Effect of Rewards on Staff Motivation


"Desire is the art of getting people to do what you want those to do because they would like to do it. "

--Dwight D. Eisenhower

Like just a little youngster being given a delicious chocolate on position first in his class or a large hug for doing something good like aiding someone, or cleaning the area after playing, rewards whether financial or non-monetary can be significant tools for the inspiration of employee and a confident step to the improvement of his performance an maximizing his morale. Jack Zigon (1998) identifies rewards as "something than escalates the frequency of a worker action".

It's the observation that the majority of us don't perform our jobs completely, not because they're difficult but because of low interest or motivation to execute that task. The desire or motivation is essential for the performance of an activity. Kleinginna and Kleinginna (1981a) defines drive as, "internal express or condition that activates tendencies and provides it course; desire or want that energizes and directs goal-oriented patterns; influence of desires and needs on the level and course of habit. "


Gatlin, Rebecca (1997), says a good and attractive compensation program is essential the employees to be able to encouraged them otherwise the unmotivated employees will not perform their jobs properly and will ultimately affect the company in a negative way i. e. decrease in success. Organization's performance would depend on the employees who work for it, so in order to get the better and quality productivity, rewards add a great deal in this part, so it is essential for organization's professionals to make effective and attractive compensation programs to inspire their employees, Deeprose (1994).

Gregory P. Smith, writer of book 'Active Ways to Incentive, Energize & Motivate Your Groups', areas in his publication that satisfying and recognizing the task of the employees makes them happy, provide them job security plus they add more towards the organization.

Edward E. Lawler III (2003), "With the right mixture of prize system methods, people will be motivated to excel, and those who do excel will be motivated to stay because they will be highly rewarded. This is actually the base of the virtuous spiral, where both sides succeed and create success for every other".

In Pakistan human resource departments have emerged only in those organizations where technology is rigorously relevant or that are highly knowledge organizations. The telecommunication sector of Pakistan shows tremendous growth lately and its own all because of using up at this point technology and the adoption of competitive and impressive human resource practices. Becker and Huselid (1998) helps that for getting the competitive advantage for any business Human source of information is basic source to get it.

The organizations in the telecommunication sector of Pakistan will be the structures offering their services backed by the human resources. The main element in the delivery of the best quality service is the inspiration of the employees; on the average person level as well as on the group level. Nowadays of competition to deliver best service in order to meet customers it is becoming very difficult; in reality organizations take it as an effort to motivate employees to be able to get best productivity from them. The telecommunication sector of Pakistan plays a powerful role in its overall economy. Excellent professional services sent by the employees of the telecom sector of Pakistan can create a positive and everlasting image in the eyes of the customers.

Several studies show that rewards have a huge impact on the job satisfaction and inspiration of the employees. Beer (1984) says that for top level management it's the top most responsibility to build up a strong positive relationship between your organization and its employees in order to carry out the continuous needs of both i. e. organizations and employees. Organizations want their workers to follow the organization's regulations i. e. work based on the standards that are being placed on their behalf, and consequently of computer employees want from the business good working environment, good salary, good patterns, job security, delegation of specialist. For organizations understanding to deal with these anticipations of employees is necessary.

Nel (2001), argues that those employees that are encouraged and are totally aware of the organizations goals, offering the organizations gain, will divert their all effort and devotion towards those goals.

According to Flynn (1998), these times organizations understand the great gains produced by linking rewards whether economic or non financial to their business strategy. The telecommunication sector of Pakistan offers several benefits and rewards to its employees; so that employees feel encouraged and remain satisfied with their careers and improve their performance to be able to achieve organizational goals.


The basic aim for carrying out this research is to gauge the impact of rewards in the most fast growing sector of Pakistan i. e. Telecommunication sector Pakistan on the inspiration of its employees.


The significance for carrying out this research is that if the employees in the telecommunication sector of Pakistan are content with their organizational incentive system or not. And which incentive type they appreciate the most if the financial rewards or the non financial rewards.

Review of Literature


Jack Zigon (1998) defines rewards as "something than increases the frequency of a worker action".

In order to treating the employees of the organization right, rewarding them properly is one of quite components. Organization which keeps growing healthier provides its employees the chance to increase and prosper. In today's highly business competitive environment win-win relationship is important that forms the right treatment of employees by the organizations. Strategy of satisfying employees when performance is bad cannot prevail for long, hence worthwhile once and for all performance stimulates employees to keep their performance and improve their skills and knowledge daily to contribute favorably towards firm, Edward E. Lawler III (2003).

ACCEL team development says that for improved and better end result from the employees rewards act as 'catalyst'. Rewards are part of the company and management should pay especial attention towards them; rewards should stop wasting time, significant, related to performance, appropriate for job dimension and irrevocable. Rewards should be given fairly, if there is some factor of unrealistic distribution of rewards like supplying advertising of the favoritism basis, it has a negative impact on the drive of the rest of the employees.

Searle, John G. (1990), getting the satisfaction of the employees over the rewards that are being offered to them id a hard task, organization has to learn to take care of those things which creates sense of dissatisfaction among employees; Employee's satisfaction towards pay back in comparison of what he expected and how much he received subsequently is contrasting his rewards with other folks of same jobs in the organization, overestimating his own performance as compare to his co-workers. So rewards should be designed in full justice by the management of what they are taking from staff and what they are offering to him for his insight, and they should be totally defined to the employees so that there might not remain any chance of misconception. This takes on important role in creating sense of satisfaction or dissatisfaction.

Cameron & Pierce (1977), says that every business use rewards like salary, promotion, and other types of bonus items to encourage employees towards higher level of shows.

Types of Rewards

According to Syedain (1995), there are two classes of thought for rewards at the place of work, one is to say THANK YOU at all, verbal, non-verbal, via qualification etc other is to give a concrete rewards that create a direct effect.

There are two types of rewards monetary rewards and non-monetary rewards. Employee prize programs design takes a balance between economic rewards and non-monetary rewards to provide incentives and benefits to the employees.

Monetary rewards

Marcia Moore, M. S. S. W. (2010), says that monetary rewards are those rewards that are being given by the organization by means of cash, or through cheque or some other way of financial transaction for obtaining the sales goals, providing best value, providing remarkable performance in a difficult situation or delivering a project article in the simplest way.

Gratton (2004), states that "desire depends upon both financial and non-monetary factors, money has come to play an extremely important role in our taking into consideration the causes of behavior. Generally in most companies very limited commitment are spent on considering non-monetary resources of motivation. "

Money is an important factor in motivating people once we reside in a money determined world. Corresponding to Peter Drucker (1974), " there is not one shred of evidence for the allege turning from material rewards. Antimaterialism is a myth, no subject how much it is extolled. " Monetary rewards have a great deal importance that if no proper attention is paid to them or ignoring them will become demotivator. He further says, "Economic bonuses are becoming rights somewhat than rewards. "

ACCEL team development argues that economic rewards cannot be remunerated by the non-monetary rewards (human relations). Famous companies like Microsoft, IBM are for some level a result of monetary motivation. Fiscally rewarding employees' boosts their determination levels, which results in increase in the end result, creating more gains and those revenue should be circulated back again to the employees who are in reality accountable for it.

Non-Monetary Rewards

Marcia Moore, M. S. S. W. , (2010), non-monetary awards includes certificate, a expression of thanks a lot from supervisor or manager, adaptable schedules, a day off, acknowledgment of birthdays, and free lunches or dinners to remember team work success.

Pfeffer (1998), "People do work for the money - but they work even more for so this means in their lives Companies that dismiss this truth are essentially bribing their workers and can pay the price in too little loyalty and dedication".

Sherry Ryan (Training Specialist, Weyerhaeuser Company), says that non-monetary rewards play important role in enhancing employee performance. Using proper attractive and communicative method of non-monetary rewards leaves a good effect on the employees and enhances employees' performances in various measurements. Such types of honours are inexpensive to share with employees but worthy of a lot when employees obtain them.

Bob Nelson (2004), expressing thank you to your employees or appreciating their shows when something good is performed, is extremely important factor that needs to be identified by the managers. According to him 78% employees said that they feel more stimulated and happy when their director appreciates them.

According to analyze conducted by, Allen and Helms' (2002), expressions of understanding and compliment by the managers give employees encouragement. North american Modern culture for Training and Development's (ASTD) research demonstrates that non-monetary honours work as a significant factor for keeping hold of top accomplishing employees.


Motivation comes from a Latin expression, 'movere', this means to go.

The writer of book 'Desire, beliefs, and organizational change' (1999), Dr. Green and Butkus (1999), says that motivation is derived from a expression "motivate", which means to move, force or persuade to act for satisfying a need. Further determination can be discussed as operating of such causes within a person that cause a excitement of effort, course and goal direction.

'Motivation' is the total involvement of a person in his jobs to handle with determination, devotion, joy, excitements, and voluntarily, Mol (1992).

Theories on Motivation

There are two classes of theory of inspiration;

Content Theories: Content also called as need ideas of motivation quite simply emphasis on inside factors of a person that strengthen and gives the direction to the patterns.

Maslow's Hierarchy of needs:

Abraham Maslow (1943, 1954), unsatisfied needs creates demotivation, there are following needs that must definitely be satisfied, these are called as 'deficiency needs'. As these needs are satisfied the person is satisfied and move towards progress and do it yourself actualization.

Physiological needs: These are the basic needs for example food, water, air, and all the things that are necessary for the survival. To be able to enhance workplace determination by achieving the target of satisfying the needs of employee give proper breaks for lunch break, and offer such salary to employees that permit these to buy basic needs of life. Provide sufficient breaks for lunch break and recuperation and pay salaries that allow staff to buy life's basics.

Security needs: it includes security regarding the physical environment, living in a safe area, medical insurance, job security. These needs can simply be fulfilled by giving all these securities to employees.

Belongingness needs: it includes friendship's trust and satisfaction, sense right in a group, giving and receiving health care and love. It could be achieved by making a feeling of approval.

Esteem needs: It includes recognition, attention, interpersonal status, accomplishment, self-respect. It could be achieved by recognizing the achievements of the staff, by assigning them some projects, make them feel important and respected asset for business.

Self-actualization needs: it includes one's own potential, creative capacities etc, it can be achieved by offering challenging and significant work tasks which enable innovation, creativity, and improvement regarding to long-term goals.

Alderfer's ERG Theory:

The Alderfer's ERG theory (1969), can be an expansion of Maslow's theory of needs. He suggested that requires can be split into three components; lifestyle (similar to physiological needs and security needs), relatedness (comparable to belongingness needs and esteem needs) and development (much like self-actualization).

It differs from Maslow hierarchy of needs theory in a manner that relating to Alderfers it could happen that more than one need may be determined at exactly the same time, lower motivators is not essential to be significantly satisfied before moving towards higher motivators, the order of needs varies from individual to individual, there is a 'aggravation- regression rule' and regarding to it if high order need is frustrated a person may regress to improve the satisfaction of a lower need which looks easier to meet.

Frederick Herzberg's Motivator health theory:

Herzberg's motivator hygiene theory (1959), is closely related to Maslow's theory but it is more tightly related to how to encourage individuals at their workplace. Regarding to him individuals are influenced by two sets of factors;

  • Hygiene factors: These are reported to be lower level of needs by Herzberg.
  • Motivator factors: They are said to advanced of needs by Herzberg.

According to him achieving hygiene factors won't motivate individuals to place their effort or to enhance their performance, it'll just help them from being getting dissatisfied, but if motivator factors will be coupled with this it can help individuals to encourage.

McClelland's Learned needs theory: acquire

McClelland's theory state governments that individuals learn needs off their culture and life activities. You will find three basic needs of a person;

  • Need for affiliation (n Aff): It is the need of establishing social connections with folks, neighborhoods, getting accepted by them.
  • Need for electric power (n Pow): It is divided in two parts, desire to control one's environment and second to affect others.
  • Need for achievement (n Ach): It entails the aspiration to use accountability, placed challenging goals and get opinions of these performance.

McClelland states a person has full strong ability in virtually any one of the aforementioned categories, thus it offers prospective to motivated people that leads to satisfaction. Management should comprehend these needs of the individuals and then structure their careers to fulfill them. Those people who have high n Aff such people perform well in customer support jobs or where customer connections is involved. Those people who have high n Pow management should provide them the opportunity to manage others. Those people who have high n Ach such people should be given challenging but attainable goals.

Process Theories: These theories of motivation give attention to known individuals decision behaviors for the explanation if motivation. These ideas determine that how a person's behavior can be energized, managed in willed and self aimed cognitive process.

Victor Vroom's Expectancy Theory:

Victor Vroom (1964), theory is based on three beliefs;

  • Valence: is the extend of the expected outcomes of an individual are attractive or unattractive.
  • Expectancy: is the extend to which employees assume that they are supplying enough effort that they will achieve the mark of given level of performance.
  • Instrumentality: is the particular level to which employees assume that achieving confirmed performance level result in the form of certain reward.

Motivation = Valence x Expectancy (Instrumentality)

If even one of the is zero the staff will have not motivation for the duty, so professionals ensure increase in effort will improve performance and upgraded performance will result in high rewards.

The theory says employees have different goals to achieve and can be encouraged if they believe that; there is a positive correlation between attempts and performance, good performance will bring about a reward, and this reward will gratify an important need, and the want satisfying that need is powerful enough to make work valuable.

Equity Theory:

Equity theory was first time produced by John Stacey Adams in 1963. Individuals in the population make contrast of their attempts (inputs) and rewards (outputs) that they get. The fairness regarding the rewards influences the level of motivation of individuals a lot. Equity exists when individuals see that the ratio between there efforts and rewards is comparable to whom they may be comparing.

Individual's Rewards (output) / Individual's Attempts (Suggestions) = Other person's Rewards (output) / Other person's Attempts (Source)

Similarly inequity occurs when you can find difference in ratio compared to others. Inequity has two types;

  • Under-Reward: this kind occurs when an individual starts believing that he's putting more initiatives as compare to others, but acquiring the same rewards that others are getting for relatively less work.
  • Over-Reward: this kind occurs when a person starts believing that his collateral ratio is higher other individuals. Thus getting ultimately more rewards by adding less work.

Under-Rewarded individual may get motivate to do more work to meet his performance level while on the other hands he might get dis-hearted out of this. Over-Reward specific start adding less efforts as he may assume that he's getting much more rewards from little effort. For managers equity theory states that rewards should be good to all employees.

Gary Latham and Edwin Locke's goal setting theory:

E. Locke and G. Latham (1990), suggests that goals are essential factors in influencing the manners and motivation levels of employees. Motivated tendencies of employees can be achieved by setting up challenging goals on their behalf that usually entail the quantitative targets. Such goals of performance are more good than those where you just say, 'you did a congrats, well done'. Researches show that challenging goals tend to be more motivational than some other goals that are often achievable. The greater the dedicated is staff the more he will put his effort to attain those goals. Researchers show that folks that perform in goal setting techniques have rises goal commitment. If an individual has high self-efficiency he'll respond more positively to achieve goals somewhat than those who find themselves low-efficient.

B. F. Skinner's Reinforcement Theory:

In Reinforcement theory B. F. Skinner (1957), considered a drive theory along with learning theory. The idea state that stimulated behavior is the results of reinforces that happen to be actually the resultants from the habit that cause it more likely that occurs again. It further says that it is essential to gauge the consequences of action rather than to comprehend cognitive or functions motivation. Such habit that once was rewarded will be continued in future as well from an individual rather than that habit that was not rewarded or for which he was being punished. The idea suggests to managers that they can handle the action modifications by reinforce desired behaviors and punish undesired actions.

Need for motivation

The satisfaction or the dissatisfaction degrees of an employee are immediately proportional to his good or bad performance. Staff dissatisfaction can lead to poor performance. Petcharak (2004), it is the responsibility of the individuals tool management of the business that employee may not dissatisfy from his job, so HR management should do something to encourage employees normally employees won't perform up to expected expectations of the business. Cheng (1995), says that it is one of the larges test issue for service providing organizations to encourage their employees in order to satisfy their customers. The HR department's major task is to develop strategies to inspire its employees.

Human capital somewhat than financial capital performs a significant role in reaching the goals of the business. It is the responsibility of the top executives to encourage the employees of the organization. Individual capital is the essential way to obtain competitive advandage for just about any service providing company these days. Organizations which actually pay attention towards the inspiration of its employees assures its success, Dale Carnige (1985). This demonstrates employees who are encouraged are best for the organizations to achieve its goals, it's the duty of professionals and supervisors to motivate them, Roberts (2005).

According to La Motta (1995), motivational arousal triggers an employee's interest to complete its job, achieve those goals that are being placed for him. Different people are encouraged by various ways, one thing that is creating inspiration to 1 person might not create to other, because there is difference in inspiration levels of every person.

Baron (1983), will abide by Maslow's hierarchy of needs, that we now have some natural factors of drive that if provided to an individual will motivate him like security needs, esteem needs and home actualization needs.

Importance of Rewards and Motivation

Searle, John G. (1990), rewards are essentially to inspire the actions of employees towards their work. Rewards should get because of this to effective performance. Following are some conditions that are essential for the creation of determination among employees;

  • Employees will need to have faith that their effective performance will surely be treasured and rewarded.
  • The rewards which will be being proposed by management are attractive.
  • The believe of employees that their work is really contributing worthwhile to achieve the organization's goals.

Organizations must give consideration into the Monetary as well as Non-Monetary rewards, because the balanced blend of both creates drive. A person's goals and organization's goals are self-employed goals that are connected by the task desire. Individuals provide their services to organizations to realize organization's goals in order to meet their personal goals. So, we can say that an individual's goals are directly proportional to the organizational goals.

Robert (2005), while learning the Baron's work (1983) reviews that inspiration not only can influence the performance however the performance can be affected by rewards, i. e. direct rewards to true performance. 'Total reward system' is the system in which salaries and other rewards are given to the employees based on their performance. Therefore, 'total prize system' is one of the key aspect, Wilson (1994).

Mosley, Megginson, Pietri (2001), reports that the there are three levels of employee motivation;

  • Behavior: the course of those behaviours of an employee that he selects to execute.
  • Effort: the amount of willingness of a worker to put their effort on their work.
  • Persistence: the level of determination to work regardless of difficult situations.

In Pakistan telecommunication sector is facing big changes for previous couple of years, not only their customers are increasing but also the services are increasing. They reported from a research conducted by them that employees in telecommunication sector give more importance to pay and promotion than training, and pay and promotion gives a positive effect on their job satisfaction and drive, . Kashif u Rehman et al. , (2007).

Theoretical Framework

Problem Statement

Hypothesis # 1:

There is an optimistic marriage between rewards and drive in the employees of Telecommunication sector of Pakistan.


Rewards are things that boost some one's morale to do something; it is observed in our daily life that whenever a person or a team is being given reward for his or her good work the motivation of the worker rises to do more good work in order to obtain additional rewards.

Hypothesis # 2:

Monetary rewards cause more worker determination than the non-monetary rewards in the telecommunication sector of Pakistan.


Reward by means of money appeals to people more somewhat than other incentive in form of just appreciation or a certificated. This hypothesis will test that whether it is true or not in the telecom sector of Pakistan.

Hypothesis # 3:

There are significant dissimilarities in ramifications of biological variables on employee work drive in the telecom sector of Pakistan.


This research hypothesis will see answers to such questions as;

  • Who were more enthusiastic male or female?
  • Which age group people were more motivated?
  • Who were more enthusiastic new or old employees?
  • Married people had more desire towards work or unmarried?
  • Sales people are usually more enthusiastic as compare to rest of the people at different designations?

Research Methodology

Tool for data collection

The tool for data collection because of this research is study. And for the intended purpose of doing surveys email questionnaire is designed. This technique of data collection is chosen because it has geographical flexibility, easy sample availability, saves time, and cost, anonymity and respondent convenience to reply.

Design of Questionnaire

The research questionnaire includes three parts;

Part I: It contains personal information of the topic, such as gender, years, designation, working experience, marital status and education.

Part II: It is designed for the collection of data about the indie adjustable i. e. Rewards (Monetary Rewards/Non- Economic Rewards).

Part III: It really is created for the collection of data about the reliant changing i. e. staff motivation.

Units of observation

The units of observation are the employees of different companies of telecom sector of Pakistan;

  • Mobilink
  • Ufone
  • Telenor
  • Warid
  • Zong
  • Wateen
  • World Call
  • Wi-Tribe
  • Pakistan telecommunication Limited

The test includes all categories of employees.

Sample Size

The test size for data collection is 1000.

Time Dimension

This study is a mix sectional review.

Scale / Credit scoring of questionnaire

Te Likert size is employed for the collection of data. Likert scale is basically a 5-point level which consists from 5 to at least one 1.

For positive claims credit scoring is;

Strongly Agree = 5

Agree = 4

Neutral = 3

Disagree = 2

Strongly Disagree = 1

For positive statements credit scoring is;

Strongly Agree = 1

Agree = 2

Neutral = 3

Disagree = 4

Strongly Disagree = 5


Questionnaire will be disseminate one of the employees of telecommunication sector of Pakistan via mail questionnaire in their work area. Instructions and grantee of confidentiality of the personal information will be made certain.

Data analysis

For the descriptive evaluation SPSS (Statistical Bundle for Social Sciences) version 16 or simply Microsoft Excel 2010 will be utilized.

For finding out the correlation between the Rewards (3rd party changing) and staff motivation (centered variable) Pearson Relationship Coefficient will be used.

For learning the correlation between your Financial Rewards and staff drive; and Non-Financial Rewards and worker motivation Pearson Relationship Coefficient will be utilized.

For the evaluation of the distinctions in employees work drive based on the non-public characteristics (biographical) ANOVA will be used which is utilized to gauge the significant differences between your variances.

Expected Results

The various studies which have been completed in a variety of sector in various countries of the world studies that rewards have a positive impact on staff motivation.

In 1997, Carolyn Wiley compared the result of previously organised four surveys that were conducted on determination of employees in season 1946, calendar year 1980, season 1986 and time 1992.

The survey that was conducted in 1992 resulted that in today's world employees are motivated by economic rewards. Employees chosen 'salary' as the top most motivating aspect. The research said that salary is a economic reward with an all natural influence.


Low response rate

Low completion rate

Cannot get verbal behavior

Cannot use lengthy questionnaire

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