nfluence of Non Financial Rewards on Job Satisfaction: A Case Study of Educational Sect or of P akistan

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ASIAN JOURNAL OF MANAGEMENT RESEARCH Online Open Access publishing platform for Management Research

Research Article ISSN 2229 – 3795

ASIAN JOURNAL OF MANAGEMENT RESEARCH 688

Volume 2 Issue 2, 2012

Influence of Non Financial Rewards on Job Satisfaction: A Case Study of

Educational Sector of Pakistan Tausif M

©

Department of Management Sciences, COMSATS Institute of Information Technology,

Wah Cantt, Pakistan.

[email protected]

ABSTRACT

The purpose of this paper is to explore the relationship between non financial rewards and

employees job satisfaction for the educational sector of Pakistan. We had conducted a survey

on Public sector School teachers to examine the relationship of non financial rewards (i.e.

promotion, job enrichment and job autonomy) and employee‟s satisfaction towards job.

Sample of 200 full time employees was taken. Schools were randomly selected from the city

of Wah Cantt. Structured questionnaire was used to collect the data. The response rate was 86

percent. We identify two competing hypotheses on the relationship between non financial

rewards and job satisfaction. We used t test, regression and correlation to test our hypothesis

whether non financial rewards have positive relationship with employee job satisfaction or

negative relationship with employee job satisfaction. Results show that non financial rewards

are the strong determinant of job satisfaction for the employees of public educational sector

of Pakistan. The satisfaction increases with the increase in age. The old employees are more

satisfied with job rewards than young employees. Results also show that the age differences

of the employees affect the association between employee rewards and employee job

satisfaction.

Keywords: Promotion, Job enrichment, Job autonomy, Job satisfaction, Age Difference

1. Introduction

The concept of employee satisfaction has great importance in the field of human recourse and

compensation management. There are wide varieties of research studies have been conducted

on this area. Organizations use different techniques to satisfy and motivate their employees.

According to the research study of Clifford, (1985) different types of rewards have

relationship with employees‟ satisfaction towards job. If employees are highly satisfied with

their work then they become more productive and loyal to their work. Rewards in the form of

money considered as the best tool to motivate employees. However, organizations also use

different types of non financial rewards to enhance the satisfaction of their employees and

increase the motivational level of the employees. Locke, (1969) has defined the term job

satisfaction. According to his definition job satisfaction is a positive emotional feeling which

is comes as a result of the comparison of employee‟s expectation and what he actually gets

from it. Non financial rewards play important role to satisfies and motivate the employees.

Non financial rewards involve promotion, job enrichment and job autonomy. Monetary

rewards give considerable levels of employee satisfaction at some or no cost. Employees are

more likely to be motivated and satisfied through the use of non monetary rewards. Non

Influence of Non Financial Rewards on Job Satisfaction: A Case Study of Educational Sector of Pakistan

Tausif M

ASIAN JOURNAL OF MANAGEMENT RESEARCH


689

financial Rewards have been a key element in improving employees‟ satisfaction, in order to

increase productivity as well as sustain competitive advantage.

The study of human resource is the most important area among all other areas of organization.

Capable and knowledgeable workforce in an organization is very crucial in overall

performance of an organization. Motivated employees can help and make an organization

competitively more value added and cost-effective. Different extent of work motivation and

satisfaction are significantly associated and reward and recognition have great impact on

motivation of the employees, and if the employee is motivated than he would increase his job

performance, which leads to job satisfaction Danish et al, (2010). Employee job satisfaction

is an important matter for managers and workers in any organizational setting. There are no

significant differences in the conditions of employee satisfaction between male and females

suggested by Richard P. Vlosky et al, (2009).

2. Literature review

There is large amount of literature available about rewards and employee satisfaction. Pragya

(2008) described the relationship between non financial rewards and employees satisfaction

and told that non monetary rewards increase the satisfaction of the 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 performance of an individual. Danish et al (2010) revealed that

human resources are the most essential area among all the resources of organization.

Competent and knowledgeable personnel in an organization are very essential in overall

performance of an organization. Motivated employees can help and make an organization

competitively more value added and cost-effective. He also originate that different degree of

work motivation and satisfaction are considerably linked and reward and recognition have

great influence on motivation of the workers, and if the worker is motivated than it would

increase his job performance, which leads to job satisfaction.

Steven et al, (2001) revealed that if major promotion systems typically practiced in

businesses increases the satisfaction of the employees. Mohr et al, (2006) concluded that

different the data on work features is to study whether “enriched” job design, nature like

excellence circle, response, suggestion programs, and task teams, affects job satisfaction and

inspected that that two opposing hypothesis are recognized on the association between

enriched jobs and job satisfaction. Motivational hypothesis,” demonstrates that enrichment

will increase satisfaction these results show that a number of types of enrichment, in

particular offers, information sharing, task teams, excellence circles and training, increase

satisfaction.

Vasilios D. Kosteas, (2006) concluded the association of promotions and promotional point

of view on job satisfaction. Result shows that a promotion in the previous two years improve

the possibility an employee will be very satisfied. It is also accomplished that impact of

promotion on job satisfaction is independent from any related wage raise. The results depict

that manager may be able to exercise promotions as a new technique to increase employee

satisfaction. Ira Feder,(1999) explained that Job enrichment is a qualitative change to a job

that enhance the influence of job, allow employees to have a better tasks and feed back in

working environment they also studied that this process provides greatest extent of intrinsic

job satisfaction.


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Oladele et al, (2010) observed in their research that additional job responsibility and task

properly is very essential in raising the motivation of employees, which is addressed by job

enrichment. He also explained that by use a casual sampling method, the understanding and

management of job enrichment method among District Agricultural Officers in Botswana. In

order to make sure the cause of job enrichment on satisfaction their effect shows that the

familiarity of job enrichment techniques was moderate among district official. In order to

develop performance training should be given on job enrichment and other job- associated

models.

P. Vlosky et al (2009) described that employee satisfaction is a considerable subject for

organization and workers in any organizational setting. He also developed a general model of

worker satisfaction and tested it for both female and male U.S Extension employees.

Outcomes of his study specified that there are no differences in the conditions of employee

satisfaction between genders. Rehman et al, (2010) described the connection between job

rewards and job satisfaction. The results of this study exposed that job rewards are

demonstrated to be strong determinant of work satisfaction.

John Tippet (2009) established that non financial rewards are the helpful instrument to

enhance the satisfaction of the workers. Stovall et al, (2003) conducted research on non

financial rewards and worker job satisfaction and research told that an effective reward

package could have an important impact on the employee‟s performance. They explained that

non financial rewards motivate workers which lead to job satisfaction. Douglas et al, (1991)

had conducted research on the job satisfaction of older personnel. He found that the old

workforce is more satisfied with their job rewards than young workers. According to

Kalleberg (1983), job satisfaction raises with the age, the old workers have greater

satisfaction than new employees.

3. Research objectives

The objective of this research is to identify that what are the main factors of non financial

rewards which affects the job satisfaction and in what manner the employee leads towards

satisfaction.

1. To identify the importance of non financial rewards for the educational sector of

Pakistan.

2. To identify the moderating role of age difference regarding preferences of job rewards.

4. Research methodology

4.1 Sampling procedure

The research study was conducted in educational sector of Pakistan. Data collected from

public sector school. The survey has conducted through respondents entering into their

offices in chosen randomly in the city of Wah Cantt, where the faculty of institutions acting

as respondents to the survey. There are thirteen total schools in wah region. The respondents

were divided into eight categories: the employees are age 20 to 25 was considered as

category one and 26 to 30, 31 to 35, 36 to 40, 41 to 45, 46 to 50, 51 to 55 and 56 to 60 was

included in the categories of two, three, four, five, six, seven and eight respectively.


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4.2 Sample size

The total population of this institution‟s facility is five hundred employees. To guarantee that

specific groups within a population are adequately represented in the sample and to improve

efficiency by gaining greater control on the composition of the sample. To study the

relationship between the variables, the total respondents for this research were 200

employees. The sample is the 40% of total population that truly represent the whole

population. The questionnaire was filled from full time employees and the response rate was

86 percent.

4.3 Theoretical framework

Conceptual Model: Influence of Non Financial Rewards on Job Satisfaction: A Case Study

of Educational Sector of Pakistan

4.4 Variable justification and Hypothesis development

This model describes the relationship of non financial rewards (promotion Job enrichment

and job autonomy) with job satisfaction.

Employee satisfaction

Employee satisfaction is a measure of how happy workers are with their job and working

surroundings. Keeping confidence high among workers can be of wonderful benefit to any

company, as happy workers will be more likely to produce more, take fewer days off, and

stay reliable to the company. Locke, (1969) has defined the term job satisfaction. According

to the definition job satisfaction is a positive emotional reaction which is comes as a result of

the comparison of employees‟ expectation and what he in reality obtains from it.

Promotion

Steven e. Phelan and Zhiang Lin (2001) defined a link between promotion and work

satisfaction, results showed positive relationship between these two. And Vasilios D.Kosteas

(2006) told effect of promotion job satisfaction and there exists a positive relation between

these two variables.

Job enrichment

In (1999) Ira feder studied the contribution of job enrichment in a qualitative change to a job

& also inspected the association between job enrichment and job satisfaction which

ultimately effects on organizational performance.


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Job autonomy

Karim et al, (2008) found that job autonomy has positive relation with employees‟ job

satisfaction, if there is freedom at the work place then employees will be more satisfied his

work.

So hypothesis will be

H1: Job rewards have positive relationship with Employee’s job satisfaction.

Age: Dougles, (1991) had conducted research on the job satisfaction of older personnel. He

found that the old employees are more satisfied with their job rewards than young workers.

According to Kalleberg (1983), job satisfaction increases with the age, the old workers have

greater satisfaction than new workers.

So hypothesis will be

H2: Age differences moderate the relationship between job rewards and employee’s job

satisfaction.

5. Research findings

The Pearson correlation matrix demonstrates that job satisfaction is positively and

considerably associated with non financial rewards such as promotion, Job enrichment, Task

autonomy. The value of Pearson correlation (.353**) proves that Promotion is highly linked

with employee job satisfaction and task autonomy (.198**) is less linked with job satisfaction.

Job satisfaction is considerably linked with age (.137). Age is also correlated with promotion,

job enrichment and task autonomy.

Table 1: Pearson correlations

Job satisfaction Promotion Job Enrichment Task Autonomy Age

Job satisfaction 1

Promotion .353** 1

Job Enrichment .198** .250(**) 1

Task Autonomy .133 303(**) 439(**)

1

Age .137 .079 .085

.032 1

In Table 2, mean and standard deviation of all variables and one way analysis of variance

results for age differences has been revealed. It actually shows the direction of job

satisfaction, promotion, job enrichment and task autonomy with relation to age differences.

As we have used age differences as moderating variable so these analyses will clearly

demonstrates that job satisfaction is increasing with increase in age differences. Therefore old

worker are reporting high level of satisfaction 3.32.

Table 2: Comparison with age differences

Job Satisfaction Promotion Job Enrichment Task Autonomy

Mean Standard

Deviation

Mean Standard

Deviation

Mean Standard

Deviation

Mean Standard

Deviation

(20 - 25) 3.5000 .92376 2.0000 .00000 3.6650 .38682 3.5000 .19630


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Age

(26 - 30)

3.2531 .89874 2.2031 1.18362 3.3953 .84928 2.9372 .84858

(31 - 35)

3.0892 .91250 2.2162 .82950 3.4597 .63940 3.3149 .66237

(36 - 40)

3.0615 .85102 1.6923 1.03155 3.6146 .80256 3.1285 .86650

(41 - 45)

3.4000 .87427 3.0625 1.56950 3.4025 .82236 3.6396 .79273

(46 - 50) 3.7519 .85547 2.6667 1.02844 3.5926 .74164 3.2844 .89915

(51 - 55) 3.4250 .96245 2.5417 1.25903 3.8204 .67300 3.2500 .89124

(56 - 60) 3.3200 .94845 1.5000 .52705 3.2640 .56315 2.8000 .47558

Regression analysis

Table 3 explained that the model tested is significant. The regression analysis accounted for

14% change is caused by job rewards to job satisfaction which is dependent variable.

Table 3: Regression analysis

Model R

R

Square

Adjusted

R Square

Std. Error

of the

Estimate Change Statistics

R Square

Change

F

Change df1 df2

Sig. F

Change

1 .371(a) .138 .122 .85258 .138 8.898 3 167 .000

Moderating variable analysis

To test the moderating variable, age differences with respect to job satisfaction and job

rewards linear regression is used and comparison of change in R square is tested. A table 4

shows that the linear model tested is significant. The regression analysis accounted for 7%

change is caused by job rewards to job satisfaction which is dependent variable.

Table 4: Regression for Moderation

Model R R Square Adjusted R Square Std. Error of the Estimate

1 .256(a) .065 .031 .87591

Table 5 illustrates that the linear model tested is significant. The regression analysis

accounted for 20% change is caused by non financial rewards and age differences to job

satisfaction which are dependent variable.



1 .447(a) .200 .149 .80623

Table 6 explained that the linear model tested is significant. The regression analysis

accounted for 34% change is caused by job rewards to job satisfaction which is dependent

variable.


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1 .582(a) .339 .273 .80610

As the R square value is greater for the job rewards * AGE than only for Job rewards. The

age difference is confirmed as a significant moderating variable.

5.1 Discussion and conclusion

The purpose of this study was to measure the relationship between non financial rewards and

job satisfaction of educational sector of employees in Pakistan. This research study was

conducted in public sector High School in Wah Cantt. After interpretation of results, our H1

is sustained as there is a significant relationship is found between non financial rewards and

job satisfaction.

The moderating impact of age differences on the relationship between job reward and job

satisfaction is proved and results are significant. The considerable relationship of age with

both work rewards and work satisfaction proves it as moderating variable (Table 4 – 5-6).

Hence the H2 Age difference moderate the relationship between works rewards and job

satisfaction is proved. According to the results old age employees report high satisfaction if

they receive non financial rewards.

5.2 Managerial Implications

The paper examined the impact of non financial rewards on employees‟ job satisfaction with

the moderating affect of age differences. We concluded that job satisfaction increases with

the increase the age of employees. Older employees are more satisfied than new employees.

This research study can be helpful for HR managers in two ways. First, HR managers can

design effective compensation package for teachers. Secondly, the study also helpful to

design the compensation package considering the age differences of employees. This study

clearly shows that the preferences of senior employees are different from fresh employees.

5 3 Limitations

This research has many limitations. First, measurement of the variables of “non financial

rewards and job satisfaction” is all based on perceptions and attitudes of participants of this

study through a questionnaire. Thus, some possible sources of error might exist in the data set.

Second, all subjects in this study worked for the federal Government educational settings.

Therefore, the findings cannot be generalized to other private institutions.

5.4 Future work

This research study was based on the influence of non financial rewards such as Promotion,

Job enrichment and task autonomy with the moderating effect of age differences. The next

step of this research could be to examine the combine effect of financial and non financial job

rewards on job satisfaction with the moderating variable of age differences or gender. To use

gender as moderating variable will describe us the differences in the preferences of male and

female employees.


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6. References

1. Clifford J. Mottaz., (1985), The Relative Importance of Intrinsic and Extrinsic Rewards

as Determinants of Work Satisfaction. The Sociological Quarterly, 26(3), pp 365-385.

2. Douglas M. Eichar, Stephen Norland, E. Michael Brady and Richard H. Fortinsky.,

(1991), The job satisfaction of older workers. Journal of Organizational Behavior, 12(7),

pp 609–620.

3. Eichar DM, Norland S, Brady EM, Fortinsky RH., (1991), The Job Satisfaction of older

Workers, Journal of. Organizational Behavavior, 12(7) pp 609-620.

4. Eyupoglu SZ, Saner T., (2009), Job satisfaction: Does rank make a difference, African

Journal of Business Management, 3(10), pp 609-615.

5. Ira Feder., (1999), Customized Job Enrichment and Its Effects on Job Performance,

Dissertation.com USA.1999 ISBN: 1-58112-069-9.

6. John Tippet, Ron Kluvers., (2009), Employee Rewards and Motivation in Non Profit

Organizations. Case Study from Australia. International Journal of Business and

Management, 4(3), pp 7-14.

7. Kraig S.Stovall., (2003), Increasing Employees participation in fire safety education

program using non monetary rewards „Submitted to national fire academy as a part of

enactive fire officer program. Available at www.usfa.fema.gov/pdf/efop/efo35676.pdf

8. Kalleberg AL, Karyn A, Loscocco C., (1983), Aging, Values, and Rew ards: Explaining

Age Differences in Job Satisfaction, American Soc. Review, 48 (1), pp 78-90.

9. Kosteas, Vasilios D., (2010), Job Satisfaction and Promotions Industrial Relations. A

Journal of Economy and Society, 50(1), pp 174-194.

10. Locke EA., (1969), What is Job Satisfaction, Organization. Behavior Human

Performance, 4, pp 309-336.

11. Muhammad Zia ur Rehman, Muhammad Riaz Khan, Ziauddin and Javed Ali Lashari.,

(2010), Effect Of Job Rewards On Job Satisfaction, Moderating Role Of Age

Differences: An Empirical Evidence From Pakistan. African Journal of Business

Management, 4(6), pp 1131-1139.

12. O. I. Oladele1, S. K. Subair and N. V. Sebina., (2010), Knowledge and utilization of job

enrichment techniques among district agricultural officers in Botswana”. African

Journal of Agricultural Research, 5(21), pp 2918-2924.

13. Rizwan Qaiser Danish, Ali Usman., (2010), Impact of Reward and Recognition on Job

Satisfaction and Motivation: An Empirical Study from Pakistan. International Journal

of Business and Management, 5(2), pp 159-177.

14. Robert D. Mohr, Cindy Zoghi., (2006), Is Job Enrichment Really Enriching ‟BLS

Working Papers U.S. Department of Labor, U.S. Bureau of Labor Statistics, Office of

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15. Richard P. Vlosky., (2009), A Model of Employee Satisfaction: Gender Differences in

Cooperative Extension‟ Journal of Extension, 47(2), pp 1-15.

16. Sonawane, Pragya., (2008), Scope of Non-monetary Rewards.

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17. Steven E. Phelan and Zhiang Lin., (2001), Promotion Systems and Organizational

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18. Yoswa M Dambisya, (2007), A Review of Non-Financial Incentives for Health Worker

Retention in East and Southern Africa. Equinet Discussion Paper No. 44. University of

Limpopo, South Africa.

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nfluence of Non Financial Rewards on Job Satisfaction: A Case Study of Educational Sect or of P akistan