4. Introduction
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The Behavior and performance of the sale
representatives and other employees depends mainly
upon their satisfaction and motivation level from their
job, Organization’s reward system, training and
development, their salary, work environment, Retirement
benefits and others (Robbins & Judge, 2003).
A study by (Fu, Weihui & Deshpande, 2014) argued that
dissatisfaction of employee’s leads to high turnover rate
of employees .
5. Introduction
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Self-determination theory mainly concerned with the intrinsic
motivation and based upon the assumption that peoples can be mainly
motivated by internal forces like sense of autonomy, sense of
relatedness and sense of competence. (Gagne and Deci, 2014).
They further argued that sense of autonomy is to make the employees
sure that they have the power to organize their work in their own way
while sense of competent is the feelings of self-confidence of doing
something of value in better way. The sense of relatedness is also the
inner feelings of employees that they are the special part of the
organization. (Gagne and Deci, 2014).
According to Vroom Expectancy theory employees make decisions on
the base of expectancy that the certain type of reward will be awarded,
which mean that employees are only motivated and work hard in a
desired way when they believe that certain output will gain (Nel et al.,
2001).
6. Introduction to the Study
Problem Statement
What is the impact of different types of
rewards (intrinsic and extrinsic) on the
performance of employees at the workplace
in insurance companies in Pakistan?
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7. Objectives of Study
To what extent extrinsic rewards affect
employee’s performance in insurance
sector
To investigate the influence of intrinsic
rewards on employee’s performance in
insurance sector
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8. Research Questions
What is the impact of extrinsic rewards on
employee’s performance in insurance sector?
What is the influence of intrinsic rewards
on employee’s performance in insurance
sector?
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9. Gap Analysis
Overall impact of intrinsic and extrinsic rewards should
be investigated in different industries and context. To fill
the gap, the study therefore aimed to investigate the
effects of reward strategies (Intrinsic and extrinsic
rewards) on employee performance in insurance
companies in Pakistan located in Rawalpindi and
Islamabad region.
Through this study management can design effective
reward strategies to get maximum performance from
their employees in this sector and will help to increase
their firm’s profits.
The findings of the study facilitated the formulation and
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10. Literature Review
Year Author Title Findings
2008 Ripley •employee performance as about encouraging
productive discretionary behavior with a goal to
achieving human capital advantage.
• Every manager, no matter what his or her role,
knows that exceptional employee performance
is critical in today's world
2007 Malhotra et
al.
•all forms of financial return, tangible services
and benefits an employee receives as part of an
employment relationship
2014 Warneken
and
Tomasello
Intrinsic rewards are mostly intangible like
appreciation, caring attitude of employer,
meeting challenges, Sense of achievement,
Sense of meaningfulness, sense of
competence, sense of choice and sense of
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11. Literature Review
Year Author Title Findings
2005 Tsai • Extrinsic rewards including monetary rewards
or cash rewards are used to cater the
expectations of individual employees in order
keep them motivated.
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2003 Thomson
and
Rampton
Organizations should reward employees
more often. This greatly improves
performance compared to having the
rewards maybe only once a year. This is
because frequent rewards are easily
linked to the performance.
12. Literature Review
12
Year Author Title Findings
1998 Martocch
io
compensation denotes both the
intrinsic and extrinsic rewards
employees receive for performing their
jobs. Intrinsic compensation refers to
the employee's psychological mindsets
that result from performing their jobs. It
refers to the enjoyment and the sense
of achievement that employees
experience as a result of their work.
Extrinsic compensation includes both
monetary and non-monetary rewards.
Nonmonetary reward includes the
benefits that employees receive apart
15. Research Design
Type of Study
Descriptive, Correlation study
Unit of Analysis
Individuals of Rawalpindi and Islamabad working at Insurance
companies/houses
Population
Rawalpindi and Islamabad
Sample Selection Strategy
Convenient sampling technique was used
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16. Research Design
Sample Size
255
Data Collection Instrument
Questionnaire
Statistical Tools
Correlation, Multiple Regression
Software
Statistical Package for the Social Sciences (SPSS)
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19. Discussion
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The purpose of this study was to investigate the effect of rewards (Extrinsic
and Intrinsic rewards) on employee performance in insurance industry of
Pakistan. In today’s competitive Business environment it is very important
for every type of Organizations to maintain loyal customers as it will not only
enhance the revenue but also play a vital role in cost reduction, competitive
edge, profitability and the overall wealth of the shareholders. (Ahsan, 2015)
It depends on various things like Company’s product, brand name, pre and
after sale services, and especially the behavior of the sale representatives
of the company with the customers. The Behavior and performance of the
sale representatives and other employees depends mainly upon their
satisfaction and motivation level from their job, Organization’s reward
system, training and development, their salary, work environment,
20. Discussion
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The correlation coefficient for the hypothesized relationship was r=.631**and
the coefficient of the parameter estimate in the regression model was also
B= 633**. The results of both the tools are significant at both 1 % and
5%level of significance. The results of this paper are also consistent with the
previous studies done in this area (Rehman et al., 2010: Khalizani, Hanisah
and Loke, 2011).
The correlation coefficient for the hypothesized relationship was r=.431**and
the coefficient of the parameter estimate in the regression model was also
B= 0.433. The results of both the tools are significant at both 1 % and
5%level of significance. The results of this paper are also consistent with the
previous studies done in this area (Ryan & Deci, 2000; Rehman et al.,
2010).
21. Discussion
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As stated by Luthans in 2000 , “that there are two types of rewards,
financial and non-financial and both can be used to enhance the
performance of employees, financial rewards mean pay for
performance such as performance bonus, tips gifts, commission,
and gratuities etc. while non-financial rewards are non-cash/non-
monetary rewards and it’s a social recognition such as appreciation
acknowledgement, and certificate etc. ” Presence of such rewards
cause increase in employee performance while working with such
organizations, leading to the acceptance of the H1 & H2.
22. Implications of the Study
The study will help the scholars in Pakistani’s context and may be in other
developing countries about the effect of different types of rewards on
employee's performance.
This study investigated the impact of rewards on employee's performance in
insurance industry of Pakistan located in Rawalpindi and Islamabad region.
Human capital is one of the most important assets for any type of an
organization. Therefore to polish, retain and improve the worth of this asset this
paper sets the guidelines for top management and corporate governance
especially in insurance industry of Pakistan to develop and refine regularly their
rewards strategies according to the needs of their employees.
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23. Limitations
Two Cities ( Rawalpindi, Islamabad )
This study only cater insurance sector of Pakistan
therefore this research can be used to examine the
same relationship of variables in other sectors of
Pakistan
The results of this study may vary in different contextual
framework that is developing and developed countries.
Therefore this is recommended to undertake the same
study in different study setting.
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24. Future Direction
Future research can be conducted using diverse sample
from different areas in Pakistan
The data collection method can be upgraded and
personal interviews can also be included in order to get
an in depth analysis of the research.
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25. Conclusion
There is direct correlation between Intrinsic
Reward and Employee performance.
There is direct correlation between Extrinsic
Reward and Employee performance.
Arrangement of such Rewards directly effects
emotions and feelings of the employees.
Presence of such Rewards directly affects
intellectual and mental and creative abilities of
the employees.
It makes the employees comfortable that
develops the level of job satisfaction
Employee Performance.
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