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

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1 Online Open Access publishing platform for Management Research Research Article ISSN Influence of Non Financial Rewards on Job Satisfaction: A Case Study of Educational Sector of Pakistan Department of Management Sciences, COMSATS Institute of Information Technology, Wah Cantt, Pakistan. tausif50@hotmail.com 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 688 Volume 2 Issue 2, 2012

2 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. 689

3 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. 690

4 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. 691

5 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 H 1 : 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 H 2 : 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 (**) 439(**) 1 Age 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 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)

6 Age (26-30) (31-35) (36-40) (41-45) (46-50) (51-55) (56-60) 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. R Square Table 3: Regression analysis Adjusted R Square Std. Error of the Estimate Model R Change Statistics R Square F Sig. F Change Change df1 df2 Change 1.371(a) 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) 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. Table 5: Regression for Moderation Model R R Square Adjusted R Square Std. Error of the Estimate 1.447(a) 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. 693

7 Table 6: Regression for Moderation Model R R Square Adjusted R Square Std. Error of the Estimate 1.582(a) 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. 694

8 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 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 Eichar DM, Norland S, Brady EM, Fortinsky RH., (1991), The Job Satisfaction of older Workers, Journal of. Organizational Behavavior, 12(7) pp Eyupoglu SZ, Saner T., (2009), Job satisfaction: Does rank make a difference, African Journal of Business Management, 3(10), pp Ira Feder., (1999), Customized Job Enrichment and Its Effects on Job Performance, Dissertation.com USA.1999 ISBN: 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 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 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 Kosteas, Vasilios D., (2010), Job Satisfaction and Promotions Industrial Relations. A Journal of Economy and Society, 50(1), pp Locke EA., (1969), What is Job Satisfaction, Organization. Behavior Human Performance, 4, pp 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 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 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 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 Productivity and Technology. 695

9 15. Richard P. Vlosky., (2009), A Model of Employee Satisfaction: Gender Differences in Cooperative Extension Journal of Extension, 47(2), pp Sonawane, Pragya., (2008), Scope of Non-monetary Rewards. Indian Journal of Industrial Relations, 44(2), pp Steven E. Phelan and Zhiang Lin., (2001), Promotion Systems and Organizational Performance: A Contingency Model. Computational & Mathematical Organization Theory, 7, pp 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. 696