THE IMPACT OF FINANCIAL REWARDS ON FINANCIAL PERFORMANCE: THE CASE OF PIONEER INSURANCE COMPANY LIMITED

By

Syed Zubayer Alam ID: 0420007

An Internship Report Presented in Partial Fulfillment of the Requirements for the Degree of Bachelor of Business Administration

INDEPENDENT UNIVERSITY, BANGLADESH December 2008

THE IMPACT OF FINANCIAL REWARDS ON FINANCIAL PERFORMANCE: THE CASE OF PIONEER INSURANCE COMPANY LIMITED

THE IMPACT OF FINANCIAL REWARDS ON FINANCIAL PERFORMANCE: THE CASE OF PIONEER INSURANCE COMPANY LIMITED

By

Syed Zubayer Alam ID: 0420007

has been approved December 2008

____________________ Dr. Sarwar Uddin Ahmed Assistant Professor School of Business Independent University, Bangladesh

December 1, 2008 Dr. Sarwar Uddin Ahmed Assistant Professor School of Business Independent University, Bangladesh

Dear Sir,

With great pleasure, I am submitting my internship report on “The impact of financial rewards on financial performance: The case of Pioneer Insurance Company Limited.” This report is a part of my internship program (BBA-499A) for the partial fulfillment of my Bachelor of Business Administration (BBA). The report will be helpful to the company to relate financial reward with financial performance as this is a correlation study.

This is the first time I have done a correlation study in a complete form and my optimum level of efforts has been utilized to make the report. However, there were some limitations which were not possible to minimize.

I anticipate you will consider the limitations while assessing the study. Your wise suggestions will help me to do enriched research in future.

With regards

Syed Zubayer Alam ID: 0420007

Acknowledgement
At first, I would like to thank the supreme almighty Allah for giving me such blessings to complete my internship and preparing the report. In preparing and finishing my internship report, I would like to acknowledge the support and guidelines provided by number of peoples and institution. I am grateful to the management of Pioneer Insurance Company Limited for giving me the chance to complete my internship in their organization. I would like to mention the name of Mr. Q.A.F.M Serajul Islam, Managing Director, for allowing me as an intern in the organization. My gratitude is expressed to my organizational supervisor Mr. Habibur Rahman Chowdhury, Assistant General Manager, Human Resource Department for providing me the opportunity to gather certain work experience to enhance my quality in job market. I am highly respectful to Mr. A.K.M Abdul Alim, Assistant General Manager, Underwriting and Mr. A.N.M Shakawath Hossain, Assistant Manager, Underwriting for providing me a pleasant learning time. Finally, I am grateful to my honorable supervisor Dr. Sarwar Uddin Ahmed, Assistant Professor, School of Business (SB), Independent University, Bangladesh (IUB) provided valued guideline needed which diluted constraints and encouraged me to prepare my internship report on: “The impact of financial rewards on financial performance: The case of Pioneer Insurance Company Limited.”

Table of Contents
List of Tables List of Figure Executive Summery 1.0 2.0 3.0 4.0 5.0 6.0 Introduction Statement of the Problem Purpose of the Study Research Timeline Limitations of the Study Review of Literature 6.1.0 Orientation of Variables 6.1.1 6.1.2 6.2 6.3 6.4 7.0 8.0 9.0 Dependent Variable: Financial Performance Independent Variable: Financial Reward I I II 1 2 2 3 3 5 5 5 6 7 8 10 11 11 12 12 12 12 13 13 13

Relationship between Financial Rewards and Financial Performance Contradiction to the Theory General Assumption of the Study

Research Timeline Research Hypothesis Development of Conceptual Framework

10.0 Operational Definition 11.0 Methodology 11.1 11.2 11.3 11.4 Research Design Research Approach Sampling Method Research Instruments

11.5 11.6 11.7 12.0 Results 12.1 12.2

Pilot Testing Data Collection Data Analysis

14 15 15 16

Descriptive Statistics and Reliability Coefficient Correlation Analysis

16 17 18 18 19 20 21 22 23 24 25 28 29 31 32 38 44

12.3.0 Regression 12.3.1 Standardized Regression 12.3.2 Forward Stepwise Regression 13.0 Discussion 14.0 Assessment of Hypothesis 15.0 Significance of the Study 16.0 Recommendation for Future Research 17.0 Conclusion Reference Appendices Appendix-1 Appendix-2 Appendix-3 Appendix-4 Appendix-5

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List of Tables
1. 2. 3. 4. 5. 6. 7. Timeline for conducting the research Operational definition of measured variables Descriptive statistics and reliability coefficient Levels of correlation among the studied variables Benchmark of measuring the strength of relationships among studied variables Standardized regression Stepwise regression on financial performance 3 12 16 17 17 18 19

List of Figure 1. Conceptual framework of independent and dependent variables 12

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Executive Summary
This is a research paper has been prepared to investigate the relationship between several financial reward practiced in the context of Pioneer Insurance Company Limited and its financial performance. The results of the investigation will help the company to resolve its problem that has been described in statement of the problem and other users to generalize the findings so that they can apply the decision suggested if similar problem faced in different contexts. The researcher of this study tried to describe all possible typologies used and prior evidences of similar study, applied designs, sources of data, tools of investigation and decision criteria. Limitations are the most prominent section in this study. The researcher has also tried to suggest some guidelines to those who have interest to conduct research further on the same areas of interests.

1.0 Introduction
The practice of insurance has been increasing day by day in Bangladesh. Government regulation requires insurances of motor vehicles to permit transportation. There are a lot of loans available in commercial banks in the country for business development, production procurement and various other long term or short term projects. The banks require certificates of insurances in order to approve the loan request. Pioneer Insurance Company Limited (PICL) is one of the leading general insurance (non-life) companies of Bangladesh. The company has started its journey since 1996 sponsored by several well established industrialists. The company has authorization to issue shares in both Dhaka Stock Exchange (DSC) and Chittagong Stock Exchange (CSE). Regular declarations of dividends from its very birth proved its financial strength. The selling price of the company share is 375TK each where the book value is 100TK. The company is capable of paying high claims. The company’s mission is to become fast growing insurance company in Bangladesh. Its aim is to boost the industrial and economic growth of the country with help of competitive price. In addition, the company wants to become leading re-insurer which helps Bangladesh economy, to develop risk management technologies. Its mission is to serve best to the clients, to protect shareholders investments, to facilitate employees, to maintain ethics, to collect revenue for government and to be transparent in disclosing. It covers almost all risks of fire, marine, motor, engineering, aviation and other miscellaneous insurances. The company applies relationship marketing strategy. It has big buyers like Advanced Chemical Technologies Limited (ACI group), Boshundhara Group of Industries and Square Group of Industries etc. The organization is also enlisted with almost all major local and foreign banks operating in Bangladesh. The researcher joined the head office as an intern found middle and lower management personnel’s tendency to shift jobs.

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2.0 Statement of the Problem
Pioneer Insurance Company Limited is experiencing employee turnover tendencies over the past few years. Most of the employees showing such tendencies work in middle and lower middle management. These employees are vital to the company’s day to day operations. As insurance companies are distinctive sector of business, it is an unavoidable loss for a company when well trained, developed and experienced employees are shifting their job and roaming in the same industry. The workers of any insurance company are likely to roam in the same industry as their experience level and training systems are different compared to other industries. These act of employees putting the company in a double trouble of facing internal weakness and external threats of competitors at the same time. In analyzing and resolving the problem, management is suspecting the employee satisfactions and motivations are not supported by the rewards they receive compared to the tenure they provide. As a result, company might face below average financial performance in the long run. For the company it is important to find out an evident relationship between financial performance and the financial reward practiced in the organization.

3.0 Purpose of the Study
The purpose of the study is to identify the relationship between financial reward and financial performance. The researcher used different guidelines to build strong thought about the relationships which have been identified. In prior researches, the researcher found positive significant relationships between various financial rewards and financial performance which were considered evidential proof about the relationships and a rational need to investigate relationships between rewards and performance. In this study, the research paper of Richard & Marilyn (2001) had been used as a skeleton. Based on their study, the researcher tried to rectify the same findings in the context of Pioneer Insurance Company Limited, Bangladesh.

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The researcher expected likelihood of the findings in the studied area as per prior research findings.

4.0 Research Timeline
Table 1 Timeline for conducting the research Activities
Proposal submission Review of literature Conceptual framework Data collection Data analysis and findings interpretation Draft Submission Final Submission

Timeline
15th September 12th October 27th October 10th November 19th November 23rd November 1st December

5.0 Limitations of the Study
An unambiguous disclosure of limitation draws a clear picture about the validity of any research paper. In this paper, only the limitation have acted as an acute barrier in the decision making process of the users. Several limitations have been discussed in the following: • Exclusion of an important variable: The researcher had no permission to collect demographic information of the respondents from the management of the company. As a result, the moderating effect of ‘career stage life cycle’ in the relationship between financial rewards and financial performance had been treated as an extraneous variable. Career stage life cycle describes employees demand for rewards vary throughout their different stages of careers (Lynn et all, 1996; Weaver, 1976). The diversity regarding responses of employees in the company could not be possible to explain without their demographics.

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Sampling: The context of this research is Pioneer Insurance Company Limited. The company has 9 workstations throughout Bangladesh. Though simple random sampling is proven to be bias free sampling technique but the researcher had used non probability convenience sampling due to program structure and unfavorable involvement of management. Moreover, as there was no prior study done in the context, population parameter was not found to plan any sample frame.

Time limitation: This type of study is difficult to be conducted within three months of time. If the researcher had the opportunity to conduct research with larger time frame, the problem statement, conceptual framework, research questions and hypothesis would have been clearer and findings of data analysis would be more undisputed.

Relying only on primary data: This type of study can be better conducted through the involvement of secondary data such as reports of management accounting, appraisal of competence reports (ACR) and prior related research etc. As the researcher had no access to management reports, so that the study only relied on employees attitudes regarding the conceptual framework.

Experience level of the researcher: The researcher had little or no experience conducting research. This is the first time for the researcher conducting a complete research alone. The level of experience of the researcher must be considered before judging the validity and reliability concerning the analysis and findings of the study respectively.

Response error of participation: The researcher has used self administered personal survey to collect data. The researcher tried to motivate the respondents regarding the cooperation of the study. But there were still chances of error occurrences in the participation. The belief of respondents that the survey is important and response must include the dismissal of mental reservations was still uncontrollable by the researcher.

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Pilot testing: Pilot testing has not been done in a broad range due to several above mentioned reasons. Pilot testing helps to improve the reliability of multiple item scale variance. There were disputes found to benchmark the acceptability about reliability of scales. Many researchers differently benchmarked the acceptability of Cronbach’s Alpha value. Moreover, there was no specific guideline found to improve the content of questionnaires so that the alpha value improves. However, to be acceptable, Cronbach’s Alpha value requires rational responses of the participants which are still their liberty.

6.0 Review of Literature
6.1.0 Orientation of Variables 6.1.1 Dependent variable: Financial performance Researchers consider business performance as the aggregate results of the activities undertaken by an organization. That implies organizational performance includes different types of financial and non-financial success. Financial success includes sales, profit, cash flow, turnover, returns on investment, growth return on capital and inventory turnover. Measuring performance in variety of levels such as national, industry, company and product and services the conclusions of results become difficult. Measuring performance includes three dimensions such as effectiveness, efficiency and adaptability. There is always trade-offs among these three. Success in one dimension compromises success in other dimensions. So, it does not guarantee the accuracy of performance (Richard & Marilyn; 2001). Here is some brief discussion about several financial performances: • Return on assets: Indicates profitability of a company relative to its total assets for a specific period of time (usually for one year). It is the ratio of net income and average total assets.

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Net Income: Net income is calculated by taking revenues and subtracting cost of business, depreciation, interest, taxes and other expenses. The calculation is found on a company’s income statements.

Cash Flow: It is a financial performance which represents the amount of cash a company generates after expending the money required to maintain or expand its assets. It is an indicator to enhancing shareholder value, developing new products, making acquisitions, paying dividends and reducing debt. Even a negative cash flow is considered to be as an indicator of investment. It is difficult to fake cash flow statements rather than faking net income. Cash flow is calculated by adding amortization and depreciation with net income and subtracting changes in working capital and capital expenditure.

Return on Investments (ROI): It is a financial performance measure by calculating the ratio of net gain from investment and total cost of investment.

Dividend: It is a distribution of a portion of company’s earnings, decided by the board of directors to the shareholders according to the amount of ownerships. (Source: Investopedia)

6.1.2 Independent variable: Financial reward Reward can be treated as some offerings in addition to pay. Traditional reward systems based on positions and longevities. But now a day’s profit sharing, gain sharing and stock options plan is being practiced as a reward. Modern reward system includes stock grants, certificate of appreciation, even personal thank you notes. (Nelson, 1994) According to Walker et al (1979), rewards are classified into extrinsic and intrinsic rewards. Extrinsic rewards include basic salary and allowances which is needed to fulfill psychological and safety needs. Intrinsic rewards help individuals’ feelings and perceptions

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about the job situation which is needed to fulfill self-esteem, competence, self-actualization etc. There are several financial rewards commonly found in sales organizations are salary and commission, bonus, fringe benefits, stock options, retirement plan which fulfills both extrinsic and intrinsic needs of employees. According to Coli (1997), classification of reward and recognition, there are three types of rewards. They are monetary, awards and developmental rewards. Monetary rewards includes individual bonus for project completion, stock grants, skill-based pay, gain sharing, targeted total cash, special individual increase, non-discretionary incentives for the beginning of the project etc. According to Lyons & Ora (2002), financial performance includes basic salary, variable pay, other compensations, perquisites and benefits. Zammit (2004), best described financial rewards. A reward strategy is an integrated approach to reward employees according to their contribution, skill and competence and their market worth. The author classified four types of financial reward. They are basic salary, performance related pay, allowances and other financial rewards. The basic salary is determined according to management position, standard of living, job market, qualification of the receivers. The dimensions of performance consist of bonuses, commissions and special skills. Allowances are most commonly provided for substitution, workstation transfer and transportation, free or discounted benefits, cultural or religious holidays, telecommunications. Other financial rewards mostly practiced by offering stock options, pension schemes. 6.2 Relationship between Financial Rewards and Financial Performance Financial rewards practiced by an organizations plays an important role in motivating employees to perform. Organization’s financial performance ultimately affects by employee performance. It is also considered that improper reward practices may result below average financial performance of organizations. Most agree that reward practices act as motivators that shape the employees behaviors. According to prior researches, it is commonly believed that if

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financial rewards are effectively used, employees are motivated to perform high and that ultimately results financial performance. Financial performance is improved if there is a carefully crafted reward practice (Allen & Helms; 2001). It is difficult to relate financial reward with organizational financial performance (Kerr, 1999). Reward must be positively influence performance (Nelson, 1994). Regardless to ‘team-based reward’, individual reward is still important as individuals could see that their activities are making difference to the organization. A few businesses design their reward system for the optimization of company performance. Basic salary and incentives matches competitive practice and emphasizes performance results (Zingheim & Schuster, 2000). In a research, it is found that employees stock ownership plans and profit sharing are widely used reward practice (Lawler et all, 1995). Hale (1998) and Lawler (1981, 1987) recognized rewards have critical importance as a means of employee motivation. Organizations and manager acknowledge reward and recognition consistently as a motivator of individual employees. Employees’ understandings and satisfactions with reward system lead to specific behaviors and actions, finally results operational and financial results (Cacioppe, 1999). According to Saxby (2007), it is an avoidable mistake of management for not rewarding employees for a well done job. Tangible rewards are nicer and more meaningful regarding employee motivation rather than intangible praising and acknowledgement. 6.3 Contradiction to the Theory According to LaBelle (2005) in some cases managers may practice rewards for some behaviors which is unexpected or unproductive. Sometimes worker may misunderstand the objective of getting reward. Some cases of mismatches are discussed below: • Safety vs productivity: Sometimes, employees do not understand that whether he\she is receiving reward for working safely or for the firm’s productivity or for the quality of services rendered.

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Long term vs short term: Every company usually have strategic goals for long term or short term basis. To implement the strategy, managers implement timelines according to the strategic term basis. If any employee does not know about for the incentive plan, he\she will never consider incentive as a reward for motivation.

Decrease of error rate: Sometimes employees get reward for the decrease of their error in operations. If an employee corrects the errors after making it and gets rewarded for that, it will not enhance the financial performance of any firm. Because employees efforts gets double counted on working and re-working on a single task.

True exposure vs compliance: Sometimes employees behave that they have high commitment to their job responsibilities, eager to add value to company’s productivity but actually they are not much productive for the company still getting rewards for this sort of behaviors.

Rewarding for incomplete tasks: Very often company gives reward to its employees for incomplete tasks or closely completed task. Management thinks correcting mistakes consume resources like time, energy and equipments. This sort of operational trend does not leads financial performance as it rather compromises with the quality of products and services.

Treating rewards as a cost of operation: Management accountants sometimes treat rewards as a cost driver. As a result, cost per unit goes higher. If the company focus on cost reduction strategy then employees will be deprived from the rewards and ultimately reward will not help financial performance.

Budget constraints: If there is such budget where the fund for financial reward become narrow or cut off then the employees could not receive their rewards or feel discriminated about the amount of incentive they receive.

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Improper use of budget: Although there is fund for financial reward in a budget, if that not used properly, reward could not enhance financial performance.

6.4 General Assumption of the Study Goode (1985) set some general assumption as a prerequisite where financial reward influences financial performance. As his statement, financial rewards results in financial performance if any company practice the following issues: • There must be a “pay for performance” philosophy in the company policy. A company must pay its employees for their performances. • Incentive plan must start from the top level management. It is especially for those workers whose performance has significant and measurable impact on the financial results or on the quality of service. • Incentives must be used to the extent where it generates revenue or saves costs. In other words, there must be a benefit of costs for an incentive plan. • Incentives must be given for both financial performance and quality of service. If financial reward is only for the financial performance, then management might overlook the quality of goods or services. • • Employees must be motivated by monetary rewards. Financial rewards must be substantial. There must not be unlimited amount of rewards for a specific amount of performance. • Incentive should not be any liability unless any performance is done. It must be clearly outstanding, in excess of promised regular payment. • The performance must be measurable in most times. Sometimes, non-measurable performance might be considered in order to keep balance between organization’s long term and short term objectives.

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Any reward plan must be communicated and administered with trust. A trusted employee can add value to organization if he\she is communicated and administered with a well designed incentive plan.

7.0 Research Questions
1. Is there is any significant relationship between the basic salary paid to the employees and the company’s financial performance? 2. Is there is any significant relationship between paying the employees for their performance and the company’s financial performance? 3. Is there is any significant relationship between receiving various allowances by the employees and the company’s financial performance? 4. Is there is any significant relationship between other financial reward received by the employees and company’s financial performance?

8.0 Research Hypothesis
1. There is a significant relationship between the basic salary paid to the employees and the company’s financial performance. 2. There is a significant relationship between paying the employees for their performance and the company’s financial performance. 3. There is a significant relationship between receiving various allowances by the employees and the company’s financial performance. 4. There is a significant relationship between other financial reward received by the employees and company’s financial performance.

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9.0 Development of Conceptual Framework
Independent Variable Financial Reward • • • • Basic Salary Performance Allowance Others Figure 1: Conceptual framework of independent and dependent variables Financial Performance Dependent Variable

10.0 Operational Definition
Table 2 Operational definition of measured variables Measured Variables Financial performance Financial reward: a) Basic Salary b) Performance c) Allowance d) Others
Operationally defined by Zammit (2004)

Operational Definition
Operationally defined by Richard S. Allen and Marilyn M. Helms (2001)

11.0 Methodology
11.1 Research Design According to the research questions, hypothesis and conceptual framework, this research requires a co relational study. The researcher thus identified the relationships among the variables. Any research that studies relationship among two or more variables is called co relational study (Cooper & Schindler, 2003). In the research questions, the requirement of relationship identification is implied. On the other hand, in conceptual framework there are

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four independent sub-variables defining independent variable and a single dependent variable shown which directs the researcher to a relationship study. The four independent variables are basic salary, pay for performance, allowance and other financial rewards. The only dependent variable is financial performance. 11.2 Research Approach In order to answer and test the research questions and hypothesis respectively, the researcher conducted a survey to collect primary information. The researcher used structured and previously used questionnaire with well established scales to collect and measure primary data. The respondent of the survey was the employees of Pioneer Insurance Company Limited, Head Office. There were two types of employees work there according to classification of human resource management department of the company. One is desk employees, the employees who work in the office for a specific period of time in a week. Other is especially business developers. They have no restrictions to stay in the office. The developers were not reachable directly by the researcher as they mostly work at outside. The researcher surveyed at the office. The respondents voluntarily responded the survey. The researcher has also oriented the survey to the HR staffs for assistance and to reach the business developers as they are mostly works outside the office. 11.3 Sampling Method Due to the research opportunity (internship program), the researcher had only scope to make a survey in one office. Referring to the situation, the researcher applied a nonprovability convenience sampling. All respondents in the sample work in the head office. Size of the population is 60 excluding incomplete response and non-participation. 11.4 Research Instruments The researcher used questionnaire as the instrument of research. As already mentioned, the questionnaires are previously practiced, well defined, scaled and structured. Questionnaire is a

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structured technique of data collection which contains series of questions to answer through writing and speaking (Malhotra, 2004). The questionnaire used in this study was close ended and written form. The reasons to use this sort of questionnaires are: • • • • It is easy to instruct the respondents. Personal communication builds trust in respondents. Ease of data analysis. Consumes less time to conduct.

The conceptual framework has been derived from Allen & Helm’s (2001) “Reward Practices and Organizational Performance” where the conceptual framework was total rewards influencing organizational performance. In their research, they included nonmonetary independent and dependent items. Questionnaires for independent variables they used in their research were developed by Bellenger et al (1984); Churchill et al (1979); Ford et al (1985); Ingram & Bellenger, (1983). They developed their own questionnaire for organizational performance. In this study, the questions of non monetary items had been omitted. The questionnaire used in this study contains 22 questions. Among the questions, 15 questions were used to measure independent variables and 7 questions were used to measure dependent variable. 4 questions were used to measure basic salary, 3 questions were used to measure performance, 6 questions were used to measure allowances and 2 questions were used to measure other financial rewards. The scale of all questions were five-point likert type scale starting from 1= “strongly disagree” to 5= “strongly agree”. 11.5 Pilot Testing As mentioned by Cooper & Schindler (2003), pilot tests are used to reduce errors in the design of survey instruments and improper control of extraneous variables. Pilot test includes re-ordering, re-wording, questionnaire layout, items deletions, item swapping among variables

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and scale re-engineering. The researcher had little or no efforts to perform pilot test. The reason has been discussed in the limitation section. The researcher consulted with the top management to make sure items used in the questionnaire either have practice in the organization or not. Finally, the unpracticed item has been deleted and questionnaire was reprepared for data collection. 11.6 Data Collection As there was no prior study done in the context of Pioneer Insurance Company Limited, the researcher had collected primary data. Questionnaire surveys are mostly used to collect primary data. A cover letter explaining the purpose of the survey was attached with each questionnaire. The respondents were guaranteed to be anonymous. The data was collected at the office mostly in person so that the respondents feel secure in stating their opinion. They were given the questionnaire at lunch break during the working days. Some data were collected through the HR staffs regarding the responses of business developers. 11.7 Data Analysis This is a correlation study. After collection of primary data the researcher have used statistical to illustrate the degree to which variable is related with another variable. The tool is known as correlation analysis. First, researcher has measured some descriptive statistics such as mean, standard deviation for consistency, Cronbach’s (1951) alpha for reliability of the variables. Then, researcher also has calculated the Pearson’s product moment correlation coefficient. This identified the direction of relationships between independent and dependent variables. Finally, the researcher has conducted regression analysis to assess the association of independent variables correlated with the dependent variable. There are two types of regression analysis has been done. First one is the ‘standard’ or ‘enter’ method of regression where all the independent variables were put together and be assessed how they are explaining

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the dependent variable. Second one is forward stepwise method which will be used to identify which independent variable(s) has the best linear model. In short, there has been a goodness of fit to test if the variables together associated or not. For significance test in correlation analysis, p-value has been define significance of correlation and ‘significance F’ has been used to define the significance of regression analysis. The researcher has used Microsoft Excel 2002 and XLSTAT 2008 for data analysis to meet requirement of research.

12.0 Results
12.1 Descriptive Statistics and Reliability Coefficient Table 3 Descriptive statistics and reliability coefficient Variables Basic Salary Performance Allowance Others Financial Performance No. of Items
4 3 6 2 7

Alpha
0.091 0.138 0.017 0.07 -0.533

M
2.9375 3.0556 3.0278 2.9667 3.95

SD
0.4133 0.503 0.3392 0.5739 0.245

The above table shows the descriptive statistics and reliability coefficient of measured variables. In the descriptive statistics researchers calculated means (M) and standard deviations (SD). Mean illustrates summarized opinion of the respondents and standard deviation shows the consistency of the opinions. Closer the value of standard deviation is near to 0 more the opinions are consistent. As there are multi item variables, weighted average method has been implemented to calculate the mean of variable. There are five variables in the table. First four are independent variable and last one is the dependent variable. Every variable contains multi item scales. Cornbach’s (1951) alpha coefficient has been calculated to measure reliability of multi-item scale variables. According to Gilem & Gilem (2003), value of Cronbach’s (1951) alpha ranges usually from 0 to 1, but

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there is no lower limit of this value, closer to 1 stronger the reliability. According to George and Mallery (2003), alpha value more than 0.5 is sufficient and not more than 0.5 is unacceptable. 12.2 Correlation Analysis Table 4 Levels of correlation among the studied variables Variables Basic Salary Performance Allowance Others Financial Performance Correlation study has been conducted to measure the relationship status among the variables. In this above table show all the by-variant correlation. Pearson’s product moment correlation (r) has been calculated. The value of r ranges from -1 to 1. Negative value of r determines negative relation between the variables, positive value of r determines positive relation between variables and 0 value of r determines no relation. Rowntree (1981) suggested a benchmark to interpret the r values are in the following: Table 5 Benchmark of measuring the strength of relationships among studied variables Range
0.0 to 0.2 0.2 to 0.4 0.4 to 0.7 0.7 to 0.9 0.9 to 1.0

Basic Salary Performance Allowance Others
1 -0.04416 0.047861 -0.07146 -0.05528 1 0.112234 0.172886 -0.04256 1 0.128192 -0.04127 1

Financial Performance

-0.05509 1

Interpretation
Very weak, negligible Weak, low Moderate Strong, high, marked Very strong, very high

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P-value has been considered to test proposed hypothesis significance. The range of p-value is 0 to 1. If the value is less than 0.10, then the hypothesis is statistically significant. If p-value is not less than 0.10 then the hypothesis is not significant. No sustainable management decision can be made on the basis of any insignificant relationship.

12.3.0 Regression 12.3.1 Standardized regression Table 6 Standardized regression Variables Beta Coefficient R-Square
0.008595935

Significance-F\P
0.975099598 0.663817964 0.808522542 0.836161263 0.718067487

Basic Salary Performance Allowance Others

-0.034964533 -0.016254409 -0.020451512 -0.021310704

In this table above, R-square shows how these four variables explaining the dependent variable. Beta coefficient shows the individual direction of relationships with the dependent variable. Significance F in the first row shows the level of significance of total model and rest of the values show individual p-values of independent variables contributing in the regression model.

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12.3.2 Forward stepwise regression Table 7 Stepwise regression on financial performance Model Step 1 BS-FP P-FP A-FP O-FP Step 2 (BS+P)-FP BS P (BS+A)-FP BS A (BS+O)-FP BS O Step 3 (BS+O+P)-FP BS O P (BS+O+A)-FP BS O A
-0.034225773 -0.023564295 -0.02271113 -0.03529396 -0.025339802 0.0078177 -0.035977328 -0.022714035 -0.017562148 0.0075271

Beta Coefficient
-0.032779624 -0.020737327 -0.029818736 -0.023523646

R-Square
0.0030557 0.0018112 0.0017029 0.0030344 0.0050846

Significance F\P-Value
0.67485265 0.746796181 0.754240691 0.675922389 0.864779222 0.666608422 0.734402823 0.878105305 0.687861789 0.770908457 0.828995136 0.654645057 0.655618767 0.931137714 0.651297421 0.695991294 0.790789394 0.934639202 0.667601136 0.683504312 0.816030763

Decision
Select Reject Reject Reject Reject

-0.033960427 -0.021969762 0.0045506 -0.03168102 -0.027971036 0.0065588

Reject

Select, Accept

Reject

Reject, Stop

Forward stepwise regression analysis has been done to find out the best model of regression. Explaining the best model, stepwise regression technique sorts out the association of independent variables best explains the dependent variable. In the best model, both independent variables contribute optimum to the relationship with dependent variable. In this table above, beta coefficient shows the partial correlation coefficient between independent variables and dependent variable. R-square shows the strength of regression

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model. Significance-F and p-value shows the significance level of regression model and the correspondent independent variables respectively. Choosing the best model, p-values of independent variables and significance-F values of regression model has been considered. At first step byvariant regression has been done with all independent variables individually. The model with a lowest p-value has been selected. In the second step, another three variables has been added with the chosen model separately. Again, significance-F and p-values had been observed and model with the lowest significance-F value and p-values has been selected. At third step, the rest two independent variables added separately and observation was repeated. Finally, the model with the lowest significance-F value has been chosen and accepted.

13.0 Discussion
In this section, the researcher will interpret the findings of the data analysis. This helps the users of the study to understand the results. At the table of descriptive statistics and reliability coefficient shows every variable is multi-item scale variable. Basic salary, performance, allowance, others and financial performance has 4, 3, 6, 2 and 7 items respectively. All variables have unacceptable levels of reliability. Among those, performance has the most (0.138) level of reliability and financial performance is abnormally (-0.533) unreliable. Mean (M) illustrates the summarized opinions of the respondents. Regarding basic salary (2.9375), performance (3.0556), allowance (3.0278) and others (2.9667); respondents have showed ‘neutral’ attitudes but regarding financial performance (3.95), the respondents showed ‘agree’ attitudes. Regarding standard deviation (SD), financial performance (0.245) has the most consistency and other financial reward (0.5739) has the least consistency. The table of correlation shows the correlation matrix of studied variable. According to Rowntree’s (1981) benchmark, all correlations found very weak, negligible. Among them

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most strong relationship found between performance and other financial rewards (0.172886); least strong relationship found between basic salary and other financial rewards (-0.07146). There are 10 correlation found in the study. Among those 6 are positive and 4 are negative. There are negative relationships found between independent variables and dependent variables. In the table of stepwise regression, at first stage basic salary (0.67485265) has been selected according to its lower p-value compared to other independent variables. At second stage basic salary and other financial rewards yields lower significance-F value (0.828995136) compared to other models at the second stage. In this model, the p-values of independent variables decrease as the sign of association together. At third stage, no variable is associated with basic salary and other financial rewards as the significance-F value increases in the regression model. So, no variable has been selected at third stage. The best model found in the stepwise regression is basic salary and other financial rewards as the independent variable and financial performance as the dependent variable. Basic salary and other financial variable explain partially the financial performance by 2.5% and 3.5% respectively. As there are negative signs in the beta coefficients, both independent variables are negatively correlated with the dependent variable. R-square shows the strength of regression (0.66%) model. This stepwise regression implies lower the significance-F and pvalues, higher the R-square values.

14.0 Assessment of Hypothesis
As per the data analysis results and discussion, the researcher has found the answers to the research questions and hypothesis. Hypothesis 1: There is an insignificant (0.67485265) negative (-0.05528) relationship between basic salary paid to the employees and company’s financial performance.

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Hypothesis 2: There is an insignificant (0.746796182) negative (-0.04256) relationship between paying the employees for their performance and the company’s financial performance. Hypothesis 3: There is an insignificant (0.75424055) negative (-0.04127) relationship between receiving various allowances by the employees and the company’s financial performance. Hypothesis 4: There is an insignificant (0.75424055) negative (-0.05509) relationship between other financial reward received by the employees and company’s financial performance.

15.0 Significance of the Study
In this study, there is no significant result is found. In explaining the statement, limitations, prerequisites, conditions must be considered for the clarity of the results. The career life stage of employees acts vital role in this relational study. Involvement of this variable may help to explain diversity of participants’ responses which has contributed the poor status of reliability coefficients. The reliability of the measured variables could be improved through guided procedure of pilot testing which was not somehow possible to perform. The honest and enthusiastic response was not confirmed. According to the general assumptions has been described in the literature review, the management might not have considered those prerequisites before starting any rewards plan. The employees might not be oriented fully about the rewards plan. As described in contradiction section, the employees might be wrongly motivated by the reward system of the company which may result unfavorable outcome of data analysis. It has been usually observed that due to company policy, there is always trade-offs among different performance aspects. So, company policy plays an important role in this study.

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However, without any significant outcome from this research, no substantial management decision can be made which is important for the company’s welfare. But regardless to the difficulties discussed earlier, it is theoretically proven that financial reward has positive impact on financial performance. This study may be treated as the actual picture of Pioneer Insurance Company Limited which may be a representative of the whole scenario of general insurance sector in Bangladesh. As per the data analysis, the relationships are negligible and negative. Moreover basic salary and miscellaneous financial rewards are associated together, also showing negligible and negative correlation with financial performance. Management may either assume that there is little or no relationship exists between financial rewards practiced in the organization and its financial performance based on the result of this research. So, the company can try to motivate its employees through other non-monetary motivation inputs. Otherwise it may intend to take initiatives in such a way that monetary rewards can be treated as unique inputs for motivation which indirectly helps financial performance in the company based on theoretical hypothesis. Between these two options, company can choose one to minimize or eliminate management dilemma. The decision can be made through the judgment of limitations described in this study.

16.0 Recommendation for Future Research
This research includes numbers of limitations which causing difficulties for the researcher to generalize its findings. The researchers who have interest to conduct any research in the same studied area should try to minimize the limitations as best as possible and should try working in broader conceptual framework as well. If so, management dilemmas can be resolved in effective, efficient and practical ways. Following steps can be taken to minimize limitations and enrich the future research: • The researcher must consult with the management and carefully define and develop the problem statement as this is the foundation of any research.

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The researcher should consider all the relevant variables actively influence the problem before developing the conceptual framework.

The researcher must have the opportunity to complete research within a sufficient amount of time.

• •

The sampling method should be bias free. Access to the secondary information should be allowed if those are necessary to conduct the study.

The company policy, direction of employees’ motivation to organizational performance and their knowledge about company’s strategic and reward plan must support the areas of research interest.

The researcher should have acceptable authentication and guidelines in order to conduct pilot testing.

17.0 Conclusion
Pioneer Insurance Company Limited is one of the leading general insurance companies in Bangladesh. They have high customer demand for insurance policy as observed by the researcher. In order to comply with the increasing customer demand, the efficiency of its business process has no alternative. It can be improved through employee motivation for working enthusiastically. The motivation of employees working can enhance the company’s operational performance via smoothing of business process which can improve its financial performance. Regarding motivation, money is the most effective motivator compared to other alternatives. Finally, it can be concluded that effective motivation of employees can drive the company to achieve its objectives, missions and visions if financial reward policies are implemented in accurate manners.

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Appendices

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Appendix-1

Dear,

A questionnaire survey will be conducted to measure the employee\employers’ perception regarding financial reward

practices influencing the company’s financial performance. Your anonymity will be maintained.

Please read the questions carefully and mark the appropriate answer.

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Circle Only One Answer Questions 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 2 2 2 2 2 2 2 3 3 3 3 3 3 3 Strongly Disagree Disagree Neutral Agree Strongly Agree (1) (2) (3) (4) (5) 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5

SN

1 2 3 4 5 6 7

8 9 10 11 12 13 14 15

16 17 18 19 20 21 22

Your basic salary is (1-4):perfectly aligned according to different management positions enough to cover your standard of living fair enough to justify the job market according to your qualification Bonus for your performance motivates you to work hard Commission for selling improves your companies performance You deserve reward for your special skills The company's financial performance is influenced by receiving allowance for: (8-13) Substituting fellow employees responsibility(s) Employee transfer to any other workstation (e.g. branch, head office etc) Using company cars for any purpose any free insurance for employees’ benefits any bonus for cultural or religious purpose telecommunication expenditure employees ownership of share can conclude financial strengths of the organization Pension schemes for employees contributes company's financial performance Above mentioned financial rewards can positively influence your company's: (16-22) Return on Assets (ROA) Sales of insurances Net Income Cash Flow Return on Investment (ROI) Stock price rise Distribution of dividend\profit share to investors

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Appendix-2

Descriptive Statistics

Items Basic Salary Performance Allowance Others Financial Performance 2.9375 3.055556 3.027778 2.966667 3.95 Mean 0.053357 0.064934 0.043786 0.074092 0.03164 Standard Error 3 3 3 3 4 Median 2.75 3 3.333333 3 4 Mode 0.413299 0.502973 0.339167 0.573915 0.245083 Standard Deviation 0.170816 0.252982 0.115034 0.329379 0.060066 Sample Variance -0.97036 -0.35048 -1.09289 -0.78271 -0.30748 Kurtosis 0.088769 -0.01758 -0.0467 -0.00505 -0.13923 Skewness 1.5 2 1.333334 2 1.142857 Range 2.25 2 2.333333 2 3.428571 Minimum 3.75 4 3.666667 4 4.571429 Maximum 176.25 183.3333 181.6667 178 237 Sum 60 60 60 60 60 Count

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Appendix-3

Cronbach’s Alpha

Basic Salary

XLSTAT 2008.7.01 - Factor analysis - on 11/21/2008 at 12:31:26 PM Observations/variables table: Workbook = Cronbach's Alpha.xls / Sheet = Basic Salary / Range = a1:d61 / 60 rows and 4 columns Correlation: Pearson (n) Extraction method: Principal factor analysis Number of factors: Automatic Initial communalities: Squared multiple correlations Stop conditions: Convergence = 0.0001 / Iterations = 50

Cronbach's alpha:

0.091

Factor analysis: Maximum change in communality at each iteration: Iteration 40 41 42 43 44 45 46 47 48 49 Maximum change 0.0024 0.0023 0.0023 0.0022 0.0022 0.0021 0.0021 0.0020 0.0020 0.0019

Reproduced correlation matrix: Q1 0.045 -0.053 0.108 -0.041 Q2 -0.053 0.417 0.182 0.043 Q3 0.108 0.182 0.534 -0.106 Q4 -0.041 0.043 -0.106 0.039

Q1 Q2 Q3 Q4

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Residual correlation matrix: Q1 0.955 -0.003 0.003 0.012 Q2 -0.003 0.583 0.002 0.003 Q3 0.003 0.002 0.466 -0.003 Q4 0.012 0.003 -0.003 0.961

Q1 Q2 Q3 Q4

Performance

XLSTAT 2008.7.01 - Factor analysis - on 11/21/2008 at 12:33:51 PM Observations/variables table: Workbook = Cronbach's Alpha.xls / Sheet = Performance / Range = a1:c61 / 60 rows and 3 columns Correlation: Pearson (n) Extraction method: Principal factor analysis Number of factors: Automatic Initial communalities: Squared multiple correlations Stop conditions: Convergence = 0.0001 / Iterations = 50

Cronbach's alpha: Factor analysis: Maximum change in communality at each iteration: Iteration 9 10 11 12 13 14 15 16 17 18 Maximum change 0.0030 0.0020 0.0013 0.0009 0.0006 0.0004 0.0003 0.0002 0.0001 0.0001

0.138

Reproduced correlation matrix: Q5 0.281 0.131 0.151 Q6 0.131 0.264 -0.130 Q7 0.151 -0.130 0.280

Q5 Q6 Q7

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Residual correlation matrix: Q5 0.719 0.000 0.000 Q6 0.000 0.736 0.000 Q7 0.000 0.000 0.720

Q5 Q6 Q7

Allowance

XLSTAT 2008.7.01 - Factor analysis - on 11/21/2008 at 12:34:36 PM Observations/variables table: Workbook = Cronbach's Alpha.xls / Sheet = Allowance / Range = a1:f61 / 60 rows and 6 columns Correlation: Pearson (n) Extraction method: Principal factor analysis Number of factors: Automatic Initial communalities: Squared multiple correlations Stop conditions: Convergence = 0.0001 / Iterations = 50

Cronbach's alpha: Factor analysis: Maximum change in communality at each iteration: Iteration 40 41 42 43 44 45 46 47 48 49 Maximum change 0.0041 0.0040 0.0040 0.0039 0.0038 0.0038 0.0037 0.0037 0.0036 0.0035

0.017

Reproduced correlation matrix: Q8 0.731 -0.138 -0.156 Q9 -0.138 0.171 0.144 Q10 -0.156 0.144 0.220 Q11 0.040 -0.001 -0.141 Q12 0.283 0.072 0.070 Q13 -0.158 0.049 0.055

Q8 Q9 Q10

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Q11 Q12 Q13

0.040 0.283 -0.158

-0.001 0.072 0.049

-0.141 0.070 0.055

0.199 -0.024 -0.016

-0.024 0.228 -0.043

-0.016 -0.043 0.037

Residual correlation matrix: Q8 Q8 Q9 Q10 Q11 Q12 Q13 0.269 -0.005 0.005 0.004 0.003 -0.011 Q9 -0.005 0.829 0.003 0.001 0.001 -0.025 Q10 0.005 0.003 0.780 -0.001 -0.006 0.010 Q11 0.004 0.001 -0.001 0.801 -0.003 0.012 Q12 0.003 0.001 -0.006 -0.003 0.772 0.019 Q13 -0.011 -0.025 0.010 0.012 0.019 0.963

Others

XLSTAT 2008.7.01 - Factor analysis - on 11/21/2008 at 12:35:26 PM Observations/variables table: Workbook = Cronbach's Alpha.xls / Sheet = Others / Range = a1:b61 / 60 rows and 2 columns Correlation: Pearson (n) Extraction method: Principal factor analysis Number of factors: Automatic Initial communalities: Squared multiple correlations Stop conditions: Convergence = 0.0001 / Iterations = 50 Cronbach's alpha: 0.07

Factor analysis: Maximum change in communality at each iteration: Iteration 1 2 3 4 5 6 7 8 9 10 Maximum change 0.0174 0.0087 0.0044 0.0022 0.0011 0.0005 0.0003 0.0001 0.0001 0.0000

Reproduced correlation matrix: Q14 Q15

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Q14 Q15

0.036 0.036

0.036 0.036

Residual correlation matrix: Q14 0.964 0.000 Q15 0.000 0.964

Q14 Q15

Financial Performance

XLSTAT 2008.7.01 - Factor analysis - on 11/21/2008 at 12:38:30 PM Observations/variables table: Workbook = Cronbach's Alpha.xls / Sheet = Financial Performance / Range = a1:g61 / 60 rows and 7 columns Correlation: Pearson (n) Extraction method: Principal factor analysis Number of factors: 7 Initial communalities: Squared multiple correlations Stop conditions: Convergence = 0.0001 / Iterations = 50

Cronbach's alpha: Factor analysis:

-0.533

Maximum change in communality at each iteration: Iteration 29 30 31 32 33 34 35 36 37 38 Maximum change 0.0004 0.0003 0.0003 0.0002 0.0002 0.0002 0.0001 0.0001 0.0001 0.0001

Reproduced correlation matrix: Q16 0.554 -0.137 -0.042 Q17 -0.137 0.337 -0.193 Q18 -0.042 -0.193 0.321 Q19 -0.174 -0.029 -0.067 Q20 -0.399 0.173 0.090 Q21 -0.063 0.064 0.013 Q22 -0.053 0.029 0.128

Q16 Q17 Q18

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Q19 Q20 Q21 Q22

-0.174 -0.399 -0.063 -0.053

-0.029 0.173 0.064 0.029

-0.067 0.090 0.013 0.128

0.499 0.079 -0.288 -0.129

0.079 0.549 -0.134 0.151

-0.288 -0.134 0.548 -0.116

-0.129 0.151 -0.116 0.313

Residual correlation matrix: Q16 0.446 0.000 0.000 0.000 0.000 0.000 0.000 Q17 0.000 0.663 0.000 0.000 0.000 0.000 0.000 Q18 0.000 0.000 0.679 0.000 0.000 0.000 0.000 Q19 0.000 0.000 0.000 0.501 0.000 0.000 0.000 Q20 0.000 0.000 0.000 0.000 0.451 0.000 0.000 Q21 0.000 0.000 0.000 0.000 0.000 0.452 0.000 Q22 0.000 0.000 0.000 0.000 0.000 0.000 0.687

Q16 Q17 Q18 Q19 Q20 Q21 Q22

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Appendix-4

Regression

Bs-Fp
SUMMARY OUTPUT Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations ANOVA Df Regression Residual Total 1 58 59 SS 0.01082898 3.53304857 3.54387755 MS 0.010828983 0.060914631 F 0.177773102 Significance F 0.67485265 0.055278274 0.003055688 -0.014133007 0.246808895 60

Coefficients Intercept Basic Salary p-Fp SUMMARY OUTPUT Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations ANOVA Df Regression Residual 1 58 0.04255828 0.001811207 -0.015398944 0.246962892 60 4.046290144 -0.032779624

Standard Error 0.23058717 0.07774473

t Stat 17.54776759 -0.421631476

P-value 7.17043E-25 0.67485265

Lower 95% 3.584720112 -0.188402484

Upper 95% 4.50786 0.122843

SS 0.0064187 3.53745886

MS 0.006418697 0.06099067

F 0.10524063

Significance F 0.746796181

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Total

59

3.54387755

Coefficients Intercept Performance a-fp SUMMARY OUTPUT Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations ANOVA Df Regression Residual Total 1 58 59 0.041265766 0.001702863 -0.015509156 0.246976294 60 4.013364055 -0.020737327

Standard Error 0.19790707 0.06392358

t Stat 20.27903299 -0.324408123

P-value 5.18761E-28 0.746796181

Lower 95% 3.617210305 -0.148694171

Upper 95% 4.409518 0.10722

SS 0.00603474 3.53784282 3.54387755

MS 0.00603474 0.06099729

F 0.098934554

Significance F 0.754240691

Coefficients Intercept Allowance o-fp SUMMARY OUTPUT Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations ANOVA Df Regression Residual 1 58 0.055085708 0.003034435 -0.014154626 0.246811525 60 4.040284505 -0.029818736

Standard Error 0.28880334 0.0948015

t Stat 13.98974303 -0.314538636

P-value 3.06248E-20 0.754240691

Lower 95% 3.462182244 -0.219584423

Upper 95% 4.618387 0.159947

SS 0.01075367 3.53312389

MS 0.010753667 0.060915929

F 0.17653292

Significance F 0.675922389

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Total

59

3.54387755

Coefficients Intercept Others Step 2 4.019786817 -0.023523646

Standard Error 0.16912516 0.05598759

t Stat 23.76811821 -0.420158209

P-value 1.37925E-31 0.675922389

Lower 95% 3.681246279 -0.135594903

Upper 95% 4.358327 0.088548

(bs+p)-fp
SUMMARY OUTPUT Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations ANOVA Df Regression Residual Total 2 57 59 SS 0.01801923 3.52585832 3.54387755 MS 0.009009617 0.061857164 F 0.14565196 Significance F 0.864779222 0.071306449 0.00508461 -0.029824702 0.248711004 60

Coefficients Intercept Basic Salary Performance (bs+a)-fp SUMMARY OUTPUT Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations ANOVA 0.067458308 0.004550623 -0.030377425 0.248777739 60 4.116888584 -0.033960427 -0.021969762

Standard Error 0.31124156 0.07842041 0.06443893

t Stat 13.2273098 -0.433055999 -0.340939279

P-value 5.11724E-19 0.666608422 0.734402823

Lower 95% 3.493637836 -0.190994649 -0.151006548

Upper 95% 4.740139 0.123074 0.107067

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Df Regression Residual Total 2 57 59

SS 0.01612685 3.5277507 3.54387755

MS 0.008063426 0.061890363

F 0.130285646

Significance F 0.878105305

Coefficients Intercept Basic Salary Allowance (bs+o)-fp SUMMARY OUTPUT Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations ANOVA Df Regression Residual Total 2 57 59 0.08098631 0.006558782 -0.028298804 0.248526677 60 4.127753077 -0.03168102 -0.027971036

Standard Error 0.36269429 0.07845482 0.09560255

t Stat 11.38080511 -0.40381228 -0.292576269

P-value 2.6588E-16 0.687861789 0.770908457

Lower 95% 3.401469969 -0.188784155 -0.219411916

Upper 95% 4.854036 0.125422 0.16347

SS 0.02324352 3.52063403 3.54387755

MS 0.011621761 0.061765509

F 0.188159393

Significance F 0.828995136

Coefficients Intercept Basic Salary Others Step 3 4.128850755 -0.03529396 -0.025339802

Standard Error 0.29635412 0.07848646 0.05652114

t Stat 13.9321526 -0.44968218 -0.4483243

P-value 5.27755E-20 0.654645057 0.655618767

Lower 95% 3.535411621 -0.192460444 -0.138521488

Upper 95% 4.72229 0.121873 0.087842

(Bs+o+p)-fp
SUMMARY OUTPUT Regression Statistics Multiple R R Square Adjusted R Square Standard Error 0.088417531 0.00781766 -0.045334966 0.250576932

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Observations ANOVA

60

Df Regression Residual Total 3 56 59

SS 0.02770483 3.51617273 3.54387755

MS 0.009234943 0.062788799

F 0.147079467

Significance F 0.931137714

Coefficients Intercept Basic Salary Others Performance (Bs+o+a)-fp SUMMARY OUTPUT Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations ANOVA Df Regression Residual Total 3 56 59 0.086759111 0.007527143 -0.045641045 0.250613614 60 4.17673049 -0.035977328 -0.022714035 -0.017562148

Standard Error 0.34863332 0.07917546 0.05783254 0.06588516

t Stat 11.98029639 -0.454400005 -0.392755309 -0.266556944

P-value 4.40304E-17 0.651297421 0.695991294 0.790789394

Lower 95% 3.478334494 -0.194584722 -0.138566448 -0.149545901

Upper 95% 4.875126 0.12263 0.093138 0.114422

SS 0.02667527 3.51720228 3.54387755

MS 0.008891758 0.062807184

F 0.141572312

Significance F 0.934639202

Coefficients Intercept Basic Salary Others Allowance 4.18920987 -0.034225773 -0.023564295 -0.02271113

Standard Error 0.3949486 0.07927734 0.05749967 0.09715952

t Stat 10.60697482 -0.431722008 -0.40981618 -0.233750935

P-value 5.17451E-15 0.667601136 0.683504312 0.816030763

Lower 95% 3.398033276 -0.193037266 -0.138749901 -0.217344916

Upper 95% 4.980386 0.124586 0.091621 0.171923

SUMMARY OUTPUT Regression Statistics Multiple R 0.092714263

The impact of financial rewards on financial performance: The case of Pioneer Insurance Company Limited.

43

R Square Adjusted R Square Standard Error Observations ANOVA

0.008595935 -0.063506179 0.252745456 60

Df Regression Residual Total 4 55 59

SS 0.03046294 3.51341462 3.54387755

MS 0.007615735 0.063880266

F 0.119218898

Significance F 0.975099598

Coefficients Intercept Basic Salary Performance Allowance Others 4.227518953 -0.034964533 -0.016254409 -0.020451512 -0.021310704

Standard Error 0.42825318 0.08000926 0.06675269 0.09842444 0.05872268

t Stat 9.871541414 -0.437006099 -0.243501935 -0.207788953 -0.362904135

P-value 8.84985E-14 0.663817964 0.808522542 0.836161263 0.718067487

Lower 95% 3.369280623 -0.195306625 -0.150029757 -0.217698451 -0.138993561

Upper 95% 5.085757 0.125378 0.117521 0.176795 0.096372

The impact of financial rewards on financial performance: The case of Pioneer Insurance Company Limited.

44

Appendix-5

PRODUCT & SERVICES

The Company Underwrites following types of General Insurance Business Such as:

Fire: Fire and Allied Perils Insurance Consequential Loss Due to Fire Insurance Household Insurance Hotel Owners All Risks Insurance Industrial All Risks Insurance

Marine: Cargo Insurance Hull Insurance

Motor: Comprehensive Insurance Act Only Liability Insurance Increased Liability Insurance

Engineering: Contractors All Risks Insurance (CAR) Contractors Plant & Machinery Insurance (CPM) Erection All Risks Insurance (EAR)

The impact of financial rewards on financial performance: The case of Pioneer Insurance Company Limited.

45

Machinery Insurance (MB) Machinery Loss of profit Insurance (BI MB) Electronic Equipment Insurance (EEI) Deterioration of Stock Insurance (DOS) Energy Risks Insurance (Offshore & Onshore) Power Plant Insurance Boiler and pressure Vessels Insurance Lift, Escalator and Hoisting Equipment Insurance

Miscellaneous Insurance: All Risks Insurance Cash / Property in Premises Money / cash in Transit Insurance General/ Public Liability Insurance Comprehensive General Liability Insurance Employers Liability Insurance Products Liability Insurance Professional Indemnity Insurance Directors and Officers Liability Insurance Personal Accident Insurance Peoples Personal Accident Insurance Overseas Medical claim Insurance Cellular Mobile Phone Insurance Fidelity Guarantee Insurance Hole in One Golf Tournament Insurance

The impact of financial rewards on financial performance: The case of Pioneer Insurance Company Limited.

46

Neon Sign Insurance Plate Glass Insurance Rubber Plantation Insurance Lockers Insurance

Aviation Insurance: Hull Insurance Liability Insurance Deductible WAR Insurance

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