A

DISSERTATION REPORT
ON
Role of organizational rewards on the motivation level of employees
[Submitted in the partial fulfillment of MBA degree]
(Approved by AICTE, Govt. of India)
ACADEMIC SESSION
(2013-2015)

SUBMITTED TO:

SUBMITTED BY:

MR.YOGENDER KUMAR

ANKITA

ASSISTANT PROFESSOR

MBA 4TH SEM

MANAGEMENT

ROLL NO-874

UILMS SEC-40

REGN. NO -08-GG-3614

GURGAON

MAHARSHI DAYANAND UNIVERSITY, ROHTAK

University Institute of law &management studies
Gurgaon, Haryana
1

PREFACE
The Present report is mainly intended for commerce department such as attempt has been made
to explain in reasonably brief manner various aspects of Research & the impact of employee
motivation on job. We feel deeply owned to our respectable teacher
Asst. Prof. YOGINDER KUMAR University of law and management studies who always been a
source of inspiration of us.

ACKNOWLEDGEMENT
On the very outset of this report, I would like to extend my sincere & heartfelt obligation towards
all the personages who have helped me in this endeavor. Without their active guidance, help,
cooperation & encouragement, I would not have made headway in the project.
I am ineffably indebted to DR.VIJAY RATHEE for conscientious guidance and encouragement
to accomplish this assignment.
I am extremely thankful and pay my gratitude to my faculty guide MR.YOGENDER
KUMAAR for his valuable guidance and support on completion of this project in its
presently.
I extend my gratitude to UILMS for giving me this opportunity.
I also acknowledge with a deep sense of reverence, my gratitude towards my parents
and member of my family, who has always supported me morally as well as
economically.
At last but not least gratitude goes to all of my friends who directly or indirectly helped
me to complete this project report.
Any omission in this brief acknowledgement does not mean lack of gratitude.
Thanking You
ANKITA

SUPERVISIOR CERTIFICATE
This is to certify that the project work entitled Role of organizational rewards
on the motivation level of employees is a bonafide work carried out by Ankita,
a candidate of

the MBA

(2013-2015) UILMS

direction.

Signature of the supervisor

YOGENDER KUMAR - supervisor

under my supervision and

Table of contents
PREFACE
..2
ACKNOWLEDGEMENT...........
...............................3
CERTIFICATE
4
Executive Summary......................................................................5
literature review............................................................................ 6
Methodology.................................................................................9
Research Design.........................................................................10
company profile...........................Error! Bookmark not defined.
introduction to motivation...........................................................25
Reward
system
..32
rewards system linked to motivation...........................................37
Conclusion and suggestions........................................................52
questionnaire..
53
biblography................................................................................. 54

Executive summary
Motivation refers to forces within person that affect his or her direction, intensity, and
persistence of voluntary behavior Motivated employees are willing to exert a particular level of
effort (intensity) for a certain amount of time (persistence) toward a particular goal (direction).
Every organization wants to increase motivation of their employees to enhance their productivity.
For that purpose some organizations use rewards which includes various benefits which are
provided by employer these may be monetary or non monetary and some use other tactics like
job design practices to motivate employees. We are conducting this research to enhance the
academic knowledge in this topic Organizational Rewards and Employees Motivation.
This study finds out the motivation level of different employees for benefits and rewards
received from their employers in Pakistan. Responses from users will be received through
Questionnaires, Interviews and Observation.
The scope of this research is that it will help organizations management to learn the ways of
improving their services. It will tell them how they can motivate their employees and what the
shortcomings in their operations are. For that purpose we are supposed to explore banking sector.
Our study will be of exploratory nature. Exploratory study is necessary when some facts are
known, but more information is needed for developing a viable theoretical framework.
Exploratory studies are important for obtaining a good grasp of the phenomenon of interest and
advancing knowledge through subsequent theory building and hypothesis testing. Qualitative
studies where data reveal some pattern regarding the phenomenon of interest, theories are
developed and hypothesis formulated for subsequent testing.

Literature Review
DEFINITION:
A literature review is a step-by-step process that involves the identification of published and
unpublished work from secondary data sources on the topic of interest, the evaluation of this
work in relation to the problem, and the documentation of this work.
AUTHORS Michael R. Bowers, (Assistant professor of marketing at the University of Alabama
at Birmingham.), Charles L. Martin, (Assistant professor of marketing at The Wichita State
University, Wichita, Kansas.), AlanLuker, (Assistant director of marketing at Baptist Medical
Centres in Birmingham, Alabama.)
Offers the new product to the employees so in this way manage the good relationship between
employees and customers. If the quality and rules good of any organization than the motivation
of the employees also increase. The values of services play a vital role for increasing the
motivation among the employees. So in this way the satisfaction also increase. At the end we
suggests that if any organization developing the high quality services with lower cost so in this
way also increase the motivation of the customers.
AUTHOR (GRANT, PHILIP C)
To increase the employees motivation, employees of that organization must be achieved higher
result with higher satisfaction. To achieve some rewards we must focus on work.
College of Business, University of Illinois at Urbana-Champaign, Champaign, IL 61820, United
States
Motivation, opportunity and ability are the three kinds which help to make the frame work.

Employee motivation, at times, can be an elusive quest for companies and managers due to the
multiplicity of incentives that can influence employees to do their best work. Furthermore, shortterm financial incentives are often seen as mandatory to foster motivation and are generally
viewed very positively by employees in the workplace. However, recent research has indicated
that there are other factors that can significantly influence motivation and lead to innovation.

In the current scenario the competition in the business markets has been dramatically increased
due to which organizations want more competent and motivated employees. In the past
organizations have armies of supervisors to closely monitor employees motivation and rewards
system. Even if commitment and trust were low, employees performed their jobs with the boss
watching them closely but most companies thinned their supervisory ranks when they flattered
organizational structure to reduce costs. Supervisors now have many more employees, so they
cant possibly keep a watchful eye out for laggards. Therefore now organizations want more
motivated employees.
Organizational rewards refer to benefits which organization provides to its employees it may be
monetary rewards or non monetary rewards. Monetary rewards include salary increases, profit
sharing, stock options, project bonuses and additional paid vacation time. Non monetary rewards
include employee autonomy, personal recognition, pleasant work environment, flexible work
hours training, new and challenging opportunities and also momentous trophies. Monetary
rewards fulfills the employees basic needs therefore they are important but non monetary
rewards are also very important because they are more long lasting and less costly for the
organizations. that can significantly influence motivation and lead to innovation.

Statement of the Problem

The purpose of this study was to determine what types of incentives and motivational factors can
more effectively promote innovation and increase employee motivation in the company, as well
as to provide recommendations to management on what to implement, eliminate, or change,
based on our findings.

Scope of the Study

This study was completed using the input of full-time and part-time employees of the company
in all different departments. These employees were surveyed for the purpose of discovering what
is most motivating to them in the workplace. Employee motivation is defined as the eagerness or
drive in an employee that directly influences their level of involvement or performance in the
workplace. Motivating factors and incentives are reasons for employee motivation, and in order
to best evaluate and describe which of these factors are most and least critical to employees, we
have split this study up into the following criteria: communication, income, long-term incentives,

and non-financial incentives. The study was limited to employees working in the sona koyo
stearing company.

Research Question:
Introduction shows that now more motivated and satisfied employees are needed, now the
important concern is that how we can satisfy the employees? Various previous researches shows
that employees can be motivated as well as satisfied by giving those rewards, but only rewards
do not result in satisfaction, it may be due to several other factors. Therefore in this study we will
evaluate,
What is the role of organizational rewards on the motivation level of employees?

Research Objectives
The main objective of this research is to check how the organizational benefits and rewards
affect the performance and satisfaction of employees. Some specific objectives are as follows;

This study shows various rewards used by organizations.

This study evaluates the impact of reward system on employee motivation.

This study is conducted to identify most important organizational rewards.

This study helps to deliver the theories and models of motivation in the organization.

This study helps to demonstrate the motivational approaches existed in an organization.

Research Methodology
The study conducted is Descriptive in nature. Descriptive study are under taken in organization
to learn and describe the characteristics of a group of employees.

Data collection method:

The primary method of data collection adopted by us is questionnaire. A detailed questionnaire
about motivational incentives has been made to found the required result.

Sampling Design:
9

Target population

Target population for this study is the employees of different departments of the same
organization.

Characteristics of sample

Our sample includes males and females employees of different ages from different departments
of the same organisations. They are working on different job status.

Sample Size

questionnaires were distributed to employees of different departments of the organizations.

Type of sample

Type of sampling we use is convenient sampling. We visited different organizations to get fulfill
our questionnaires.

Research Design
This research will be taken on the following approaches.
Purpose of Study
Our study will be of exploratory nature. Exploratory study is necessary when some facts are
known, but more information is needed for developing a viable theoretical framework.
Exploratory studies are important for obtaining a good grasp of the phenomenon of interest and
advancing knowledge through subsequent theory building and hypothesis testing. Qualitative
studies where data reveal some pattern regarding the phenomenon of interest, theories are
developed and hypothesis formulated for subsequent testing.
Type of investigation
The type of our investigation is causal. When the researcher wants to check the cause and effect
relationship among variables then causal study is called for.
Study Settings
The study setting for our research is non-contrived. Because it has conducted in the natural
environment of organization where work proceeds normally.
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Units of analysis
Because weve to study the behavior of the individuals on the workplace, so our unit of analysis
is individuals.
Time Horizon
The time horizon of the research is the cross sectional because the data is gathered just once.
This kind of time horizon is also called one shot studies.

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COMPANY PROFILE

KEY EXECUTIVES

Chairman

Dr. Surinder
Kapur

Vice Chairman & M.D.

Mr. Sunjay
Kapur

Deputy Managing
Director

12

Mr. K Kamiki

Sona Koyo Steering Systems

Limited

Sona Koyo Steering Systems Limited (SKSSL) the flagship company of The Sona Group, is
currently the largest manufacturer of steering systems for the passenger car and utility vehicle
market in India. Its collaborator and partner, JTEKT Corporation, is the market leader in Japan
and in the recent past announced a merger with Toyota Machine Works. Post this merger,
JTEKT will become the world's largest steering systems manufacturer. The company also has a
technical collaboration with Mando Corporation, Korea.
As part of Sona Koyo Steering Systems Ltd's (SKSSL) globalisation strategy, the company has
acquired a position in Fuji Auto tech France, SAS, the 4th largest steering system supplier in
Europe. Via Fuji Auto tech, The Sona Group footprint extends to Eastern Europe and South
America.
Established in 1985, Sona Koyo Steering Systems Ltd. is the group's flagship company, and the
largest manufacturer of steering systems in India, catering to passenger cars, utility vehicles and
light commercial vehicles. Sona Koyo has technical and financial collaboration with JTEKT
Corporation, Japan (formally known as Koyo Seiko Co. Ltd.), the largest producer of passenger
vehicles' steering systems in the world.Sona Koyo's customers include major vehicle
13

manufactures in India such as Maruti Suzuki, Toyota, Hyundai, Tata Motors, Mahindra &
Mahindra, General Motors and Mahindra-Renault. Independently, as well as through its network
of overseas joint-venture partners, it exports high quality precision products to USA, Europe and
Japan.

History of Sona Group

The Sona Group was founded in 1985 to manufacture components for the automotive industry.
Today it is a USD 800 million multi-national with over 16 plants across India, 3 in Germany
and 1 in the USA. The group also has a strategic position in Fuji Auto Tec, Europe - which has
subsidiaries in Brazil, France, Sweden and the Czech Republic. Starting out as a Manufacture to
Print organization, the group today boasts having created its own IPR particularly in the areas of
power steering for off highway applications and precision forging.
The Sona Group has engineering capabilities in the areas of machining and assembly, precision
forging, cold & hot forging and heat treatment. The Groups range of products primarily consists
of steering and driveline components for the automotive OEM segment namely passenger cars,
utility vehicles, commercial vehicles and specialty vehicles.
The Group is committed to expansion of its products range and clientele by continuous
investment in research and development. SONA is drawing upon the strength of its joint venture
partners which include JTEKT Corporation, Japan; Mando, Korea, Mitsubishi Materials Co.,
Japan, Somic Ishikawa, Japan and ZF Lemforder, Germany to upgrade it's systems, skills and
production values to offer its customers contemporary and high quality products.
The Group boasts the worlds largest precision forging enterprise, Indias largest steering systems
manufacturer recognized in 1997, by the World
Economic Forum as a topperforming Global Growth Company; a recipient of the prestigiouss
Deming Award in 2003 it received the TPM Excellence award in 2007

14

The Sona Group Vision & Values

15

16

Core Values
RESPECT FOR THE INDIVIDUAL
Treating everyone with dignity regardless of the
persons origin and status.

SERVICE TO THE CUSTOMER

Exceed stated and understand need of the customer

EXCELLENCE IN THE PURSUIT OF

OUR GOALS
Continuously strive to achieve higher and higher standards in
everything we do.

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PRODUCT PORTFOLIO

Product range of the company includes:

Carrier Differential Assy

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Column Type Electronic Power Steering Assy

Intermediate Drive Shaft Assy

Intermediate Shaft Assy With Rubber Isolator

Intermediate Shaft Assy With Rubber Isolator Car

Manual Steering Column Assy With Ea Bracket

Manual Steering Column Assy With Lower Tilt-car

Manual Steering Column Assy With Upper Tilt

Propeller Shaft Assy

Rack & pinion Type Hydraulic Steering Gear Assy.-uv

Rack pinion Type Manual Steering Gear Assy with Integral Housing_uv

Rack pinion Type Manual Steering Gear Assy With Integral Housing_uv

Rack pinion Type Hydraulic Steering Gear Assy with Integral Housing-car

Rear Axle Assy

Recirculating Ball Screw Type Manual Gear Assy

Recirculating Ball Screw Type Manual Gear Assy

Tilt and Telescopic Column HCV

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Customer Base
Export Customers Base
Domestic Customer Base

VE Commercial Vehicles Ltd

General Motors India Pvt Ltd
Chevrolet Sales India Pvt Ltd
Hindustan Motors Ltd
Mahindra & Mahindra Ltd
Maruti Udyog Ltd
Suzuki Powertrain India Ltd
Tata Vectra Motors Ltd
Reva Electric Car Co. Ltd
Swaraj Mazda Ltd
Tata Autocomp Systems Ltd
JCB Manufacturing Ltd (Plant-II)
Fiat India Automobiles Private
Tata Motors Ltd
Toyota Kirloskar Motors Pvt Ltd
Hyundai Motors India Ltd
Mando India Steering Systems
Mobis India Ltd
International Cars & Motors Ltd
Ford India Private Ltd

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Fuji Autotech , Brazil

Fuji Autotech, France
Fuji Koyo, Czech
JTEKT
Sona Autocomp
Maval Manufacturing
Sigma ASL Logistics
EZGO textron
Mando America Corporation
Transaxle Manufacturing of
America
John Deere Horicon Works
Nissan south Africa

Milestones:

Jan 1985- Technical Collaboration Agreement with Koyo Seiko Co. Ltd.,
Japan, for manufacturing

Oct 1987- Commencement of Production -Manual Steering Gear -Manual

Steering Column

Sep 1994 -ISO-9002 Certificate by TUV-CERT, GERMANY

Jul 1996- Production of Hydraulic Power Steering Gear

Dec 1998 -Established Plant in Chennai

Oct 2003 -Established Export Oriented Unit(EOU) in Chennai

Nov 2003 -'Deming Award' by JUSE, Japan

Oct 2004 -Acquired 21% stake in Fuji Autotech France

Mar 2006- Started Production of Column-type Electric Power Steering

Feb 2007 Established Plant at Dharuhera, Haryana

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Manufacturing Sites in India

S
no

location companies
s

Gurgaon

Sona Koyo Steering Systems Ltd.

Sona BLW Precision forging ltd.
Sona stamping ltd.

Chennai

Sona Koyo Steering System Ltd.

Sona Somic Lemforder components ltd.

Sanand

Sona Koyo steering systems ltd.

Daruhera 1-2 -3

Sona Koyo steering systems ltd.

Bawal

JTECT Sona automotive India Ltd.

Sona Fuji kiko automotive ltd.

Nasik

Mahindra Sona India Ltd.

Pune

Sona BLW Precision forging Ltd.

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Collaborations

23

Sona Koyo journey

1985 : Technical collaboration agreement with Koyo Seiko, Japan to
manufacture manual steering Geer
1987: commencement of participation
1992: Equity participation by Koyo
1994: ISO9002 certification by TUV CERT Germany
1995: Technical collaboration with Koyo for manufacture of power steering
Geer
1997: Koyo increased equity stake to 20.5%
1998: name of Sona steering systems ltd changed to Sona steering system
ltd.
: Established 2nd plant in Chennai
2000: QS 9000/ISO9001 Certification by TUV-CERT Germany
2002: ISO 14001Certification by TUV-CERT Germany
2003: Deming award by JUSE, Japan
2004: 21% participation by Fuji Autotech France S.A.S
2005: Establishes presence in North America through Sona Autocomp Inc.
2006: Establishing presence in Europe through Sona Autocomp Europe
S.A.R.L
2007: Recipient ot TPM award

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Sona code of conduct

Sona Koyo is committed to create a disciplined and healthy working environment that is free
from harassment and discrimination, where workers are respected and provide an appropriate
culture to encourage good performance and conduct. The code of conduct aims to provide
guidance to all employees of Sona Koyo on how and in which manner should they conduct
themselves while at work.
The circumstances of conducts as set out below, although are intended to cover situations that
may occur. In case an employee encounters any circumstance which is not covered hereunder or
in case of any doubt, he should seek guidance from the human resource development and act
accordingly.

Conflict of interest
Confidentiality of information
Compliance with rules & regulations
Bribes/gifts & other benefits
Fraud
Heath , safety & environment
Harassment
Protection and use of company property
Alcohol & substance abuse

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HR DEPARTMENT
STRUCTURE
Human RESOURCE
HUMAN

Resource

HR

Recruitment
Training &development
Performance mgmt system
Talent retention

26

Personnel

Payroll mgmt
Time office
Employee welfare
Statutory Compliances
Contractual workforce
mgmt

Adminstratio
n

Facility mgmt
Transportation
Liaisioning
Security mgmt
Housekeeping
Scrap mgmt
Front office mgmt
Water mgmt
Civil infrastruture

Introduction to Motivation
Motivation
The term motivation is derived from the Latin word for movement (movere). Building on this
concept, Atkinson defines motivation as the contemporary (immediate) influence on direction,
vigor and persistence of action (1964: 2).
Motivation is the driving force within individuals that drive them physiologically and
psychologically to pursue one or more goals to fulfill their needs or expectations (Lam & Tang:
2003).
While Campbell and Pritchard (1976), defines motivation as a dependent and independent set of
relationships which explains the amplitude, direction, and persistence of a behavior holding
constant the effects of skills, aptitude, and understanding of a task and the constraints operating
in the work environment.
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(Torrington,
Hall, Taylor & Atkinson, 2009, p. 276).
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 (Beardwell & Claydon, 2007, p. 491).
Managers can motivate employees through methods such as pay, promotion and praise.
Employees can also motivate themselves by seeking work where individual goals, needs and
wants will be achieved. These two types of motivation are called intrinsic and extrinsic
motivation and are more closely described as follows: (Armstrong 1988, p. 109).

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MOTIVATIONAL TECHNIQUES:
Peoples believe that they obligate their work in a good way. But on the other side some peoples
who work do as much as they do. Motivation provides us higher profit, productivity and success.
Dr.kushel, author and professor, write on his book is there is the many variables are involved in
motivation. There are three variables used in motivational techniques and these variables are
there:

MOTIVATION STRENGTH

DURATION

CONTEXT

VALUED

Motivation strength is show that work for his or her loots. If the employer provide the incentives
to their employees dont means the employee cant work for the employer. Motivation also called
intensity, strength and etc. Motivation intensity show that how the person is strongly. It depend
on the peoples how they motivate highly or less. Peoples must be answers some questions like
what in it for me?
What the duration for motivation is that question it may be a longer or shorter. Due to the
durability recurrent rewards are stronger. Someone who expect the reward but he dont know
how the treat this reward. Possibly it has to do with the doubt or the wonder factor of the
incentive.
Contextis the third variable and this variable show the time, place and the way to deliver the
rewards. Context also relates the culture of any organization.
Values is more important for every culture of any organization. Without the values no one can
achieved the motivation. There is no commitment among the values of any organization. In
values two strengthen are included:
NEGATIVE STRENGTHEN
POSITIVE STRENGTHEN
Negative strengthen provides us the highly de-motivating result. This is used for long term
period for setting business. Negative strengthen include punishments, admonishments, docking
or withholding pay, stopping vacations, removing freedoms, and showing dislike for or ignoring
the performer. De-motivation is worse than no motivation at all.
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Positive strengthen works better as compare to the negatives strengthen. Positive strengthen
include gratitude, adoration, praise, better working conditions, money, paid vacations, fringe
profits, prizes, etc.

HOW CAN YOU INCREASE EMPLOYEES MOTIVATION?

MANGERIAL ACTION FOR INCREASE MOTIVATION:
Motivation method varies from person to person so it can be achieved by different
methods among the employee. It is therefore important to know that factors, so that after
identifying that factors we can implement them. Employee appraisal is introduced for it.
If there are small numbers of employees then it becomes very easy to know the problem of them
and to handle that problem also become easy. They even have an idea how they can motivate the
employees to improve the performance and motivation. They even not to have used any specific
process to check that factors and these can also be used for all employees.
If there are numbers of employees then it becomes difficult to know factors and to handle
the workers at one time. For it different tasks are assigned to the mangers assistant managers or
to supervisors to check the motivation of employees.

Financial Incentives:
Financial reward is a method through which the motivation of employees can be
increased. For it all those employees of employees are focused who are involved in production
and rewards given to them as a unit and paid also according to the produced units. It can be
imposed to them to produce high quality units and increase in numbers of units will increase the
reward because the customers are attract only by good quality and quantity.

Non-financial incentives:
Money is not everything, so it is not much more effective to know the motivation of
employees it can only be short term. Employees can also focus on some other points and factors
are concerned to it.
We can increase the motivation of employees by giving them good responsibilities. So
that, they can feel good and valuable to their selves. And also if it is announced that if the
performance will be better as compared to earlier and reached it on the standard set by
organization then they will be awarded with special bonus.
It is all because they can improve their efficiency by it.
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Following points are also be used at some degree to improve it.

JOB ENLARGEMENT:
It means to give the opportunity to do the work completely instead of a part of it. It
removes there repeaters of the activity which cause of boring and dull working.
It can be asked to employees to produce a whole product instead of making a part of it. It
will be considered full task and can be completed full task and can be completely easily.
Interesting and in less time.

JOB ROTATION:
It means to move an employee from one place or department to another .the work
duration can be divided in period of one week set up and one employee will work in marketing
department, in admin and so on in others and the back towards its real job. It will increase his
experience and self-confidence. This will be an organizing process and really good.

JOB ENRICHMENT:
Same as we can use the techniques an enlargement it is also a method by which employees
motivation can be achieved. In it the working levels increased in same working condition
For example:
Manufacture of product and producer, produce goods. And it can be assigned to him to
make order for production or make marketing of that products for production department.
This will improve the skill of workers and feeling of responsibility will be increased the
implication of Maslowshierarchyof needs
Existence of anything contribute a lot towards the satisfaction, so for this purpose before
going towards to make improvement programme about the cash or any monetary form. It is not
necessary to make its physical shape for the satisfaction so that they can gain tangible evidence
of their work
Mostly the incentive program depends on the behavioral model which a psychologist
F skinner explained.
This model shows who positive attitude and positive work effect on the behavior of
employee individually.

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This positive process help the organization to achieve its goal and the required results are
found by it.
By changing the behavior every employee or work comes to know what his duty is and how he
has to complete it. For this purpose and improvement constant feedback is necessary.

Reward system
The Word rewards state the benets that workers receive from their jobs (Kalleberg
1977,Mottaz1988), and significant elements of employee job attitudes such as organizational
commitment and motivation(Steers and Porter 1991). In any organization, rewards play an
important role in building and sustaining the commitment among employees that ensures
a high standard of performance and workforce constancy (Wang 2004). According to the
individualorganization exchange theme, individuals enter organizations with specic set of
skills, desires and goals, and expect in return a decent working environment where they
can use their skills, satisfy desires, and attain their goals (Mottaz 1988). Mostly
organizations have increased the substantial improvement by entirely complying with the
organizational strategy by a well-balanced reward and recognition programs for employee.
Reward refers to all categories of nancial benefits, tangible services and benets that an
employee receives as part of employment relationship with the organization (Bratton and
Gold 1994). Lawler (2003) described that there are two aspects that decide how much a
reward is attractive, the quantity of reward which is provided and the weight age an employee
gives to a specific reward. Employees are certainly closer to their organizations and perform
better job, while they receive healthier reward and recognition in their organizations.
Rewards increase the level of efficiency and performance of the employees on their jobs and in
the result thereof increase the success of the organization. Generally employees job
description and job specification determines rewards to maintain fairness among employees
within an organization and competitive in the marketplace (Zaini et al. 2009).
Organizational rewards means all the benets i.e. nancial and non-nancial that an
employee receives through their employment relationship with an organization (Bratton
and Gold 1994,Malhotra et al. 2007).
According to the literature the rewards distinguishes into three main types that individuals
seek from their organization i.e. extrinsic, intrinsic and social rewards (Williamson et al.
2009).
Extrinsic rewards
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These are the physical benets provided by the organization such as pay, bonus, fringe
benets and career development opportunities.
Intrinsic rewards
These refer to the rewards that come from the content of the job itself, and encompass
motivational characteristics of the job such as autonomy, role clarity and training
(Hackman and Oldham 1976).
Social rewards
These arise from the interaction with other people on the job and may include having
supportive relationships with supervisor and co-workers.Ali and Ahmed (2009) established that
there is a substantial affiliation between reward and recognition, and similarly in employee
motivation and job satisfaction. Study exposed that if rewards and recognition offered to
employees then there would be a substantial modification in work motivation and satisfaction.
Explores past and present attitudes of employees concerning work-related motivational factors.
Understanding the factors that employees consider Motivating lends insight to the rewards to
which they more positively respond. Compares the results of four motivation surveys conducted
in 1946, 1980, 1986 and 1992. The comparisons reveal that employees motivational preferences
vary over time. In addition, the results of the 1992 survey indicate that the factors that motivate
todays workers are more extrinsic than they used to be. Although employees differ on how they
rank these factors, they overwhelmingly selected good wages as the top motivator. A good
wage is an extrinsic reward with intrinsic potency. On the surface good wages seem to be
purely extrinsic. Yet, at a deeper level, monetary rewards communicate what the company
values and affect employees emotional and familial wellbeing(Carolyn Wiley, (University of
Tennessee at Chattanooga, Tennessee, USA)
A well designed and functional reward system is an efficient way to increase employee work
motivation. The appropriate type of reward is developed in accordance to the company's
reward philosophy, strategies and policy. However, it might be challenging to find the right way
to combine the companys integrated policies and practices together with the employees
contribution, skill and competence. (Armstrong, 1999, p. 569-570).

Theoretical Framework
Schematic Diagram for the Theoretical Framework

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Independent Variables

Dependent variable

Bonuses and
incentives
Handsome salary
packages
Promotion
opportunities

Employees
Motivation

Working Environment
Working Environment

In this research we take the following variables;

Dependent Variable
Employees Motivation

Independent Variables

Bonuses and incentives

Handsome salary packages
Promotion opportunities
Working Environment

Explanation of the relationship between dependent and

independent variable
The variance in the dependent variable, motivation of employees can be explained by the five
independent variables; Bonus and incentives, handsome salary package, promotion opportunities,
Flexible timings, Working Environment.
If the employees are given the proper training in this way their motivation level towards
organizations can be increased. With highly motivated employees organizations can increase
33

their productivity. Different factors affect the motivation level of employees that includes
bonuses and incentives, handsome salary package, promotion opportunities, flexible timing, and
working environment.
Bonuses and incentives is a very important factor for motivating the employees within the
organization to get high productivity from them. In this way organizations can increase
motivation level of the employees.
Handsome salary packages also affect the motivation level of the individual. If someone
perceives the beneficial and fruitful salary package for himself then his motivation level be such
higher than others.
Promotion opportunities also have great impact on employees, so that promotion opportunities
should be exist in every organization. Because every employee wants to be grow up in his
working field and also status conscious. If the employees know that promotion opportunities
exist within the organization then they work with their best efforts which are beneficial for the
organization.
Working environment is also very important factor for the employees as well as good repute of
the organizations. If organizations provide friendly working environment to their employees then
employees will perform their duties with high moral and also will pay their full concentration to
their work.

HYPOTHESiS:
Based on the assumed casual relationship given in the conceptual model the following
hypothesis were developed for testing.
H1:- Higher the employee rewards lead to higher the Employee Motivation
H2:- Lower the employee rewards lead to lower the Employee Motivation
A reward can be defined as an external agent administered when a desired act or task is
performed, that has controlling and informational properties. While rewards are typically
delivered to increase the probability of a response, they can increase or decrease the probability
of an event occurring, depending on the saliency and direction of the controlling and
informational aspects of the reward. Saliency would refer to the intensity of either the controlling
or informational aspect of the reward. It is what stands out to you the most. While direction
would refer to whether the reward is perceived as increasing or decreasing the athletes control;
and whether the information is perceived as positive (increasing the athletes competency) or
negative (decreasing the athletes competency). Rewards can come in the form of verbal rewards
(i.e. telling someone good job!), physical rewards (i.e. a pat on the back), or tangible rewards

34

(i.e. giving someone money, food, or a medallion), among others. There are 5 basic types of
rewards discussed in the literature as follows (Deci, Koestner, & Ryan, 1999)

REWARDS VS. RECOGNITION

Although these terms are often used interchangeably, reward and
recognition system should be considered separately. Employee reward
systems refer to programs set up by a company to reward performance and
motivate employees on individual and/or group levels. They are normally
considered separate from salary but may be monetary in nature or otherwise
have a cost to the company. While previously considered the domain of large
companies, small businesses have also begun employing them as a tool to
lure top employees in a competitive job market as well as to increase
employee performance. As noted earlier, although employee recognition
programs are often combined with reward programs, they retain a different
purpose altogether. They are intended to provide psychological rewards a
financial benefit. Although many elements of designing and maintaining
reward and recognition system are the same, it is useful to keep this
difference in mind, especially for small business owners interested in
motivating staffs while keeping costs low.

DIFFERENTIATING REWARDS FROM MERIT PAY AND THE

PEFORMANCE APPRAISAL
In designing a reward program, a small business owner needs to separate
the salary or merit pay system from the reward system. Financial rewards,
especially those given on a regular basis such as bonuses, profit sharing,
etc., should be tied to an employees or a groups accomplishments and
should be considered pay at risk in order to distance 18 them from salary.
By doing so, a manager can avoid a sense of entitlement on the part of the
employee and ensure that the reward emphasized excellence or
achievement rather than basic competency. Merit pay increases, as a result,
are not part of an employee reward system. Normally, they are increase for
inflation with additional percentages separating employees by competency.
They are not particularly motivating since the distinction that is usually made
between a good employee and an average one is relatively small. In
addition, they increase the fixed costs of a company as opposed to variable
pay increases, such as bonuses, which have to be re-earned each year.
Finally, in many small businesses teamwork is a crucial element of a
successful employees job. Merit increases generally review an individuals
35

job performance, without adequately taking into account the performance

within the context of the group or business. PURPOSES OF REWARD SYSTEMS
To recognize individual and In designing a reward program, a small business
owner needs to separate the salary or merit pay system from the reward
system. Financial rewards, especially those given on a regular basis such as
bonuses, profit sharing, etc., should be tied to an employees or a groups
accomplishments and should be considered pay at risk in order to distance
18 them from salary. By doing so, a manager can avoid a sense of
entitlement on the part of the employee and ensure that the reward
emphasized excellence or achievement rather than basic competency. Merit
pay increases, as a result, are not part of an employee reward system.
Normally, they are increase for inflation with additional percentages
separating employees by competency. They are not particularly motivating
since the distinction that is usually made between a good employee and an
average one is relatively small. In addition, they increase the fixed costs of a
company as opposed to variable pay increases, such as bonuses, which have
to be re-earned each year. Finally, in many small businesses teamwork is a
crucial element of a successful employees job. Merit increases generally
review an individuals job performance, without adequately taking into
account the performance within the context of the group or business.

PURPOSES OF REWARD SYSTEMS

To recognize individual and team efforts
To re-enforce positive behaviors
To create a better working environment
To have a system that recognizes as many people as possible.
To attract and retain good employees
To reduce the absenteeism
To facilitating organizational culture and strategic objectives

DESIGNING A REWARD PROGRAM

The key characteristics of developing a reward program are as follows:
Identification of company or group goals that the reward program will
support
Identification of the desired employee performance or behaviors that will

36

 reinforce the companys goals. Determination of key measurements of the

performance or behaviors,
based on the individual or groups previous
achievements.
Determination of appropriate rewards.
Communication of program to employees
Reward system are concerned with two major issues: Performance and
Rewards.
Performance includes defining and evaluating performance and providing
employees with feedback. Rewards included bonus, salary increase,
promotions, stock awards and perquisites. Large corporations with several
different businesses may have multiple reward systems. And while they may
share some fundamental philosophies and values, they may differ
accordingly to the particular business setting, competitive situation, and
product life cycle. Thus, multiple reward systems can support multiple
cultures within one organization. These components will be designed,
developed and maintained on the basis of reward strategies and policies
which are created within the context of the organizations between strategies.
1. Improve Organizational Effectiveness: Support the attainment of the
organizations mission, strategies, and help to achieve sustainable,
competitive advantage.
2. Support and Change Culture: Under pin and as necessary help to change
the organizational culture as expressed through its values for
performance innovation, risk taking, quality, flexibility and team working.
3. Achieve Integration: Be an integrated part of the management process of
the organization. This involves playing a key role in a mutually reinforcing
and coherent range of personal policies and process.
4. Manageable: It helps to manage the undue administrative burdens
imposed on managers and members of the personal department.
5. Motivate Employees: Motivate employees to achieve high level of quality
performance.
6. Increased Commitment: Enhance the commitment of employees to the
organization that will a) want to remain members of it, (b) develop a strong
belief in and acceptance of the values and goals of the organization; and (c)
be ready and willing to exert considerable effort on its behalf.
7. Fairness and Equity: Reward assesses can upgrade competence and
encourage personal development.
37

8. Improved Skills: The employees can upgrade competence and encourage

personal development.
9. Improved Quality: Help to achieve continuous improvement in levels of
quality and customer service. 10. Develop team working: An effective award
system improves co-operation and effective team working at all level.

REWARD SYSTEM LINKED TO MOTIVATION

One of the primary purposes to use rewards in companies is to motive the
employee to perform well. When we talk about motivation from managerial
prospective it is important to bear in mind that: You cant motive other
people. You can only influence what theyre motivated to do. In other words
we do things because it will fulfil some current or future personal goal or
desire we have. It is therefore important for the corporate management to
identify what motivates their employees and try to join their personal
objectives with the ones of the company.
MASLOW HIERARCHY OF NEEDS
The motivation process can be described in the term of need theory which
states that it is an unsatisfied need that motivates behavior. The best known
theory within this category is written by Abraham H Maslow (1908-1970). An
American psychologist in 1954. Maslows hierarchy of needs is one of the
most famous theories in the term of individual motivation. Human need are
by him divided into five different levels, physiological, safety, belongings,
esteem and self-actualization. Maslows hierarchy of needs always illustrated
in the pyramid, shown in the following figure.

MASLOWS NEEDS CLASSIFIED INTO FIVE CATEGORIES:

Physiological needs are basic needs for survival such as food, water &
sleep.
Safety needs consist of variety of safety needs such as security of
employment, health & family. Social need consist of friendship, family, love
& intimacy.
38

The esteem needs presents the desire to be accepted & valued by others.
Here we find the concept such asself-esteem, confidence, achievement,
respect for others and respect by others.
The need for self-actualization here we find the motivation to ones own
maximum potential, self-fulfillment and try to become everything that one is
capable of becoming. It includes the concept as morality, creativity,
spontaneity, problem solving and some more.

HERZBERGS MOTIVATION-HYGIENE THEORY (TWO FACTOR

THEORY)
To better understand employee attitudes and motivation, Frederick Herzberg
performed studies to determine which factors in an employees work
environment caused satisfaction or dissatisfaction. He published his findings
in the 1959 book the Motivation to work. The following table presents the top
six factors causing dissatisfaction and the top six factors causing
satisfaction, listen in the order of higher to lower importance.

Factors Affecting Job Attitudes

Leading to dissatisfaction

Leading to satisfaction

Company policy

Achievement

Supervision

Recognition

Relationship with boss

Work itself

Work conditions

responsibility

Salary

Advancement

relationship with peers

growth

EXPECTANCY THEORY
Expectancy Theory (1964) is a motivational theory written by Victor Vroom,
born 1932, in Canada. The theory states that motivation will be strong if the
39

individual can expect that their effort & contribution will give meaningful
rewards. It means that motivation is more likely when a clear relationship is
exists between performance and outcome and the outcome is satisfying
needs.

Perceiv
ed

ability

motivation

effort

performance

Reward
system

satisfactio
n

Motivation in work can be reached in two ways.

Firstly, people can motivate themselves by working with things that satisfied
their personal needs. Secondly people can be motivated by management
using incentives such as pay, promotion, praise.

TYPES OF REWARDS
Rewards serve many purposes in organizations. They serve to build a better
employment deal, hold on to good employees and to reduce turnover. The
principal goal is to increase people's willingness to work in ones company, to
enhance their productivity. Most people assimilate "rewards", with salary
raise or bonuses, but this is only one kind of reward, extrinsic reward. Studies
proves that salespeople prefer pay raises because they feel frustrated by
their inability to obtain other rewards, but this behavior can be modified by
applying a complete reward strategy. Besides verbal appreciation, tokens of
appreciation, rewards (award trophies, framed certificates, special parking
spaces, gift cards, pens or a free day off.) etc. are generally given to
employees. The principal difficulty is to find a balance between employees'
performance (extrinsic) and happiness (intrinsic)
There are two kinds of rewards:
Extrinsic Rewards- Tangible / Concrete Rewards.
Intrinsic Rewards- Non Tangible / to give satisfaction to Individual

Various categories of rewards that are given and can be given are:
40

Basic Pay: Basic Pay is defined as the rate fixed by applicable law or
regulation. Examples of special
types of pay included in Basic Pay are:
Night differential pay for wage employees
Environmental differential pay for employees who work under hazardous
situations.
Premium pay for groups such as law enforcement officers
Locality-based comparability payments.
It is an essential factor which is closely related to job satisfaction and
motivation. Although pay may not be a reward as this is a static amount
which an employee will be paid every month, it will be considered as a
reward if similar worker is paid less.
Additional Hours Rewards: This is similar to that of overtime. However, it
is paid to employees if they put in an extra hour of work for working at
unsocial hours or for working long hours on top of overtime hours.
Commission: Many organizations pay commission to sales staff based on
the sales that they have generated. The commission is based on the number
of successful sales and the total business revenue that they have made. This
is a popular method of incentive.
Performance Related Pay: This is typically paid to employees who have
met or exceeded their targets and objectives. This method of reward can be
measured at either team or department level.
Profit Related Pay: Profits related pay is associated with if an organization
is incurring a profit situation. If the organization is getting more than the
expected profits, then employees receive an addition amount of money that
has been defined as a variable component of the salary.
Payment by Results: This is very similar to that of profit related pay. This
reward is based on the number of sales and total revenue generated by the
organization.
Piece Rate Reward: Piece rate reward is directly related to output. The
employees get paid on the number of pieces that they have produced. These
pieces will be closely inspected to make sure that quality standards are being
met.
Bonuses: Bonuses will be paid to employees who have met or exceeded
their targets and objectives. This is aimed at employees to improve their
performance and to work harder. There are several types of bonus programs
followed by industries, some are as follows: Current Profit Sharing, Gain
Sharing, Spot Bonus Award, Noncash Bonus, Sign-on Bonus, Mission Bonus,
Referral Bonus, Retention Bonus, Holiday Bonus, etc. Recognition: Employees
will not always be motivated by monetary value alone. They do require
recognition to be motivated and to perform well in their work.
Job Enrichment: This is a common type of recognition that is aimed at
employees to get motivated. Job enrichment allows more challenging tasks
to be included in the day-today tasks performed by the employee.
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Job Rotation: Unlike job enrichment, job rotation refers to shifting employees
between different functions. This will give them more experience and a sense
of achievement.
Teamwork: Teamwork is also considered as recognition. Creating teamwork
between team members will improve performance at work. Social
relationships at work are essential for any organization. Empowerment:
Empowerment refers to when employees are given authority to make certain
decisions. This decision making authority is restricted only to the day to day
tasks.
Training: Many organizations place a greater emphasis on training. This is
considered as recognition for employees. Training could vary from on the job
training to personal development training. Benefits: Another element in the
total rewards approach includes employee benefits. Benefits are programs
that an employer uses to supplement the cash compensation that employees
receive. These benefits provide a level of security for employees and their
families, and may include health care insurance, time off, disability insurance
and retirement programs. As such, benefits fall under the satisfier
category.
AWARDS:
This again is an important type of recognition that is given to employees who
perform better. Organizations have introduced award systems such as best
performer of the month etc. and all these will lead employees to perform
better. Rewards are basically the methods to extrinsically motivate
employees. These awards can be MONETARY or NON MONETARY. Some of the
commonly given awards in various organizations are: Service Awards: Each
year that an employee commits to an employer, he offers great advantages
to the business or organization. Employees gain more knowledge of their
position and responsibilities over time, and the company does not have to
set aside time and money hiring and training new employees. Employers
often reward employees who remain committed with a recognition pin or a
certificate acknowledging the number of years of continuous service.
Employers may further reward long-term employees with an extra gift such
as a watch or a special desk set, typically engraved with the employees
name and the date they received the honor.

Employee of the Month:

Some workers will consider being designated Employee of the Month a great
honor. This award is commonly given to the one employee each month who
has given exceptional service, had perfect attendance and gone the extra
mile for the company to ensure all 28 customers are given the service they
expect. These employees are often recognized during monthly staff meetings
with a plaque or certificate recognizing their efforts. A designated parking
space is another good idea, and displaying the plaque where customers can
42

see it adds to the honor. Employers should take care in choosing employees
in a manner that shows no favoritism. If others perceive that employees are
chosen unfairly, the award can be counterproductive.

Attendance Awards:
Companies depend on employees to be punctual and perform tasks to their
potential so that the work load can be evenly distributed. Employees who
strive to be at work during every scheduled shift and never come in late
deserve to be recognized in a special way. Perfect attendance awards can be
given in the form of a certificate, plaque or even as a cash bonus. Sometimes
employers will give employees with perfect attendance a day off with pay or
a gift certificate to a local restaurant in appreciation for their commitment to
the company.

Safety Awards:
Safety awards are a great way for employers to recognize employees or
teams for their continued adherence to safety guidelines. This kind is
typically awarded when an employee or a group files no incident or accident
reports over a given period of time, such as a month or year. These
acknowledgements are often expressed in terms of the man (or woman)
hours since the team last experienced in injury. Cash bonuses or gifts such as
tickets to popular local events make great safety awards.

Company Advancement:
The ultimate reward that every employee tends to strive for is company
advancement. Employees generally work hard to earn recognition in an
attempt to be promoted to a higher position within the company or receive
an annual raise in pay. Employers should choose candidates for
advancement carefully, avoiding favoritism and ensuring that the most
reliable and skilled employees are advanced to higher positions.

Special Operating Unit Award:

Individual bureaus may establish award programs which are appropriate to
their particular interest in recognizing certain group of employees. There are
a large variety of programs, ranging from recognition for scientific
accomplishments to employee of the year. These award programs can be
cash or non-monetary.

Cash-in-Your Account Award:

43

A small cash award designed to recognize employees for going the extra
mile in getting the job done. These awards do not recognize overall
performance, but rather specific instances of exemplary performance.
Awards range from Rs. 1000 to Rs. 10000 in Rs. 1000 increments.

Suggestion Award:
Under the suggestion program, employee are granted an award for formal
suggestions which have been evaluated and adopted. The amount of the
award is determined by the amount of tangible and intangible benefits of the
idea.
On the Spot Award:
A small award which is granted as a means to recognize employees for
those day-to-day efforts which contribute in a special way to get the job
done.
Certificates of Appreciation:
Certificates granted to employees or non-employees who have made
outstanding contributions or who have performed significant services to the
Department. External Awards: Awards sponsored by other agencies and nongovernment organizations given to corporate employees. 30 Group-Based
Reward Systems Group-based reward systems are based on a measurement
of team performance, with individual rewards received on the basis of this
performance. While these systems encourage individual efforts toward
common business goals, they also tend to rewardunder-performing
employees along with average and above-average employees. A reward
program which recognizes individual achievements in addition to team
performance can provide extra incentive for employees.

WHAT IS PERFORMANCE MANAGEMENT

It can be defined as a continuous process of assessing and measuring the
performance of an individual and aligning it with the organizational goals. It
is the job of the HR people to design an effective performance management
system. Expansion for the word Perform, best explains it
44

. P Potential
E Enthusiasm
R Reliability
F Flexibility
O Orientation
R Reengineering
M Motivation

Why Link Reward to Performance

To connect two ends of the rope, a knot is required; to make it lengthy and
useful for long run. Likewise, the tie up between the reward and performance
should be made for employee retention and their commitment to work,
which ultimately improvise the contributing factor of the employee.
Employees should perform well to be rewarded and the approach designed
for this is Pay for Performance. Apart from the base pay, which is based on
job description, a variable pay should be announced for their outstanding
performance. Although the pay raise motivates the employees to an extent,
ultimately they want them to be appreciated and recognized in a society for
their work, here comes the employee recognition program. Many employees
become less committed to work notbecause of their low pay structure, but
for the lack of recognition. Both types of rewarding 31 system should be
ensured for higher motivation, retention, engagement and job satisfaction. A
simple example for performance based reward system can be best explained
by the game of cricket. When a bowler or batsman performs well in a match,
his performance is rewarded by the cricket council through the title Man of
the Match and cash award. It motivates the winner and also the team
players to perform well for their team.

PERFORMANCE MANAGEMENT, REWARDS AND AWARDS

Performance management is the systematic process by which an
organization involves its employees, as individuals and members of group, in
improving organizational effectiveness in the accomplishment of agency
mission and goals.
Employee performance management includes:

Planning work and setting expectations

Continually monitor performance
Developing the capacity to perform.
Periodically rating performance in a summarized fashion, and
Rewarding good performance
45

 Planning Rewarding Monitoring Rating Developing

Performance appraisals and rewards are designed to show recognition to

employees. Those who exemplify outstanding abilities in the workplace are
celebrated through an appraisal and reward system. Managers may offer
employee praise in a one-on-one setting, such as a performance evaluation,
or in a group setting among peers. Archer North, a company that designs
and develops employee performance appraisal and corporate evaluation
systems, says that social recognition is powerful and is an effective forum for
showing value in employees. Employee recognition programs boost the
morale of employees and positively change the health of an organization. By
instituting performance appraisal and reward systems, an employer lets its
workers know that their hard work pays off and is appreciated. Reward
system is a part of performance appraisal. When an employee do
performance appraisal he uses reward system to appreciate the work done
by the employee. Every company has its own reward system which has to be
linked with its performance appraisal method. Reward systems are
concerned with two major issues: performance and rewards. Performance
includes defining and evaluating performance and providing employees with
feedback. Rewards included bonus, salary increase, promotions, stock
awards and perquisites. Purposes of Performance Management The purposes
of performance management may be grouped as under:
a) Informational Purpose
To let an employee know how his performance compares with job
standards.
To assist in identifying special talents and abilities
To identify employees needing performance improvement
To allow employees to evaluate management.
b) Motivational Purpose
To establish closer employer-employee relationships and communicate
the job
To provide financial rewards or recognition for a job well done.
To work out plans to solve performance problems.
To encourage initiative, creativity and develop a sense of ownership
amongst the employees.
c) Developmental Purpose
To identify individual employee training needs
To identify individuals for potential development.
46

 To help the employee strengthen current performance and prepare for

higher responsibilities.
To show organizational interest in attracting and retaining capable
employees.
d) Managerial Purpose To translate organizational goals into individual
job/performance objectives
To communicate managements expectations regarding employee
performance.
To provide feedback to the employee about job performance in the light
of
managements expectations. To coach the employee on how to improve
job performance on a periodic basis.
To diagnose the employees strength and weakness.
To determine what kind of development activities might help the
employee better
utilize his competencies / skills on the job. Functions of Performance
Managements:
To communicate vision of its objectives to all
Functions of Performance Managements:
To communicate vision of its objectives to all its employees
. To set departmental and individual performance targets which are related
to widerobjectives.
To conduct formal review of progress towards these targets.
To use the review process to identify training, development and reward
outcomes
To evaluate the effectiveness of the whole process in order to improve
effectiveness.
Benefits of Performance-based Rewarding approach
An effective Performance-based Rewarding approach can bring out multiple
benefits to an organization and employees,
Decreased attrition rate, which empowers employee retention in long run
andcommitment. Due to decreased attrition rate and increased employee
retention, recruitment cost is less which helps in the financial stability of the
organization
Motivate employees to perform better, aligning with the organizational
goals.Employees get a clear insight of what should be done to meet the
goals.

47

 Employee involvement (Participation Management) is increased which

results inautonomy, more productivity and satisfaction. Employees feel that
they are part of a big success, enabling more confidence and innovation in
work.
Rather than working on routine jobs, employees volunteer to work on
challenging jobs to increase their recognition levels in the working society. It
enforces healthy competition among individuals to perform better.
Employee gets a chance to learn and enhance their skills, which highlights
their development in career.
For the real success of the system, it should be implemented without any
bias or oversight. When employees perform well, he should be acknowledged
rightly by the supervisors. HR department should not make this process to
follow over a night; its importance has to be stressed to the supervisors and
employees at all levels. When a perfect system is implemented, it results in
higher retention of talented employees and greater profits to the
organization.

LIMITATIONS OF REWARD SYSTEM

Feeling of discrimination or dissatisfaction among employees (if they feel
the reward assessment process is not transparent).Staff morale could fall if
there is a large difference in the amount of reward being paid out to people
doing similar work. Staff may become too focused on individually earning
those rewards/bonuses that they forget to work in the best interests of the
team as a whole. Competition can be good but if its too aggressive it can be
detrimental. There will always be an element of judgment required to
administer such a system. Someone will have to rate the performance of
staff. This judgment may end up being too subjective rather than objective.
Some functions are support roles in nature (and therefore may not attract as
much rewards as other roles such as sales). There must be a good balance of
incentives for these admin/support staff or else they will not feel
appreciated.

RECENT TREND OF REWARD SYSTEMS IN INDIA

Reward systems helps in increasing performance and creating happier
employees. The greatest management principle is that the things that get
rewarded get done. All reward systems are based on the assumptions of
attracting, retaining and motivating people. Financial rewards are an
important component of the reward system, but there are other factors that
motivate employees and influence the level of performance. Those
48

organizations which gives the maximum reward attracts and retains most
people. Higher rewards will give higher satisfaction. This will lead to lower
turnover and more job applicants. It is difficult to retain the best performers
in any organization. They will get higher offers from competitive
organizations and may leave the company. For retaining the best performers,
the organization needs to reward people at all level above the reward
standards in similar organizations. In some organization, reward system is
based on performance and skills of the employees. So higher rewards will
motivate skilled employees to perform better. In hierarchical organizations,
reward system acts as a motivation for lower cadre employees to learn those
skills which will lead to promotion to the higher levels. The reward system
contribute to the overall culture and climate of organizations. Reward
systems are a major cost factor in many organizations.
There are some criteria for building effective reward systems.
Give Value for the employees preference in the reward system. Employees
prefer rewards in different ways like cash awards, plaques, recognition in
award ceremonies and company newsletters.
Reward systems should simple and specific. Easy understanding of the
system will make the system work effectively. Elaborate procedures,
evaluations and review by different levels will lead to confusion among
people. A line of sight should be maintained between rewards and actions.
Rewards should be timely. The recognition/rewards should be provided
frequently enough to make performers feel valued for their efforts.
Reward systems should be fair and effective.
It should be reliable, that is, the program should operate according to its
principles and purpose.
Involve people in the formulation of the reward system.
By ensuring the participation of the people in the reward system, the
company can empower them to do the needful. For most people, the most
important reward is the pay they receive for their work. Effectively planned
and administered reward systems will enhance motivation thus performance
also. Employees who work hard and produce better quality products should
get higher pay than the poor performers. The employees should be satisfied
with the rewards they receive for their good work. They should be given
extrinsic rewards like pay, promotion and other status symbols. This will give
them a feeling of competence, achievement, personal growth and selfesteem.
In India, rewards are given in the form of financial benefits, incentives, profit
sharing, gain sharing and stock options. Financial rewards are given to
employees for their achievements. Pay is of many types like Competence
related pay, Skill-based Pay, Team based pay and merit pay.
49

RECENT TRENDS A FEW EXAMPLES

Its an annual affair at Genpact to identify 35 star leaders within the
company and fly their families on a vacation. This is apart from regular ritual
of recognizing high performing leaders in every board meeting. Even as
salary levels soar and are a given in the current war for talent, more and
more companies are fumbling for the ideal mix of non compensation rewards
to retain leaders.
Retaining and rewarding leadership is a hot button issue facing most
organizations. Increasing complexity of hiring leadership talent in the face of
burgeoning market demand is bringing companies under pressure to retain
their top talent. The only way to reward and retain top leadership is by
sharing the success of the company with them, says Piyush Mehta, senior VP, Genpact.
It is common to see firms ring fence their senior executives by devising longterm wealth certain opportunities in the form of retention pay, deferred
bonus plans, stock options and shadow options. Companies are arriving at a
reward system, which is linked with the companys performance.
As a business leader in Accenture moves higher, the variable component in
his 37 compensation goes up. Equity has been quite effective as a
leadership reward system. Conversely too, it works well as it makes leaders
conscious of the fact that they carry the weight of the organization, says
Rahul Varma, senior HR director, Accenture India. Employee stock plans
offered by Indian firms in the past few years have been ableto create the
right setting than that MNC counterparts, says K Sudarshan, managing
partner, EMA Partner International. Key employees feel a lot closer to centre
of action with a belief that they are making a difference to the fortunes of the
organization as opposed to large MNCs where the India business is still a
small percentage of their overall numbers, he says.
The attractiveness quotient for Indian companies is increasing all the time.
Even though we see emergence of several employee millionaires, analysis
caution, relying on generous compensation as the only strategy for retaining
your key resources is a sure shot recipe for disaster.
There is interplay of multiple factors which makes the organization a
preferred destination for top talent and creates a long-term sustainable
employer brand. Thats why the best employers need not necessarily be the
best paymasters.

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First and foremost is to create a sense of ownership and belonging to the

organization. Successful organizations have a culture which supports and
encourages entrepreneurial behaviour, the freedom to make informed
business decisions and above all eliminates the fear of failure, says Mr
Sudarshan. This will work only if it goes hand-in-hand with standard
compensation levels in the industry.
HR fraternity believes ICICI Bank has done well on both fronts. They have
provided great opportunities to their stars plus have locked in their key
people with significant stock options. It also helped that ICICI bank is growing
more rapidly when compared to HDFC Bank and there is a great passion at
work one can experience with senior people in ICICI group.
HDFC Bank has largely adopted the ESOP route to reduce fixed cost but this
has backfired in the long term because people moved on once the stocks
vested and their exit barriers significantly reduced, says a head of
headhunting firm. Bharti has largely taken the compensation route both fixed
as well as long-term wealth 38 creation opportunities for their people. Hutch
has always retained their key people on the basis of the work culture and
freedom to operate though the compensation levels have always been
pegged lower than Bharti and Reliance.

REWARD SYSTEM LINKED TO PERFORMANCE IN SONA KOYO

STEARING SYSTEMS LTD.
SONA KOYO STEARING SYSTEMS LTD. has developed an unbreakable bond
with sound HR practices in an environment that defies traditional roles and
responsibilities. The company views its employees as assets, which as to be
utilized efficiently. The SONA KOYO STEARING SYSTEMS LTD. senior
management constantly keeps track of the vast intellectual assets, their
skills sets, the status of projects on which they are working, and the number
of people available for being placed in other projects. SONA KOYO STEARING
SYSTEMS LTD. determines its manpower requirements based on inputs from
senior consultants, who provide information on changes in the technology
and the potential demand for new skills in the immediate future. This
enables the HR department to plan and schedule recruitment and training
programs. Figure 1 illustrates the role of HR, which evidently is that of a
facilitator. So whether it is recruitment or even career development, HR is
the catalyst which initiates and institutionalizes processes. To manage all the
function of employees is herculean task but the smoothness of operations is
intriguing. The HR structure, which allows flexibility and empowerment, is the
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solution. SONA KOYO STEARING SYSTEMS LTD. takes care of every aspect of
Human Resource Management, from recruitment to training and career
development. The company combines its aim of recruiting skilled employee
with the broader objective of improving educational standard in India. SONA
KOYO STEARING SYSTEMS LTD.Is well recognized in the industry for its
emphasis on employee training. Company is having its own training center in
Dighi, Pune, where induction and other training are conducted by its expert
trainer who provide functional and operational knowledge about the SONA
KOYO STEARING SYSTEMS LTD. and its subsidiaries. It keeps decent amount
of budget from its annual sales on training. In addition to training, IT also
believes in grooming its employee into managers. In their first couple of
years at the company, employees are put to work on different technological
platforms and applications. The organization consciously does not try to
develop its employee as specialists, as it knew that they would become
useless once their area of specialization becomes obsolete. This approach
was different from that of many other companies, who stressed
specialization of their workforce.

AWARD CATEGORIES
There are three award levels in new appreciation framework. Each award
level has multiple awards as detailed below:
Level 1- Marking a difference
i.
Thank you appreciation card
ii)
Hi 5
Level 2- Above and Beyond
i) Xtra Mile
ii) Blue Ribbon
iii) ACE
iv) Partner & Progress
Level 3- CEO Recognition
1. Proclub
The detail description of awards are as follows:
1) Thank you appreciation card: It is basically a simple greeting card
which is been given by any employee to the performer for his significant
performance.
2) Hi 5- As on the spot recognition program to recognize any significant
contribution of individuals at any time.

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Process: Nominations along with the citation will be made by the

Reporting Manager.
All winners would receive gift certificates, given by the Reporter
manager.
All efforts should be made to ensure that the recognition is done
publicly. Citations through mail will also be sent by the Reporting Manager
to the peers/team members of the winners to ensure transparency of the
process.
Rewards will be given at any time.
3) XtraMile: It is an On-the-Spot Recognition program to recognize any
significant contribution of individuals in solo or in a team.

4) Blue Ribbon: It is a Quarterly Reward and Recognition program for

exceptional contribution by individuals in their respective Function/ LOB/
Shared Services.
Number of rewards: Maximum of 1-2 rewards in every LOB/ Shared Services
per quarter. Process: Nominations and Selection: Individual nominations
will be made by the Manager. Nominations must be made using the
nomination form provided in the annexure.
The nomination would have to be approved by the Reviewing Manager.
The form should be duly filled with very specific details of the initiatives
and results. All relevant supporting information like Rs / $ savings or profit,
customer or team appreciation etc. should be provided to strengthen the
case.
To qualify for consideration, the achievement must be in line with the
Corporate and LOB/Shared Services goals (e.g. profitability enhancement,
process improvement, superior contribution or teamwork).
The selection would be made by the LOB/ Shared Services Head.

Timeline
Request for nominations for achievements in the previous quarter, to be
sent out in the first week of every quarter
. Completed nominations to be submitted within two weeks of request for
nominations.
Rewards
Each of the winners would receive gift certificates
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. All winners would receive a certification and the winners would be

recognized during town halls.
The names of such winners would be announced in the Company
Newsletters/ Tata Communications Buzz with a brief write-up on their
achievement.
5) A.C.E.- Award for Champion Employees is a quarterly reward and
recognition given to an individual for his/her outstanding contribution
towards the achievement of the companys objectives. Number of Rewards:
Maximum of 1-2 rewards in every LOB/ Shared Services per quarter.
Nominations and Selection:
Individual nominations may be made by a LOB / Shared Services Head.
To qualify for consideration, the achievement must be in line with the
Corporate and LOB/Shared Services goals (e.g. profitability enhancement,
process improvement, superior contribution or teamwork).
Nominations must be made using the nomination form provided in the
annexure.
The form should be duly filled with very specific details of the initiatives
and results. All relevant supporting information like Rs / $ savings or profit,
customer or team appreciation etc. should be provided to strengthen the
case.
The final selections will be made by the nominating LOB/ Shared Services
Head in consultation with another LOB/Shared Services Head who has
reasonable visibility of either the individual or the delivery of the outcomes
of that individual who is being considered for the reward.

CONCLUSION
I am highly privileged that I got an opportunity to work with SONA KOYO
STEARING SYSTEMS LTD. which is a leader in Telecommunications industry.
Here I got to learn a lot about my project which is on the role of
organizational rewards for motivation of employees. I am really happy that I
got an opportunity to have a deep knowledge about the subject.
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It has been a great learning experience. For my project which I had

interacted with different departments, understand their working, their
contribution and SONA KOYO STEARING SYSTEMS LTD as a whole.
Somewhere or the other, it has directly helped a lot in my confidence
building because in the process I got to interact with SONA KOYO STEARING
SYSTEMS LTD management from all the departments.
This essay has evaluated the reward systems and highlighted the importance
of reward management. As discussed above, payment including reward and
other benefits does not mean simply encourage minimal expectation of
employees. This can be basic in organization to attract and retain people.
Effective reward management can not only be applied to dominate an
individuals behavior but also improve an organizations productivity.
These rewards aim to recognize and reward outstanding individuals and
teams who have gone beyond their role requirements and have taken
initiatives that have had a positive impact to its short term and long term
growth objectives.
There is a general direct / positive relationship between total rewards and
employee performance which are linked with Leadership Signatures on its 6
attributes. Reward is very critical and central activity in the human resource
management function in the organization which can be used in scientific way.
Through embracing a total reward approach to management of rewards,
organizations are able to address diverse needs of employees in their
organization and the diverse ways in which individuals are motivated to
work.

QUESTIONNAIRE

55

NAME:
EDUCATION

GENDER

STATUS
Note: Based on your knowledge and experience, please indicate your views about
the impact of rewards and incentives on motivational level of employee

Financial incentive increases employee work productivity.

Strongly Disagree
Disagree
Strongly Agree

Agree

Neutral

Intrinsic rewards increases employee on job satisfaction.

Strongly Disagree
Disagree
Strongly Agree

Agree

Neutral

Incentives develops employee attitude toward organization.

Strongly Disagree
Disagree
Strongly Agree

Agree

Neutral

Incentives increases employee loyalty towards organization.

Strongly Disagree
Disagree
Strongly Agree

Agree

Neutral

Motivated employees are real asset of any organization.

Strongly Disagree
Disagree
Strongly Agree

Agree

Neutral

Relevant need satisfaction leads to high motivation.

Strongly Disagree
Disagree
Strongly Agree

Agree

Neutral

Is money enough to motivate employee.

Strongly Disagree
Disagree

Agree

Neutral

Work recognition & appraisal motivates employees towards job.

Strongly Disagree
Disagree
Strongly Agree
Agree

Neutral

Strongly Agree

Work environment is also important for motivation.

Strongly Disagree
Disagree
Strongly Agree

Agree

Neutral

Motivated employees are effective and efficient in their functioning.

Strongly Disagree
Disagree
Strongly Agree
Agree

Neutral

Bibliography:
http://www.answers.com/topic/employee-reward-and-recognition-systems

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