A STUDY ON IMPACT OF REWARDING AND RECOGNITION ON THE EMPLOYEE

MOTIVATION, EMPLOYEE JOB SATISFACTION AND EMPLOYEE RETENTION

PRAJWAL.S
PES1PG21MB238
(Prajwal2111997@gmail.com)
DEPARTMENT OF MANAGEMENT STUDIES
PES UNIVERSITY, BANGALORE

Submitted to:
Dr.Priyanka Sharma
Associate Professor
DEPARTMENT OF MANAGEMENT STUDIES
 DATE : 4TH APRIL 2022

Abstract :

The primary objective of this research paper is to understand the impact that rewards and
recognition has on employee’s – performance , job satisfaction and motivation .
Organisations have always benefitted from having employee’s who are inspired, excited and
motivated to perform , it is key that a organisation ensures that they are satisfied with there
jobs and are motivated to perform better through the process of rewarding and recognition.
It is clearly evident from the study that that there is a direct association between reward
and recognition and job satisfaction and motivation. So if rewards and recognition that a
company offers to it’s workers is changed it has a corresponding effect on the job
satisfaction and motivation levels and performance of the employee’s . As per the hierarchy
theory of Maslow , the organisation first needs to fulfil the salary and benefit’s aspect
primarily before moving on to other benefit’s and recognition that it can offer. It is very
important for the management to form different strategies to motivate different people as
all people don’t have the same requirements .

Keywords : Rewards , Recognition , Job satisfaction , motivation , retention

Literature Review :

“Masood Asim (2013)”

This paper showed the effect that motivation stages amid employee’s in Pakistan
Universities and there levels of performance in work and the training that they required to
further improve performances . The problem identified to be addressed in the research is
that of the association that exists between promotion and rewards on the levels of
motivation in the employee’s with refrence to the education sector . The research outcomes
clearly signify that by raising the salary levels and improving the reward and recognition
system better performance can be expected from the employee’s .
“Chukwuma Edwin Maduka and Obiefuna Okafor (2014)”

This paper showed that an organisation cannot meet it’s goals and function smoothly
without motivating it’s employee’s . The problem identified to be solved in thsis research is
the different methods through which an organisation can motivate it’s employee’s . The
findings showed that the compensation that was paid was very low and this demotivated
employee’s and caused them to perform badly . The study shows that by providing proper
reward and recognition how the employee’s can be motivated .

“ Horwich and Calllahan , 2016 “

Employee’s that are inspired always outperform employee’s that are just satisfied by more
than 100% when it comes to the aspect of productivity . When workers are motivated they a
deep sense of determination to perform as opposed to just fulfilling the minimum job
requirements creating an internal motivation purpose for the organisation .

“Kahn 2019 “

Employee engagement results in many positives for the organisation , the employee’s
commitment to the goals and objectives can be enhance by engaging employee’s and can
also result in retention and low employee turnover rate

“Popli and Rizvi 2016 “

The more and manager expresses this appreciation for an employee , the confidence of the
employee increases and they become more engaged in there work and contribute more
towards the organisation

“ Sabir 2017 “

Motivated employee’s depict certain trait’s that are unique to them and very different from
those of non motivated employee’s . These trait’s include enhanced productivity and more
passion towards the job and care towards the organisation .
“Yousuf , 2014 “

When employee’s receive a feedback about there performance from there managers , a
relationship that is based on trust is formed between them and this increases the
recognition of the employee and he starts to identify himself more with the organisation

Introduction :

A main problem that affects organisations is the financial and human resource burden that
are caused by turnover of employee’s . Recent statistics continue to show that turnover
rates have been high across industries but it is alarming that most of these employee’s
belong to critical sectors like that of information technology , marketing , sales and service .
The costs of replacing these employee’s is also very high as the new employee’s have to be
trained and need more time to adapt to the organisation environment and reach there full
potential . This main problem of employee turnover and be prevented by having employee’s
who are satisfied and are motivated to perform better . These things can be achieved by and
organisation by recognising and rewarding the good performance of an employee .

Employee’s not only require good or fair pay for there work but also want there efforts and
commitment to there job be recognised and valued . Recognition is the formal or informal
acknowledgement of an employee’s efforts or performance that help the company to meet
it’s objectives

Job satisfaction is a state of mind of the employee based on the experience that he has had
in the organisation . These are based on the expectation that he has from the firm . Positive
job satisfaction means that the employee enjoys his experience of being part of the
company . Negative job satisfaction occurs when the expected benefit’s and rewards of an
employee are dashed .

Motivation is one of the most important aspects that enhance the morale of an employee
and help them in achieving the organisational goals . Rewards and recognition play a very
main role in motivating an employee . A motivated employee is always looking to improve
his performance and inturn helps the organisation.

Rewards can be categorised as intrinsic and extrinsic . Extrinsic reward are given to
employee’s for performing the task better than expected and are tangible in nature like
salaries , bonus payments , promotion , incentives like vacation and foreign recruitment etc .
Intrinsic rewards are more psychological in nature and are intangible they include aspects
like appreciation , job security and positive feedback , caring response from the manager or
supervisor etc.

The important benefit’s that a firm can draw from having a proper reward and recognition
system in place are increased employee level of performance , development of newer skills ,
good organisational culture , higher job satisfaction , increased reputation of the
organisation , enhanced productivity leading to more revenues.

Research Methodology :

This research paper gives details about rewarding and recognition and it’s impact on the
employee motivation and job satisfaction in the present times. The research was conducted
by analysing various data sources from various research papers that study about the impact
that rewarding and recognition has on the employee’s motivation to work , job satisfaction
and employee retention.

The first aspect of the study deals with employee preference when it comes to rewarding

The second aspect deals with the levels of recognition and it’s impact on the employee’s
motivation levels, job satisfaction and attitude towards the company and retention or
loyalty toward the organisation.

The data for this research is collected from a secondary source where employee’s working in
different sectors where surveyed and there opinion about the rewarding recognition were
collected .This survey was conducted by Kansas Wesleyan University

Tables :
Research Analysis :

When it comes to rewards that the surveyed respondents were given the choice to rank the
following rewards based on there order of preference

Salary Pay , Compensation , Promotion , Fringe benefit’s , awards , empowerment ,

challenging work allocation

Based on the overall response received the ranking was as follows :

1 Salary pay

2 Promotion

3 Awards

4 Compensation

5 Empowerment

6 Fringe benefit’s

7 Challenging work allocation

These results show that the basic needs such as salary pay are always a primary priority.

Employee’s are always looking for growth so promotions came in second . But surprisingly
the awards came in third ahead of tangible benefit’s like fringe benefit’s and compensation
for the extra hours put in . This clearly reflects there is a high need for recognition of
performance among the employee’s . The workers placed challenging work allocation and
empowerment in the last and fifth place respectively .

Based on the above outcomes the management can design a better plan regarding the
rewards for better performances keeping the above priority of the employee’s in order to
better meet their expectations and increase their morale.
When the respondents were asked the question of how would they scale the employee
work recognition in there respective organisation .

They were given the option of rating on the following 5 scales :

Strongly agree , agree , neither agree nor disagree , disagree , strongly disagree

After answering the above stated question the very further presented with the question
about

There sense of motivation and inspiration about work , whether they felt determined to put
in there best efforts to improve there performance , there job satisfaction level and opinion
about the organisation and also where they saw there short term future of one to two year.

The above stated aspects also were asked to be scaled on the first stated five point scale.

Around 26.96% of them strongly agreed and it is very important to see that around 88.24%
of these respondents felt that they were very much strongly inspired to perform better in
there respective work , had positive thoughts about there work place and would put in a
better efforts to maintain this recognition that they received . 94.12% of them also agreed
that they saw there short term future with the organisation that they are working in and are
very much satisfied with there current job .

There a very small 5.88% of employee’s who strongly agreed with the recognition , felt that
they are not inspired by it in any way to work . But none of these employee’s also saw
themselves quitting the job in the near future of one to two years .

This shows that recognition of an employee’s performance can help the organisation to
motivate and inspire there employee’s to perform better . The employee retention can also
be increased by this , it helps in reducing employee turnover and helps the organisation .
Management can learn a key take away to recognise an employee’s good performance as it
enhances the overall productivity of the organisation.
Around 46.03% respondents selected the agree option to the above question

Among the above stated respondents , 97.59% also agreed that felt a sense of inspiration
and increase in determination to put in there best at workplace . 72.41% of these
respondents accepted that they had positive opinion regarding there job and looked
forward to improve themselves . 51.72% of them felt that they were very much exited by
there jobs .And all of the above surveyors agreed that they saw there short term future with
there respective organisation for one to two years.

These responses again show the similar results of improved job satisfaction , motivation and
inspiration to work better for the organisational goals . The employee retention levels were
also very high.

Around 12.70% of respondents neither agreed nor did they disagree with the above query .
The below

Among the above stated respondents 62.5% agreed that they felt very much inspired to be
working and were also determined to put in there best efforts at the workplace . Only 50%
of them and positive opinion about the job satisfaction and had positive opinion about the
organisation. Around 62.5% agreed that they saw there short term future of one to two
years with the organisation and the rest 37.5% were not very sure about there future with
the organisation and planned on shifting if a better opportunity came along there way.

The above outcomes show that with a decrease in agreement about the recognition of
work, the employee’s were also showed that they were also less inspired and motivated to
work . But majority agreed that were still motivated to put in better efforts to work and had
a sense of job satisfaction in the organisation . The employee retention was also low among
these segment of respondents but majority of the respondents saw here future in there
respective organisation .
Around 11.11% of the respondents selected that they disagreed with above stated question
in the survey.

Among the above stated respondents 14.29% agreed that they felt very much inspired to be
working and were determined to put there best efforts at the workplace . 28.57% had a job
satisfaction and felt themselves to be a important part of the organisation and had positive
opinion about the organisation . The same percentage of respondents also saw there short
term future of one to two years with the organisation.

57.14% of the above stated respondents strongly disagreed that they felt very much
inspired to be working and were determined to put in there best efforts at the workplace .
85.71% said that they were not at all satisfied with there jobs and had a negative opinion
about the company . 28.57 % of the above respondents did not see there short term future
with organisation and planned on quitting the organisation . Around 44% of the respondents
were not sure about there future in the organisation , neither did they plan on quitting nor
staying and were on the fence looking to jump ship if something came along .

The sense of disagreement that employee’s had with the recognition showed that the
employee’s were very much less motivated to put in there better efforts to enhance there
performance at the workplace . There also very low amount of job satisfaction and positive
opinion of the working environment . The employee retention also was very low among this
bunch , this shows that most of the employee’s who didn’t feel recognised by the
management saw there futures elsewhere and this would lead to increase in employee
turnover and become a burden for the organisation.

Around 1.59% of the respondents of the survey strongly disagreed with the query in the
survey.

0% of the above stated respondents agreed that they felt veery much inspired to be working
and were determined to put in there best efforts at the workplace . The all the above stated
respondents were highly dissatisfied with there job and had negative opinion about the
working environment of the organisation . All the above stated respondents planned on
quitting there jobs as they felt they were not valued by there respective organisation .

Base on the above stated opinions of this segment we can clearly state that employee’s who
felt that there work was not recognised at all were not inspired or motivated to work and
achieve the organisational goals and the retention among them was nil and everyone of
them planned on quitting there jobs . The high employee turnover among this group will be
a challenge for the management.

Based on the opinions collected from the respondents to the survey and overall analysis of
each segments of the opinions of the employee’s were can clearly see that when the
employee’s saw that there work was recognised by the management they felt strongly
motivated and inspired to work , they were also determined to put in better efforts and had
a strong sense of job satisfaction and also positive opinion about the work environment .
The retention levels were also very high . As the employee’s felt that they work was less
recognised by the organisation they started to developed a lesser positive response to the
above stated aspects and finally turned negative when the disagreement levels with the
recognition by the management were very high .

When asked if the recognition and reward should be made in public or personally , 78% of
the respondents wanted the recognition and reward to be made in public as this would
create a reputation for them within the organisation

Conclusion :
It is clearly evident from the above analysis that rewarding recognition play a very crucial
role in employee satisfaction and motivation levels . There exists a direct relationship
between reward and recognition to employee motivation , job satisfaction , opinion towards
the company as well as retention with it . Hence we can say that by altering the rewards and
recognition positively the management can alter the above stated aspects positively there
by increasing the overall employee morale and creating a god working environment . The
findings also show that employee’s those who are not recognised for the reperformance
have high level of dissatisfaction towards the company and a on the look for better
opportunities . The management can motivate these employee’s by providing proper
feedback and help the to increase there performance to enhance there reputation within
the company . This will also help in there retention and help the company to reduce the
burden of hiring new employee’s which costs very highly in financial terms and decrease in
productivity initially . Based on the employee preference we can clearly see that the basic
needs such as salary pay are always a primary priority .Employee’s are always looking for
growth so promotions came in second . But surprisingly the awards came in third ahead of
tangible benefit’s like fringe benefit’s and compensation for the extra hours put in . This
clearly reflects there is a high need for recognition of performance among the employee’s .
Employee’s also prefer the reward and recognition to be more in public as it will enhance
there standing in the company and boost there confidence . The learnings of this study can
help managers to formulate a better reward and recognition policy for employee’s and
increase the overall efficiency of the organisation .The manger needs to keep in mind that a
common policy cannot be applied across all levels and formulate different strategies for
different set of people as there requirements are different .

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