Sie sind auf Seite 1von 17


The project tile should be precise and clear. The format could be as follows:




For the Post Graduate Diploma in Human Resources Management

St. Xavier’s College (Autonomous)

Month & Year


I declare that the project titled “………………………………………….” has been done by me and has
not been submitted in part or full to any authority for award of any Degree / Diploma.
Signature of student Name in full Date:

Description Page no
Acknowledgement i
Declaration by student
Executive summary
1. Introduction
1.1 Project
1.2 Industry
1.3 Company
1.4 review of literature (if necessary)
2. Methodology
3. Limitations of the study
4. Analysis and interpretation of data / facts obtained
5. Findings & references
6. Recommendations
7. Conclusions


I, Payel Das OF ST.XAVIERS COLLEGE OF Post Graduate diploma in Human Resource

management SEMESTER II, hereby declare that I have completed the project on ‘REWARD
academic year 2018-19. The information submitted is true and original to the best of my

The aim of this research study was to investigate the impact of rewards management on
employee motivation of BPO employees in Kolkata. More specifically it aimed to find out
which aspects of the reward system functions well, and which aspects could be further
developed and improved in order to increase employee satisfaction According to the
literature review on the previous studies it is proven that organizations use reward systems
and strategies to motivate their employees and to increase their performance.

In this study, employee motivation effectiveness is determined on reward systems. At the

beginning of the study, there is a literature review and there are hypotheses concerning the
effects of reward management system and motivation on employee performance. Secondly,
theoretical framework is discussed through the effects of reward management system
applications and motivation on employee performance. Finally hypotheses are tested using
data from majorly 5 companies from Kolkata and research results or findings are analyzed.


This research is intended to achieve the following objectives:-

To study the reward and recognition program and its effectiveness among the employees in
BPO sector.
 To Study of various reward systems in BPO sector
 To study the overall employee opinion about the current reward system in the
 To determine if there is a relationship between reward and employee motivation.
 To determine the impact of rewards on motivation.
 To determine which factors contribute to work motivation
 To identify the level of satisfaction employees have towards the current reward and
recognition program in the organization.
 To what extent does employee rewards have an impact on employee motivation in
BPO companies of Kolkata
 The objective of this study is to identify the kind of relationship that exists between
rewards and employees motivation.

 To assess the effectiveness of existing reward system

 To make suitable recommendation to make current reward system more effective.

 Study of linkage between PMS & reward system.

 To identify the gaps in the current reward system.
 Reward System is an official system and this is done by performance-based
measures, objective or subjective.
 To reward employees fairly, equitably and consistently in correlation to the
value of these individuals to the organization.


1. The study enumerates the importance of the reward system and its effectiveness
among the employees In BPO industry
2. Recognizing and rewarding good performance in an organization.
3. Building an effective employee recognition strategy.
4. Recognition implies that whether the employees were receiving the recognition and
feedback for the job they perform.
5. Whether the provide benefits such as Reward and recognition schemes are
satisfactory or not.

Literature Review

This thesis begins with an introduction section which will outline the background of the
study and also the aims of the research.

The second section of this study is a literature review. A literature review is “a systematic,
explicit, and reproducible method for identifying, evaluating, and synthesizing the existing
body of completed and recorded work produced by researchers, scholars, and
(Fink 2005). The literature review of this study focuses largely on reward systems, the
various incentives employers offer employees, elements of motivation and employee
performance with an emphasis on the reward systems that are predominantly used in the
Irish construction industry.

Hartle (1995) points out that reward is an important part of the feedback loop in
performance management.

Mehmood (2013) explicates reward system is the requirement of any organization to retain
and hire the most suitable employee to gain competitive edge in a competitive
environment. He further explains that reward system inspiring the employee to work harder
and faster because employee needs motivation to put extra effort on their task. Finally he
concludes that reward system should match with the organizational culture and the strategy
in order to achieve sustainable competitive advantage.

This study examines the impact of extrinsic and intrinsic rewards on employee performance
in a BPO sector. Employee performance is taken as dependent variable and extrinsic and
intrinsic rewards are taken as independent variables. In independent variable, extrinsic
rewards represent four dimensions which are pay, bonus benefits and promotion. Intrinsic
rewards embody recognition, career advancement, responsibility and learning opportunity.
Hypotheses were developed and tested based on the conceptual framework. Extrinsic
rewards Intrinsic rewards Reward system Employee performance.


In India, Business Process Outsourcing (BPO) is the fastest growing segment of the ITES
(Information Technology Enabled Services) industry. Factors such as economy of scale,
business risk mitigation, cost advantage; utilization improvement and superior competency
have all lead to the growth of the Indian BPO industry. Business process outsourcing in
India, which started around the mid-90s, has now grown by leaps and bounds.

India is now the world's favoured market for BPO companies, among other competitors,
such as, Australia, China, Philippines and Ireland. The BPO boom in India is credited to cheap
labor costs and India's huge talent pool of skilled, English-speaking professionals. Research
by the National Association of Software Services and Companies (NASSCOM) has revealed
that quality orientation among leading BPO companies, 24/7 services, India's unique
geographic location and the investor friendly tax structure in India have all made the
BPO industry in India very popular.
The term Business Process Outsourcing or BPO refers to outsourcing in all fields. A BPO
service provider usually administers and manages a particular business process for another
company. BPOs either use new technology or apply an existing technology in a new way to
improve a particular business process. India is currently the number one destination for
business process outsourcing, as most companies in the US and UK outsource IT-related
business processes to Indian service providers.


1. Customer support services: 24/7 inbound / outbound call center services that
address customer queries and concerns through phone, email and live chat.
2. Technical support services: Installation, product support, running support,
troubleshooting, usage support and problem resolution for computer software,
hardware, peripherals and internet infrastructure.
3. Telemarketing services: Interacting with potential customers and creating
interest for the customer's services/ products. Up-selling, promoting and cross
selling to existing customers and completing online sales processes.
4. IT help desk services: Level 1 and 2 multi-channel support, system problem
resolutions, technical problem resolution, office productivity tools support,
answering product usage queries and performing remote diagnostics.
5. Insurance processing: New business acquisition and promotion, claims
processing, policy maintenance and policy management.
6. Data entry and data processing: Data entry from paper, books, images, e-books,
yellow pages, web sites, business cards, printed documents, software
applications, receipts, bills, catalogs and mailing lists.
7. Data conversion services: Data conversion for databases, word processors,
spreadsheets and software applications. Data conversion of raw data into PDF,
HTML, Word or Acrobat formats.
8. Bookkeeping and accounting services: Maintenance of the customer's general
ledger, accounts receivables, accounts payables, financial statements, bank
reconciliations and assets / equipment ledgers.
9. Form processing services: Online form processing, payroll processing, medical
billing, insurance claim forms processing and medical forms processing.
10. Online research: Internet search, product research, market research, surveys,
analysis, web research and mailing list research.


Wilson (1995) defines reward systems as follows:

“A Reward system is any process within an organization that encourages,

reinforces, or compensates people for taking a particular set of actions. It may beformal or
informal, cash or noncash, immediate or delayed”.

It can also be defined as “a structured method of evaluating and compensating employees

based on their performance”.

Rewards are what employees receive for performing well. Sometimes these rewards come
from the organization in the form of money, recognition and promotions. Rewards can also
consist of feelings from having performed well in work. It can be said that rewards are very
powerful motivators of performance.

Organizations need various types of performance from their employees to become active
members of the organization, and to improve their performance.
In order to achieve improvements in performance different reward systems must be


Employee reward and recognition programs are of immense importance to an
organization and will benefit the employee along with the organization.


To recognize individual and team efforts.
To create a better working environment.
To attract and retain good employees
To have system that recognizes as many people as possible.

The key characteristics of developing a reward program are as follows:

Identification of company or group goals that the reward program will support.

Identification of the desired employee Performance or behaviours that will

reinforce the company’s goals.

Determination of key measurements of the performance based on the individual or

groups previous achievements

Determination of appropriate rewards.

Communication of program to employees.

Reward system are concerned with two major issues: Performance and

Performance includes defining and evaluating performance and providing

employees with feedback. Rewards included bonus, salary increase,
promotions, stock awards and perquisites. Large corporations with several
different businesses may have multiple reward systems. And while they may
share some fundamental philosophies and values,
they may differ accordingly to the particular business setting, competitive
situation, and product life cycle. Thus, multiple reward systems can support
multiple cultures within one organization.

These components will be designed, developed and maintained on the basis

of reward strategies and policies which are created within the context of the
organizations between strategies.

1. Improve Organizational Effectiveness: Support the attainment of the

organization’s mission, strategies, and help to achieve sustainable,
competitive advantage.

2. Support and Change Culture: Under pin and as necessary help to change
the organizational culture as expressed through its values for performance
innovation, risk taking, quality, flexibility and team working.
3. Achieve Integration: Be an integrated part of the management process of
the organization. This involves playing a key role in a mutually reinforcing
and coherent range of personal policies and process.

4. Manageable: It helps to manage the undue administrative burdens imposed

on managers and members of the personal department.

5. Motivate Employees: Motivate employees to achieve high level of quality

6. Increased Commitment: Enhance the commitment of employees to the
organization that will a) want to remain members of it, (b) develop a strong
belief in and acceptance of the values and goals of the organization; and (c)
be ready and willing to exert considerable effort on its behalf.
7. Fairness and Equity: Reward assesses can upgrade competence and
encourage personal development.
8. Improved Skills: The employees can upgrade competence and encourage
personal development.

9. Improved Quality: Help to achieve continuous improvement in levels of

quality and customer service.

10. Develop team working: An effective award system improves co-

operation and effective team working at all level.

Rewards serve many purposes in organizations. They serve to build a better
employment deal, hold on to good employees and to reduce turnover. The principal
goal is to increase people's willingness to work in one’s company, to enhance their
Most people assimilate "rewards", with salary raise or bonuses, but this is only one
of reward, extrinsic reward. Studies proves that salespeople prefer pay raises
because they feel frustrated by their inability to obtain other rewards, but this
behavior can be modified by applying a complete reward strategy.
Besides verbal appreciation, tokens of appreciation, rewards (award trophies, framed
certificates, special parking spaces, gift cards, pens or a free day off.) etc. are
generally given to employees. The principal difficulty is to find a balance between
employees'performance (extrinsic) and happiness (intrinsic)
There are two kinds of rewards:

Extrinsic Rewards- Tangible / Concrete Rewards.

Intrinsic Rewards- Non Tangible / to give satisfaction to Individual.


Intrinsic rewards are the satisfaction that an individual obtains from the job itself. It
means, they are the factors of esteem and self-actualization needs of the employees.
The satisfaction one gets from the job itself are its intrinsic rewards. These
satisfactions are self-initiated rewards, such as having pride in one’s work, having a
feeling of accomplishment, or being part of a team. These satisfactions are self-
initiated rewards and are fulfilled internally by the employees. These rewards consist
of having a pride in work, having a feeling of accomplishment, or being a part of the
team etc.

Extrinsic rewards are the benefits provided externally. These rewards are provided in
term of money and fringe benefits. Extrinsic rewards include money, promotions,
and fringe benefits. Their common thread is that extrinsic rewards are external to the
job and come from an outside source, mainly, management. These rewards are
necessary to fulfill physiological and safety needs of the employees. Such rewards
are the results of management policies and procedures of the organization.


There are a number of different types of reward programs aimed at both individual and team

Variable Pay

Variable pay or pay-for-performance is a compensation program in which a portion of a

person's pay is considered "at risk." Variable pay can be tied to the performance of the
company, the results of a business unit, an individual's accomplishments, or any combination
of these. It can take many forms, including bonus programs, stock options, and one-time
awards for significant accomplishments.


Bonus programs have been used in American business for some time. They usually reward
individual accomplishment and are frequently used in sales organizations to encourage
salespersons to generate additional business or higher profits. They can also be used,
however, to recognize group accomplishments. Indeed, increasing numbers of businesses
have switched from individual bonus programs to one which reward contributions to
corporate performance at group, departmental, or company-wide levels.

According to some experts, small businesses interested in long-term benefits should probably
consider another type of reward. Bonuses are generally short-term motivators. By rewarding
an employee's performance for the previous year, they encourage a short-term perspective
rather than future-oriented accomplishments. In addition, these programs need to be carefully
structured to ensure they are rewarding accomplishments above and beyond an individual or
group's basic functions. Otherwise, they run the risk of being perceived of as entitlements or
regular merit pay, rather than a reward for outstanding work. Proponents, however, contend
that bonuses are a perfectly legitimate means of rewarding outstanding performance, and they
argue that such compensation can actually be a powerful tool to encourage future top-level

Profit Sharing
Profit sharing refers to the strategy of creating a pool of monies to be disbursed to employees
by taking a stated percentage of a company's profits. The amount given to an employee is
usually equal to a percentage of the employee's salary and is disbursed after a business closes
its books for the year. The benefits can be provided either in actual cash or via contributions
to employee's 401(k) plans. A benefit for a company offering this type of reward is that it can
keep fixed costs low.

The idea behind profit sharing is to reward employees for their contributions to a company's
achieved profit goal. It encourages employees to stay put because it is usually structured to
reward employees who stay with the company; most profit sharing programs require an
employee to be vested in the program over a number of years before receiving any money.
Unless well managed, profit sharing may not properly motivate individuals if all receive the
share anyway. A team spirit (everyone pulling together to achieve that profit) can counter
this—especially if it arises from the employees and is not just management propaganda.

Additional Hour’s Rewards: This is similar to that of overtime. However, it is

paid to employees if they put in an extra hour of work for working at unsocial hours or for
working long hours on top of overtime hours.

Commission: Many organizations pay commission to sales staff based on the sales that they
have generated. The commission is based on the number of successful sales and the total
business revenue that they have made. This is a popular method of incentive.

Performance Related Pay: This is typically paid to employees who have met or exceeded
their targets and objectives. This method of reward can be measured at either team or
department level.

Profit Related Pay: Profits related pay is associated with if an organization is incurring a
profit situation. If the organization is getting more than the expected profits, then employees
receive an addition amount of money that has been defined as a variable component of the

Payment by Results: This is very similar to that of profit related pay. This reward is based
on the number of sales and total revenue generated by the organization.

Bonuses: Bonuses will be paid to employees who have met or exceeded their
targets and objectives. This is aimed at employees to improve their performance
and to work harder. There are several types of bonus programs followed by
industries, some are as follows: Current Profit Sharing, Gain Sharing, Spot Bonus
Award, Noncash Bonus, Sign-on Bonus, Mission Bonus, Referral Bonus,
Retention Bonus, Holiday Bonus, etc.

Recognition: Employees will not always be motivated by monetary value alone.

They do require recognition to be motivated and to perform well in their work.

Job Enrichment: This is a common type of recognition that is aimed at employees

to get motivated. Job enrichment allows more challenging tasks to be included in
the day-to-day tasks performed by the employee.
Job Rotation: Unlike job enrichment, job rotation refers to shifting employees
between different functions. This will give them more experience and a sense of

Teamwork: Teamwork is also considered as recognition. Creating teamwork

between team members will improve performance at work. Social relationships at
work are essential for any organization.

Empowerment: Empowerment refers to when employees are given authority to

make certain decisions. This decision making authority is restricted only to the day
to day tasks.

Training: Many organizations place a greater emphasis on training. This is

considered as recognition for employees. Training could vary from on the job
training to personal development training.

Benefits: Another element in the total rewards approach includes employee

benefits. Benefits are programs that an employer uses to supplement the cash
compensation that employees receive. These benefits provide a level of security for
employees and their families, and may include health care insurance, time off,
disability insurance and retirement programs. As such, benefits fall under the
“satisfier” category.

This again is an important type of recognition that is given to employees who
perform better. Organizations have introduced award systems such as best
performer of the month etc. and all these will lead employees to perform better.

Rewards are basically the methods to extrinsically motivate employees. These awards can be
MONETARY or NON MONETARY. Some of the commonly given awards in various
organizations are:

Service Awards:

Each year that an employee commits to an employer, he offers great advantages to the
business or organization. Employees gain more knowledge of their position and
responsibilities over time, and the company does not have to set aside time and money hiring
and training new employees. Employers often reward employees who remain committed with
a recognition pin or a certificate acknowledging the number of years of continuous service.
Employers may further reward long-term
employees with an extra gift such as a watch or a special desk set, typically
engraved with the employee’s name and the date they received the honor.
Employee of the Month:
Some workers will consider being designated Employee of the Month a great
honor. This award is commonly given to the one employee each month who has given
exceptional service, had perfect attendance.

Attendance Awards:
Companies depend on employees to be punctual and perform tasks to their
potential so that the work load can be evenly distributed. Employees who strive to be at work
during every scheduled shift and never come in late deserve to be recognized in a special
way. Perfect attendance awards can be given in the form of a certificate, plaque or even as a
cash bonus. Sometimes employers will give employees with perfect attendance a day off with
pay or a gift certificate to a local restaurant in appreciation for their commitment to the

Safety Awards:
Safety awards are a great way for employers to recognize employees or teams for their
continued adherence to safety guidelines. This kind is typically awarded when an employee
or a group files no incident or accident reports over a given period of time, such as a month or
year. These acknowledgements are often expressed in terms of the man (or woman) hours
since the team last experienced in injury. Cash bonuses or gifts such as tickets to popular
local events make great safety awards.

Company Advancement:
The ultimate reward that every employee tends to strive for is company
advancement. Employees generally work hard to earn recognition in an attempt to be
promoted to a higher position within the company or receive an annual raise in pay.
Employers should choose candidates for advancement carefully, avoiding favoritism and
ensuring that the most reliable and skilled employees are advanced to higher positions.

Cash-in-Your Account Award:

A small cash award designed to recognize employees for going the extra mile in
getting the job done. These awards do not recognize overall performance, but
rather specific instances of exemplary performance. Awards range from Rs. 1000
to Rs. 10000 in Rs. 1000 increments.

Suggestion Award:
Under the suggestion program, employee are granted an award for formal
suggestions which have been evaluated and adopted. The amount of the award is
determined by the amount of tangible and intangible benefits of the idea.

Certificates of Appreciation:
Certificates granted to employees or non-employees who have made outstanding
contributions or who have performed significant services to the Department.

On the Spot Award:

A small award which is granted as a means to recognize employees for those dayto-day
efforts which contribute in a special way to get the job done.
External Awards:
Awards sponsored by other agencies and non-government organizations given to corporate

Group-Based Reward Systems

Group-based reward systems are based on a measurement of team performance,with
individual rewards received on the basis of this performance. While these systems encourage
individual efforts toward common business goals, they also tend to reward under-performing
employees along with average and above-average
employees. A reward program which recognizes individual achievements in
addition to team performance can provide extra incentive for employees.

The study mainly depended upon the primary data. However, some secondary sources of data
were also consulted for the purpose of gathering background information supporting the
study. Relevant primary data was collected through a sample survey using a Self designed
questionnaire which was used as the primary data collection method . Books, journal
articles and online references used as the secondary data. The aim of this research is to
identify the impact of extrinsic and intrinsic reward on employee performance in a BPO
sector. The representative sample of 110 employees are selected from few IT companies of
Kolkata and Hyderabad. The sample was selected from Capgemini, TCS,CTS, IBM and
Accenture. And the sample represents every level of employee category including top level,
middle level and bottom level.

Access to these BPO firms was secured through contacts and through networking techniques.
Altogether, data was collected from a total of 110 employees.The perceptions of the
respondents on the Eighteen statements, qualifying as the variables being derived from a
review of literature in the area of study, are measured on Likert’s (1932) five-point scale of
“Strongly Disagree, Disagree, Agree, Strongly agree’, Neither agree nor Disagree”.

The scale in quantitative terms being:

0 - 20 per cent: strongly disagree,
21 - 40 per cent: disagree,
41 - 60 per cent: Neither agree nor Disagree,
61 - 80 per cent: agree,
81 - 100 per cent: strongly agree
A multiple regression analysis has been done to identify the variables influencing the
satisfaction of the respondents towards the reward and recognition policy and the results


The research design used in this research will be Exploratory Research Design.


In order to take a reasonable sample size and not to disturb the functioning of the
organization, a sample size of 100 employees of 4 or 5 companies will be taken for research
Accordingly, employees will be selected at random from all the departments of the
organization and feedback forms (questionnaire) will be obtained. The data will be analyzed
in order to understand the effectiveness of reward system on employee performance in the


The technique of Random Sampling will be used in the analysis of the data.
Random sampling from a finite population refers to that method of sample selection, which
gives each possible sample combination an equal probability of being picked up and each
item in the entire population to have an equal chance of being included in the sample. This
sampling is without replacement, i.e. once an item is selected for the sample, it cannot
appear in the sample again.

To determine the appropriate data for research mainly two kinds of data will be collected
namely primary & secondary data as explained below:

Primary data is those, which will be collected afresh & for the first time and thus happen to
be original in character. However, there are many methods of collecting the primary data;
all will be not used for the purpose of this project. The ones that will be used are:

 Questionnaire

 Observation


Secondary data will be collected from previous researches and literature to fill in the
respective project. The secondary data will be collected through:

 Text Books

 Articles

 Journals

 Websites


The main statistical tools which will be used for the collection and analyses of data in this
project are:
 Questionnaire

 Pie Charts

 Tables