Financial and Non-Financial Incentive Effects on Staffs

This research investigates the effects of financial and non-financial incentives on staff motivation, performance, and productivity. It explores the factors and level of motivation and assesses the impacts of incentives on staffs. The study includes a survey of 50 staffs in Morocco and uses statistical tools for data analysis.

Running head: FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
Name of the Student
Name of the University
Author Note

1FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
Abstract
The purpose of this research is to investigate the factors and level of motivation with the help
of the financial and the non financial incentives. The intention is to find out the actions
needed to be undertaken by the managers in motivating their staffs in order to assess the
positivity or the negativity of a particular incentive. The basic purpose is to assess the impacts
of the financial and the non-financial incentives on staff. The motivation of the employees
has positive relation with their performance level and their after their productivity within the
organisations. The reason for which the human resource managers must pay attention towards
the motivation of the employees is that employees are the most important part of the
organisation and their performance depends on the motivation level. The research paper has
clearly discussed all the concepts in these aspects and the previous literatures are reviewed
based on which the literature gap has been determined.
For this particular study, 50 staffs of Morocco have been selected and thereafter the survey
has been conducted in order to find out the impacts of the financial and the non-financial
incentives on the staffs. The statistical tools are used in the research process in order to come
to the conclusion that has answered the research questions clearly.

2FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
Acknowledgement:
It would be an immense pleasure in expressing my sincere gratitude and thank the respectable
people for the immense support and help that have been provided to me. Without their
assistance, it would have not been possible for the research completion. I would thank
 My supervisor for the constant guidance and advice that has enabled me to move
along with my research in an effective and diligent manner.
 My family members as well as my close friends for their support, both financially and
emotionally.
 All the respondents who listened to me and gave me their time for the survey
conduction.
 I would like to express my thanks to all the teaching staffs and library staffs of my
college/university, who have helped me with several questions and articles.

3FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
Table of Contents
Chapter 1: Introduction..............................................................................................................5
1.1. Background of the Study.................................................................................................5
1.2. Statement Problem..........................................................................................................9
1.3. Research Aim and Objectives.......................................................................................10
1.4. Research Questions.......................................................................................................10
1.5. Structure of the Study....................................................................................................11
Chapter 2: Literature Review...................................................................................................12
2.1. Introduction...................................................................................................................12
2.2. Human Resource Importance........................................................................................14
2.3. Reward Management....................................................................................................15
2.4. Motivational Theories...................................................................................................15
2.5. Types of Financial Incentives.......................................................................................20
2.6. Types of Non-Financial Incentives...............................................................................23
2.7. Summary.......................................................................................................................27
Chapter 3: Research and Methodology....................................................................................27
3.1. Introduction...................................................................................................................27
3.2. Research Method Outline..............................................................................................28
3.3 Research Onion..............................................................................................................28
3.4 Research Philosophy......................................................................................................29
3.5 Research Approach........................................................................................................30
3.6 Research Design.............................................................................................................31

4FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
3.7 Data Collection Process.................................................................................................31
3.8 Sampling and Sample Size.............................................................................................31
3.9 Data Analysis Plan.........................................................................................................32
3.10 Ethical Consideration...................................................................................................32
Chapter 4: Research Data Analysis..........................................................................................32
4.1 Introduction:...................................................................................................................32
4.4 Summary........................................................................................................................46
Chapter 5: Research Findings..................................................................................................47
5.1 Introduction....................................................................................................................47
5.2 Correlation......................................................................................................................47
Chapter 6: Conclusion and Recommendation and Future Work.............................................49
6.1 Conclusion......................................................................................................................49
6.2 Recommendation............................................................................................................51
6.3 Future Work...................................................................................................................52
References................................................................................................................................53
Appendix..................................................................................................................................58
Questionnaire.......................................................................................................................58

5FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
Chapter 1: Introduction
Every organisation is concerned about their productivity and the profitability and that
can be done only by utilizing the resources properly. The higher level of the productivity is
attainable only through the staff motivation. The consequences of the financial rewards and
the non-financial rewards are a major concern for the human resource management. The
financial rewards are in the form of money and the non-financial rewards are in the form of
appreciation and other non-monetary rewards. Both these rewards are necessary for the
motivation of the employees that will lead to efficient performance, which in turn will
increase the productivity of the organisation. The report studies in details about the effect of
the financial and the non-financial rewards on the staffs.
1.1. Background of the Study
The main motive of all organisations is quality production at the cheapest cost. The
organisations are therefore concerned with achieving the best and the highest possible output
by utilising the given resources within the organisation. The ultimate resource in any
organisation is the human resource (Noe et al. 2017). The whole production process is
impossible with the human resource. The human resources pool all the other required
resources and integrates the whole process by ensuring cooperation and coordination inside
the organisation. The human resources therefore are needed to remain motivated and highly
associated with the organisation in order to maintain quality productivity throughout. This
can be only possible if there are some motivational incentives being provided to the
employees to increase their productivity.
The important function of the human resource management is to ensure the
implementation of certain practices within the organisation that will boost the employee
morale and enhance the employee satisfaction (Pak et al. 2018). A minimum financial or non-

6FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
financial reward is expected by all the employees because of the efforts and the services they
put in. If there are no proper organisational framework, training and development procedure,
equitable pay structure, appreciation system, opportunities and recognition, then the
employees will not be motivated to work properly within the organisation. There will be no
sense of belongingness rather there will prevail a sense of dissatisfaction. The dissatisfaction
that will arise because of the poor rewarding structure will increase the employee turnover of
the organisation and yield poor results. The minimum benefits expected by the employees
and that the employee foresees for their families and their own selves, stimulates the best
effort from the employees’ end.
There can be two kinds of incentives and they are the financial incentives and the
non-financial incentives. The financial rewards are termed as the extrinsic reward and the
non-financial rewards are termed as the intrinsic reward. The financial rewards include all
the benefits that can be measured in monetary terms, for example bonus, incentives,
promotions, allowances, share in the profits of the organisation, increase in the pay; whereas
the non-financial incentive refers to the appreciation and recognitions within the organisation,
the caring attitude and meeting the new challenges (Burns and Rothman 2018). A sound and
proper working condition of the organisation increases the employee satisfaction. Much
theory suggests that the financial incentives provided to the employees are effective only for
a limited period of time but they have a serious effect on the employee motivation. A
company may allow an individual to get a pay raise to a certain level after his long tenure in
the company but that individual have never been appreciated and recognised. This would not
increase the satisfaction level of that individual. The employee will be very much dissatisfied
after a few days again. It can be therefore said that a degree of non-financial incentive is
required to be added with the financial incentives in order to maintain a long term satisfaction
and motivation of the employees. Additional benefits along with the monetary benefits are

7FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
termed as Fringe benefits. The fringe benefits acts as a boost and helps in increasing the
motivation which in turn increases the productivity of the organisation, the overall sales and
then profitability (Clemens, Kahn and Meer 2018).
Now a day’s many employers takes a holistic approach. They ensure that the
employees are productive, loyal to the organisation and are motivated. They see whether the
employees are satisfied with their work post and if that particular post has matched with the
competency of the employees. Exceptional work performance and hard work are recognized
and appreciated, which in turn promotes a positive workplace culture. The policy of “total
reward” is often chosen by the employers that combines the financial rewards with the non-
financial rewards and incentives (Shields et al. 2015). Financial incentive like the Pay is
being provided to the employees on the basis of their proportionate knowledge, skills,
adaptability and expectations. This is ranked at the top because money is important for the
fulfilment of the basic needs of the life. It also fulfils the needs of belongingness and allows
the employees to build a sense of authority, create a status and maintain a rank and position.
Many organisations also provide their employees with insurance facilities. Health insurance
is one of the most motivational incentives provided to an employee because the employees
feel themselves to be valued by the organisation. Pension schemes are also provided by few
organisations by which a certain amount is kept aside with the company and after retirement
the amount is returned on a monthly basis (Hunt and Blake 2017).
Many organisations also provide transportation facilities, most of the employees stay
at far places and it takes time to avail a public transport facility. Under such circumstances,
there are many organisations that provide pick up and drop facilities. This reduces the burden
of the employees and the physical and mental stress of availing the transport facilities. This
increases the motivation of the employees. Many companies also provide the scope of
vacation with pay that the firm provides in order to increase the wellbeing of the employees.

8FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
Free meals and drinks, meal cards and other food benefits and offers are also given to the
employees. All these benefits facilitate performance. Non-financial reward like the training
and development is also being provided to the employees that help them increasing their
knowledge and skills and helps in boosting the employee morale. It helps the employees in
improving their performance and efficiency. Motivation of a person is dependent on the goals
and the objectives. When the expectations of the employees align with the accomplishment of
the organisational goals, the employees gets motivated to perform and give their best (Kian
and Yusoff 2015). Along with promotions and recognitions, all the employees also seek for
the development of their career. The careers development processes of the employees are
done by the process of the training and development programs.
The working condition and the environment of the organisation also play an important
role in the employee motivation. The employee morale is affected by the working condition,
Favourable working condition contains several issues like comfortable lighting structure,
comfortable furniture, proper seating arrangements, proper functional design, proper supplies
and availability of all the tools and office resources increases the attentiveness of the
employees. There is a common saying that individual does not only live by breads yet he is
unable to live without it. This means that the individuals want to avail several other needs
along with the basic needs. In the recent competitive market all the organizations are in a
competition in recruiting the highest talents at the cheapest cost and In order to do so several
strategies are being implemented by the organisations to attract the talents. The reward
structures and the reward management system help in increasing the attractiveness of the job,
which in turn attracts experienced and knowledgeable candidates. The organisation are facing
huge competition from the different other companies, in the various labour markets. The
demand and the supply condition of this market push the organisation to create attractive and
lucrative offers that would allow them capturing the most talented employees.

9FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
The overall objective of any organisation is to reward all the people equally, fairly
and consistently as per their organisational values so that the strategic objectives of the
organisation are achieved easily. Reward management answers the two basic questions of
what is being valued and what the individuals are prepared to pay for (Rose 2018). The
reward management system has always been a challenging situation for the organisations.
The reward systems not only increase the motivation of the employees but it also increases
and maintains the industrial harmony. The selection of the proper reward system is also very
challenging for the organisation. The several reward alternatives and the cost associated with
it must be understood and analysed. The points to be considered while deciding upon it are
what type of rewards are to be given, the norms of providing the rewards, the criteria for the
distribution of the rewards and what can be the probable outcomes of the reward structure.
The research work will therefore enlighten the effects that the financial and the non-
financial rewards will have on the individuals working within the organisation and how this
motivates the individuals in improving their performance and thereafter stay committed
towards the organisational goals. The effects of these rewards can be negative as well as
positive in nature. The financial incentives involve the direct payment of cash over the
normal amount that is to be received by the employees whereas the non-financial incentives
do not involve direct cash payments and they can be either tangible or intangible.
1.2. Statement Problem
The continuous problems faced by the organisation leader at present are the difference
in the performance level of the customers. The employee performing poor might be
performing so because of inefficiency but there can also be a lack of motivation of the
employees. The performance of the employees also depend on the certain key variables such
as the family background, the age of the employee, the educational background, the
aspiration level and the understanding and interpretation ability. The organisations therefore

10FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
need to understand the exact cause of poor performance and thereafter decide how these poor
performances can be improved. The proper financial and the non-financial structure are
therefore needed to be determined accordingly, which is a complicated and complex task and
must be done carefully.
1.3. Research Aim and Objectives
The central objective of the study is to determine and examine the effect of the
financial and the non-financial incentives on the productivity of the staff. The study is
specifically set out to-
i. Understand whether the remuneration is based on incentive schemes that will
motivate the employees.
ii. Examine the financial incentive schemes and the effect of the same on the
productivity of the workers.
iii. Determine the non-financial incentives that can be provided and if that can retain
the employee motivation for a long time period.
iv. Understand if the reward system is equitable, fair and consistent.
v. Select the best and common reward system for the entire organisation.
vi. To understand what kind of reward system is provided by the organisations that
wants to attract the best talents.
vii. To understand if performance appraisal can also be a part of the non-financial
incentive structure.
1.4. Research Questions
The research questions addressed in this study are therefore:
i. Does the systematic implementation and administration of the motivators of
incentives have a positive effect and positive performance outcomes on the staffs?

11FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
ii. Are the financial and non-financial motivators having different effects on the
performance outcomes?
iii. Can the non-financial incentives maintain the motivation of the employees for a
longer period of time?
iv. Can performance appraisal be a part of the non-financial motivators?
v. What can be the best combination of the reward system for any organisation?
1.5. Structure of the Study
The report clearly discusses about the concept of the reward system and the types of
reward system that can enhance the motivation of the employees. The introductory chapter
discusses about the incentives in the background study. The problem statement has also been
analysed that is the problem related to the motivation of the employees in the organisation
and the performance level that can be improved with the help of incentives. The aims and the
objectives of the study are thereafter determined and thereafter the research questions have
been set accordingly. The following discussions would include about what the other scholars
have researched about the same topics and thereafter methods to attain the predetermined
objectives have been set. The type of data that has been analysed has also been mentioned
and the analysis has been done as per the requirements. The results are derived from the
analysis and discussions on the results are being done, which is then backed by conclusion
and recommendations.

12FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
Chapter 2: Literature Review
2.1. Introduction
The term motivation has been derived from the word ‘movere’, a Latin word that
means ‘to move’ (Peters 2015). Motivation is that inertia that influences and persuades the
employees to perform in a manner that can give positive results and rewards. It can be
defined as the condition that allows and induces an individual to move ahead in a manner that
has been planned in order to achieve the predetermined objectives of the organisation. The
study of the motivation of the human has become more matured and informative over the past
centuries. Currently the organisations wants to prioritize on high self-awareness and the
intrinsic drive as the guiding factors in the way the employees engage in the workplace.
Researchers like Edward Deci and Richard Ryan went through the previous studies and
the theories of motivation and there after they formulated the theory if Self Determination.
They concluded that the peoples’ tendency of growing and fulfilling the psychological needs
are the basis on which their self-motivation depends.
The main reason for the human resource management is to enhance and increase the
motivation of the employees. The more the motivation of the employees, the more will be the
job satisfaction and the involvement of the employee in the organisation. Several research
indicates that some cross disciplinary factors are there that determines the motivation of the
employees. The factors are loyalty of the employees and their intention to leave or quit the
job, the commitment towards the job and the organisation as a whole, loyalty and
contentment. Motivation helps a person to achieve the desired goal smoothly. It implies the
efforts and the persistence level of an individual in performing certain tasks that will lead to a
positive result (Lepper and Greene 2015). It shows the readiness and the eagerness of the
employee to give efforts passionately and to provide the best of their ability while reaching

13FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
the organisational goals. The effectiveness of the organisation depends on the motivation
level of the employees to a great extent. The greater the motivation the greater is the
organisational efficiency and the lesser the motivation, the lesser will be the organisational
efficiency. A workforce that is motivated in nature gives outputs of a better quality and they
are very much dedicated in the accomplishments of the organisational goals.
An employee will put effort only when the efforts to perform are related to a certain
result or outcome. It is because the individuals are motivated by the volume of their wants
and expect it to recur. The research that has been reviewed portrays that the effort created
will result in positive performance, positive outcome can be obtained from those positive
performances and thereafter valences can be obtained from those positive outcomes (Popović
et al. 2014). Any company can gain a competitive advantage by motivating and inspiring the
labour force and thereafter retaining them. The organisations usually motivate their
employees by providing them with various kinds of financial and non-financial rewards.
These kinds of rewards are positively related to the behaviour of an employee and it affects
the motivation of the employees to a large extent. The financial and the non-financial
incentives have a strong influence on how the employee of the organisation performs their
tasks. There are several combinations of these rewards that vary as per the age of the
employees. The employee of a younger age is provided with a different incentive structure
than the employees having an older age. It has been noted that the increase in the pay of the
employee increases the motivation of the employees but this increase in the motivation does
not stay for a long period. The organisation therefore prefers to add the non-financial rewards
along with the financial rewards. If the company supposedly appreciates the employee on a
regular basis for his performance along with the increase in the pay, then it will increase the
motivation level of the customer to a large extent and the process will have a lasting positive
effect on the employee as well.

14FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
2.2. Human Resource Importance
Research review portrays that the most important function of the Human Resource
Management is implementation of practices that increases the level of satisfaction of the
employees with respect to their jobs (Yousaf et al. 2014). Human resource is one of the most
important resources of the organisation. It is the most valuable asset of the organisation basis
of which the organisation can increase its profit. The company must therefore value the
resources that help them the most in achieving their goals and increase their profitability. The
company’s success in achieving the different goals is actually inseparable from the
employees. The organisations must therefore have the knowledge to guide and motivate the
employees as closely as possible.
The employees have contributions in the company in several forms; it can be in the
form of the skills and expertise of the employees, the behavioural pattern of the employee and
also their professionalism. Job achievement provides a boost to the employees in performing
their task more efficiently but this job achievement is dependent upon the performing of the
task by using the respective knowledge, skills, experiences and sincerity and within the
proper deadline (Bratton and Gold 2017).
Great achievers, skilled employees and professionals are always required in order to
be more responsive to the organisational needs. The employees are the key factors that add up
to the planning process as well as several decision making process. The organisations must
therefore put effort in providing incentives to the employees to boost their performance level
and motivation and also to retain their sense of belongingness. It has been noted that ‘Money’
has always been the primary incentive but it has also been analysed that only money is not
enough to boost high performance and motivation of the employees (Teng, Jayasingam and
Zain 2018). Money might be an important factor that helps in attracting and retaining the
people and it might provide satisfaction but such satisfaction is for a short term. Moreover,

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there can be strong dissatisfaction if the organisation does not follow the distributive
principles and procedural justice. It can be inferred that money motivates some people at all
time and all people at some time but it cannot be relied upon to motivate all the people all of
the time. It cannot be relied upon as the sole motivator and therefore it has to be backed by
the non-financial rewards.
2.3. Reward Management
Reward management is an important factor for the entire organisation that requires
dealing with the strategies, processes and the policies so as to ensure the recognition and
rewarding of value of the people and contribution in achieving the organisational goals. It is
not only regarding the pay and employee benefits (IPROJECT 2019). It should be understood
by every organisations that reward management is not only concerned about the financial
rewards but it is equally concerned about the non-financial rewards. This management
technique is concerned about the effective formulation and the strategic implementations that
help in providing the maximum satisfaction to the people in an equitable and consistent
manner (Antoni et al. 2017). The companies are facing serious issues relating to the lower
performance of some employees with respect to some other employees. The companies must
therefore also analyse what are the factors that affects the motivation of the employees and
thereafter performs several motivational analysis by following some motivational theories.
2.4. Motivational Theories
According to Akbar et al. (2018), there are different criteria for every individual to
satisfy their demands and it is important for the organisation to recognize those criteria. The
organisation starts finding out what motivates the people to work. This also helps in the
proper designing and structure of the incentive systems. There are several different
approaches, few of which are discussed as follows:

16FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
1. Maslow’s Need Hierarchy Theory:
This is a motivational theory that deals with the different needs of the human
beings and that is depicted in a pyramid structure. The needs are structured in the
pyramid on a hierarchical basis. The needs in the lower level of the pyramid are
needed to be satisfied before satisfying the needs in the higher level. Maslow
identified five different human needs and stated that once a need is satisfied another
higher need is activated in order to motivate the particular individuals. The five
different needs from low to high are – Physiological needs, Safety needs, Social
needs, Esteem needs and Self-actualisation (Neubauer and Martskvishvili 2018). The
following pyramid helps in the better understanding of the concept.
2. Herzberg’s Motivation Hygiene Theory:
This concept of motivation was proposed by Frederick Herzberg and it is an
extended concept of Maslow’s motivational concept. It is a two factor theory. A
motivational study of 200 engineers and accountants from around the western region
of Pennsylvania was being done by Herzberg. The people were asked to describe two
important incidents relating to their job –
S
e
l
f
A
c
t
u
a
l
i
s
a
t
i
o
n
EsteemNeedsSocialNeedsSafetyNeedsPhysiologicalNeeds Desire to become the best and the most one can
Self-Esteem, Respect, Rcognition, Freedom, Status
Love and belongingness, friendship, intimacy.
Security, Property, Employment, Health
Food, Shelter, Air, Water, Clothing
Desire to become the best and the most one can
Self-Esteem, Respect, Rcognition, Freedom, Status
Desire to become the best and the most one can
Love and belongingness, friendship, intimacy.
Self-Esteem, Respect, Rcognition, Freedom, Status
Desire to become the best and the most one can
Security, Property, Employment, Health
Desire to become the best and the most one can
Self-Esteem, Respect, Rcognition, Freedom, Status
Security, Property, Employment, Health
Desire to become the best and the most one can
Love and belongingness, friendship, intimacy.
Self-Esteem, Respect, Rcognition, Freedom, Status
Security, Property, Employment, Health
Desire to become the best and the most one can

17FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
i. When did a particular employee feel good about his job?
ii. When did that person feel extremely bad about his job?
The responses given by them were thoroughly analysed and thereafter he concluded
the two factors are the hygiene factors and the motivators (Alshmemri, Shahwan and
Maude 2017). The motivators are the recognition, achievement, advancement, the job
itself and responsibility whereas the hygiene factors are the policy of the company
and the administration, the interpersonal relationship, the working conditions, status,
salary, security and supervision.
3. McClelland’s Need Theory:
This theory was proposed by psychologist David McClelland and it is also a
need based theory, which is very well known. This theory is closely associated with
the learning theory. This theory is also called as the Learned Need Theory or the
Three Need Theory (Tanter and Ullman 2015). The three basic motivation needs that
have been identified under this concept are the power, affiliation and achievement.
The people with higher power want to have a higher position in the organisation and
the wants to exercise control over other people. The power seeking people are
generally demanding, practical, outspoken, and forceful and like to interact in any
kind of conversations. The need for affiliation is a different concept where the people
with higher needs get pleasure when they are being given importance and loved by
all. They like to interact with the other people in the organisation and feel that the
other people in the organisation accept them. The individuals having this kind of
needs usually tend to maintain a pleasant and cooperative relationship with all the
other people of the organization. They also tend to help the people within the
organisation in case of any complex problems. There are many people who have the
urge to achieve. The high achievers take moderate risks in order to have a proper

18FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
management and they want to get the feedback at the earliest possible timeframe in
order to know how they are progressing towards their goals. If the goal is being set,
the high achievers usually tend to concentrate more on their work and continue with it
until the works successfully gets completed. It can be therefore concluded from this
theory that the efficiency, effectiveness and the motivation of an individual is very
much influenced by all the three factors as mentioned.
4. McGregor’s participation Theory:
As per research conducted by (Lawter, Kopelman and Prottas 2015), it has
been seen that the Theory X is negatively labelled and Theory Y is positively labelled.
These are actually the two styles of management. This theory has been proposed by
Douglas McGregor. Theory X is authoritarian and Theory Y is participative in nature.
If it is seen that the employees are disinterested to work and have a very little
motivation to work then the organisation will use the authoritarian management style
and if it is seen that the employees of the organisation is happy with their work and
takes any obstacles as a challenge then the company will use the participative theory.
The Theory X has the following assumptions:
i. People tend to work as less as possible.
ii. They lack the sense of responsibility and lacks ambition. They prefer the
others to direct them.
iii. They are not very sharp and intelligent as an individual.
iv. They are usually more worried and interested about themselves rather than the
interest of the organisation.
The Theory Y on the other hand has the following assumption:
i. They have a proper sense of responsibility.
ii. They work for the organisation and aims for the organisational success.

19FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
iii. They are capable to manage themselves and do not depend on the others.
iv. They are very active with respect to the organisational goals and are not
resistant in nature.
v. They seek for achievement.
5. Vroom’s Expectancy Theory:
The expectancy theory had been proposed by Victor Vroom. This theory is a
cognitive process. The theory states that that there are relationship between the effort,
performance and the reward of an individual. The key construct of the theory are Expectancy,
valence and instrumentality. The theory believes that the more the effort is given the better
the performances will become and these can be done only when the proper resources are
available at the required time, when the person performing the task is having the proper and
required skills and possess the required support and information to get the job done . Valence
refers to the value or strength of a particular outcome as placed by an individual. An
individual must prefer to attain a particular outcome than not attaining in order to increase the
positivity of the valence. Instrumentality refers to the concept that if an individual performs
better then the valued outcome will be received by him.
After understanding the several factors that affect the motivation of the employees, it
becomes very easy for an organisation to formulate an incentive plan that will best help the
organisation in retaining and motivating the employees. The incentives are planned
accordingly. Incentives can be termed as a stimulus for a greater action (Herzberg 2017). It is
something that is given in extra along with the fixed pay by means of some additional pay or
recognition for a better work. This is a concept that provides the employees the energy and
the zeal to perform better in the long run. The several motivational theories have clearly
stated the needs of an individual, the expectations and the behavioural traits of an individual
under specific circumstances. The organisations therefore plan their incentives on the basis of

20FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
the nature of the work of the company as well as the factors of motivations that has been
determined.
2.5. Types of Financial Incentives
The current meta-analyses of the incentive schemes show that the mixture of the
financial and the non-financial incentives have a positive impact on the employee
performance. The several incentive schemes are discussed as proceeded. The concept of
money as one of the important and best motivator has been given attention. In order to get an
increase in the efficiency of the financial incentives, it has been suggested that attention must
be given on the application and the administrative processes. As per Bertone and Witter
(2015), primarily the financial incentives are more intimately tied with the performance of the
employees as we as the improvements in several outcomes. It has been analysed in their
research that high performer turnover is more if there prevails a low reward contingency and
if the employees are not properly and sufficiently rewarded. Another theoretical concept that
is relevant is that the financial incentives depends upon the fact whether it is being prepared
for a group or an individual. The sharing of the profits and gains in the groups are very
common. There are several evidences that show that if the pay plans are properly designed as
per the group performance, it can increase the productivity and overall efficiency of the
group. The financial rewards are pay, fringe benefits, bonuses, health and life insurances,
medical facilities, transportation facilities and vacation with paid meal facilities. Thus the
financial reward can be segregated in the form of direct monetary forms and indirect
monetary forms (Haff et al. 2015). Financial incentives in the monetary form includes
commissions, bonuses, deferred commissions and profit sharing and in the form of the social
security is housing facilities, car facilities, food facilities, medical treatment and many more.
In case of Pay Reward, payment is being fixed as the educational qualification,
knowledge, skills and experiences of an employee. The payment also varies as per the

21FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
employee’s performance level and the level of achievement. An equitable and just pay
structure increases the motivation of the employees. It makes the employees feel appreciated.
People require money to fulfil the basic necessities of life and any additional remuneration in
form of money is always a positive motivator for all the employees as this will enable them to
satisfy more than their basic necessities. Sometimes pay incentives are given when the
employees over achieve their targets. This enables and motivates all the employees to work
more and achieve more than their target. It is a belief that the individuals with more money
holds more power and it becomes easier for them to have the things that they want in their
way.
Bonuses are another form of financial incentive that are paid to the employees after
they can achieve a certain standard or a certain quota of a particular project. It is a pay which
is outside the base pay of the employee. It is given as a reward to the employees for a specific
purpose as well as specific behaviour (Young and Keup 2018). It also depends on the ability
of the employees to achieve their targets. It helps the employees in getting a lump sum
amount at the end of a particular time period which motivates them to focus on the common
organisational goals. This process also helps in retaining the top performers.
Fringe benefits are also provided to the employees that is some additional benefits
along with the pay (Shodhganga 2019). These benefits are generally exempt from tax. Fringe
benefits are generally the accidental and the health benefits, commuting facilities, cell phones
provided to the employees, meals, educational assistance, retirement planning services,
employee stock options and discounts, group term life insurance coverage, service related to
the dependant assistance and many more.
Transportation is also an important motivator. An employee who needs to visit to
several branches of the organisation has to incur a lot of expenses in the transportation.

22FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
Travelling to several places takes a lot of energy if there are no proper transportation facilities
available. The public transports are not readily available and are unpleasant in nature.
Transportation is required also for those who stay far away from the work place. The people
residing far away have to change the mode of transportation for several times in order to
reach the workplace. This takes away the energy of the employees. Most of the employees
lose their interest to go to the job just because of the distance and because of the hectic
travelling. The companies must therefore provide their staffs with proper convenience
facilities in order to reduce their mental stress as well as increase their motivation.
Life Insurance and other health insurance policy is also being provided by the
company to make the employees feel that the company truly values the health of the
employees and it increases the sense of belongingness of the employees to the company. The
health cost has increased to a large extent in the recent days. The health facilities thus help
the employees in saving a large amount of money to be expended on health issues.
Vacations with pay are being ensured by the organisations for the welfare of the
employees by providing them with various opportunities of vacation with pay. This
opportunity is available for the employees who have been working in the company for a
longer period of time, usually for more than seven years. The vacations are sometimes
necessary for the employees who have some serious assignments or those who need to spend
some time with the family. The employees are being paid a trip to good places and they are
not treated as holidays instead they are paid similar to regular payment.
Pensions are also a payment scheme which is a deferred income that the employees
will gather while the working tenure and that gets transferred to them after a specific period
of time. This type of scheme is provided to the employees in order to make sure that the
employees stay in the organisation until the retirement age. The employees are not provided

23FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
with this scheme if they leave the organisation before their retirement period or if they are
fired from the organisation because of their misbehaviour or some other improper behaviour.
2.6. Types of Non-Financial Incentives
In the research conducted by Wei and Yazdanifard (2014), the non-financial
incentives are given in form of prizes and awards, appreciations, medals, awarding of degrees
and so on. It has been seen that the better the work place, the better will be the motivation of
the employees. The employees will be more engaged if the working condition is hygienic in
nature and is safe. A proper working condition should have all the required resources and the
facilities that the employees need in order to perform a certain task. If the resources are
adequate in amount then the employees gets pleasure in doing the work. Inadequate
resources, improper ventilation, unhygienic conditions, poor lighting and seating
arrangements also affects the sense of satisfaction of the employees in performing his job. A
healthy working condition with proper lighting and seating arrangements and a good
functional arrangement will improve the performance of the employees, increase the
productivity and also reduce distress of the employees. The organisational culture also affects
the motivation of the employees. There should be proper rules and regulations related to the
employee harassments and the sexual harassments in order to protect the employees from any
kind of bullies and distress. The proper security and culture within the organisation makes the
employee fell safe. If the employees are surrounded by bad people the motivation and the
performance level of the employee will automatically reduce because of the fear of safety and
security. All the organisations must therefore aim in providing a proper organisational
structure and must maintain a proper norm in order to protect the employees. The
organisations can also have some canteens and gaming rooms in certain cases where the work
is very hectic and long. This helps in the recreation of the employees within the workplace
only and reduces their stress level and thereafter the productivity of the employees increase.

24FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
According to Haider et al. (2015), non-financial incentive like training and
development facilities are also being provided by the companies. In this research it has been
stated that improper training and development facilities within the organisation will result in
managerial problems as the managers might not be aware of their skills and competencies
required for all kind of situations. The employees’ confidence level and self-esteem is also
boosted by the process of training and development. The employees can be motivated if the
expectation of them in relation to the career development is being recognized by the
organisation and the opportunity is being provided to them. The employees feel loyal to the
organisation for providing them with the opportunity to grow further. The development
opportunities help the organisation in building the esteem needs and the self-actualisation
needs of the employees. It should be kept in mind that all the employees of the organisation
should be provided with an equal opportunity of the growth and development. Employees are
also provided with several growth and learning opportunities that helps them in their
promotions. The employees are provided with some course facilities and software trainings at
free of cost that helps them in acquiring knowledge and skills at the cost of the company.
This increases the employee loyalty and reduces the employee turnover.
The empowerment and the participation in management also boost the performance.
The employees feel that they are a part of the decision making process and gets the
motivation to perform better thereafter. The process of the centralisation and decentralisation
within the organisation also affects the employee morale. If the organisation is decentralised
that means that the employees can also take part in the decision making process (Awan and
Tahir 2015). This is one indirect non-financial incentive where the motivations of the
employees get seriously affected. The employees feel a sense of belongingness and there is
also an increase in the confidence level of the employees when they can interact with the
management and take part in the decision making process. The empowerment of the

25FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
employee engagement increases the self-worth of the employees. Once the employees gets
recognized and creates a sense of self-worth, they start owing their jobs and takes
responsibility by their own in order to avoid any kind of negative impacts on their
performance. The commitment of the employees increases along with their motivation, if a
certain level of autonomy is being provided to them while performing their responsibilities.
The empowerment helps the employees to take their respective job responsibilities.
Empowerment allows an employee to put forward his ideas in front of everyone that may or
may not be accepted but the point is always considered while making the final decision. The
employees can present and voice their ideas in front of the management in case of the
participative decision making and it helps in increasing the team efficiency.
The performance management system is the most important non-financial incentive
provided to the employee. Under this management system the performances of all the
employees are monitored and good performances are always recognized, praised and
rewarded (Buckingham and Goodall 2015). The contribution of the employees are also
analysed and recognised and appreciation for the same is being provided. The performances
of the employees are measured with the help of the performance appraisal. Performance
appraisal is done in order to let the employees know that the organisation values the
performance of the employees and at the same time it is also interested in the professional
development of the organisation. This portrays the fact that the success of the organisation is
dependent upon the performance of the employees in the organisation. The overall
performance and the involvement of the employees are analysed in the performance analysis
of an employee. The employees therefore want to stay active and perform best so that their
works get noticed and recognized. The performance appraisal system therefore motivates the
competent employees who try to give the best and over achieve the goals. This in turn
inspires the less competent employees to perform better within the organisation.

26FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
Figure: Employee engagement
Source: (Essays, Research Papers and Articles on Business Management 2019)
Employee engagement is also one of the key motivating factors for all the employees
(Mone and London 2018). The centralisation of the management system does not allow the
employees to interact freely with each other. The low level employees have to follow a lot of
steps in order to communicate with the higher hierarchy in case of centralisation. The
complex process creates a problem of communication within the organisation that creates a
chaos and ultimately leads to demotivation. The performances start falling. In case of
decentralisation the powers, authorities and the responsibilities are distributed among the
employees from the higher authority. The employees can freely interact with each other and
communicate with each other. Conveying grievances to the higher authority becomes easier
in case of decentralisation. This makes the employees feel happy and motivated and hence
the performance is improved when there is employee engagement in the organisation.

27FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
2.7. Summary
The literature that has been reviewed in relation to emoluments concludes that the
compensation that is received by the employees has a direct effect on their level of
motivation. The literature review has presented a brief and clear view of the several
researchers in relation to the financial and the non-financial incentives and the effects of the
same on the motivation of the employees. The articles present a clear picture of the different
kinds of financial rewards and the non-financial rewards. The leaders of every organisation
must understand the nature of the motivation of the employees and the factors that motivate
the workers to perform their tasks. Proper motivation within the organisation will be having
positive impact within the organisation and the organisations will thus try to put emphasis on
structuring a proper financial and non-financial incentive for the employees. Any improper
condition within the work place affects the motivation of the employees. The several
motivation theories help the organisation in understanding the motivation of the employees
and the several financial and non-financial indicators are also analysed. The basic task of the
entire organisation is to assess the needs of the employees and the organisational needs and
thereafter formulate a proper incentive plan that will best motivate the employees of the
organisation and will help them in achieving their target at ease.
Chapter 3: Research and Methodology
3.1. Introduction
This part of the paper provides the ideas about the approaches, designs and plans that
are required to get done for the purpose of achieving the desired result as planned in the
research. This section also discusses about the type of the data being used in the research. The
source of the data and the authenticity of the data has been also analysed in this section that
will help in arriving at the desired outcome. The appropriateness of the responds obtained

28FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
from the respondents has also been ascertained in order to undertake the process of the data
analysis from the research paper. This part discusses about the research approach, the
research philosophy and also the ideal design suitable for the research. All these detailed
information helps the researcher to proceed with the process of data analysis after which the
respective results can be analysed. This section of the research project helps the researcher in
solving the presented problems and to prove the hypothesis that has been put forward.
3.2. Research Method Outline
The research method outline portrays the methodology objectivity. The section
highlights the processes and the techniques that will be used in this study. The researcher for
the report has chosen the philosophy of positivism and epistemology. The positivism
philosophy has been selected as the data is scientifically observed and proved and the data
cannot be manipulated during the data collection process because they are independent to the
research subject (Campbell 2016). The epistemology has been selected as the study is related
to a particular area of the human resource management where there is dealings with the data
from the natural scientist perspective and also data that is concerned about the attitude and
the feelings of the workers towards their respective managers. The researcher has also chosen
a deductive approach in order to select the specific data that is suitable for the research paper.
The deductive approach of research is good for developing and determining the result that is
best suitable to the topic. The research design that has been selected here is the is a
descriptive research design as a lot of information and data has been researched and reviewed
in order to come to the conclusion.
3.3 Research Onion
This is one of the most important sections of the research topic. The research onion
helps in the explanation of the research methodology of the research work as well as the
research framework. The dissertation is written on the basis of a research onion. This helps

29FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
the researcher in obtaining the outcomes of the research with the help of five different works.
Different techniques and processes of completing adopted by the researcher in completing the
research work have been explained. It also helps the researcher by assisting him with the
proper strategic use, the research philosophy and the time period.
Figure: Research Onion
Source: (Sahay 2016)
3.4 Research Philosophy
This is also an important part of the research methodology. There are several
philosophies like the pragmatism, positivism, realism and interpretivism. It makes the
efficient and proper utilisation of the paradigm and helps the researcher in recognizing the
research goals. The research philosophy is selected by the researcher on the basis of the topic.
As stated by Dang and Pheng (2015), there are several traits of philosophy that can be
classified as ontology, epistemology and axiology. All these philosophies have their
respective features according to which the philosophy is selected.

30FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
This topic of research deals with the impacts of the financial and the non-financial
incentives on the staffs and therefore the researcher has used the philosophy of positivism as
the research takes highly structured data that are based on scientific evidences. The factors
that have impacts on the motivation of the staffs and how does it actually impact have been
considered and given emphasis on. All the responses of the respondents are recorded and are
segregated by using various theories and scientific tools and the outcome is accordingly
ascertained. The epistemology theory has also been applied in this research work. This theory
has been implemented as it focuses on the fact of the truthfulness of the incentive system and
the rationalism of the system has been determined. All the other philosophies do not take
under consideration any scientific theories and hence they have not been implemented in this
research paper.
3.5 Research Approach
The research approach refers to the detailed plan and steps of the data collection
method, its analysis and interpretation. The research approach can be structured into two
parts – the data collection approach and the data analysis approach. There are generally two
kind of research approach and they are the deductive approach and the inductive approach
(Sekaran and Bougie 2016). The deductive approach considers a research question or a
research hypothesis, based on which the generalised information takes the shape of an
appropriate structure. The inductive structure involves the development of several improved,
unique and new models and theories by the researcher after the explanation of the research
results. The deductive approach has been chosen as the data taken are usually the models and
the theories that have been already established and are available and hence are related to the
research paper.

31FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
The inductive approach has not been used because there is no need of developing and
forming new models and theories that is related to the topic. The current topic of the research
is a general one and therefore the research paper uses the deductive approach.
3.6 Research Design
The research design guides the researcher to move along a particular direction as per
the objective of the research. It is the structure of the methods and the techniques that has
been selected by the researcher in order to mix the different research components in a logical
manner so that the problems of the research can be handled effectively and efficiently. There
are three types of research designs and they are descriptive design, explanatory design and
exploratory design (Creswell and Poth 2017). The descriptive research has been selected in
this research paper as it has been explained in details about the issues related to the financial
and the non-financial incentives and its impacts on the staffs.
3.7 Data Collection Process
The data collection process provides a detailed idea about the various types of data
that has been used in the research. The data used can be primary data as well as secondary
data. Primary data are the data that are directly collected by taking live responses of a sample
whereas the secondary data refers to the collection of data from several articles, journals and
other literatures (Cella et al. 2016). This research paper uses both the primary as well as the
secondary data.
3.8 Sampling and Sample Size
Sampling is the process of choosing selecting a particular group of member form a
huge population (Emerson 2015). It is the group targeted from a population for the research
work. The sampling process helps in getting an idea about the specific precise data source for
blending several suitable information associated with the research objective. The process of

32FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
the simple random sampling has been used in the research paper where the respondents are
selected randomly from the entire population group of Morocco. A total of 50 responses have
been recorded and their responses are taken under consideration for the analysis of the
research project.
3.9 Data Analysis Plan
The collection of the data is to be done with the help of the questionnaires. Close
ended questionnaires have been selected in this paper (Johnston 2017). The responds of the
respondents are recorded in the excel sheet for the data analysis process.
3.10 Ethical Consideration
A suitable code of conduct has been followed while the preparation of the research
paper. The data collection process has been done ethically. The data has not been collected by
using coercion and has been collected from authentic sources. The responses given by the
respondents are kept safe and secured and are not misused. The demographic details collected
from the questionnaires are not being published anywhere for commercial purposes.
Chapter 4: Research Data Analysis
4.1 Introduction:
The research data analysis helps in the analysis of the data collected for the research
process. The responses of the respondents are analysed and the data have been recorded in the
excel sheet. Excel tools are used and various interpretation has been done based the research
objectives and questions.
4.2 Data Analysis
Q1. Select your gender:
Gender Frequency Percentage

33FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
Male 34 68%
Female 15 30%
Prefer Not to Say 1 2%
TOTAL 50 100%
Table 4.1: Gender of the respondents
(Source: As generated by the author)
30%
68%
2%
Gender
Female
Male
Prefer Not To Say
Figure 4.1: Gender of the respondents
(Source: As generated by the author)
As per the table and the figure given above it can be clearly stated that 30% of the
total respondents are female, 68% are male and the remaining 2% preferred not to mention
their gender. This implies 2% of the people prefer to hide their gender.
Q2. Select your age group:
Age Frequency Percentage
20-29 31 62%
30-39 11 22%

34FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
40-49 6 12%
50-59 2 4%
TOTAL 50 100%
Table 4.2: Age group of the respondents
Source: (As generated by the author)
62%
22%
12%
4%
Age
20-29
30-39
40-49
50-59
60 and above
Figure 4.2: Age group of the respondents
Source: (As generated by the author)
As per the above table and figure, it can be stated that out of the 50 respondents, 31
people fall in the group of 20-29 years of age that is around 62% of the total respondents
surveyed. 11 people fall in the age group of 30-39 that is 22% of the total population. Only 12
% falls in the age group of 40-49 and the rest 4% in the age group of 50-59. There is no one
in the age group of 60 and above and hence it has been eliminated from the above chart. This
data implies that most of the people who are involved into working are of young age. This
means that most of the companies are opting for acquiring the young talents and the old
personality is fading away slowly.

35FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
Q3. Select your occupation
Occupation Frequency Percentage
Executive Manager 11 22%
Chief Manager 7 14%
Manager 6 12%
Deputy Manager 5 10%
Assistant Manager 9 18%
Sales Manager 6 12%
Sales Officer 6 12%
TOTAL 50 100%
Table 4.3: Occupation of the respondents
Source: (As generated by the author)
22%
14%
12%
10%
18%
12%
12%
Occupation
Executive Manager
Chief Manager
Manager
Deputy Manager
Assisstant manager
Sales Manager
Sales Officer
Figure 4.3: Occupation of the respondents
Source: (As generated by the author)
The occupational data that can be analysed from the above table and the figure is that
most of the respondents are holding the higher position that is 22% of the total respondents

36FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
are employed as executive managers. The next level is the chief manager, where 14% of the
population are working. The data shows that 12 % are employed as Managers, 10% as deputy
managers, 18% as assistant managers, 12% as sales manager and 12% as sales officer. It can
be stated from the above data that most of the population is either engaged in the higher level
of the organisation or the middle level of the organisation, which indicates that they must get
a fair remuneration from the organisation because of their efficiency to be in that position.
Q4. How long are you associated with the organisation?
Years Frequency Percentage
1-3 19 38%
4-7 23 46%
7-10 7 14%
10 and above 1 2%
TOTAL 50 100%
Table 4.4: Association with the organisation
Source: (As generated by the author)
38%
46%
14% 2%
Association with Organisation
1-3 Years
4-7 Years
7 - 10 Years
10 Years and above
Figure 4.4: Association with the organisation
Source: (As generated by the author)

37FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
The above analysis of the tables and the figures show that most of the respondents are
new to the organisation. 38% of the people within the organisation are having just 1 to 3
years of experience and 46% are having an experience of about 4 to 7 years. The person
having 7-10 years of experience is 14% and only 2% of the population have above ten years
of experiences. This indicates that the labour turnover in the business organisation is high.
This means that the employees keep on switching their organisations or leave the
organisation as soon as they start to age. This also implies that the companies are recruiting
the young people and does not prefer to hold on a particular employee for a long term. It can
be assumed that the average stay of particular employee is 4 to 7 years in an organisation,
after which they prefer to change their organisation in order to change the monotony of their
work and gain advantage over their remunerations as well.
Q5. Is your organisation providing financial and non-financial incentive?
Response Frequency Percentage
Yes 29 58%
No 21 42%
TOTAL 50 100%
Table 4.5: Financial and Non-Financial Incentives
Source: (As generated by the author)

38FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
58%
42%
Is organisation providing financial and
non financial incentives?
Yes
No
Figure 4.5: Financial and Non-Financial Incentives
Source: (As generated by the author)
It has been seen that 58% of the population claims that their companies are providing
the financial and the non-financial incentives whereas 42% of the total population claims that
financial and the non-financial incentives are not provided to them. This implies that most of
the organisations are unable to keep their employees happy because of the poor incentive
structures. The negative response of the respondents states that most of the organisations are
not having strong incentive policies and even if they are having it, the respondents are not
happy with the prevailing scheme.
Q6. Are you happy with those incentive schemes?
Response Frequency Percentage
Yes 29 58%
No 21 42%
TOTAL 50 100%
Table 4.6: Happiness with the incentive schemes
Source: (As generated by the author)

39FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
58%
42%
Happy with incentive schemes?
Yes
No
Figure 4.6: Happiness with the incentive schemes
Source: (As generated by the author)
The above table and the figure analyses the number of respondents who are happy or
unhappy with their incentive schemes. 29 people out of the 50 respondents are happy with
their incentive schemes whereas 21 people are unhappy with their incentive schemes. This
states that almost all the organisation wants to keep their employees satisfied with their job
by providing them with proper amount of financial incentives as well as non-financial
incentives.
Q7. Do you think that only monetary benefits drive your motivation?
Response Frequency Percentage
Yes 33 66%
No 17 34%
TOTAL 50 100%
Table 4.7: Only monetary benefits drive motivation?
Source: (As generated by the author)

40FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
66%
34%
Does only monetary benefits drive
motivation?
Yes
No
Figure 4.7: Only monetary benefits drive motivation?
Source: (As generated by the author)
The above table and figure shows that 66% of the total population that is 33 out of 50
people thinks that money is the key factor of motivation, whereas 34% of the total population
that is 17 out of 50 people thinks that money is not the sole motivational factor. This implies
that the general though of financial incentive being the key factor of motivation is to some
extent true but it is also true that 100% of the population does not think so. The organisations
can lose some of the experienced and highly qualified individual if they just want to satisfy
the 66% of the population. It can be so that the 34% of the population, which is not, too less
in amount, are highly skilled and qualified. The companies must therefore think on the
educational and sill backgrounds as well.
Q8. What can drive your motivation more?
Motivating
Factors
Frequency Percentage
Money 10 20%
Recognition 14 28%

41FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
Both 26 52%
TOTAL 50 100%
Table 4.8: What can drive your motivation?
Source: (As generated by the author)
20%
28%
52%
What can drive your motivation
more?
Money
Recognition
Both
Figure 4.8: What can drive your motivation?
Source: (As generated by the author)
It is clearly seen here that maximum people assumes that both the monetary as well as
non-monetary incentives are required for the motivation of the employees. 20% of the
population have chosen money as the indicator of their motivation, 28% have chosen
recognition and the remaining 52% prefers both. The data implies that people have self-
respect and always want to be recognized for their good performance. Hence, both money
and recognition is necessary for the employees to survive within the organisation.
Q9. Is the performance appraisal system of you organisation effective?
Response Frequency Percentage
Yes 36 72%
No 14 28%
TOTAL 50 100%

42FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
Table 4.9: Effectiveness of the performance appraisal system of your organisation
Source: (As generated by the author)
72%
28%
Is performance appraisal of your
organisation effective?
Yes
No
Figure 4.9: Effectiveness of the performance appraisal system of your organisation
Source: (As generated by the author)
It can be seen from the above table and the figure that 72% of the respondents confirm
that they have proper performance appraisal system in their organisation and the remaining
22% states that the performance appraisal procedure is not proper. This implies that the
maximum acceptance is in favour of the current appraisal system of their respective
organisations. It is assumed that the employees are aware of the performance appraisal
system of the organisation and are happy with the system prevailing.
Q10. Does the performance appraisal affect your motivation?
Response Frequency Percentage
Yes 40 80%

43FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
No 10 20%
TOTAL 50 100%
Table 4.10: Does performance appraisal affect your motivation?
Source: (As generated by the author)
80%
20%
Does performance appraisal affect
your motivation?
Yes
No
Figure 4.10: Does performance appraisal affect your motivation?
Source: (As generated by the author)
As per the information and the responses collected it is clearly seen that 80% of the
respondents that is 40 out of 50 people feel that the performance appraisal affects the
motivation of the employee. This implies that performance appraisal has a strong and positive
relation with the motivation of the employees.
Q11. How does it affect your motivation to perform?
Response Frequency Percentage
Negatively 38 76%

44FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
Positively 12 24%
TOTAL 50 100%
Table 4.11: How does it affect your motivation?
Source: (As generated by the author)
76%
24%
How does it affect your motivation to
perform?
Negatively
Positively
Figure 4.11: How does it affect your motivation?
Source: (As generated by the author)
The above analysis shows that most of the people perceives performance appraisal as
a negative source of their motivation. 76% of the respondents feel that performance appraisal
is negative for the motivation of the employees and 24% of the respondents feel that
performance appraisal is positive for the motivation of the employees. The negative
perception of the respondents implies that performance appraisal might demotivate the
employees of the organisation as it yields different result for different employees and some
employee can be more efficient but the other can start feeling low on the basis of that other
person’s performance.
Q12. Do you consider the performance appraisal to be a part of your non-financial
incentive?

45FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
Response Frequency Percentage
Yes 39 78%
No 11 22%
TOTAL 50 100%
Table 4.12: Do you consider the performance appraisal to be a part of the non-financial
incentive?
Source: (As generated by the author)
78%
22%
Do you consider performance appraisal to be a part
of the non-financial incentive?
Yes
No
Figure 4.12: Do you consider the performance appraisal to be a part of the non-
financial incentive?
Source: (As generated by the author)
It has been clearly noticed that 39 respondents out of 50 respondents consider
performance appraisal as a part of the non-financial incentives that is 78% of the total
population considers the performance appraisal as a part of the non-financial incentives
whereas 22% of the total population considers that the performance appraisal is not a part of

46FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
the non-financial incentives. This implies that the respondents consider that the performance
appraisal is good for motivation.
4.4 Summary
It can be clearly stated from the above discussion that in order to motivate the
employees both the financial and the non-financial incentives are necessary. The systematic
implementation and administration of the motivators of the incentives will have a positive
effect and will lead to the positive performances of the staffs. Most of the employees have
perceived that both recognition and money is required for the purpose of motivation and
hence it can be said that the non-financial incentives can hold the motivation of the
employees for a longer time. The financial incentives can boost the motivation of the
employees whereas the non-financial incentives can hold it for a long term. The issue related
to the performance appraisal is however unclear. It has been seen that most of the population
perceives that there has been a negative effect on the motivational level of the employees for
performance appraisal but again the same population states that the performance appraisal
should be a part of the non-financial incentive structure. A full proof conclusion about the
performance appraisal system is hence cannot be drawn.

47FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
Chapter 5: Research Findings
5.1 Introduction
This chapter deals about the experiences and the data that has been collected by the
researcher during the surveying of the respondents. The findings align perfectly with the
overall research and it helps in answering the research questions and fulfilling the research
objectives along with the ascertainment of the impact of the financial and the non-financial
incentives on the staff.
5.2 Correlation
Correlation refers to the connection between two or more variables. It helps in
understanding how are the variables related to each other and how strong is the relation. The
correlation done in the project is one the basis of a rating scale. The responses given by the
respondents are converted into ratings. For example a positive response is given a higher
rating and a negative response is given a lower rating. The data are then recorded in the excel
sheet and then the correlation formula is being run. The results obtained are the correlation
coefficients. The value of ‘r’ must be between -1 to +1 indicating the positive and the
negative relationship between the variables. Rs of 0.5 means 0.25 or 25% of the variations are
related to each other. The correlation coefficient obtained from the given data is shown in the
table below:
HOW LONG ARE YOU
ASSOCIATED WITH YOUR
ORGANISATION?
How long are you associated with your organisation? 1.00
Is your organisation providing financial and non-financial
incentives?
0.37
Do you think that only monetary benefits drive your
motivation?
0.32
Is the performance appraisal system of your organisation
effective?
0.31
DOES THIS PERFORMANCE APPRAISAL AFFECT
YOUR MOTIVATION?
0.13

48FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
Do you consider the performance appraisal to be a part of
your non-financial incentive?
0.31
The table shows that providing of financial and non-financial incentives, monetary
benefits and effective performance appraisal has a positive relationship with the association
in the organisation. This states that if there is an increase in these independent variables there
will also be an increase in the dependent variable that is the association with the organisation.
(0.37)2or 13.69% of the variations of financial and non-financial incentives and association
with the organisations are related to each other. (0.32)2or 10.24% of the variations of
monetary benefits and association with the organisations are related to each other. (0.31)2or
9.61% of the variations of effective performance appraisal system and association with the
organisations are related to each other. The above interpretation can give a fair idea that
these incentive schemes have a positive effect on the staffs that make them stay in the
organisation for a longer period of time.

49FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
Chapter 6: Conclusion and Recommendation and Future Work
6.1 Conclusion
The analysis and interpretation of the data has yielded the results and these results that
have been acquired in the previous chapters leads to the conclusion of the research paper. The
completion of the research paper has been done on the basis of the previous chapters that
have been discussed. The introduction part of the paper explains about the background of the
topic that has been given. The background of the paper discusses about the necessity of the
incentives in the business organisation and the types of the incentives that are provided to the
employees in the present scenario. The various types of the incentives are clearly discussed
and how it boosts the motivation has also been highlighted. This section also explains about
the research aims and the research objectives on the basis of which the research paper has
proceeded. The problem statement has been identified and thereafter the research questions
are mentioned in this section.
The introduction chapter has been followed by the literature review where the
information provided by the other researchers has been mentioned. The features and the key
points that have been addressed by the other researchers on a similar kind of a research topic
have been discussed in details. The literature review points out the facts and several key
factors that are recognized by the researchers and that have an impact on the incentive
structures of the organisation as well as the motivational level of the organisation. The
importance of the human resource management has been pointed out and all the possible
types of financial and non-financial incentives have been explained with great details. The
motivational theories have also been pointed out and analysed. These theories have helped in
the better understanding of the perception level and the thought process of the employees

50FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
with respect to the incentive structures. The impacts of certain incentive schemes that have
been researched by the researchers previously have also been assessed.
The research methodology states the ideas and the steps that are needed to be
followed for the purpose of collection of the data. It has been seen that the research paper has
used both the primary data and the secondary data. The positivism philosophy has been used.
The explanations and the discussion have been done by using descriptive analysis. The
primary data is quantitative in nature where the responses of the respondents have been
collected by using questionnaire and the responses are put in the excel sheet based on which
the required research questions are answered. The responses of 50 respondents of Morocco
have been obtained with the help of a close ended questionnaire.
The research outcome helps in the understanding and identification of whether the
results are able to meet the research objectivity. The first objective is to assess the effects of
the financial and the non-financial incentives on the staffs, the second objective is to
understand whether no-financial incentives can retain the employees for a long time.
Measurement of the performance appraisal as a part of the non-financial incentive has also
been observed. The relationship between the incentives and the motivation of the staff have
been analysed and it is positive as per the outcomes of the analysis. It can be therefore said
that the results obtained has met the research objectives to a greater extent apart from the
mixed answers related to the performance appraisal.
The responses obtained by the respondents clearly states that the employees are
mostly of young age and it is known that young age are attracted towards more money but it
has been seen that most of the respondents feel that both money and recognition are
necessary for the motivation of the employees. Just a change in the salary structure or mere
increase in the payment because of overachieving of target cannot boost the employee

51FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
motivation. If improper incentive structure is provided to the employees they will feel low
and will lose the urge to work. Although most of the respondents feel that money can boost
the motivation for working yet the same respondents mention that both the money and
recognition are required for effective performance. From this aspect it can be concluded that
money can boost he motivation of the employees whereas the recognition can make that
motivation stay for a longer time. Therefore the result is positive that both financial and no-
financial incentives have an effect on the staffs. A proper combination of the two can provide
a great deal of satisfaction, positivity and motivation to work.
6.2 Recommendation
The results and the research outcomes have helped in the formulation of various
recommendations that can be helpful for the business organisations while maintaining the
employee motivation. The business organisations must keep in mind that the financial
incentive can only boost the motivation for a short period of time and hence provide the
employees with some additional benefits that can be very easily implemented by the
organisation. It is suggested that the managers should use a decentralised management system
at certain time to increase the employee engagement which helps the employee in feeling that
their ideas are also taken into considerations. The problems and the obstacles faced by the
employees must be properly listened by the managers and the prompt solution must be
provided to them. Setting up of an employee grievances structure will help solving the
problems of the employee in a quick and efficient manner. It is also recommended that the
employees are given the opportunity to work from home if there is a scope in case of the
emergency situation of the employees. This step will make the employee feel that the
company values the health of the employee and the employee will be loyal to the company
because of such a consideration. It can be suggested that in case of the bad performance of an
employee the company can call the employee and ask him about his problems. A

52FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
psychometric test can be taken and specific problems of the employee can be highlighted and
thereafter the necessary training can be given so that the employee can improve his
performance. This step will make the employees feel that the company has given them a
chance to improve their weakness and will also feel that the company cares about the
progress of the employees. In these ways the business organisations can keep their employees
motivated to work for a longer period of time.
6.3 Future Work
There is a scope of the future work. The needs and the preferences of the individuals
changes from time to time. With the flow of time therefore the demand and the expectations
of the employees, from the organisation, will evolve. The changes will lead to a different
answer in the future which states that future research is possible. The question related to the
performance appraisal has still been unclear and the future research can therefore have the
possibility or the chance to provide a better picture on this aspect. The future research on this
topic will help in creating an understanding about the extent of the changes that will occur
and thereafter new results and outcome can be derived.

53FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
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58FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
Appendix
Questionnaire
Questionnaire on Effectiveness of Financial and Non-Financial Incentives
on Staffs
1. Select your gender:
a. Male ( )
b. Female ( )
c. Others ( )
d. Prefer Not to Say ( )
2. Select your age group:
a. 21-29 Years
b. 30-39 Years
c. 40-49 Years
d. 50-59 Years
e. 60 and above
3. Select your occupation
a. Executive Manager
b. Chief Manager
c. Manager
d. Deputy Manager
e. Assistant Manager

59FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
f. Sales Manager
g. Sales Officer
4. How long are you associated with your organisation?
a. 1-3 Years
b. 4-7 Years
c. 7-10 Years
d. 10 Years and above
5. Is your organisation providing financial and non-financial
incentives?
a. Yes ( )
b. No ( )
6. Are you happy with those incentive schemes?
a. Yes ( )
b. No ( )
7. Do you think that only monetary benefits drive your motivation?
a. Yes ( )
b. No ( )
8. What can drive your motivation more?
a. Money ( ) b. Recognition ( ) c. Both ( )
9. Is the performance appraisal system of your organisation effective?
a. Yes ( ) b. No ( )
10. Does this performance appraisal affect your motivation?

60FINANCIAL AND NON-FINANCIAL INCENTIVE EFFECTS ON STAFFS
a. Yes ( ) b. No ( )
11.How does it affect your motivation to perform?
a. Positively ( ) b. Negatively ( )
12. Do you consider the performance appraisal to be a part of your non-
financial incentive?
a. Yes ( ) b. No ( )