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The Impact of Non Financial Rewards On Employee Motivation in Apparel Industry in Nuwaraeliya District

(1) The document discusses the impact of non-financial rewards on employee motivation in the apparel industry in Nuwaraeliya district. It notes that while financial rewards are important, non-financial rewards like recognition, praise, and career growth opportunities can also be powerful motivators. (2) Studies from other countries have found a positive relationship between non-financial rewards like training, recognition, career advancement opportunities, communication, and job security on employee motivation. Recognition and appreciation were found to boost morale while a lack of it could demotivate employees. (3) For the apparel industry in Nuwaraeliya district, the study aims to identify the impact of various non-financial rewards on employee

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0% found this document useful (0 votes)

334 views12 pages

The Impact of Non Financial Rewards On Employee Motivation in Apparel Industry in Nuwaraeliya District

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geethanjali champika

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THE IMPACT OF NON FINANCIAL REWARDS ON EMPLOYEE

MOTIVATION IN APPAREL INDUSTRY IN NUWARAELIYA DISTRICT

M.G.G.C.Gnanarathne

MGT 2015/2016/084

MGT- 4252

Department of Business Management

Faculty of management studies

Rajarata university of Sri Lanka

Mihinthale

1. CHAPTER ONE

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1.1 Background of the study

Every organization and business wants to be successful and has a desire to get constant progress.
The current era is highly competitive and organizations regardless of size, technology and market
focus are facing employee retention challenges. To overcome these restraints a strong and
positive relationship and bonding should be created and maintained between employees and their
organizations. Human resource is the central part of any organization.[CITATION Dha15 \l 1033 ]

Employees are viewed as an important element and considered as the human capital of any
organization. If employees are motivated and satisfied, they will perform their duties diligently
and actively. employees who are motivated to work are likely to be determinant, innovative and
competent. Motivated employees are content, dedicated and work enthusiastically, resulting in
the optimum level of employee’s retention, loyalty, and harmony. De-motivated employees are
likely to put in little or no effort in their jobs, produce low quality work, mostly avoid their
workplace and even exit the organization when they have available opportunities [ CITATION
Dha151 \l 1033 ]

Psychologists have disclosed that human motivation comes with their needs as Maslow’s
hierarchy of needs theory where it is employer’s responsibility to understand and cater them
accordingly. Reward management is a part of general management where it is seen as key
strategies use to motivate the employees and create committed work force. Favorable attitudes
towards rewards make employee job satisfaction, motivation, affective commitment, high levels
of performance and finally lead to organizational success into long term future.

Employee rewards is about how people are rewarded in accordance with their value to an
organization. It can be categorized mainly into two parts. That is financial rewards and non-
financial rewards. Financial reward processes consist of base pay/ fixed pay, variable pay and
employee benefits, which together comprise total remuneration. The system also incorporates
non-financial rewards such as; recognition, praise, achievement, responsibility and personnel
growth.Two important reasons that employees should be motivated are to achieve their own
personal goals and the organizational goals [ CITATION Sha12 \l 1033 ]

People have different reason for working, and the most appropriate reward method depends on
those reasons. When individuals are hard to provide food, shelter and clothing for their families,

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money may well be the most important rewards. However, some people work long hours a day,
receive relatively little pay, and yet love their work because it is interesting or provide
psychological satisfaction from the job.[ CITATION KEP171 \l 1033 ]

As Armstrong and Marlis (1994) point out, “reward management is not just about money. It is
also concerned with those non-financial rewards which provide Intrinsic or Extrinsic
motivation”.

According to latham and Locke (1979) Source of Organizational Dynamics, say that “money
alone is not always enough to motivate high performance”. Motivation can also achieved by non-
financial rewards and financial and non- financial motivators can be mutually reinforcing.

One thing is clear: Non-financial rewards also can be very powerful factor in the total reward
system. And sometimes it affects to a large degree on motivation rather than financial rewards.
So, the research is going to identify the impact of Non-financial rewards on employee
motivation, in Apparel industry in Nuwaraeliya district.

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1.2 Problem Statement

The business environment is changing rapidly in the today’s changing world. In the age of
information technology, various changes have occurred in every aspect of the people from
personal to business, government to private, national to international. So, the nature of people
and their expectation from the job is also changing.Employees leave the organization because
they are not motivated enough. Some are not willing to quit the job because they are enjoying
some benefits in terms of promotion, which leads to increase in salaries and wages, bonus and
some other incentives. The employees of any organization will prefer financial rewards to non-
financial rewards, but sometimes they feel non-financial rewards are the great motivator than
other rewards

In many countries, researchers have examined the impact of non financial rewards on employee
motivation.

Cheema et al. (2013) there are five independent variables taken for this study; training,
recognition for performance, opportunities for career advancement, effective communication
channels and job security to identify their impact on employee’s job-related motivation. The
study confirmed the existence of positive significant relationship between the five non- monetary
rewards.

(Tausif, 2012)Explored the relationship between the non- financial rewards (promotion, job
enrichment and job autonomy) and job satisfaction for the educational sector of Pakistan. Data
collected from 200 full time employees from public sector schools show that there is a strong
relationship of non-financial rewards with job satisfaction. And also the satisfaction increases
with the age. The older employees are more satisfied with non-financial rewards than younger
employees.

(Dambisya, 2007)Investigated that the use of nonfinancial incentives for health worker leads to
satisfaction of employees. This study was conducted in health sector and found that non-financial
rewards affect the motivation of an individual.

(Group, 2011)This study was conducted in online staff in business sector that are more satisfy
with non-financial rewards rather than financial rewards. He concluded that non-financial

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rewards effects on performance and also effects to increase the productivity and profitable
growth of organization.

One can say that money is not the motivator for the employees in each and every situation
prevailing in an organization (Nelson, 2004). But particularly for lower level employees
(Operating core) are running behind the monetary incentives due to family problems lack of
salaries and wages as well as other social considerations. This situation should be changed while
giving positive thinking and cognitive development on each employee levels to improve their
performance to achieve organizational rewards such as salary increments, promotions, as well as
recognition. To improve such performance, outcomes need to be connected with organizational
goals and objectives where a framework should be established to link the rewards system with
the aim of enhancing motivation. At the same time organizations must ensure that the rewards
are justified and sought by the employees (Fulfill employee needs).

Relative importance of motivated employees for an organization is that, they can boost the
performance and be a competitive firm in the market. Apart from the financial rewards
employees expect recognition and appreciation for the effort given by the employees. Even
though money act as a top ranker of motivation because of its nature to satisfy the basic needs of
people with attainment of power and affiliation, both financial and non-financial rewards are
equally require to enhance the motivation of employees to achieve massive performance.

Here the main impact of non-financial rewards is enhancing the moral of employees. If nobody
appreciates their effort then employees will be demoralized and try to back out the
responsibilities towards organization (Dobre, 2013).

Dzuaranin (2012) says that companies that only focus on monetary incentives to motivate their
employees must also introduce nonmonetary rewards to their performance rewards systems to
increase the motivation level of their employees since many people prefer the former over the
latter. This study suggests that the organizations using effective reward programs better achieve
their organizational objectives and also influence employee behavior.

A “McKinsey Quarterly” study found that 70% of organizations are using or planning to use
motivation programs for their organizations (Dewhurst et al, 2009). According to the findings of
this study, for most people non-monetary rewards or recognition serve as a better motivator than
money. Money alone is not always enough to motivate high performance, the study concluded.
Latter, a study by Latham and Locke (2004) found that motivation can also be achieved by non-

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financial rewards and recognition like praise, achievement, responsibility and personal growth
etc. according to the study, non-financial reward can create perceptions of the overall fairness of
a rewards program which leads to employee’s motivation towards their work.

Mason (2001) found that recognition in various forms is a powerful motivational and retention
strategy for any organization. He argues that it is not expensive for any organization to adopt
strategies to motivate their talented employees by recognizing their efforts.

A study conducted by the US Department of Labor found that 46% of people leave their jobs
because they feel unappreciated and management fails to handle this huge turnover because of
not having proper employee

Wiscombe (2002) conducted a research with managers and revealed that recognizing employees
assists them to become more productive. According to this study, 69.3% of the respondent
managers indicated that providing non-monetary recognition helps more the manager to achieve
their organizational goals. A survey by the Professional Secretaries International revealed that
30% of professional secretaries prefer a simple letter of appreciation from their managers.
However, only 7% had got such letters in their career. The finding bespeaks indifference of the
organizations towards such effective and efficient source of employee motivation on the job.

According to Remi et al (2011) there are many evidences on the importance of different
motivators such as financial and non-financial rewards on motivating employees to best
performances. As per the argument of Ahmad et al (2012) employees are the most significant
resource of the organization that generates competitive advantages compare to other resources
because, it is unable to copy skills, abilities and knowledge of motivated employees like
imitating product, services, technologies or other organizational processes. In this scenario, there
is a greater challenge for the today’s organizations to understand different motivators and how
these motivators can be used to influence employee behavior to achieve desired goals which is
the definite requirement to win competitive advantages

According to the pilot study found that 85% out of 20 employees are less motivate in the apparel
industry in Nuwaraeliya district.

But in Sri Lanka there is no any finding about the problem in apparel sector that has been ever
conducted in Nuwaraeliya District.Accourding to the research problem trying to identify The
impact of non financial rewards on employee motivation in apparel industry in

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Nuwaraeliya District”. That makes a researchable gap to conduct research about impact of non
financial rewards on employee. So here going to identify the potential link between non-
financial rewards and motivation through this research.

And also This research is conduct to know how Organizations are using non-monetary rewards
to motivate their employees in order to improve their performance.

Since non-financial rewards are the central issue of the study, research is going to address some
questions regarding the non-financial rewards.

 If the employees are experiencing a lack of motivation in the work place we will
also see this evident in the amount of days they take off.
 If the employees are experiencing lack of motivation in the work place employees
turnover has been increase.

1.3 Research questions

1. How recognition has been influence to employee motivation in Apparel industry in

Nuwaraeliya district?
2. How responsibility has been influence to employee motivation in Apparel industry in
Nuwaraeliya district?
3. How achievement has been influence to employee motivation in Apparel industry in
Nuwaraeliya district?
4. How availability has been influence to employee motivation in Apparel industry in
Nuwaraeliya district?
5. How personal growth has been influence to employee motivation in Apparel industry in
Nuwaraeliya district?

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1.4 Research Objectives

1. To identify the impact of non financial rewards on employee motivation in Apparel

industry in Nuwaraeliya district.
2. To identify the extent of recognition has been influence to employee motivation in
Apparel industry in Nuwaraeliya district.
3. To identify the extent of responsibility has been influence to employee motivation in
Apparel industry in Nuwaraeliya district.
4. To identify the extent of achievement has been influence to employee motivation in
Apparel industry in Nuwaraeliya district.
5. To identify the extent of availability has been influence to employee motivation in
Apparel industry in Nuwaraeliya district.
6. To identify the extent of personal growth has been influence to employee motivation in
Apparel industry in Nuwaraeliya district.

1.5 Hypothesis