3

CHAPTER 2

2.0 LITERATURE REVIEW

Reward describes a reward strategy that brings components such as learning and

Development together with aspects of the work environment, into the benefits package. In the total reward system both tangible and intangible rewards are considered valuable. Tangible rewards arise from transactions between the employer and employee and include rewards such as pay, personal bonuses and other benefits. Intangible rewards have to do with learning, development and work experience. Examples of these types of rewards are opportunity to develop, recognition from the employer and colleagues, personal achievement and social life. The aim of total reward is to maximize the positive impact that a wide range of rewards can have on motivation, job engagement and organizational commitments. Motivation is the desire to achieve beyond expectations, being driven by internal rather than external factors, and to be involved in a continuous striving for improvement”. Motivation, in the context of work, is a psychological process that results from the interaction between an employee and the work environment and it is characterized by a certain level of willingness. The employees are willing to increase their work effort in order to obtain a specific need or desire that they hold.

Some articles has been discussed and reviewed shows the impact on each other.

Puwanenthiren Pratheepkanth (2011) conducted a study “Reward System And Its Impact On Employee Motivation In Commercial Bank Of Sri Lanka Plc, In Jaffna District” Increasingly; organizations are realizing that they have to establish an equitable balance between the employee’s contribution to the organization and the organization’s contribution to the employee. Establishing this balance is one of the main reasons to reward employees. Organizations that follow a strategic approach to creating this balance focus on the three main components of a reward system, which includes, compensation, benefits and recognition. Studies that have been conducted on the topic indicates that the most common problem in organizations today is that they miss the important component of Reward, which is the low-cost, high-return ingredient to a well-balanced reward system. A key focus of recognition is to make employees feel appreciated and valued. Research has proven that employees who get recognized tend to have higher self-esteem, more confidence, more willingness to take on new challenges and more eagerness to be innovative. The aim of this study is to investigate whether rewards and recognition has an impact on employee motivation. A biographical and Work Motivation Questionnaire was administered to respondents. The results also revealed that staff, and employees from non-white racial backgrounds experienced lower levels of rewards, and motivation. Future research on the latter issues could yield interesting insights into the different factors that motivate employees. Notwithstanding the insights derived from the current research, results need to be interpreted with caution since a convenience sample was used, thereby restricting the generalisability to the wider population

Kalimullah Khan “RELATIONSHIP BETWEEN REWARDS AND EMPLOYEE MOTIVATION IN COMMERCIAL BANKS OF PAKISTAN” data was collected from 167 employees of commercial banks of Kohat Pakistan. The study examined the influence of rewards (payment, promotion, recognition and benefits) on employee work motivation. It is important for the top management to develop strong relationship between the organization and employees to fulfill the continuous changing needs of both parties. Organizations expect employees to follow the rules and regulations, work according to the standards set for them, and the employees expect good working conditions, fair pay, fair treatment, secure career, power and involvement in decisions. These expectations of both parties vary from organization to organization. For organizations to address these expectations an understanding of employees’ motivation is required Beer, (1984). The commercial banks in Pakistan are now realizing to revisit their benefits offering to staff which includes reward program so that employee feel motivation and satisfaction to improve their performance to achieve organization goals. Therefore present study is specifically designed to analyze the impact of rewards on employee motivation in commercial banks of Pakistan. The research study has shown that management can apply different strategies to motivate employees, but it is important that managers keep in mind that different strategies would have a different motivational impact on different people. Employers are continuously trying to develop such a pay policies and procedures that will enable them to attract, motivate,

Retain and satisfy their employees.

Roshan Levina Roberts (2005) conducted the study “the relationship between rewards, recognition and motivation at an insurance company in the western cape” the sample for this study collected from 184 male and female.  Increasingly, organizations are realizing that they have to establish an equitable balance between the employee’s contribution to the organization and the organization’s contribution to the employee. Establishing this balance is one of the main reasons to reward and recognize employees. Organizations that follow a strategic approach to creating this balance focus on the three main components of a reward system, which includes, compensation, benefits and recognition (Deeprose, 1994). Studies that have been conducted on the topic indicates that the most common problem in organizations today is that they miss the important component of recognition, which is the low-cost, high-return ingredient to a well-balanced reward system. A key focus of recognition is to make employees feel appreciated and valued (Sarvadi, 2005). Research has proven that employees who get recognized tend to have higher self-esteem, more confidence, more willingness to take on new challenges and more eagerness to be innovative (Mason, 2001). The aim of this study is to investigate whether rewards and recognition has an impact on employee motivation. A biographical and Work Motivation Questionnaire was administered to respondents (De Beer, 1987). The results of the research indicated that there is a positive relationship between rewards, recognition and motivation. The results also revealed that women and employees from non-white racial backgrounds experienced lower levels of rewards, recognition and motivation. Future research on the latter issues could yield interesting insights into the different factors that motivate employees.  Notwithstanding the insights derived from the current research, results need to be interpreted with caution since a convenience sample was used, thereby restricting the generalisability to the wider population.

Judy Cameron, Katherine M. Banko, and W. David Pierce (2001) “Pervasive Negative Effects of Rewards on Intrinsic Motivation”A major concern in psychology and education is that rewards decrease intrinsic motivation to perform activities. Over the past 30 years, more than 100 experimental studies have been conducted on this topic. In 1994, Cameron and Pierce conducted a meta-analysis of this literature and concluded that negative effects of reward were limited and could be easily prevented in applied settings. A more recent meta-analysis of the literature by Deci, Koestner, and Ryan (1999) shows pervasive negative effects of reward. The purpose of the present article is to resolve differences in previous meta-analytic findings and to provide a meta-analysis of rewards and intrinsic motivation that permits tests of competing theoretical explanations. Our results suggest that in general, rewards are not harmful to motivation to perform a task. Rewards given for low-interest tasks enhance free-choice intrinsic motivation. On high-interest tasks, verbal rewards produce positive effects on free-choice motivation and self-reported task interest. Negative effects are found on high-interest tasks when the rewards are tangible, expected (offered beforehand), and loosely tied to level of performance. When rewards are linked to level of performance, measures of intrinsic motivation increase or do not differ from a non rewarded control group. Overall, the pattern of results indicates that reward contingencies do not have pervasive negative effects on intrinsic motivation. Theoretical and practical implications of the findings are addressed.

Lan Shi (2011) “Monetary Rewards, Image Concern, and Intrinsic Motivation Evidence from a Survey on Blood Donation” the dsta collected from 590 responded to the survey. Using original survey data, this paper examines whether monetary rewards and honor rewards encourage or discourage blood donation. On the use of monetary rewards, we find that i) the overall sample’s response to monetary rewards is positive, and ii) people who volunteer more frequently, people who donated blood regular it and people who donate blood to help others respond less positively to monetary rewards than otherwise. For honor rewards, we find that i) the overall sample’s response is negative, and ii) people who volunteer more frequently, and people who donated blood regularly respond more negatively than otherwise. We also find that people who derived greater social image rewards do not respond less positively to a discount on future use of blood, and respond more positively to appeals for donation than those who derived less social image rewards. Our findings are broadly consistent with predictions from Benabou and Tirole (2006).

Robert Coakley Richardson , Larry N. Killough, Robert M. Brown,Joseph J. Franchina, D. Jordan Lowe and James A. Yardley (1998) The present study investigated the effects of reward structure and environmental conditions (i.e., context) on integrated motivation for an accounting task using 101 undergraduate accounting students. A computer-simulated task in which students were asked to estimate allowance for doubtful accounts was used to create and manipulate reward structure (i.e., performance-contingent vs. task-contingent) and context (i.e., self determined vs. controlled). It was hypothesized that a self-determined context would create greater motivation than a controlled context when motivation was measured by Response intensity, response persistence, integrated response intensity, and integrated Response persistence. An ordinal interaction was also hypothesized such that in a self determined context, performance-contingent rewards would create more motivation than Task-contingent rewards, and in a controlled context, performance-contingent rewards would create less motivation than task-contingent rewards. Results indicated that response intensity, as measured by time on task, did not support the hypothesized main effect or the ordinal interaction; however, when self reported effort was used as a measure of response intensity, support for both hypotheses was found. Similarly, when response persistence was measured by time on task, support for the hypotheses was not found; however, when number of problems worked during the free choice period was used to assess response persistence, hypothesized effects were supported. For integrated response intensity and persistence, support for the hypotheses was not found.

gabriel “venom” wilson, “the effects of external rewards on intrinsic motivation” motivation can be defined as the intensity and direction of effort (mccullagh, 2005). Intensity refers to the quantity of effort, while direction refers to what you are drawn too. Evidence suggests that enhanced motivation promotes learning, performance, enjoyment, and persistence in sport, among other benefits (mccullagh, 2005; wilson, 2005). for over 30 years now, there has been an intense debate on the effects of external rewards on intrinsic motivation. the answer to this question appears to depend on two properties of a reward: control and information. though many professions have utilized rewards to control behavior with students, athletes, and children, it appears that this very controlling mechanism is what undermines intrinsic motivation. Conversely, an informational message of competency can enhance intrinsic motivation. Therefore, the way the reward is delivered will determine its effects on intrinsic motivation. In this context, the purpose of this paper was to analyze the effects of various rewards on intrinsic motivation. Rewards will be analyzed using the well established cognitive evaluation theory.

Maarten Vansteenkiste and Edward L. Deci (2003) Competitively Contingent Rewards and Intrinsic Motivation: Can Losers Remain Motivated?” for this study data is collected from 80 respondents. this study explored the effects on intrinsic motivation and ego-involved persistence of winning versus losing a competitively contingent reward and, for losers, the additional effects of receiving either positive performance feedback or performance contingent Rewards. Winners were more intrinsically motivated than losers. Losers given an explicit normative standard who received positive feedback for meeting the standard were more intrinsically motivated than losers who did not receive the additional standard and feedback. Losers who received a performance-contingent reward for reaching the same explicit standard displayed less intrinsic motivation behaviorally assessed than did losers who got positive feedback, but the two groups did not differ on self-reported enjoyment. Effects on enjoyment were mediated by perceived competence, but effects on free-choice behavior were not. People who lost the competition showed more ego-involved persistence than people who won or did not compete.

Amer Rajput, Abdul Hamid Abu Bakar and Muhammad Shakil Ahmad (2011) “MOTIVATORS USED BY FOREIGN AND LOCAL BANKS IN PAKISTAN: A COPARATIVE ANALYSIS”     the data is collected for this study through questionnaire from 27 respondents of different banks. The banking sector plays a significant role in a contemporary world of money and economy. There is Emergence of global competitors from developed countries in the shape of Multinational Banks in developing countries in international banking industry. The purpose of this study is to give a comparison directly based on motivators used by foreign banks and local banks. This exploratory study finds out motivators used by Multinational Banks of Developed countries in a developing country and it also identifies the motivators used by local banks. By analyzing and comparing the data collected from local and foreign banks it is concluded that the same motivator are being used by both foreign and local banks.

Ron Kluvers and John Tippet 5 Sep 2009 “The Effect on Motivation of a Change in Rewards” Interviews were conducted with 14 staff of the organization. The interviewees were Selected with respect to age, gender, and the unit to which they belonged. Intrinsic motivational factors have been found to be important, in both the presence and absence of an employee bonus scheme. Extrinsic motivators do play a role, but not to the extent that classical agency theory would suggest. The introduction of a bonus had very little impact on motivation, tensions, or organisational culture. The attitude of service to clients appears to remain unchanged; and there has been no conflict between recipients and non-recipients of the bonus. The only apparent negative impact of the bonus is that there is minor evidence of a degree of distrust between staff and Management and some diminishing of co-operation between staff in the care of their clients, with staff inclining towards offer service only to their own clients. The fact that both motivation and camaraderie appear to have been unaffected, and that there is only minor evidence of dissatisfaction, indicates that no deinstitutionalization occurred. Given the continuing strength of the culture of the organization and the significant degree of intrinsic motivation, it appears that organizational change consequent upon the introduction of the bonus scheme has been minor. This finding is in line with expected outcomes of mimetic change, and is in line with the argument of Model and Wiesel (2007). The results reported in this paper were gained from one organization and therefore the conclusions should be tentative. However, the findings do give direction for future research.

Edward L. Deci , Richard Koestner , Richard M. Ryan Spring 2001 Impact of Extrinsic Rewards and Intrinsic Motivation on Education Their meta-analytic strategy (Deci et at, 1999) involved a hierarchical approach in which the results of 128 experiments were examined in two separate mneta-analyses. The first involved 101 of the studies that had used a free-choice behavioral measure of intrinsic motivation, and the second involved 84 of the studies that had used self-reported interest as a dependent variable. In a hierarchical meta-analysis, one begins with the most general category and reports the composite effect size. If the set of effects is heterogeneous, then one proceeds to differentiate the overall category into meaningful subcategories in an attempt to achieve homogeneity of effects within the subcategories. Thus, in both met analyses (i.c., with the two dependent measures), we began by calculating the effects of all rewards on intrinsic motivation and then systematically differentiated the reward conditions. Only after we had exhausted all possible moderator variables did we discard outliers to create homogeneity within subcategories. Using this approach, we ended up discarding only about 4% of the effects as outliers, whereas Cameron and Pierce (1994) had discarded approximately 20% of the effects as outliers. '.o summarize, results of the meta-analysis make clear that the undermining of intrinsic motivation by tangible rewards is indeed a significant issue. Whereas verbal rewards tended to enhance intrinsic motivation (although not for children and not when the rewards were given coitrollingly) and neither unexpected tangible rewards nor task-no contingent tangible rewards affected intrinsic motivation, expected tangible rewards did significantly and substantially undermine intrinsic motivation, and this effect was quite robust. Furthermore, the 1Udermining was especially strong for children. Tangible rewards-both material rewards, such as pizza patsies for reading books, and symbolic rewards, such as good student. Awards- --are widely advocated by many educators and are used in many classrooms, yet the evidence suggests that these rewards tend to undermine intrinsic motivation for the rewarded activity. Because the undermining of intrinsic motivation by tangible rewards was especially strong for school-aged children, and because studies have linked intrinsic motivation to high-quality and adjustment (e.g., Benware & Deci, 1984; Ryan & Grolnick, 1986), tlie findings from this meta-analysis are of particular import for primary and secondary school educators. Specifically, the results indicate that, rather than focusing on rewards for motivating students' learning, it is important to focus more on how to facilitate intrinsic motivation.

Nathalie Houlfort, Richard Koestner, Mireille Joussemet, Am ‘lie Nantel-Vivier, and Natasha Lekes December 2002 “The Impact of Performance-Contingent Rewards on Perceived Autonomy and Competence1” Participants in this study were 85 undergraduate students who participated for extra-credit. Their mean age was 19.3 years and 80% were women. Participants were randomly assigned to four conditions. Studies examined the impact of performance-contingent rewards on perceived autonomy, competence, and intrinsic motivation. Autonomy was measured in terms of both decisional and affective reports. The first study revealed an undermining effect of performance-contingent rewards on affective reports of autonomy among university students, and an increase in reports of competence. Decisional autonomy judgments were unaffected by rewards. The second study replicated this pattern of findings among elementary school children. These results help resolve Cognitive Evaluation Theory’s (E. L. Deci & R. M. Ryan, 1985; R. M. Ryan, V. Mims, & R. Koestner, 1983) and Eisenberger, Rhoades, et al.’s (R. Eisenberger, L. Rhoades, &J. Cameron, 1999) divergent positions on the impact of performance-contingent rewards on autonomy. The studies also included measures of intrinsic motivation. The present studies sought to assess the impact of performance-contingent rewards on perceived autonomy, competence, and intrinsic motivation. We differentiated affective autonomy (absence of feelings of pressure and tension) from decisional autonomy (feelings of choice). Our findings suggest that performance contingent rewards have a negative impact on affective autonomy but not on decisional autonomy. These results point to the importance of distinguishing between affective and decisional autonomy for a more complete and thorough assessment of the influence of performance-contingent rewards. The possible differential impact of such incentives on affective and decisional autonomy adds to the current debate, in that it may explain the opposing points of view of CET and Eisenberger, Rhoades, et al. (1999). For the first time, autonomy was measured in terms of both decisional and affective reports. Decisional autonomy refers to feeling of choice, whereas affective autonomy refers to an absence of feelings of pressure and tension. Results revealed that performance contingent rewards undermined affective autonomy, but decisional autonomy judgments was unaffected by rewards. In addition, results suggest that performance-contingent rewards have a positive effect on feelings of competence. We believe that this new conceptualization of autonomy and this set of findings help resolve CET’s (Deci & Ryan, 1985; Ryan et al., 1983) and Eisenberger, Rhoades, et al.’s (Eisenberger, Rhoades, et al., 1999) divergent views on the impact of performance-contingent rewards on autonomy.

Maarten Vansteenkiste and Edward L. Deci 2003 “Competitively Contingent Rewards and Intrinsic Motivation: Can Losers Remain Motivated “They explore the effects on intrinsic motivation and ego-involved persistence of winning versus losing a competitively contingent reward and, for losers, the additional effects of receiving either positive performance feedback or performance contingent rewards. Winners were more intrinsically motivated than losers. Losers Given an explicit normative standard who received positive feedback for meeting The standard were more intrinsically motivated than losers who did not receive the Additional standard and feedback. Losers who received a performance-contingent Reward for reaching the same explicit standard displayed less intrinsic motivation behaviorally assessed than did losers who got positive feedback, but the two groups did not differ on self-reported enjoyment. Effects on enjoyment were mediated by Perceived competence, but effects on free-choice behavior were not. People who Lost the competition showed more ego-involved persistence than people who won Or did not compete. Given the importance in modern culture of competition and rewards made Contingent upon winning a competition, studies have begun to examine the effects of these factors on people’s intrinsic motivation for the activity at which they Compete. The following gives an overview of the types of research that have been Done. Participants completed a questionnaire after the free-choice period. This post experimental questionnaire included 13 items (scored on 7-point scales), 7 items. The effects of performance-contingent rewards for losers were more complex and help to sort out some of the confusion in the literature about performance contingent rewards. The most comprehensive and valid meta-analysis of reward effects showed that performance-contingent rewards undermined the free-choice behavioral measure of intrinsic motivation but did not undermine enjoyment of the activity (Deci et al., 1999). Accordingly, we expected different results on the behavioral versus self-report measure for losers who got performance-contingent rewards. However, in making predictions about performance-contingent-reward Effects it is necessary to consider what type of control group is being used. There Are three possibilities:(a) a group that gets no rewards and no feedback; (b) a Group that gets no rewards but gets unexpected positive feedback comparable To that implicit in the rewards for the experimental group; and (c) a group of Participants who get no rewards but are told that their performance will be evaluated and subsequently are given positive feedback comparable to that implicit in the rewards for the experimental group. The Deci et al. meta-analysis showed that Performance-contingent rewards undermined free-choice behavior relative to the First two of these control groups. The third group was not included in the met analysis because relatively few studies have been done using a control group Where participants were told their performance would be evaluated and then were Given positive feedback. Counter to our predictions that performance-contingent Rewards would be undermining relative to this evaluation-and-positive-feedback Control group, Harackiewicz and Sansone (2000) argued that relative to this control Group, performance-contingent rewards would enhance intrinsic motivation.

.

SHER KAMAL,  BAKHTIAR KHAN, MUHAMMAD BASHIR KHAN & ALI BAT KHAN “MOTIVATION AND ITS IMPACT ON JOB PERFORMANCE” In the study of human behavior, motivation is a basic psychological process, like perception and learning. On the other hand, it must be remembered that motivation should not be thought as the only explanation of behavior. Many people equate the causes of perception and learning, it is presented here as being a very important process in understanding behavior. It interacts with and acts in conjunction with other psychological process and personality. Motivation cannot be seen. All that can be seen is behavior. Many believe that the key to improve performance and productivity in any area/endeavor is motivation rather than ability. We first introduced the fundamental distinction between ability and motivation. Then from the discussion it is clear that performance directly relates to ability and motivation. But ability vary from individual to individual that can be enhanced by introducing technical assistance requirements of a job, which may have been radically upgraded, or a person who performed very well in one position may be promoted into a higher-level position that is too demanding. The challenge for today management is to administer motivational programs and variables, which will encourage employees to improve their work performance.

VINCENT F. FILAK, ROBERT S. PRITCHARD” The effect of extrinsic rewards on motivation and attachment to internship opportunities” They sent a link to an Internet study to the Public Relations Student Society of America’s (PRSSA’s) listserv, asking for advisers to have their student chapter members take this survey. A total of 157 public relations students at various institutions across the country completed their survey, which asked them to recall and rate their experience at their most recent internship. When they removed the participants who had failed to complete at least half of the survey, they were left with a data set containing 141 usable responses (n=141). Mean substitution was used to replace missing data in those cases, with no more than 5 percent of any one variable and no more than 5 percent of any one case being replaced in this manner. This study offers several valuable conclusions for educators and employers alike. On the whole, the participants in this study seemed to enjoy their experience and feel as though their psychological needs were being met. Furthermore, no statistical difference existed in any of our study variables between the participants who were and were not paid. Thus, while the 2006 Commission on Public Relations Education report recommends and many internship coordinators are likely to push students toward paid internships, our data suggests that students are not harmed in terms of need satisfaction or in terms of overall internship experience if they work for no pay. Conversely, it would appear that paying students in no way has undermined their motivation to learn and engage in the work provided for them.

Chin-Ju Tsai “Reward and incentive compensation and organizational performance” Evidence from the semiconductor industry” The link between reward and incentive compensation and organizational performance has attracted increasing research interest in recent years. The companies under study are Taiwan’s semiconductor design companies. The sample was drawn from the Taiwan Semiconductor Suppliers Directory (Chen, 2001). Companies were included in the sample frame if they employed more than 80 employees at the time of conducting the fieldwork. The fieldwork began by negotiating access in January 2003 and ended in August 2003 when the collection of survey questionnaires was completed. The decision to include only companies employing more than 80 employees was based on the results of previous empirical research into Taiwan’s HRM practices (e.g. Huang, 2000; Zhu et al., 2000), which indicate that the larger the firm the more likely it is to have a formal organizational unit dealing with human resources. The sampling criterion of companies with more than 80 employees was in fact adjusted from an initial criterion of 200 as the semiconductor design companies were later found to include a few large firms and many small firms. This study tests two sets of hypotheses that propose a positive association between organizational performance and (1) the use of reward and incentive compensation practices; and (2) the effective use of reward and incentive compensation practices. The results of the statistical analysis show that, in the context of the Taiwanese semiconductor design industry, the use of a profit-related payment scheme is positively and significantly related to organizational performance; and that the effective use of reward and incentive compensation is positively related to financial performance. The results of the study indicate that companies using a profitrelated payment scheme are more likely to perform better in terms of both financial and nonfinancial performance than companies that do not use such a scheme; and, that companies which are effective in the use of reward and incentive compensation perform better than other companies. The research findings support the commonly held notion that the effective use of reward practices has the potential to increase organizational performance; thus, it is recommended that managers should give special attention to how best to employ such practices to attract and retain talented individuals; and how to effectively incorporate performance-based payment into their reward system to strengthen the ties between pay and employees’ performance.

Dow Scott, Ph.D 2010”the impacts of rewards programs on employee engagement” A sample of 6,300 WorldatWork members, primarily total rewards professionals, was invited to participate in The Impact of Rewards Programs on Employee Engagement study. The survey was open from Dec. 15, 2009 through Jan. 12, 2010. A reminder to complete the survey was emailed Half way through the survey period and again just before the survey closed. The survey required approximately 15 minutes to complete. There were 736 WorldatWork member respondents from around the world; the 12% response rate is considered good for a survey of this type. The majority of respondents represented organizations from the United States (55%). Canada and Western Europe had the next largest representation at 7% and 4%, respectively. There were few respondents from the United Kingdom, Eastern Europe, Asia-Pacific and the Middle East. And several respondents did not specify a country. Forty-two percent of the respondents indicated that their organization’s total rewards strategies had a positive effect on employee engagement, whereas 24% did not think this was the case. WorldatWork members were asked to assess how their efforts to engage employees through total reward programs affected a variety of employee and business outcomes. These assessments were grouped into three categories, which are reported in Tables 3a through 3c. Table 3a shows that 22% to 24% of respondents either agreed or strongly agreed that the efforts to engage employees through total rewards programs had reduced employee complaints about pay fairness and equity, reduced turnover, reduced absenteeism and reduced employee problems. However, a larger proportion of respondents disagreed or strongly disagreed that total rewards programs reduced complaints about pay fairness and equity (36%) and reduced turnover (39%). Approximately an equal number “disagreed” those efforts to engage employees through total rewards programs reduced absenteeism (22%) and reduced employee performance problems (26%). This study confirms that total rewards structures, programs and policies influence employee engagement. However, what is also evident is that the majority of compensation professionals do not necessarily consider how total rewards programs affect employee engagement in the design of rewards structures, policies and programs. The lessons learned from this study and the recommendations for supporting employee engagement through total rewards programs include the following Organizations that encourage managers to engage employees by making it a performance criteria and rewarding engagement through incentive programs indicate that their organizations more effectively foster employee engagement and motivation then those organizations that do not. As such, if compensation professionals wish to encourage employee engagement, they should develop performance metrics that measure the extent to which supervisors or managers encourage engagement among their subordinates. Reward supervisors and managers for developing employee engagement among their subordinates and peers. Specifically define employee engagement and include it as goal in the strategic plan. When the impact of different categories of rewards programs on engagement was studied, it was discovered that base pay and benefits had the overall weakest relationship with the organization’s ability to foster high levels of employee engagement and motivation compared to incentives, intangible rewards and quality of leadership on engagement. Quality of leadership had the strongest relationship with effectively engaging and motivating employees. As a result, compensation professionals should Use pay packages to attract leaders who have demonstrated their ability to engage employees. Think in terms of total rewards and not just financial rewards. Develop employee engagement resources that are directed toward work environment or organization climate, work-life balance and the nature of the job and quality of the work, and career opportunities. Opinion surveys were included in this study because they are often associated with efforts to enhance employee engagement and because they are a mechanism for obtaining employee feedback on a variety of work-related issues, including total rewards programs. Respondents indicated that employee surveys were used by 80% of the organizations they represented. Although more frequent use of employee opinion surveys was associated with effectiveness in fostering high levels of employee engagement and motivation, the relationship was much stronger for organizations where employee opinion survey results generate action and change. As such it is not enough to conduct employee opinion surveys; management must respond to input and suggestions with concrete actions and change. Employees should be involved in those change efforts.

Selart, M., Nordstrom, T., Kuvaas, B., & Takemura, K. (2008). Effects of reward on self-regulation, intrinsic motivation and creativity. Article evaluates the effects of two types of rewards (performance-contingent versus engagement-contingent) on self-regulation, intrinsic motivation and creativity. Forty-two undergraduate students were randomly assigned to three conditions; i.e. a performance-contingent reward group, an engagement-contingent reward group and a control group. Results provide little support for the negative effects of performance rewards on motivational components. However, they do indicate that participants in the engagement-contingent reward group and the control group achieved higher rated creativity than participants in the performance-contingent reward group.

Joseph R. Ruth ruff, Amit Phalgune, Laura Beckwith, Margaret Burnett, and Curtis Cook Conduct a research on “Rewarding “Good” Behavior: End-User Debugging and Rewards” Emerging research has sought to bring effective debugging devices to end-user programmers. This research has largely focused on how well such devices bring genuine “functional” rewards to end users. However, emerging models of programming behavior indicate that another, often ignored, type of reward perceivable rewards can play an equally vital role in how well debugging devices serve end users. Using an empirically evaluated fault localization device, this paper investigates the impact such perceivable rewards can have on end-user debugging. Our results indicate that perceivable rewards alone can significantly improve the effectiveness and understanding of end users performing debugging tasks. Research often focuses on improving programming environments and devices without taking perceivable rewards and punishments into consideration. Our results indicate that perceivable rewards alone may significantly improve the effectiveness and understanding of end users performing debugging tasks. This finding is important for a number of reasons. First, it indicates that the traditional approach of addressing functional rewards, while valuable, may not be the only means of improving enduser debugging. Second, it suggests the need for further work in this area. Finally, our results add to the emerging body of evidence validating the importance of rewards in end-user programming. This study is especially unique in that it is the first to differentiate the importance of functional rewards from perceivable rewards in end-user debugging.

Lee, Lena and Wong, Poh Kam conduct a research on “Individual attitudes, organizational reward system and patenting performance of R&D scientists and engineers” Data for this study were drawn from the 1996 National Survey of Research and Development Personnel in Singapore.1,2 Questionnaires were mailed to R&D personnel of various organizations and a total of 1,390 usable questionnaires were generated from the survey. Out of the 1,390 respondents, over 70% are male with the majority (65%) in their 30’s and 40’s. About 66% of the respondents are of ethnic Chinese background and 31% have a postgraduate degree (Masters and above). The interactive process perspective of innovation suggests that the innovation performance of individual R&D scientist or engineers (RSEs) is influenced by a nexus of interaction between individual attributes and organizational characteristics. While numerous empirical studies have investigated the effects of various sets of individual and organizational antecedents on the innovation performance of individuals, few have examined the interaction effects between the two. This paper addresses this gap in the literature by providing empirical evidence on the interactive effects of the attitudes of individual RSEs and the organizational reward system on the patenting performance . This research examined the interactive process  person-situation perspective of innovation. Specifically, they investigated the interactive effects of individual attitudes and organizational rewards on R&D employees’ patenting performance. We found support for our hypotheses that R&D personnel with positive attitudes toward R&D work and positive attitudes toward the impediments to R&D work have greater likelihood of achieving higher levels of patenting intensity. In addition, these individual antecedent factors have a positive interaction with the organizational reward system.

Reena Ali and M.Shakil Ahmed (2009) conduct a “The Impact of Reward and Recognition Programs on Employee’s Motivation and Satisfaction” 80 questionnaires were distributed among the employees out of whom 65 were responded appropriately giving an 85% response. In order for an organization to meet its obligations to shareholders, employees and society, its top management must develop a relationship between the organization and employees that will fulfill the continually changing needs of both parties. At a minimum the organization expects employees to perform reliably the tasks assigned to them and at the standards set for them, and to follow the rules that have been established to govern the workplace. Management often expects more: that employees take initiative, supervise themselves, continue to learn new skills, and be responsive to business needs. At a minimum, employees expect their organization to provide fair pay, safe working conditions, and fair treatment. (Beer, Spector, Lawrence, Mills, & Walton, 1984). The factors affecting satisfaction were identified; payment, promotion , working condition , personal as Analysis showed immense support for positive relationship between REWARD and EMPLOYEE SATISFICTION. All these results are statistically significant thus providing rigor and generalisability in research. Conclusion-This exploratory study suggests for the positive relationship between reward and satisfaction.

 George Tzetzis, Marios Goudas, Thomas Kourtessis, Vaso Zisi conducted a study on “

 Motivation orientation differences on gender and age and physical activity” The participants of the study were 112 students in physical education classes. They were boys (N=62) and girls (N=62) from two different age groups of 9-12 years of age (M=10,6). Students classified into four groups according to their goal orientation: a) high task, low ego, b) high task, high ego, c) low task, low ego d) low task, high ego. The groups completed a goal orientation questionnaire and they formed the groups according to whether their scores were higher or lower for task or ego than their median scores. Relative research showed that there are other factors influencing effort or physical activity. Williams and Gill (1995) showed that although there is a positive relationship between task orientation and effort relationship between ego goal orientation and effort depends upon the individual’s level of perceived competence. If this level is high then the effort is also high. Contrary, if the level of perceived competence is low, the effort is also low because individuals believe that they cannot outperform others. Other factors such as level of interest, self-esteem may influence the relationship of individuals with effort. Deci and Ryan’s (1985) theory that the relationship between perceived competence and effort is mediated by intrinsic motivation or by one’s propensity to engage in challenging tasks has been partially supported in the physical domain.

Carolina Mikander conduct a study on “The impact of a reward sytem on employee Motivation in montet-Espoo” The purpose of the thesis was to investigate and analyze how well the current reward system of Motonet-Espoo helps generate employee work motivation. 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. The theoretical part of the study introduces different theories of motivation and rewarding. Emphasis is put on Maslow's hierarchy of needs, the goal setting theory and the total reward system. The empirical part of the thesis was conducted by using a quantitative research method. The data was gathered with the help of a questionnaire and two interviews. The aim of the research was to compare the different reward systems used in Motonet- Espoo and find the pros and cons of them. The research results revealed how Motonet- Espoo can develop their reward system by including the employees in the decision making process. The research supports the assumption that a well developed and functional reward system can increase employee motivation and satisfaction.

Rizwan Qaiser Danish conduct a research work on “Impact of Reward and Recognition on Job Satisfaction and Motivation” The present research aims to determine the impact of incentives, rewards and recognition on employees of financial services, telecommunication, education, health manufacturing and other industries of both government and private sectors. Population of the study comprises of employees from all of these sectors in both private and public divisions in a major industrial city of Pakistan. The reason of including all these sectors is their positive and prominent growth in recent years in Pakistan. These sectors are favorable for this study because they contain a) line and middle level employees; b) the employees from each sector shares common characteristics. Thus the selection of these employees from large city of Gujranwala, Pakistan can be used as the sample representing the employees belonging to all these sectors in the whole country. For this purpose a non probability sampling, i.e. convenience sampling technique is used for recording the responses of 220 respondents. The convenience sampling is used because the information gathered from those employees who were accessed quite easily and conveniently. The purpose of study was to investigate the relationship between incentives, rewards recognition on employee motivation and satisfaction. The results are quite according to our hypotheses. Although many dimensions of work and job motivation are related to motivation and satisfaction but recognition, work itself and operating procedures have many low mean values as compared to other dimensions. This shows that employees are less motivated with their work contents, difficulties of operating procedures and neglecting the aspects of recognition. On the other hand, when they have sufficient promotional opportunities their relationship with co- workers are friendly, they are paid for what they work, and they find their job secured, their supervisors are cooperative and they feel that they can grow living within the organizations, than their level of motivation is very high. Analysis has shown a close relationship between several dimensions of work motivation and satisfaction but recognition along with work itself and operating procedures have shown low mean values and insignificant relationship. In Pakistani context the employees think that there is a minor chance of appreciation from the boss on doing a good job. These deficiencies can be worked out if the superiors motivate their juniors with proper recognition and appreciation even through minor things like asking their family problems. Employee’s participation in the decision making process will made them more courageous and enthusiastic towards working in the organization. On the other side the periodically salary increments, allowances, bonuses, fringe benefits and other compensations on regular and specific periods keeps their morale high and makes them more motivated. There are certain limitations or constraints to the generlizebility of the study, for example, consideration of inflation rate and unemployment rate. However the research is very important in building the relationship between employees and employer.

Anton Souvorov conducted a research on “ADDICTION TO REWARDS” The purpose of the research to check the addiction to reward of employee . It  explores the hidden costs of rewards. in a dynamic principal agent framework, in which an informed principal selects in each period a reward for the agent. It shows that rewards are addictive in that once offered, a contingent reward makes an agent expect it whenever a similar task is faced, which, in turn, compels a principal to use rewards over and over again. Furthermore, in a long-term principal-agent relationship there is a double- sided ratchet effect: the principal is concerned about creating addiction for the agent, whereas the agent wants to conceal his self. On the principal.s side, the ratchet effect implies that there are fewer rewards in a long-term principal-agent relationship than in a situation where the agent faces transient principals while implementing a series of similar tasks. On the agent.s side, ratcheting with a desire to work in order to acquire the reward .

John S. Carton (1996) “The Differential Effects of Tangible Rewards and Praise on Intrinsic Motivation” research indicates that tangible rewards, such as money, prizes, and tokens, decrease Response rates by undermining intrinsic motivation. In contrast, praise appears to increase response rates by enhancing intrinsic motivation. Based on their interpretation of available evidence, many social-cognitive researchers warn not to use tangible rewards in applied settings and to use praise instead. Furthermore, they suggest that the differential effects of the two types of rewards on intrinsic motivation cannot be explained using principles of operant psychology. Cognitive evaluation theory provides one of the most recent and widely cited social-cognitive explanations for the different effects of the two types of rewards on intrinsic motivation (Deci & Ryan, 1985). However, a review of existing research found little support for the explanations based on this theory and revealed three potential confounding effects: (a) temporal contiguity, (b) the number of reward administrations, and (c) discriminative stimuli associated with reward availability. These three confounding factors provide explanations for the effects of tangible rewards and praise on intrinsic motivation that are consistent with principles of operant psychology. Key words: intrinsic motivation, tangible rewards, praise. The present review found little evidence to support Deci and Ryan's (1985) propositions to explain the effects of different rewards on intrinsic motivation. In addition, three variables were identified that were not controlled in previous research and that may have caused the different effects of tangible rewards and praise on intrinsic motivation: temporal contiguity, the number of reward administrations, and stimuli associated with reward availability. Specifically, tangible rewards were delivered only once, after the treatment or post treatment sessions, and participants were told precisely when rewards were available for performance of the target activity. In contrast, praise was delivered multiple times, immediately following the target behavior, and participants were not informed of its availability.

2.1 THEORETICAL MODEL

This study is quantitative in nature. This model show how dependant and independent variables are related to each other. It enables a reader to better identify and to understand the theory base for the study. In this model reward is taken as an independent variable and Motivation as mediating and employee performance as dependent variable. Relation between variable shows that reward motivate the employees and it effect on employee performance

Reward

Motivation

Employee performance

 

Independent                                         Mediating                                                  Dependent