Employee motivation, with regards to rewards and compensation

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Literature Review

The literature review discuses the previous studies conducted on employee motivation with regard to rewards and compensation plans. The literature review aims to explore the relationship between various independent variables such as "Freedom &flexibility of designing courses", "Nature of work", "compensation", "Relationship with co-workers" and "Student quality, behavior and response" on dependent variable that is "employee motivation" to understand the problems that leads to poor quality of teaching in universities and particularly in private universities. Moreover, literacy rate in Pakistan is very low and apart from other factors, instructor's lower motivational level can be a reason for this. However, this literature review has some limitation as very few studies were conducted on Pakistan's private university faculty so most of the literature discussed would be work of researchers of developed nations.

Baker, Jensen and Murphy (1987) conducted a study to explore compensation and incentives practices and its impact on employee motivational level. The article discuses the need to understand the internal incentive structure of a firm as it dictates how mostly workers behave. It highlights the importance of researching extensively on performance/merit based compensation plans, promotional opportunities, seniority-based pay systems, 360 employees performance evaluation, holiday bonuses and profit sharing systems to better motivate employees. It suggests the concept of "efficiency wages" which are to be planned according to various factors maintained above. The article points out the fact that economist focus on financial rewards and suggests that they serve as better motivating factors for employees while several behaviorists suggests that non-monetary incentives serve as an excellent motivating factors for employees. Behaviorists suggests that simple praise from superiors or colleagues, promotional opportunities, self-esteem or confidence, recognition of work etc go a long way in enhancing employee's motivation and their commitment towards organization. The study is based on research carried out by Medoff and Abraham, who examined the pay of employees in two large firms with little difference in wages with company A employees being paid 7.8% more compared to company B, but company B employees receiving non-monetary incentives. The results showed that company A had 20% outstanding employees while company B had 18.5%, while company A had 74.3% good employees while company B had 81%. These differences signify the importance of non-monetary incentives along with satisfactory basic pay motivates employees more compared to monetary incentives only. Promotional based incentive programs are further discussed and it has been suggested promotions should also serve two important roles; firstly employees with distinctive skills should be preferred in promotion and secondly, more promotions for lower staff. Authors indicate that it's less expensive to promote from within the organization and it motivates employees to work harder. After discussing all pros and cons of monetary and non-monetary incentive based plans it concludes that both go hand in hand to motivate an employee to work harder for the organization.

Chugtai and zafar (2006) carried out a research on the topic to see if personal characteristics of employees, several facets of job satisfaction and organizational justice vary in employee motivation of Pakistani university faculty members. The research examines the outcome of employee motivation and organizational commitment on job performance and turnover rate. Research paper begins by discussing the importance of employee commitment as it states that commitment is negatively related to employee turnover rate. Research paper discusses the lack of research carried on teacher's motivational levels as its essential in improving the literacy rate of the country. It develops the argument that it's essential to motivate instructors because employees with high levels of job commitment stay longer, work better and are likely to loyal to organization, as same applies to instructors as instructors with high level of motivation put more effort in class and are likely to deliver quality lectures. Authors also indicate that its becoming difficult for different universities to hold on to highly qualified teachers as their demand is on rise and with the emergence of private universities/colleges, retaining employees has become a difficult task. Research highlights the relationship between organizational commitment and personal characteristics of employees such age, education, marital status, length of service, job involvement and trust in university management. Through questionnaire and statistical test run it was found that all of above mentioned personal traits have statistically positive relation with organizational commitment. Furthermore, various facets of job satisfaction such as compensation, promotion, relationship with coworkers, performance evaluation, nature of work, job security, training opportunities and working conditions were discussed. Through questionnaire authors found a positive correlation between organizational commitment and facets of job satisfaction and have concluded that higher the level of each of facets of job satisfaction, the higher level of organizational commitment and lower turnover rate. Data for the study was collected by rotating the questionnaire from full time faculty members on various posts such as lecturers, assistant professors, associate professors etc teaching in 33 universities in main cities of Pakistan such as Lahore, Islamabad and Peshawar. Facets of job satisfaction were measured by assigning different weights to them. Each item on questionnaire was assessed on scale ranging from strongly disagree which was weighted 1 to strongly agree which was weighted 7. The coefficient alpha of this sample was 0.82. Regression Analysis was run to test above stated hypothesis. In research all variables except age, organizational tenure, marital status and educational levels were measured on ordered scales. Research suggested OLS regression couldn't be run for variables with ordered scales as they may produce biased results. Hence, all variable were rescaled to measure the standard deviations between a given response and the mean response. Mean and standard deviation were calculated of each variable based on questionnaire results. In order to check each variable result multiple-regression was used and as significance level of 0.05 was used to include or remove variables from the regression model. Pearson Product moment correlations were run to test each variable. Reach is concluded on a note that institutes providing attractive compensation and reward plans are the one most successful in retaining the highly qualified employees with higher organizational commitment.

Danish and Usman (2010) carried out a research to study the impact of reward and recognition of job satisfaction and motivation on employees of various sectors in Pakistan. It discuses work motivation and its importance as it is defined in the study as collection of different processes which influences employees to achieve a specific goal. Study discusses impact of aspects of job satisfaction on employee motivational level of various work fields such as financial, telecommunication, education, health, manufacturing and other industries of both private and public divisions. Convenience sampling technique was used for recording the responses of 220 respondents. The demographics of employees varied as 73% of respondents had no managerial position in the job while 28% had. Likert scale was used to assess the results obtained from the respondents which 1 being denoted for extremely dissatisfied to 5 being extremely satisfied. Promotional opportunities, work itself, relationship with co-workers, recognition and compensation received more than 95% positive response while rest of variables like operating procedures, security, supervision, growth and sense of achievement received mixed responses. Descriptive statistics in the form of arithmetic means and standard deviations for respondents were calculated and than pearson product moment correlation coefficient was calculated to determine the relationship between the facets of job satisfaction on employee motivational levels. Since most of the results show a trend towards positive co-relations among the variables thus the research concluded the direct significant and positive relationship between facets of job satisfaction and employee motivation.

Chugtai (2008) conducted a study to examine a comparative analysis of job satisfaction among public and private sector college/university teachers in Lahore. Author builds the background of the research by explaining that highly qualified staff forms the backbone of an excellent educational institute and since they are the largest human capital that universities invest in so it's very essential to pay attention on motivational techniques. To get the best faculty possible educational system and the key to success there is to motivate employees to get perfection in motivating and compensation system. Chugtai describes an motivated instructor as not the one who is merely satisfied with his/her job but is the one who strive to achieve excellence in his/her work. To estimate the variables questionnaire was developed and floated among 502 teachers of both private and public sector colleges/ universities in Lahore. The questionnaire was structured in such a way that it was divided in three parts; first part was on obtaining employee information, second inquired about instructors' college/university characteristics and third one was about finding the variables that affected job satisfaction levels of employees the most. Mean of different variables obtained from results were computed for private and public sectors along with standard deviation and than sum total mean and standard deviation was also calculated. Moreover, percentages were calculated of satisfied and dissatisfied employees in both public and private sectors. To better understand the relationship among teacher's background and college characteristic variable were correlated with overall job satisfaction for private and public sector and OLS multiple regression analysis was used and a model was developed. After developing the model dependent variable that is overall job satisfaction was rescaled to compute z-scores. This was done primarily to avoid any biases that might appear in the results. The multiple regression analysis and analysis of variance were computed and correlation coefficient, standard error, t-statistic and p-values were calculated. Moreover, analysis of variance was calculated and since P value which came out to be 0.001 in the analysis of variance table is less than 0.01 there is statistically significant relationship among the variables.

Warsi, Fatima and Sahibzada (2009) conducted a research on understanding correlation between employee's dedication to organization and its casual factors among private sector employees in Pakistan. It recognizes the opportunities in Pakistan and states that as Pakistan is among the developing countries of the world, it needs to focus on motivating its employees to get improvement to get better performance out of them. The study intensively attempts to understand the key factors involved in enhancing employee commitment levels. It specifically aims to study the trends and attitudes of private sector employees on employee's motivational level and job commitment. The survey tools were developed and modified according to Pakistani private sector work environment, few questions were adopted from previously conducted research by Moon 2000, Drago , et al 1992 and MSQ-Minnesota satisfaction Questionnaire. Responses were collected and studied on likert scale from 1 to 5 where 1 stands for strongly disagree and 5 for strongly agree. Samples of 214 responses were gathered and simple random sampling methodology was adopted. CS-Pro was used to data entry while analysis was done using SPSS 13.0. The cronbach's alpha for job satisfaction, employee motivation and organizational commitment was calculated to be 0.822 which indicates the highest level of data reliability. Two statistical tools correlation and linear regression were used to analyze the gathered data set. Linear regression predicted employees motivation, dedication to organization and job satisfaction whereas correlation quantified the magnitude and direction of relationship between the above mentioned variables. Pearson correlation test was run and analysis showed a positive and significant relationship between the dependent and independent variables. The correlation coefficient for work motivation was r = 0.625 and for job satisfaction was r=0.652 which shows a strong and positive correlation between the variables, but job satisfaction is more strongly correlated with organizational commitment as compared to employee motivation. It also shows the direct relation which suggests that if one goes down that is if job satisfaction or motivational levels goes down so will organizational commitment. The study was successful at proving its hypothesis and suggested to policy makers that if they want to enhance employees organizational commitment the only way to do so is through employee higher motivational level and overall job satisfaction.

Rauf (2010) carried out a study to research on the relationship of optimism and job satisfaction in business schools. The study was to test the hypothesis that there is a positive correlation between optimism and job satisfaction. Several measure like Likert 7 points, Oldham and Hackman 2 item and for quantitative analysis pearson product moment correlation was calculated. The research paper begins by defining job satisfaction as being an appraisal of perceived job characteristics and employees take on it. It relates it to the concept of employee's positive attitude towards the work and how it's important for employers to understand especially in business schools as there are few business schools in Pakistani and competition is fierce among them. The common facets of job satisfaction under study in this research paper were pay, supervision, coworkers, work, and promotion opportunities. The research also develops an argument that personality of an employer has strong influence on job satisfaction. Sample of 80 full time faculty members were randomly selected from business schools of defence region Karachi. Mean and maximum scores were calculated of variables and Pearson Correlation test was run which resulted in negative correlation of -.034 among two variable which means that job satisfaction isn't directly or positively related with employer's personality traits. Regression analysis was also independently run on facets of job satisfaction which shows that there is 96% chance of job satisfaction relating positively with organizational commitment and employee motivation.

Shahzad, Bashir and Ramay (2008) carried a research to study the impact of human resource policies being practiced in various universities on performance of teachers in Pakistan. The study firstly states that HR policies and practices have positive link with employee performance and than states the variables that it aims to study that are compensation, promotion and employee evaluation etc also have impact on performances of teachers in various universities of Pakistan.It studies compensation practices in details and highlights the importance of better compensation plan in country like Pakistan where monetary benefits are preferred over others as cost of living is raising day by day. Moreover, it states that it's an excellent way of retaining the qualified staff as well as attracting new employees. Authors try to verify it by Maslow Hierarchy of needs theory as they say that if employee's basic needs are not being fulfilled, they won't respond to other incentive plans being offered. It further states that there is apparently a tough competition between universities and colleges as every university aims to have greater number of graduates in each batch and their ultimate success in future and this can only be achieved through quality instructor hired by that university. It also discusses the promotional opportunities being a motivating factor for instructor but than it suggests that it also leads to politics among colleagues and so is the case with performance evaluation practices, as if they are biased will serve as de-motivating factor rather than a motivating factor. Data was collected by floating Teseema & Soeters questionnaire and correlation matrix was used to verify the relationship shared by dependent and independent variables.

Evans (2000) researched on the implications of change in education policies on job satisfaction and motivation of academic faculty members. The study is UK based and expresses the concern for teachers there who apparently seems to have adopted a negative attitude towards job due to low salary, low status and particularly because of government reforms. Evans has discussed various studies in her research but the underlining theme has been that of job satisfaction and motivation among teachers of higher education institutes. Author has studied the effects across four models she has constructed and has carried out her study on how it affects the circumstances and situation. The research was based on research carried out over a five year period from 1989 to 1993 with sample of 19 English school teachers, employed in various schools. The data was collected through interviews, questionnaire and a form of particular observation. After the study the observation mean and standard derivation were calculated and the results were quantified by Pearson Product moment test and the study concludes by showing a positive correlation between employee motivation, job satisfaction and educational change.

Sargent and Hannum (2005) carried out a research for keeping teachers happy: job satisfaction among primary school teachers in rural northwest China. The study is based on Chinese school environment but it clearly list and examine the critical motivating factors for keeping the morale of teachers high so that they can deliver better lecture and quality education could be provided. It explains that teachers are more happy in community setup that is if they have good relations with their co-workers and it also lists several school environment factors teachers are more satisfied with that is more growth opportunities, promotional opportunities, larger schools, School affiliation etc It has been established that teachers are essential link for transfer of information and for better educational system so any change in teachers morale or motivational levels will automatically bring a change in students way of learning. It also points to the fact that even though recruiting and retaining quality teachers are necessary even than very few studies have been conducted on this area. The data for this research was taken from Gansu Survey of children and families (GSCF), conducted in Gansu Province in the summer of 2000. The main survey had multistage cluster sample as it was carried out on a large scale. Further questionnaire was developed and with help of data from that research mean and standard deviation was computed for all variables and the frequency was seen. Moreover, univariate and bivariate statistics, was used to first provide a description of social location of satisfied teachers and than with the use of random effects logit models were used to analyze the effects of community, school and individual characteristics. For doing so a model was developed with the help of multiple regressions. The correlation coefficients came out to be positive for employee motivation and job satisfaction while it was established that individual characteristics of instructor however had no effect.

Rasheed, Aslam and Sarwar (2010) conducted a research to study motivational issues for teachers in higher education: a critical case of IUB. Research aimed to find various issues of motivation for teachers in higher education institutes. It was an exploratory research where primary data was collected through questionnaire and interviews. Statistical tools such as Pie Charts, and bar diagrams were drawn to study the patterns and underlining trends by calculating mean and standard deviation of variables in questionnaire. After carrying out the research it was concluded that although compensation and benefits package is a key motivating factors but some non financial incentives like job design, work environment, career opportunities, recognition & rewarda, feedback, training facilities, participation in decision making and employee freedom to design its own course were the ones with higher frequency and mean. However, workload has negative impact on teachers motivational levels and affected the way they react to work.