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Article Information
DOI: 10.9734/BJEMT/2016/25822
Editor(s):
(1) O. Felix Ayadi, Interim Associate Dean and JP Morgan Chase Professor of Finance, Jesse H. Jones School of Business,
Texas Southern University, TX, USA.
Reviewers:
(1) Sarminah Samad, Universiti Teknologi Mara, Malaysia.
(2) Anonymous, Riphah International University, Islamabad, Pakistan.
(3) Borislav Kolaric, Serbia.
Complete Peer review History: http://sciencedomain.org/review-history/14725
ABSTRACT
The study aims to examine the influence of reward types (extrinsic, intrinsic, social and rewards mix)
on employees performance. Subjects for the study consisted of 308 workers which constituted 60%
of the total target population of 513 people working for Unified Mining Companies located in the
southern part of Jordan. Total of 308 self-designed questionnaire were distributed to employees on
their job location, 268 questionnaires were returned and only 250 were suitable for statistical
analysis. SPSS version 16 has been used for data analysis. Both descriptive and inferential
statistics were used for data analysis. The statistical tools were aligned with the objective of the
research. For this purpose, frequency Tables, percentages, means and standard deviations were
computed and substantively interpreted. Inferential statistics like Pearson product moment
correlation coefficient (r) was used to determine if there is a significant relationship exist between
independent variables (rewards types: Extrinsic, intrinsic, social and rewards mix) and dependent
variable (employees performance). Analysis and interpretation were made at 0.05 level of
significance. The findings indicated that there is a statistical significant relationship between rewards
types and employees performance. The study has concluded that, management should have deep
sense of commitment towards the issue of rewarding employees, if performance levels to be
enhanced. Finally, future research can be conducted to cover all types of rewards and to determine
their affect on performance.
_____________________________________________________________________________________________________
Keywords: Extrinsic rewards; intrinsic rewards; social rewards; rewards mix; employees performance;
mining companies.
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achievement of one of its goals, a reward often colleagues and supervisors support. In line with
follows. There is a great of agreement in extrinsic and intrinsic rewards, social rewards
literature regarding the types of rewards used in can also be classified into tangible and intangible
real life situations. According to [6], rewards are rewards [12]. Tangible social rewards evoke
categorized into two groups, financial and non- positive senses of well-being when one receives
financial rewards. The financial rewards are also an object that fosters a positive sense of well-
called extrinsic rewards and the non-financial being, like a treasured toy, piece of jewelry,
rewards are called intrinsic rewards. Other monetary incentive, etc. In contrast, intangible
researchers like [7] argued that, three types of social rewards are not physical objects but are
rewards existed and to which individuals are elicited during social interactions. Social
normally attracted to and seek from their interactions generate a positive sense of well-
organization; these are extrinsic, intrinsic and being when one feels that one belongs, is
social rewards. The study of [8] best illustrates accepted by others during social interactions,
the differences between extrinsic and intrinsic and is able to experience mastery during tasks or
rewards. Extrinsic rewards refer to physical during social interactions. Both tangible and
benefits provided by the organization such as intangible sensory and intangible social rewards
pay, salaries, bonus, fringe benefits, and career are capable of instilling rewarding outcomes of
development opportunities. positive senses of well-being and positive
emotions like happiness and contentedness.
Intrinsic rewards on the other hand, refer to the Human beings and animals a like hope,
rewards that come from the content of the job anticipate, and expect to obtain rewards and
itself and encompass motivational characteristics associated positively rewarding outcomes.
of the job such as autonomy role clarity and
training. The list of differences between extrinsic The existence of rewards and their management
and intrinsic rewards goes on to include further is becoming an increasing issue of importance
additions for extrinsic rewards as suggested by not only to practitioners and scholars but also to
[9] for example, extrinsic rewards may include the concerned parties associated with the
tangible or external rewards like incentives, organization, (that is the employer and the
promotions, job security, contract of service, employees). Understanding this critical point will
allowances and insurance. While intrinsic make all concerned parties aware of the fact that
rewards, or intangible psychological rewards may rewards systems do have influence over the way
include further elements for instance, employees perform their tasks and in return
appreciation, meeting the new challenges, achieve organizational strategic goals and
positive and caring attitude from employers, job objectives. So one can say a proper alignment or
rotation, sense of achievement, professional the use of reward systems with set organizational
growth and individual recognition. strategies will associate organizational
On the contrary, social rewards as named by [10] effectiveness. The question that would raise is
arise from the interaction with other people on that, which kind of reward practice should the
the job and may include, having supportive organization and the employees target for, that is
relationships with managers, supervisors and co- what mix of extrinsic, intrinsic and social rewards
workers. This view is supported by [11], in which should be used to achieve goals of parties
he defined social rewards as non-related factors involved. To do that, the following classification
such as the interpersonal relationships with can be considered as seen in Fig. 1.
Fig. 1. The structure of different types of intrinsic, extrinsic and social rewards that can be
offered and as reviewed in this study
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Many researchers found that people are divided "hygiene factors" or extrinsic job factors were
on this issue. Some argue that the best way to more valued. Hence, an organization that
boost employees' performance is by satisfies both extrinsic and intrinsic rewards get
concentrating on extrinsic rewards. This view is the best of their employees. Although value
supported by [13] through on line study of 1913 theme is important, other criteria like type of
full-time employees. These employees were business, size of business, the market in which
asked to rank order 14 potential performance the organization operates in, operation period
incentives in order of preference. These and the type of technologies used have a
performance incentives included common significant impact regarding the choice of
extrinsic rewards such as cash bonuses, gift extrinsic and intrinsic rewards mixture. According
cards, award points and travel awards, as well as to [19], originators of technology in large firms
intrinsic rewards, such as having more freedom are likely to be different from that of small firms
and autonomy at work, choosing interesting entrepreneur .Technical personal within large
projects and monitoring other employees. He firms seem more likely motivated by non
concluded that cash bonuses were listed as the monetary rewards that affect intrinsic value than
most preferred incentive by three out of four by monetary rewards. Entrepreneurs in smaller,
people (74%) surveyed and nine out of ten (89%) newly – emerging firms are more likely to be
listed cash bonuses within their top three motivated by extrinsic rewards that encourage a
preference. In agreement with other research stake in the venture. This knowledge triggers a
[14] believed that, money is influential for fulfilling signal to the fact that extrinsic and intrinsic
employees' non-monetary needs such as rewards practices in firms applying TQM may
authority, rank and belongingness with preferred differ according to size. On the other hand, a
groups. It's believed that people who have more research application of extrinsic and intrinsic
money are more powerful in society as compared rewards may depend on the market in which they
to those who have lesser money. That is why operate in and as mentioned before the
money is often viewed as assign of personal operation period of the firm.
triumphs and accomplishment.
On the other extreme, other researchers
Deep examination of literature on extrinsic supported with valid empirical findings argue
monetary rewards reveals that it might be true that, intrinsic rewards are just as important as
that extrinsic monetary rewards could lead to extrinsic rewards and May for some employees
improvement in performance and productivity but see them as stronger motivator and
on the contrary, most research findings consequently tend to increase their productivity
confirmed less relationship between extrinsic and strive for more professional development. In
rewards and performance. [15] in his series of addition to this view, literature has cited that
studies concluded that, extrinsic rewards- people have different perceptions of rewards. For
concrete tangible rewards such as bonuses, pay instance, some people consider recognition by
increase and awards are detrimental to managers or supervisors more rewarding than
innovation. A similar finding was cited in the work financial incentives because this brings to them
of [16] in which he concluded that, financial more inner feelings of happiness that money may
rewards are not the most motivating factors and not afford to bring. The study of [20], stressed
financial results have a de-motivating effect that, employees who are able to experience and
among employees. receive recognition for their work are also able to
have a better perception of their work, their
According to [17], although cash rewards are workplace and the people they work for and
generally welcomed by employees; managers hence positive contributions towards the
should never use this as a tool to motivate their organization and its overall objectives. [21]
employees to improve performance levels. argued that, intrinsic non-financial incentives in
Should this happen, there is a chance that the organizations are most closely associated with,
essence of reward would be forgotten. A great recognition and performance feedback and non-
deal of literature findings also showed variations financial incentives of recognition do not have
in the way people perceive rewards and the extensive theoretical foundation as that of
value they attach to them. According to [18], and money. To achieve that they identified
based on Herzberg's two factor theory of conceptual differentiation between the concept of
motivation; higher occupational levels tend to put recognition and social recognition. According to
more value on "motivators" or intrinsic job them, recognition refers to formal programs such
factors, while at lower occupational levels as employees of the month or top sales award.
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Where, as social recognition refers to informal organization" means that reward systems are
acknowledgment attention, praise, approval of generally designed to fit for an employee's
genuine appreciation for work well done from one performance. To be specific, employees seek to
individual or group to another. As with extrinsic use rewards to dominate an employee's behavior
rewards, careless use of intrinsic rewards may and to increase productivity. In this sense,
lead to negative consequences. [22] claimed employers have minimal expectations for each
that, employees who see the incentive scheme employee. Thus, when employees reach an
as opportunity to wrest control of their personal expected level of job performance, an
activities that provide little intrinsic satisfaction. organization will pay attention to them and give
These days many companies have designed them proper reward. Furthermore, if a reward,
reward systems that target for an employee's system is set up fairly and equitably; most
skills development. However, this reward system individuals in the organization will make greater
may not always bring positive effects in an efforts for companies. For these aims to be met
organization. For example, when some reward systems should bosses certain qualities.
employees pursue only their own interests, the Firstly, good or convenient reward system should
organizations objectives would be a low priority encourage employees to give their best.
to them. According to [26], the payment package is one of
the most obvious and visible expressions of the
Practically, human resources managers use employment relationship. This means that
various strategies to achieve the set goals and rewards are the most efficient way to encourage
objectives of organizations. One of such an employee's best behavior and this can be
strategies is that reward management. Reward linked to the achievement of organizational goals
management strategies is normally concerned and objectives. Secondly, since markets that
with attracting and retaining of suitable business organizations operate in are
employees and then providing them with all changeable in nature; rewards should also be
conditions that enable them to improve their adoptable to change and able to deal with market
performance through proper motivational tools flexibility. In his research, [27] found that, the
and techniques According to [23], the purpose of higher the level of adoptability of a firm, the
reward system is to a systematic way to deliver higher the level of environmental complexity that
positive consequences and fundamentally, the can be handled by that firm and the better the
purpose is to provide positive consequences for chances of its long-term survival, and an integral
contributions to get the desired performance part of that adoptability was "a flexible reward
levels. This view is parallel to the view of [24] in structure". Thirdly, any reward or incentive
which he said that, the only way employees fulfill systems should be fair and non-discriminatory.
the employers dream is to share in their dreams The notion of fairness and non discrimination is
through the mechanism of rewards that normally mandatory by legislation and go in line with the
include, systems and practices of awards, difficult concept of" equal pay for equal work".
recognition, promotions, reassignment, non- According to [28], in practice reward systems or
monetary bonuses like, vacations or a simple strategies come in all shapes and sizes, and
thank you. A clear-cut aims of reward there is no single reward package that offers "a
management according to [25], can be divided best practice approach". Legislation requires
into two distinctive parts; the first one is reward systems to be fair and non-discriminatory.
"participation in organization" and the second is Although the concept of" equal pay for equal
"performance in organization". Firstly The notion work" can be difficult to work in practice, these
of participation means to make employees are requirement under Legislation for basic
getting a sense of belonging and becoming a component (up to the statutory minimum) for
member of organization by feeling of part of elements such as maternity pay; sick pay;
community, they can not only develop a desire to access to pension schemes; paid holiday; and for
stay for a long time as a member of an payments up to at least equal to national
organization but also devote great effort to their minimum wage. A decision may well be
work. Thus, rewards can attract people to join an necessary in many organizations as to whether
organization and encourage behavior that exceed the statutory minimum or not. According
contributes to the achievement of an organization to [29], for reward systems to be effective they
objectives. Therefore, one of aims of reward have to be seen as fair. This means that there
management is to give employees a sense of has to be openness with respect to information
belonging and motivate their attendance. about how the reward system operates and how
Secondly, the notion of "performance in employees will be rewarded. Employees should
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be involved in designing the reward system and who have been performing well. Such an
its administration. Fourthly, reward systems employee will become loyal to his or her
should be effective and efficient. According to organization and it reduces employees' turnover.
[30], reward systems should be effective and Long-term rewards include being made partner
efficient so that such actions are realized in the or cash benefits that mature after many years of
corporation and this system should be designed service or at retirement. These rewards are
in a way that creates maximum returns for both, strategic for retaining the best human resources.
the corporation and the individuals. [31] pointed
that an effective reward systems requires an Employees and employers should be aware of
experimental attitude; continual fine-tuning of the the strong relationship between rewards and
system; inputs from people within the system and performance, that is the relationship between,
ongoing evaluation of effectiveness of the how people perform and what they expect must
system. [32] concluded that, effective reward be clearly defined. Performance management
systems leads increased satisfaction for programs can be used to plan employees
employees, recognition of accomplishment; a performance, monitor performance, measuring
desire to attain high standards a means to performance, and evaluate performance and
achieve personal and social goals; high controlling performance. To achieve that a well
productivity and feeling of competence and designed system needs to be developed to link
freedom. Fifthly, since employees are different in positive contributions with rewards. This link can
their perception, attitude, mentality and be seen as the mutual gain between rewards or
orientation, then a contingent reward system is incentives received and targets or goals attained.
needed. According to [33], an important task of According to [36], there is symbiotic relationship
management is to know how to integrate between human resource strategy and
extrinsic, intrinsic and social rewards performance. In order to fully understand the
successfully. Employees are different for the kind influence of rewards on employees' performance;
of rewards that they want, under different one need to give a proper definition of
organizational conditions. These conditions performance. According to [37], organizational
implies that what is needed is a contingency performance comprises the actual outputs or
approach to rewards that considers needs of results of an organization measured against its
workers, type of jobs, organizational intended output (i.e. organizational goals and
environment, and the fact that some of the most objectives). Performance, according to [38], is
important rewards are in the form of fringe defined as a discipline of acting upon intelligence
benefits and allowance. These rewards are often and reported information in planning ahead and
more valuable to employees because they have in managing services operations both directly
more psychological and social meaning. Special and through partnerships with other delivering
benefits may be evidence of recognition, status, agents. They described it as processes that
or other important social values. Finally yet contribute to the effective management of
importantly reward systems should be well individuals and teams in order to achieve high
structured, and fits well into the organizational levels of organizational performance. In their
strategies. According to [34], an effective reward research paper [39] argued that paying for
system may have three components: Immediate, performance is a big issue in a contemporary
short- term and long-term incentives. This means human resource management; organizations
immediate recognition of a good performance, have long believed that productivity improve
short- term rewards for performance could be when pay is linked to performance and payment
offered monthly or quarterly and long-term results systems and incentives are developed to
rewards are given for showing loyalty over the support this belief. Rewards received can cause
years. Immediate rewards are given to great satisfaction among employees, and
employees repetitively so that they can be aware satisfaction level is directly associated with
of their outstanding performance, such rewards employees performance. [40] concluded with set
include being praised by an immediate of factors that influence the performance with
supervisor or it could be a simple tangible regards to work. Firstly, it depends on the
reward. Short-term rewards are made either amounts received and the amount the individual
monthly or quarterly bases depending on feels he or she should receive. Secondly,
performance. Examples of such rewards may comparison to what others collect influences
include cash benefits, or special gifts for people performance. Thirdly, employees levels of
exceptional performance. [35] stated that long- satisfaction with both intrinsic and extrinsic
term rewards are awards given to employees rewards received affect overall job performance.
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Furthermore, the study of [41] showed that the interaction between individual ability and
companies could gain competitive advantage rewards. It is increasingly recognized that
over other firms by motivating and retaining planning and enabling environment have a
human resources. Here, organizations motivate critical effect on individual performance, with
the high performers by providing financial and performance goals and standards, appropriate
non-financial reward systems that would motivate resources, guidance and support from the
the employees and enhance job satisfaction. managers all being central. The argument for
Financial and non-financial rewards have strong prompt effective remuneration strategy begins
influence over the employees' motivation and are with the simple concept that all rewards are
directly related to performance. The significance based on individual performance results. In their
of financial and non-financial rewards varies with research [46] stated that the system of payment
age. The non-financial rewards influence by results is based on the principle of scientific
motivation largely after the pay exceeds a certain management and tasks that could be measured
level. Once again, which kind of rewards can by standard assessment. In this context,
best lead to increased performance still needs employees belief that, if they produce an average
more research. However, [42] conducted rate of outcomes they will expect to receive their
research on non-financial rewards and workers normal payment, while if their outcomes are
job satisfaction and research claimed that an above the average level they will receive a bonus
effective reward package could have an or other kinds of rewards because they produce
important impact on the employees' more results than other colleagues or produce
performance. Stovall study showed that non- results above an employer's expectations.
financial rewards motivate workers and that According to [47], an individual's behavior in a
leads to job satisfaction that in turn leads to certain way is greatest when he or she believes
increased level of performance. A valid starting that their behavior will lead to certain rewards. In
point to reward employees for their increased this way, the method of payment by results is the
performance would be measuring this most prompt and efficient way to motivate
performance. Measuring performance is still to employees. Team performance, on the other
some extent troublesome, especially in countries hand has its share in literature. According to [48],
where employees are normally paid set wages or team bonuses are used to show that the
salaries and sometimes overtime payment. In company is serious about valuing team
discipline of human resource management, contributions to quality and increased
writers such as [43], [44] gave suggestions productivity. Here, the monetary rewards consist
regarding measuring employees performance of a cash bonus allocated to each team member;
and its practical indicators. According to them, and given separately from their salary. Within this
the following are some indicators for measuring context [49] and when reviewing business
employees performance, quality that can be concepts developed by the best companies to
measured by percentage of work output that deal with the increasingly turbulent environment,
must be redone or is rejected; customer it was found that these organizations employed
satisfaction that can be measured by the number reward systems that emphasized group
of loyal customers and customers' feedback. performance of individual performance. Also
Also timeliness measured in terms of how fast research conducted into a list of productive
work is performed by the employees when given companies, [50] assumed that the pay plans of
a certain task; absenteeism tardiness when the companies where the reason they achieved
employees absent themselves from work; and high productivity. Instead, he found that these
achievement of objectives measured when an pay plans that were based on group productivity
employee has surpassed his or her set targets, – based compensation, drove and reinforced the
he or she is then considered to have performed culture that in turn increased productivity. Finally,
well to achieve objectives. Once performance is the methods used to link rewards to performance
measured, the next step that becomes so urgent are numerous; and their explanation is beyond
is that, should rewarding performance be based the scope of this study. However, it has hoped
on individual or group merits. Larger part of that, this study will provide the base for thorough
human resources literature give a credit to the and beneficial future research in the field of
theme of individual performance, according to rewards management and its applications.
[45] the management of individual performance
within organizations has traditionally centered on 1.7.2 Empirical literature review
assessing performance and allocating rewards Research on the field of rewards and
with effective performance seen as the result of performance is very extensive. In this study more
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light will be shed on the relationship between the determining the effect of rewards on employees
independent variable (rewards types: Extrinsic, performance at Kenya power and lighting
intrinsic and social rewards) and the dependent company plc. Specifically the studies sought to
variable (performance). The identification of this determine the effect of cash bonus on
relationship is important, so that those in charged employees' performance. 68 questionnaires were
in the management of rewards systems can collected and used for statistical analysis and
design a diverse reward systems that meet all chi-square was used to analyze and test the
employees needs, differences, desires and hypothetical relationship between cash bonuses
expectations, at the same time attaining and employees performance. The findings of the
organizational goals and objectives through study, showed that cash bonuses have no effect
higher levels of performance and productivity. on employees performance, this was due to the
The following selected studies may help in variation in opinion regarding whether cash
designing contingent or diverse reward systems: bonuses affect performance or not. The study
The study of [51] aimed to investigate different concluded that the organization should focus on
factors determining extrinsic and intrinsic changing the intrinsic nature and content of jobs;
rewards in the light of Herzberg's two-factor this according to them will increase employees'
theory and their impact on banking employees performance, as employees will get more
job satisfaction and job performance and autonomy, more jobs that are seek challenging
endeavors to influence overall performance of assignments and responsibilities. The study
commercial banks of Pakistan. For this purpose, concluded that, further research can be done to
200 employees were selected and 165 cover other elements of rewards such as owing
completed questionnaires were used for equity, so that their findings can be used to
statistical analysis. The results of this study enhance management of performance. Diversity
showed that the provision of extrinsic and of reward systems and its alignment with other
intrinsic rewards rated as satisfactory, and that firms' strategies is seen by many researchers to
respondents agreed that extrinsic and intrinsic have a positive influence on organizational
rewards increased job performance of performance. The study [54] sought to
employees. The study was considered as a investigate the effect of rewards and
milestone for understanding systems of rewards compensation strategies on the performance of
and their effect on overall organizational commercial banks in Kenya. The study targeted
performance, especially in Eastern countries. a population of 46 banks with total number of
[52] conducted a similar study that aimed to employees 2738. A stratified random sample of
examine the relationship between rewards and 349 employees was selected and self-
employees performance as well as to identify the administered questionnaires and interviews were
relationship between extrinsic and intrinsic used to collect data and (SPSS and MS Excel)
rewards. The study explored factors determining packages were used for statistical analysis. Main
extrinsic and intrinsic rewards and their impact findings of this study included that rewards and
on employees performance and actions to compensation strategies used have a significant
influence the commercial banks for a effect on performance of commercial banks in
consideration of a more systematic and a Kenya. The study established that banks are
structured approach to acknowledge employees currently emphasizing on rewarding and
efforts which in turn prosper high performance compensating their employees therefore, bank
culture in commercial banks of Bangladesh. For performance is influenced by human resource
the sack of collecting relevant information, 200 management actions. Based on findings, a
questionnaires were distributed and 180 were positive relationship was identified between
returned and used for statistical analysis to test rewards and compensation strategies and
the hypotheses derived from predictive theories. employees performance. They concluded that
The t-test showed that, there is a statistical banks should embrace the use of both financial
significant relationship between extrinsic and and non-financial rewards beside other
intrinsic rewards on employees performance, that incentives and pay schemes. [55] aimed to
is a positive relationship between rewards and investigate the influence of rewards on
employees performance and a highly positive employees' performance. The case study
significant relationship between extrinsic and approaches was used to conduct this study, and
intrinsic rewards, and due to this positive for these sack two groups of the respondents
relationship, banks of Bangladesh should keep were involved: Front line management and
using rewards if they to increase their employees. Samples of 100 respondents were
performance. [53] this study aimed at taken and data collected through questionnaires
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and SPSS package was used to analyze the esteem has appropriately affected employees
data. Findings included that in order for the motivation. While medical aid and education
organization to perform well the following issues benefits are seen the most important component
should be considered for the betterment of the that affect employees motivation. They
company. These issues include expression of concluded that rewards systems used should be
employees views, participation in decision- set based on realistic and reliable standards. The
making, provision of continuous training; good reward plan exercised should be easily
working environment and good working understood by workers. Employees should be
equipment; good pay and the provision of allowed to participate in the setting of systems
required allowances. The researcher and policies of rewards. A similar research to the
recommended that the company should provide current study is the study conducted by [58]
training, promotion, house allowance, transport which aimed to examine the influence of rewards
allowance and management should respect and on workers performance. Subjects consisted of
delegate power to employees in order to do their 100 workers of central Bank Nigeria, Abuja. The
duties well, especially on those issues selection of subjects was done in such away to
concerning how to reward employees in order to include all categories of workers (senior and
enhance their performance. As discussed earlier junior staff) and it cuts across gender. Data were
on, the relationship between motivation and collected through the administration of self –
organizational performance is stronger than one designed questionnaire and SPSS package was
could imagine. Some researchers see this used to test the hypotheses. The findings were
relationship as imperative. The study of [56] tested at 0.05 level of significance. The results
aimed to identify and investigate both financial showed that there existed relationship between
and non-financial rewards that affect the extrinsic rewards and performance of workers,
motivation of employees in organizations. In this while no relationship existed between intrinsic
paper, imperativeness between motivation and rewards and performance of workers. They
performance; and retention of employees were concluded that employers should use their sense
discussed. To collect data questionnaires were of commitment to put in place appropriate
distributed to 25 employees in Astro Films (PVI) incentive plans that would encourage workers to
situated in Lahore city of Pakistan. The be more purposeful and improve their
researchers have found that there are different performance. The last study reviewed on this
factors that may affect the motivation of subject is that of. [59] sought to establish the
employees, and these factors can be classified relationship between intrinsic and different
into two groups: Financial and non- financial extrinsic rewards, with intrinsic motivation and
rewards. According to them, although financial affective commitment. For the sake of collecting
rewards are important for employees' motivation; relevant information, across sectional correlation,
the importance of non- financial rewards cannot study was conducted and self–designed
be discriminated. The study concluded that questionnaires were distributed. Data obtained
human resource management should explore all from 399 South African employees were
factors that motivate employees and must pay analyzed using correlations and multiple
attention to the problems of employees' regressions to test hypotheses. The following
motivation for the overall benefits of the main findings were emerged: Firstly, there is a
organization. [57] this study sought to determine relationship between all types of rewards
the role of rewards system in promoting investigated the outlined variables. Secondly, this
employees motivation in the Kenyan micro relationship is stronger for intrinsic than for
finance institutions. The study targeted 86 extrinsic rewards. Thirdly, monetary rewards do
employees from which a stratified random not account for the variance in intrinsic
sample of 43 respondents were drawn and to motivation above that of non –monetary rewards.
which questionnaires were distributed. Data The study concluded that, rewards management
collected were analyzed using SPSS package. should focus on job characteristics and designs,
The study concluded that, career development to increase staff intrinsic rewards and include
and coaching mentoring are the greatest non –monetary rewards such as supportive
component of employees motivation and that a leadership to encourage employees' intrinsic
good work environment is the most important motivation and affective commitment. This can
component of intrinsic rewards that many be achieved through different rewards
organizations offer to appropriate employees, particularly intrinsic non –monetary rewards.
other intrinsic rewards like those lead to self-
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3.4 Research Instrument and accurately achieves the purpose for which it
was designed. To ensure validity of the
Two instruments are used in this study: instrument, face, and content; the questionnaire
was given to professionals for judgment,
3.4.1 Primary data appropriateness and over all evaluation.
Reliability, on the other hand relates to the
Through the use of self-designed close ended consistency of collected information. In order to
questionnaire. This instrument of research is maintain the reliability of the instrument
referred for external judgment to ensure validity researcher used a pilot study. It was carried out
and reliability. The questionnaire is comprised of on a sample of Sixty (60) employees of Unified
five sections: Mining Companies located at Al-Shedia
Phosphate Mines. The result of the reliability test
Section (1): Comprising eight (8) items seeking was 0.837 showing that the instrument is highly
demographic data such as gender, age, marital reliable.
status, nationality, education, occupational status
or category, experience and income. 3.6 Data Collection
Section (2): Consist of ten (10) items which The numbers of questionnaires distributed to the
sought to collect information about the respondents is 308, which account to 60% of the
relationship between extrinsic rewards and total target population of 513 people. The total
employees performance. number of returned questionnaires is 268. Return
were subjected to a careful checking and 18
Section (3): Consist of ten (10) items regarding questionnaires were excluded and regarded as
the perceptions of workers on the relationship unsuitable for statistical analyses because they
between intrinsic rewards and employees do not meet the conditions and criteria of
performance. answering and filling the questionnaires,
therefore, the total number of useable returns is
Section (4): Contain ten (10) items requesting 250. None response is 40 and it was assumed
information about employees views on the that the non-respondents were either unwilling to
relationship between social rewards and cooperate or simply are not interested in the
employees performance. survey. Summary of distributed, returned,
useable, non responses questionnaires are
Section (5): Contain ten (10) items seeking shown in Table 4.
information on the perceptions of workers on
rewards mix (extrinsic, intrinsic and social 3.7 Procedures
rewards) and expected relationship with
employees performance. List of Instrument Items Questionnaires were distributed to the subjects
for Sections (2-5) are shown in Table (3). on location of their work. Simple instructions and
assistance were given on how to correctly fill in
3.4.2 Secondary data
the questionnaires and confidentiality of
Include all relevant available data that have been information is assured. The scoring of responses
prepared, collected, and analyzed by others is carried out as follows:
which include publications, periodicals, essays,
and other relevant documentaries. Section (1): No scores were attached (i.e. bio-
data).
3.5 Validity and Reliability
Sections (2-3-4-5): Contain independent and
According to research principles an instrument is dependent variables. Respondents were required
valid if it measures what it is intended to measure to provide their rating on their perception using a
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5-point Likert's Scale Measurement that ranged Descriptive Statistics and Person Product
from: Moment Correlations will be used for data
analyses and testing of hypotheses. For this
1: Strongly Disagree, 2: Disagree, 3: Partially purpose, SPSS (Version 16) was used to
Agree, 4: Agree, 5: Strongly Agree. implement data analyses.
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Salah; BJEMT, 13(4): 1-25, 2016; Article no.BJEMT.25822
month. Careful insight into these earnings based on the objectives of the study that include
show that the level of income is still low the effect of rewards on employee's
compared to the same industry in performance. The study targeted a sample size
neighboring countries; that’s why the of 308 respondents and from which 250
existence of extra rewards might balance out questionnaires were considered as relevant for
these difference. statistical analysis reaching a response rate of
81%. This response rate was satisfactory to
4.2 Reliability Analysis make conclusions on the effect of rewards on
employees' performance. Furthermore,
This part presents the background information of
Cronbach's Alpha was used to insure internal
the respondents; findings of the analysis are
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Salah; BJEMT, 13(4): 1-25, 2016; Article no.BJEMT.25822
consistency of the instrument. For this purpose, order of importance for factors of intrinsic
SPSS was used for reliability analysis. rewards: Firstly, comes recognition, with a
Cronbach's Alpha reliability analysis is shown in mean of 4.34; secondly, comes appraise &
Table 6. appreciation, with a mean of 4.02; thirdly,
comes work freedom& independence with
In social science research, a higher value shows a mean of 3.89; fourthly, comes
a more reliable generated scale. According to advancement & growth, with a mean of
[61], 0.70 is an acceptable reliability coefficient. 3.81; fifthly, comes training & skills
In Table 6, all reliability values are greater than development, with a mean of 3.79; sixthly,
the prescribed threshold of 0.70 and Cronbach's comes achievement acknowledgement,
Alpha values are compatible to reliability test of with a mean of 3.65; seventhly, comes
the conducted pilot study, which is equal to 0. challenging assignments, with a mean of
837. 3.61; eighthly, comes goals setting
Table 6. Reliability analysis participation, with a mean of 3.56; ninthly,
comes job rotations, with a mean of 3.52;
Scale Cronbach's Number of and finally, comes responsibility &
alpha items authority, with a mean of 3.45. The study,
Extrinsic rewards 0.852 8 found that, the majority of the respondents
Intrinsic rewards 0.831 10 indicated that these companies showed
Social rewards 0.822 10 recognition and appreciation which
Mix rewards 0.843 10 affected employees feel sense of
satisfaction and hence increased their
4.3 Descriptive Statistics performance. Development on personal
and professional grounds were regarded
Descriptive Statistics in the form of means and as strong motivator; therefore, these
standard deviations for independent variables companies should concentrate on these
were computed and presented in Table 7. issues. Lastly, mining companies should
reconsider modifying their structure to
a) From the findings on the influence of allow for more room to allow for increased
extrinsic rewards on employees levels of responsibility & authority.
performance, the study showed the c) From the findings on the influence of social
following order of importance for factors of rewards on employees performance, the
extrinsic rewards: Firstly, comes medical study found the following order of
allowance; with a mean of 4.42; secondly, importance for factors of social rewards:
comes basic payment (wages &salaries), Firstly, comes supervisors support, with a
with a mean of 4.41, thirdly, comes good mean of 3.96; secondly, comes social
environment &Working Conditions with a status, with a mean of 3.67; thirdly, comes
mean of 4.23, fourthly, comes Retirement status symbols, with a mean of 3.66;
Benefits, with a mean of 4.18, fifthly, fourthly, comes group belongness and
comes performance(bonus &awards), with affiliations, with a mean of 3.62; fifthly,
a mean of 3,99; sixthly, comes job security, comes caring & supportive attitude, with a
with a mean of 3,98; seventhly, comes mean of 3.57; sixthly, comes supportive
compensation & incentives policies, with a environment, with a mean of 3.55;
mean of 3.97; eighthly, comes contract of seventhly, comes positive colleagues
employment, with a mean of 3.89; ninthly, relationships, with a mean of 3.52;
comes accommodation & transportation eighthly, comes organizational supportive
Allowance, with a mean of 3.82 and finally, structure and culture, with a mean of 3.46;
comes Job Promotion, with a mean of ninthly, comes prestige enhancement, with
3.65. The study, found that, the majority of a mean of 3.45; and finally, comes off-job
the respondents agreed that, medical social recreation clubs membership, with a
allowance has deep influence on mean of 3.32. The study, found that, the
employees performance because the cost majority of the respondents indicated that,
of medical treatment in Jordan is very high good supportive relationships with
compared to earned levels of income. immediate supervisors acted as motivator
b) From the findings on the influence of and hence has immediate impact on
intrinsic rewards on employees employees performance. However, the
performance, the study found the following social well being of employees was seen
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as influential important factor with a a call for more socialization through social
considerable affect on performance. This meetings which make people open
direction goes in line with modern human towards others and hence build up a
resource research; based on that, there is positive and a productive personality.
Table 7. Rates of rewards types on employees performance
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Salah; BJEMT, 13(4): 1-25, 2016; Article no.BJEMT.25822
d) From the findings on the influence of Performance) Expressed in figures 4.054 , 3.430,
rewards mix on employees performance, 3.578, 3.922 >2.498; this indicates that over all
the study indicated the following order of employees Performance is well because
importance for factors of rewards Mix: employees are satisfied with rewards they
Firstly, comes pay and recognition, with a receive.
mean of 4.46; secondly, comes job
security & advancement and growth, with a Table 8. Over all means for rewards category
mean of 4.22; thirdly, comes retirement and employees performance
benefits. recognition and social status, with
a mean of 4.21; fourthly, comes good Variables Means Standard
deviations
environment &working conditions and work
Employees performance 2.498 .130
freedom& independence, with a mean of
Extrinsic rewards 4.054 .195
4.01; fifthly, comes compensation &
Intrinsic rewards 3.430 .176
incentives policies, challenging Social rewards 3.578 .163
assignments and social status, with a Mix rewards 3.922 .187
mean of 3.89; sixthly, comes supervisors
support & training and skills development,
4.4 Pearson Correlation Coefficient
with a mean of 3.80; seventhly, comes
goals setting participation, positive
Pearson's correlation coefficient (r) is a measure
colleagues relationships, with a mean of
of the strength of the association between the
3.78; eighthly, comes contract of
two variables. According to the common practice
employment, advancement & growth and
used in research studies that normally include
status symbols, with a mean of 3.66;
several variables, beyond knowing the means
ninthly, comes responsibility & authority,
and standard deviations of the dependent and
social status, with a mean of 3.65; and
independent variables, the researcher would
finally, comes organizational supportive
often like to know how one variable is related to
structure and culture responsibility and
another. While correlation could range between -
authority, with a mean of 3.54. The study,
1.0 and+1.0, the researcher need to know if any
found that, the majority of the respondents
correlation found between two variables is
responses indicated that, strong
significant or not (i.e.; if it has occurred solely by
association between financial and non-
chance or if there is a high probability of its
financial rewards in the form of pay and
actual existence). As for the information, a
recognition which in turn reveals that
significance of p=0.05 is the generally accepted
people want money and respect if they are
conventional level in social sciences research.
to increase their performance. In addition
This indicates that 95 times out of 100, the
to that security, advancement and growth
researcher can be sure that there is a true or
are very important factors that determines
significant correlation between the two variables
the level of performance. Finally, the
and there is only a 5% chance that the
maintenance of good social status goes
relationship does not truly exist. The correlation
beyond employment period to include the
matrix between dependent variable and
retirement stage. All said to have crucial
independent variables are exhibited in Table 9.
impact on employees overall performance.
Descriptive Statistics in the form of overall As shown in Table 9, all four dimensions have
means and standard deviations for both significant correlation with employees'
independent and dependent variables for the performance. The highest coefficient of
respondents were computed and presented in correlation in this study was between extrinsic
Table 8. rewards and employees' performance. There
was a significant positive relationship between
Table 8 shows that the means for reward types extrinsic rewards and employees performance (r
ranged from a low value of 2.498 to a high value =.592, p<0.01). The second highest correlation
of 4.054. Results of descriptive Statistics reveal was between Intrinsic rewards and employees
that the rewarding of employees is relatively performance (r =.553, p<0.01) and the third
good. As can be seen from Table 8 the mean for highest correlation was found between social
the entire independent variables are relatively rewards and employees performance (r =.497,
high, and are a above the mean value of the p<0.01) and finally, high correlation was noticed
dependent variable (in this case employees between towards mix and employees
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Salah; BJEMT, 13(4): 1-25, 2016; Article no.BJEMT.25822
performance (r =.459, p<0.01). In other words, 4.6 Hypotheses Testing and Results
the results indicate that all four variables have
significant correlation with Employees For hypotheses testing, Pearson Product
performance. Moment Correlation Coefficient is used for
analysis and interpretation of results.
4.5 Regression Analysis
Hypotheses 1: The first hypotheses states that:
Regression equation is Y=
.560X1+.495X2+.454X3+.325X4+.486X5 Ho: There is no significant direct relationship
between extrinsic rewards on employees'
From the above regression equation it was found performance.
that holding extrinsic rewards, intrinsic rewards,
social rewards and rewards mix to a constant H1: There is significant direct relationship
zero, employees' performance will be 0.560, a between extrinsic rewards on employees'
unit increase in extrinsic strategies would lead to performance.
increase in employees performance by 0.495
units, a unit increase in intrinsic rewards would Results Discussion: Table 9 (a) shows that,
lead to increase in employees performance by value at 0.05 significant level with degree of
0.454 units, a unit increase in social rewards freedom 98 is 0.197. From calculations and
would lead to increase in employees indications r > tv (i.e. 0.480 > 0.197). Since
performance by 0.325 units and a unit increase calculated value is (0.480) is greater than the
in rewards mix would lead to increase in table value (0.197), the result is significant.
employees performance by 0. 486units. Extrinsic
rewards had the greatest effect on employees Decision: According to the above analysis the
performance, followed by rewards mix, then null hypotheses (Ho) is rejected and the
intrinsic rewards while social rewards had the alternative hypotheses (H1) is accepted, that is
least effect on employees performance. At 5% there is significant/direct relationship between
level of significance and 95% level of confidence, extrinsic rewards on employees' performance.
extrinsic rewards had a 0. 043 level of This implies that, an increase in extrinsic rewards
significance; intrinsic rewards had a 0.036 level like salaries; cash bonus, allowances of various
of significance, social rewards had a 0.033 level types given to employees will lead to a
of significance while rewards mix had 0.041 level correspondent increase in their performance.
of significance. Hence the sequence of the most The justification for this result is that, most
significant factors is extrinsic rewards, rewards people, including the workers of these mining
mix, intrinsic rewards and social rewards All the firms regard extra money received in the form of
variables were significant (p<0.05). salaries, cash bonus, allowances of various
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Salah; BJEMT, 13(4): 1-25, 2016; Article no.BJEMT.25822
types as one of the most important factors that Results Discussion: Table 9 (c) shows that,
encourage them to work harder and hence push value at 0.05 significant level with degree of
them to improve their performance. freedom 98 is 0.197. From calculations and
indications r > tv (i.e. 0.422 > 0.197). Since
Hypotheses 2: The second hypotheses states calculated value is (0.422) is greater than the
that: table value (0.197), the result is significant.
Ho: There is no significant direct relationship
between intrinsic rewards on employees' Decision: According to the above analysis the
performance. null hypotheses (Ho) is rejected and the
alternative hypotheses (H1) is accepted, that is
H2: There is significant direct relationship there is significant/direct relationship between
between intrinsic rewards on employees' social rewards on employees' performance. This
performance. implies that, an increase in social rewards like
supervisors' support and good relations with
Results Discussion: Table 9 (b) shows that, colleagues given and felt by the employees will
value at 0.05 significant level with degree of lead to a correspondent increase in their
freedom 98 is 0.197. From calculations and performance. The justification for this result is
indications r > tv (i.e. 0.450 > 0.197). Since that, workers of these miming companies
calculated value is (0.450) is greater than the consider social rewards in the form of
Table value (0.197), the result is significant. supervisors support and good relations with
colleagues given and felt by the employees as
Decision: According to the above analysis the
important factors that encourage them to work
null hypotheses (Ho) is rejected and the
harder which is reflected in the form of increased
alternative hypotheses (H1) is accepted, that is
performance.
there is significant/direct relationship between
intrinsic rewards on employees' performance.
This implies that, an increase in intrinsic rewards Hypotheses 4: The fourth hypotheses states
like appreciation, recognition and praise and so that:
on, given to employees will lead to a
correspondent increase in their performance. Ho: There is no significant direct relationship
The justification for this result is that, workers of between rewards mix (extrinsic, intrinsic and
these miming companies consider appreciation, social rewards) on employees' performance.
recognition and praise and so on as important
factors that encourage them to work harder H4: There is significant direct relationship
which is reflected in the form of increased between rewards mix (extrinsic, intrinsic and
performance. social rewards) on employees' performance.
Hypotheses 3: The third hypotheses states that: Results Discussion: Table 9 (d) shows that,
value at 0.05 significant level with degree of
Ho: There is no significant direct relationship
freedom 98 is 0.197. From calculations and
between social rewards on employees'
indications r > tv (i.e. 0.413 > 0.197). Since
performance.
calculated value is (0.413) is greater than the
H3: There is significant direct relationship table value (0.197), the result is significant.
between social rewards on employees'
performance.
Table 11. Correlation between extrinsic rewards, intrinsic rewards, social rewards, rewards mix
and employees performance
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in shaping people results and performance, aspects that may have significant influence on
therefore, reward strategies should reinforce employees performance.
these people results. In addition to that, it's
hoped that, the findings of this study can be used 7. LIMITATIONS OF THE STUDY
as a practical handy tool in providing practical
solutions to issue of conflicts, that have resulted Similar to other research studies, this study has
from the existence of poor reward systems or the the following prominent limitations: Firstly, the
ineffective management of reward systems. measurement of study variables and their effect
on performance are all based on respondents
5. CONCLUSION perceptions and attitudes while filling the
questionnaires. Thus, errors might exist in the
Human resources are valuable assets of data set. Secondly, the study covered three
organizations and they constitute critical mining companies in the private sector, so if
component of strategic success across all types findings of this study to be generalized, then
of organizations. Highly rewarded employees, different sectors like manufacturing, finance, and
tend to be highly satisfied well performing public sector firms should be researched to get
employees; they also tend to remain longer with more updated and valuable contributions
the organizations and that would lead or increase regarding the effect of rewards systems on
competitive edge. Going by the findings of this employees performance. Thirdly, the
study a positive significant relationships have findings of this study is applicable only to smaller
existed between (extrinsic, intrinsic, social and to medium sized organizations, therefore, the
reward mix) and employees performance; present findings cannot be generalized to a
therefore, the issue of rewarding employees bigger organizations. Fourthly, despite the fact
using all possible types of rewards matters a lot that the literature search was extensive,
and should never be neglected by management potentially valuable studies may not have been
of the organizations because deliberate included and the selection of literature sources
ignorance of rewarding needs will lead to non may have elements of bias and subjectivity.
motivated, non committed staff with poor Finally, more future research should be
performance. conducted to explore the distinction between
different forms of extrinsic, intrinsic and social
6. RECOMMENDATIONS rewards; and across different sectors and across
different cultures, so that, more complete and
Since the relationship between rewards and thorough understanding of the effect of different
employees performance is considered to be rewards programs on people results can be
strong, then that should alarm management to be achieved.
more committed regarding the setting of
appropriate incentive plans because that will COMPETING INTERESTS
encourage employees to be more purposeful and
hence increase their performance. It is also Author has declared that no competing interests
recommended that there should be a consistency exist.
between firms overall strategies and the reward
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