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FINANCIAL REWARDS
ASSESSMENT OF EMPLOYEES SATISFACTION WITH NON
FINANCIAL REWARDS;
By
David Mwasikili
202I
CERTIFICATION
We, the undersigned, certify that we have read and hereby recommended for the
acceptance by the Mzumbe University, a research report entitled, “Assessment of
employee’s satisfaction with non-financial rewards” A case of TANESCO Mbeya in
fulfilment of the requirement for award of degree of Human Resources Management
of Mzumbe University.
________________________
Major Supervisor
________________________
Internal Examiner
i
DECLARATION AND COPYRIGHT
I, David Mwasikili declare that this dissertation is my own original work and that it
has not been presented and will not be presented to any other university for a similar
or any other degree award.
Signature
____________________
Date
________________________
© 2021
This dissertation is a copyright material protected under the Berne Convention, the
Copyright Act 1999 and other international and national enactments, in that behalf, on
intellectual property. It may not be reproduced by any means in full or in part, except
for short extracts in fair dealings, for research or private study, critical scholarly review
or discourse with an acknowledgement, without the written permission of Mzumbe
University, on behalf of the author.
ii
DEDICATION
This research project is dedicated to my family, friends for their invaluable support
and encouragement during the entire process. I couldn’t do it without you.
iii
ACKNOWLEDGEMENTS
The successful accomplishment of this research has been based on ideas and support
from many individuals and institutions. It is not possible to list everyone who
contributed to the success of this study in any way, ethically and financially. However,
I would like to give my sincerely thanks to all contributed to the achievement of my
study.
First of all, I thank Almighty God for everything that he added to me. Omnipotent gave
me strength whenever I wanted to give up, his love, unlimited mercy and blessings
that gave me the courage to complete this report. Without Him, I would not have made
improvements to this study.
I would also like to thank and acknowledge the efforts, perseverance and guidance of
my senior supervisor, Madam Mongi for giving her time to read my work repeatedly.
Also, her special insight into the Assessment of employee’s satisfaction with non-
financial rewards was valuable as she provided positive feedback, advice, positive
criticism, and encouragement throughout this study.
iv
LIST OF ABBREVIATIONS
TANESCO Tanzania national electric supplier company
HR Human resources
HRM Human resources management
USA United states of America
SACCOS Savings and credit cooperatives
v
ABSTRACT
This study is an assessment of employee’s satisfaction with non-financial rewards, the
main objectives was to analyze then on financial rewards such as employee’s
promotion, recognition and Training programs on employee’s satisfaction. My study
will focus on non-financial rewards at it link with employee satisfaction within the
organization. Data was collected by using questionnaire from Tanzania national
electric supply company in Tanzania from sample size of 40 respondents and analyzed
by descriptive analysis. The study reveals that employees’ promotion, recognition and
training rewards affects and contributed to the success of an organization as they
directly affect employee’s satisfaction. The study reveals. TANESCO employees
appreciate and value non-financial rewards and they would like the organization to
provide them with such kind of rewards. The study recommends that employees
promotion, recognition and training should be implemented in order to satisfy
TANESCO workers
Key words: Recognition, Training programs and promotion
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TABLE OF CONTENTS
CERTIFICATION ...................................................................................................... i
ACKNOWLEDGEMENTS...................................................................................... iv
ABSTRACT ............................................................................................................... vi
CHAPTER ONE......................................................................................................... 1
INTRODUCTION ...................................................................................................... 1
vii
2.3 Herzberg two factor theory, according to Rao (2009) ........................................ 8
2.8 Summary........................................................................................................... 14
4.15 To what extent management support can influence job satisfaction .............. 27
REFERENCES ......................................................................................................... 34
APPENDICES .......................................................................................................... 36
x
LIST OF TABLES
Table 3.1 Krecjie and Morgan (1970) Table for Determining Sample size from a Given
Population .................................................................................................................. 16
Table 3.2 Population of the staff category ................................................................. 17
Table 4.1 Respondent rate .......................................................................................... 21
Table 4.2 Gender of the respondents.......................................................................... 21
Table 4.3 Respondent age bracket ............................................................................. 22
Table 4.4 Marital status .............................................................................................. 23
Table 4.5 Staff category ............................................................................................. 23
Table 4.6 Level of education ...................................................................................... 24
Table 4.7 Years worked ............................................................................................. 24
Table 4.8 The influence of promotion to employees satisfaction at workplace ......... 25
Table 4.9 Degree of recognition of employees .......................................................... 26
Table 4.10 The extent to which provision of training programs is utilized in Tanesco
.................................................................................................................................... 27
Table 4.11 To what extent management support can influence job satisfaction ....... 29
xi
LIST OF FIGURES
Figure 2.1 Maslow’s Hierarchy of Needs .................................................................... 7
Figure 2.2 Herzberg Two Factor Theory ................................................................... 10
Figure 2.3 The conceptual framework: Assessment of employees satisfaction with
non-financial rewards ................................................................................................. 14
xii
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
The term Employees’ satisfaction is more of an attitude, an internal state. It could for
example be associate with personal feelings of achievement, it is often suggested that
employee’s satisfaction is necessary in order to achieve high level of motivation and
performance (Laurie J Mullins 2010)
Non-financial rewards are the types of rewards that are not part of employees’ pay.
Typically, they cost little or no money yet carry significant weight (wage point 2018).
Not all employees are satisfied by given money as their awards as employees differ in
different aspects as perceptions so how one employee will be satisfied with the reward
is different to another employee. Dzuaranin (2012) argue that the company that
provides only financial incentives must also provide non-financial rewards to increase
employee’s satisfaction. This will increase the balanced satisfactions among
employees and automatically improve work performance in the organization although
it is not easy to gain satisfaction at work place with rewards
(Bayissa & Zewdie 2010) Employee’s expectations, needs and desire should be
necessarily realized and understood by managers and those rewards should be offered
to employees which led to satisfaction.
Bargraim et al (2007). Stated that employees have different needs, some have financial
goals, others have professional goals and other have personal goals. Therefore, this
shows that same rewards cannot be used to satisfy both employees as they differ in
their goals, hence managers should be flexible to make sure every employee are
satisfied according to their goals of needs
According to Arm strong (2009) in role of non-financial rewards in enhancing
employee’s commitment and performance on the job observed that essentially notion
of total rewards says that there is more to reward people than throwing money to them.
The increase of provision of Non-financial rewards has been increase in modern
organization as it has now been known for its positivity in employees satisfaction and
work performance within the organization by taking area Tanzania National Electric
1
Supply company (TANESCO) as an example whereby in this organization employees
are being provided by both non-financial and financial rewards so as to balance
workers satisfaction as employees are differ on how they become satisfied with
organization rewards
The organization provide chance for training depends with the organization needs at a
certain time but also provision of reasonable salary as monetary rewards so through
using non-monetary rewards it manages to satisfy employees with different perception.
Yavuz (July 2004) on the use of non-financial rewards as motivational tool that
satisfied employee revealed that absence of employee’s willingness to perform,
capacity and opportunity would not get generate the company desired results. The
public sector employees proffered monetary rewards so as to satisfy their basic needs
after which they will seek for non-financial rewards.
Therefore, in order for the employees to be satisfied with non-financial rewards
employer must make sure they are given enough salary to afford their needs so as to
compensate for their desired money incentives, therefore non-financial rewards are
only important when money is not an issue to the employees thus employees cannot
be satisfied with non-monetary rewards while they receive low wages
According to maslow humans are wanting beings they always want more
(mullins,Laurie J. management and organization behavior), therefore employees tend
to need more when they receive rewards hence when the organization provide
monetary rewards in other time they tend to need other rewards especially non-
financial rewards.
Job satisfaction is necessary in order to achieve high level of motivation and
performance, level of job satisfaction is affected by wide range of variables relating to
individual, social, cultural, organization and environment factor.
(Armstrong 2007,M handbook of human resource management practice 11th edition),
Reward system consist of number of inter related activities which combine to ensure
reward management is carried out effectively to the benefits of organization and people
who work for it ( Armstrong ) explained that total reward is combination of financial
and non-financial available to employees’ and Nonfinancial rewards are rewards
which do not involve any direct payments often arise from the work itself, for example
2
,achievements, recognition, scope to use and develop skills, training, career
development opportunities and high quality leadership.
3
ii. To identify degree of employee’s recognition and its impact to employee’s
satisfaction
iii. To determine how training programs, facilitate employee’s satisfaction in the
organization
4
1.7 Scope of the Study
The research consists of five chapters. Chapter one covers the background and
statement of the problem, research objectives and questions, the significance and scope
of the study. Chapter two is mainly literature review, conceptual definition, theoretical
and empirical analysis, research gap, conceptual frame work hypotheses and summary.
Chapter three contains of research design and procedures, data collection and analysis
and expected result of the study. Chapter four is concerned with presentation and
discussion of results while chapter five concern with summary of findings, conclusion,
recommendations, contribution of the studies to theory and direction for future
research.
5
CHAPTER TWO
LITERATURE REVIEW
2.0 Overview
The chapter is summarizing the information from other researchers who have carried
out their research in the same field of study. The research has drawn information from
several sources which are closely related to the theme and objectives of the study. The
specific area covered here are theoretical review, empirical review, conceptual
framework and research gap
6
Figure 2.1 Maslow’s Hierarchy of Needs
Self-actualization
(SATYARAJU, R 2000) Basic physiological needs are the primary needs of
individual; the survival of individuals depends upon the satisfaction on these needs
food, clothing, shelter, water and other necessary of life. Organization helps individual
to satisfy their basic needs by providing reasonably good salaries, benefits and working
condition once these needs are satisfied the individuals will get an idea about higher
level needs.
Safety and security needs, are considered immediately after satisfying physiological
needs of individuals. These needs can be satisfied from job security, insurance and
safer working condition. When employees feel safe and secured it brings more
satisfaction to the employees taking my field area TANESCO as example employees
feels comfortable because they being protected by securities as they continue to
perform their duties social needs are also called belonging needs When the basic and
safety needs are satisfied social needs become important, social affiliation will make
job interest. These needs are Love, affection, friendship and so on. These social needs
7
tend to play important role to satisfy employees as they are shown love and friendship
they get sense of belonging in the organization hence are important needs for the
employee’s satisfaction.
Esteem needs develop a concern for getting recognition, status, importance and respect
from others. These needs are independence achievement, competence, skill
knowledge, initiative and success. A very good co organization climate and more
opportunity to development, responsibility, praise and promotion can play avital role
to satisfy esteems needs.
Self-actualization, it involves realizing one potentiality, capabilities and continue self
-development and self -fulfillment it is a personal achievement, such challenges and
achievements provide more satisfaction to a person, these occur as people’s
satisfaction factors change over time to time for example employee may begin to
satisfy with salary at first time but when time goes on he or she become to demand
highest needs
The hierarchy of needs stated by Maslow proves the fact that the second and
subsequent needs do not dominate until the first and previous needs are satisfied.
(Satyaraju R. 2000, New delhi) Even though Maslow ‘s theory of hierarchy needs has
become popular it is still subjected to alotcritism. The experience in Belgium and
Spain workers feels that their esteem needs are better satisfied than their security and
social needs but not for satisfy higher-level needs. Some people may remain contended
with the satisfaction of physiological needs only without developing any further needs.
Herzberg studied the factors in the work environment that cause satisfaction and those
that caused dissatisfaction among workers and concluded that the factors causing
satisfaction were different from those causing job dissatisfaction and they cannot be
treated as opposite of one another, Herzberg (1998)
8
Stoner James, management (2009), from research Herzberg concluded that job
dissatisfaction and job satisfaction arose from two separate set of factors. The theory
as termed to factor theory
Dissatisfies, which he called (hygiene factors) include salary, working conditions and
company policy all of which affected the context in which work was conducted. the
most important of these factors is company policy which many individuals judge to be
major cause of in efficiency and in effectiveness. Positive ratings for these factors did
not lead to job satisfaction but merely to the absence of dissatisfaction.
Satisfiers, which he called motivating factor include achievement, recognition,
responsibility and advancement all related to the job content and rewards of work
performance
According to satyaraju R. (2000), Herzberg stated that is also necessary to pay
attention to the motivational factor of satisfiers rather than concentrating on tradition
hygiene factors. Motivational factors are motivators which are essential to increase
productivity of the employees. They also known as satisfiers and they concern with
job itself rather than the environment, these factors are recognition, feeling of
achievement, responsibility, advancement, opportunity for growth and so on.
Non-financial rewards, are the types of rewards that are not part of an employees’ pay.
Typically they cost the company little or no money, Mckinsey(2009), non-financial
were rated as more powerful motivators than financial incentives
9
Figure 2.2 Herzberg Two Factor Theory
Hygiene Factors
Quality of Low High
supervision
Pay Job Satisfaction
Physical working
condition
Relations with
others Motivation Factor
Job security
Promotion
opportunities
Opportunities for
Job dissatisfaction personal growth
Recognition
High Low Responsibilities
Achievement
This theory is relevant at TANESCO as the institution it has dissatisfies such as poor
working conditions as the employee complains about small office environment that
contain many employees at the same time it need to be used to listen customers and
employees problems, the institution needs to reduce number of workers in the same
office and reduce dissatisfies by increase hygiene factors such as employees
recognition, job autonomy encouraging career development by provide growth
opportunities to the workers thus will help to satisfy employees.
10
training and expectancy on employee motivation. The finding revealed that pay and
appreciation do not effect employee’s motivation directly, job satisfaction also does
not directly affect motivation. Employee training, expectancy and knowledge transfer
are the factor that directly affect employee motivation.
11
study analyses that promotion and good working conditions are also likely to motivate
employees.
SACCOS have well defined promotion path to their employees and their jobs require
the use of different aspects of knowledge. Employees were also satisfied by provision
of benefits such as pension schemes, life insurance, worker’s compensation these all
motivate employees (Lumumba 2011).
12
rewards and employee’s satisfaction. Further, it shows that non-financial rewards have
positive influence on employee’s satisfaction.
13
Figure 2.3 The conceptual framework: Assessment of employees satisfaction with
non-financial rewards
Employees promotion
Training programs
2.8 Summary
The figure 2.6 sums up my literature review which leads the research methodology
which is extensively handled in chapter three
14
CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Overview
This chapter entails methodology that the researcher uses during research study. It
covers research design, population, sample size and sampling procedure. It provides
data collection instruments, procedure and type of sampling techniques as well as
summary of methods used in data collection
15
3.4.1 Sample size
According to (Kothari,2004). A sample is a smaller group of subject drawn from the
population in which a given study was conducted for a purpose of drawing conclusion
about population targeted. Kothari (2004) argued that the result from the sample can
be used to make generalization about the entire population as long as it is truly
represented. This study has used the sample size of 40 employees from 415 employees
at TANESCO The sample size was obtained through Morgan chart
Table 3.1 Krecjie and Morgan (1970) Table for Determining Sample size from a
Given Population
16
Table 3.2 Population of the staff category
17
more appropriate where the sampling frame is not too large and each unit is easily
accessible White (2002), the technique facilitates on quick selection of sample and
hence influence the success of the study.
18
seeking consent of respondent during data collection hence ethical issues was
successful considered
19
CHAPTER FOUR
20
Table 4.1 Respondent rate
4.4 Gender
The research was sought to find out the gender of the respondents, as the study was
intended to comprise both male and female employees in different aspects of age and
groups therefore the study questionnaire directed employees to tick for their gender in
space provided in questionnaire so as to indicate their selves
21
4.5 Age
Age of respondents indicates experience and degree of reliability of information given
by respondents as regard to issue of the study Assessment of employee’s satisfaction
with non-monetary rewards, the study had to investigate the familiarity of the
respondents regarding to employee’s satisfaction with non-monetary rewards in term
of age bracket.
22
Table 4.4 Marital status
Middle level staffs dominates by 49%, top level follow with 29% finally 22% of low
level employees, middle level percent involves middle workers such as human
resource department while top level include directors and in low level employees like
volunteers and other low level employees. Both middle level and top level agreed on
non-monetary rewards as factor to satisfy employees, low level employees suggest on
consideration of salaries so as to make non-monetary rewards worth their satisfaction.
23
4.8 Level of education
The employees in TANESCO organization are consisted with different levels of
education, this different levels might contribute to the different response from
respondents, the response of the question are depicted in the table
24
Most of employees in TANESCO had worked between 5 to 10 years of service. this
category is highest compare to other categories where it represented by 57% of all
respondents and followed by 10 to 20 years worked employees at 29% and finally
those worked below 5 years, data collected indicates that TANESCO is the good
employer as turnover rate is obviously low as most of employees worked below 5 years
are new to the organization with 14%
Adequate 5=14%
salary
Personal 10= 29%
growth
Employment 7=20%
security
25
satisfaction to employees more than other determinants as huge number of employees
strong agreed that promotion is the best way to reward employees in the organization
26
employees and should keep in mind that individuals are different and one theory may
not necessarily apply to every employee.
27
are in need to increase their skills and knowledge’s , also the survey shows that most
of employees value training programs as non-financial rewards more than monetary
rewards this is by 71.1% of employees who said they value training programs than
monetary rewards in TANESCO while few 14.1% they said No and they value
monetary rewards.
According to HR department of TANESCO, Training programs are given to the
employees to study a certain course depends on organization needs in a specific time,
that is why employees are complain as they need training to be provided in every
arranged time in the organization. Hence due to this organization system it causes
dissatisfaction of employees and therefore it needs changes, such as organization
policy changes.
According to Lumumba (2012) in his study on the assessment of the effective of non-
monetary incentives in cooperative SACCOS in Kenya suggested that training
motivates staff through staff involvement in organization activities, brings about
professional development, improve communication, and prepare employees to
embrace change and more challenging responsibilities in the organization. Hence
satisfaction is inevitable to the employees
Sturman and Ford (2011) suggested that ongoing training at work is crucial as it helps
staff grow in sense of professional mastery and learning new skills which can be
achieved through job rotation highly motivated staff. management should also clearly
outline the expectation and purpose of each job or task so that employees to get to
discover their excellency and how to utilize their full potential as well as shortcomings
that could hindering them and ways to deal with them. Training can be made more
effective by allowing employees the freedom to choose the areas in which they want
to be trained in.
28
Table 4.12 To what extent management support can influence job satisfaction
29
CHAPTER FIVE
30
5.2.2 Employees Recognition
Employees recognition is very rarely practiced at TANESCO and affects employees
satisfaction even organization performance, employees’ think that there is a big gap of
utilization of employees’ recognition as satisfying factor, from the findings employees
said that their rarely recognized for their efforts, many employees confirmed they are
never recognized for their efforts on achievement of the set targets and that really puts
them down as they value recognition as the factor that satisfy employees’.
5.3 Conclusion
According to research, it is evident that employees’ promotion, employees’
recognition and employees’ training rewards are greatly affect employees’
satisfactions in an organization and have impacts in employee’ performance.
Employees’ desired to be promoted, trained and recognized, this is rarely done in
TANESCO and hence the organization management need to consider providing these
desires as a way of appreciating employees’. Non-financial rewards not only satisfy
employees but they are vital in motivating employees so as to perform their tasks as
organization targets hence play role to improve their performance by motivating them.
Employees’ recognition is important as it gives an employee a sense of self-worth and
encourage employees to utilize his or her full potentials and in turn helps organization
to achieve its goals. Finally, non-financial rewards are most effective mode of
improving employee’s satisfaction their performance.
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5.4 Recommendations
5.4.1 Employee promotion
Employees promotion is very important to any organization as the employees the feel
their self-worth and that contribute to the employees satisfaction hence TANESCO as
an organization should provide promotion of employees and should be fare promotions
in order to avoid bias in the organization so as a deserved employees are getting
promoted that will improve the organization performance as employees work hard to
get promoted but is very strong factor to satisfy an employee within the organization
like TANESCO. This can be done by career ladder which based on rules that set forth
guideline to promote employees after serving a complete predetermine length of
service.
32
5.5 Contribution of this study to job satisfaction theories
This study is a contribution to Maslow’s hierarchy theory as he classified human needs
un to five from most important to the least, this study is an expansion of maslow theory
on argument that even individual at the low level not necessarily value money alone
in order to fulfil basic needs but need esteem needs, safety and social needs. Hence an
individual’s differ when it comes to needs and satisfaction they may not necessarily
follow hierarchy order , in the study employees seek to be recognized, to get training
programs and promotion regardless of their levels in the organization , recognition ids
under esteem need of Maslow’s theory that’s contrary with his assumption that low-
level employees who earns less money would prefer financial rewards , Also the study
is contribution to Herzberg’s two factor theory , the factors that cause satisfaction in
TANESCO is Job security on the other hand the factor that cause job dissatisfaction
are lack of recognition, lack of training programs and lack of promotion . TANESCO
should work on these factors to convert them to satisfiers.
33
REFERENCES
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Educational and Psychological Measurement, 30: 607-610.
Kothari, C.R.( 2004). Research methodology: Methods and techniques New age
international
Lumumba , P. (2011). Corruption : the bane of Africa . Corruption in Africa 17
Mc Gaghie, W, Bordage, G, and Shea, J.A(2011). How to write a thesis. Problem
statement, conceptual frame work and Research quastions
Mullins, L.J,(1993) The hotel and the open system and the open system model of
organizational analysis. Service industries journal,
Rechel, M, & Ramey, M. A. (Eds). (1987) conceptual frame work for bibliographic
education: Theory into practice. Littleton, Colo: Libraries unlimited
RAO,V.S.P, & Krishna, V.H.(2009) Management. Text and cases. Excel book India
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Schuler,R ( 1987) Human resource management 3rd edition, west publishing company.
Saul Mcleod, S. (2007 updated 2020). Maslows hierarchy of needs retrievd
from
http/www.simplypsychology.org/maslow html June 2021
Satyaraju,R (2000). Need for ethics in corporate Governance.
Sturman, M and Ford R. (2011). Motivating your staff to provide outstanding service.
School of hotel administration collection
Yavuz,N.(2004).” The use of non-monetary incetives as motivational tool. A survey
study in a public organization Turkey” Middle east technical university.
35
APPENDICES
APPENDIX I
QUESTIONNARE
SECTION A: General information. (Tick right option)
Please provide the following information. Be frank and honest in your responses. All
your responses will be treated with ultimate confidence
INSTRUCTION
Tick the space provided
1. What is your gender? Tick the space provided
Male Female
36
Education levels Secondary Bachelor degree Postgraduate
certificate/diploma degree
2.Are you satisfied with your work place? (Tick your answer)
3.Are you satisfied with your working condition? (Tick the right answer)
37
4.Does your salary relevant to your qualifications and experience? (tick answer)
Strong agree Agree Strong dis agree Dis agree
6.Have you ever proceed in one of training programs either short term or long term?
Strong agree Agree Strong dis agree Dis agree
38
10.If training does not affect your performance, why do you think is the stumbling
block?
…………………………………………………………………………………………
……………………………………..
11.How do you think employees who get training could be more beneficial to the
organization?...................................................................................................................
............
12.Do you feel that your recognized in your Job? (tick your answer)
Strong agree Agree Strong dis agree Dis agree
39
ii………………………………………………………………………………………
………………………….
iii………………………………………………………………………………………
…………………………..
Extra duty
Housing
40
Any other(please specify
41