Abstract
In today's competitive business environment, organizations are constantly struggling to improve productivity, which ultimately leads to better performance of the organizations as a whole. It is, at this point, that various compensation schemes come into play, to motivate employees, which would reduce factors like job turnover, absenteeism, productivity, etc. and in turn, reduce costs. This study attempts to investigate the effectiveness of cash and non-cash award, reward, and recognition programs and to provide strategic guidance that will assist the organization in knowing when and where to utilize such programs, how to determine the type of motivation and award program that should be used. This study has been carried out among Pakistan Petroleum Limited employees. An analysis of 60 employees has been done to explore interesting trends related with employee motivation and types of compensation, management level viz lower, middle and upper management. The conclusions developed through this study has focused on developing an effective compensation system at PPL by identifying and understanding what motivates employees at each level in terms of cash and non-cash based rewards and allowing greater involvement of employees in selection of these rewards.
Highlights
The compensation system of an organization has strong effects on employee motivation
Monetary compensation has a positive relationship with extrinsic motivation, intrinsic motivation is not affected by monetary compensation, but it is affected by growth and promotional opportunities
It was established that employees, at different management levels, had different views towards the motivational effect of cash and non-cash incentives
Summary
The compensation system of an organization has strong effects on employee motivation This motivation can be categorized as intrinsic and extrinsic motivation, and the compensations have different effects on both of them. PPL, like most other organizations in the petroleum industry, uses both cash and non-cash awards, rewards and recognition programs to influence employee performance and motivation level. This research is designed to investigate the effectiveness of cash and non-cash award, reward, and recognition programs and to provide strategic guidance for PPL that will assist the organization in knowing when and where to utilize such programs, how to determine the type of motivation and award program that should be used and to identify. Journal of Independent Studies and Research MSSE the management level via upper management, lower management and a set of guidelines on how organizations can efficiently and effectively develop and implement various award programs
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