributed in different banks but response rate was 226 (93%). 4= disagree . This questionnaire is valid for measuring the employee motivation
. education. age. 2= agree . 3-To determine the impacts of rewards system on biographical variables Banks employee. There are around about 40 banks are operating in Pakistan and data was gather from 19 different banks of pakistan. education. qualification and Income level) in Pakistani banks. age. 3= neutral . Second part that is ranged from 1.5 point scale in following pattern (1= strong agree . 4-To suggest ways in which reward programme in Pakistani banks can be improved upon in order to increase employee motivation.Objectives of this study
1-To determine if there is association between rewards and employee motivation. education.There is no association between rewards and employee demographics (gender. Primary data collected by structured questionnaires by using sort of different approaches. qualification and Income level). 5= strong disagree ). qualification and Income level) in Pakistani banks.
H0. 2-To identify the types of reward system in Pakistani Banks. age.There is association between rewards and employee demographics (gender.
Primary data are used for present study.
working conditions) . income level and qualification of banks employees. of items 16 4 9 Cronbach-Alpha 80% 72% 76%
Overall Rewards Motivation
For this study we used 5-point likert scale method for data of collection. promotion . Basically this questionnaire consist 2 parts with section “ A” comprising items seeking demographic data such as gender. experience.In this research Cronach-Alpha reliability coefficients for demographics factors and the subsections of the Work Motivation are as follows: No. job security .and reward system . Data collected by following approaches. Part “ B” comprising of these items which sought to collect information about independent variables ( salary. appreciation . age.75% 5.25% 226
By approach By Telephone By E-mail Total
Questionnaire sent Administrative 219 9 12 240
be Response Rate 84% 3. We data collected through reference (Snowball) sampling technique. Sampling The target population for this study is all employees of all banks of Pakistan.
8 31. Response rate was 93%.1 Above 60 .D 0 Other 4.000 3.000-30.000 and more than 46.2 M.8% of the professionals were drawing a salary between Rs. comprising 44.1 Experience (year) Less than one 8.9 1-5 year 31.8 Above 10 year The demographics and descriptive statistics of the sample are presented in table 1.2% of the respondents had Masters as their highest education level.4 11.1 Above 70.000-50.phill 5. Out of 226 respondents in the sample.000 to 30.000 33.000 7.3 Ph.7 31-40 36. About 60. 226 filled and returned the questionnaires. Males were 81% and 19% female of the total sample.4 Income(Pakistani Currency) Less than 10.7 41-50 15 51-60 3.
. 101 bank employees belonged to the 20-30 age category.1 Master 60. About 51.4 year 46.000 51.000 4.6 51.9% had job experience between 1-5 years.Data Analysis and Results
SPSS (Statistical Package for Social Science) version 17 of the software for analysis of present data.9 5-10 year 12. Demographic profile (Table -1) Demographics Gender Category % age Male 81 Female 19 Age(Year) Less than 30 44.000-70.7% of the total sample. Out of a total of 240 respondents. 10.41 Education Level Bachelor 30.
2% 52. Here variables are categorical.049 .9% 16. Chi square is applying for analysis the hypothesis-1
Chi-Square Tests (Table -3 )
Value df a Asymp.4% 65.4%
13.2% 66.2% 64.908
9.4% 16% 15.7% 18% 11.2% 23.6% 17.0%) have expected count less than 5.
.2% 24. The minimum expected count is 1.9%
Chi square test of association are applied on demographics and others variables.9% 21. (2-sided)
Likelihood Ratio Linear-by-Linear Association N of Valid Cases
9.8% 22.7% 21.9% 61.597
.8% 20.4% 34.6% 22.9 % 59.1% 11.Respondent Profile Table -2
Work motivation factors Strongly Agree agree + Neutral Disagree Strongly Disagree +
Good salary Interesting Work Job security Promotion Appreciation Opportunity for advancement Loyalty to employee Sympathetic Personal Help Good working conditions Other benefits Chi Square Test
71. 1 cells (10.7% 65.5% 53.6% 12. Chi square test is applicable when data is categorical.7% 22.5% 22.013 226
incentives.048 .048 which is given in table-3 and this sig value is less than . Some banks give more salary to female as compared to male. So we can say that impacts of gender on salary of bank employees are positive. so we accepted the Hypothesis H1 and rejected the Null Hypothesis. incentives Association No) Yes No Yes Yes Yes Yes yes in (Yes/ Sig-Value ( .Motivation factors Vs Demographical variables Association between two categorical variable Gender Vs salary Gender Vs job security Gender Vs workload Gender Vs praised(admiration) Age Vs suggestions Experience Vs job security Income Vs bonus.Motivation does not depend on rewards system H1 -Motivation depend on rewards system
There is association between gender and salary of banking employees because significant value is . Female employees are less workload as compared to male employees. There is association between gender and workload.05.2356 . There is association between gender and admiration (praised of employee).0123 .0091 .50. There is strong association between age and suggestions of bank employees. There is association between income level and Bonus. In Pakistan salary varies with gender.0045 .0245 . Management of any bank encourage the suggestions of old age bank employees ( above 40 years). Banks gives more incentives and bonus to their employees which get high level income like (above Rs.
Hypothesis: 2 H0. 000).There is Association between experience and job security because high experienced employee has more secure from his job and bank not fire to more experience employees.
the regression is applied.000
a.054 .767 Sig.572 . The line regression explained the pattern of variation of depending variables in relation to values the independent variable.0527reward . (2-tailed) N Reward Pearson Correlation Sig. Correlation is significant at the 0.546 Standardized Coefficients Beta t 11. Dependent Variable: motivation
Regression Analysis In order to find out the nature of relationship between two variables factor analysis is carried out.651 9. Reward Vs employee motivation
Indicator Regression Correlation Sig-value R-square
Values Motivation = 6. 226 .546** .527 Std.546 . In this research to find what relationship exists between reward system and employee motivation.Correlations
motivation Motivation Pearson Correlation Sig.66 + 0.000 .546** .01 level (2-tailed).664 . (2-tailed) N **.000 226 226 1 reward . . Error .000 226 1
Unstandardized Coefficients Model 1 (Constant) reward B 6.61
income and experience ) but there is no association between employee motivation and qualification of banks employees . the following non monitory awards also be increased. age.527. Management of any bank intensifies the salary scheme of employees.3-Internal work environment of banks must be pleasant fully. 1-Bonus 2.Regression Model Motivation = 6. every element relates with the rewards of the employees and employee motivation of banking sector of Pakistan.546. Recommendations and Suggestions All banks of Pakistan must be careful in the following factors to increase the employee motivation of the Employees by redesigning the reward system.Overtime pay 4-
. In this equation rewards are independent variable and employee motivation is dependant variable. The value of R-square. which shows the positive relationship between reward and motivation.Regarding the salary and other allowances. That is when the reward is made on the basic of Employee point of view. 61% of Employee Motivation is accepted by Reward.The correlation between rewards and Employee Motivation is 0.66 + 0. Simply. Further. change in reward offer will have same effect of change in employee work motivation and with higher level rewards. In order to satisfy the staff and work with efficiency. 2. The study specifies that employee motivation is the result of several factors.527rwards Here regression equation given above which shows the positive relationship between the rewards and Employee Motivation.
In this Study. It should be supported to up great their standard of living. In this research Significant information was achieved that rewards and employee motivation have positive and relationship and chi-square results shows that there is association between motivation factors and demographical variables ( gender.Holiday pay 3.1Employees should be trained according to the present content of the environment. Employee Motivation will increased by 0. 4-Different facilities to be provided to all employees in order to enhance the employee motivation and job abilities.
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