This study is a description of how extrinsic motivation affects employee performance and job satisfaction. In it a brief analysis is carried out on extrinsic tools that is; monetary and non-monetary rewards and their ability to change workers’ approach in a company. The specific tools studied included; promotion, training and salary. The effects of a work environment towards job satisfaction is also briefly analyzed. The dissertation used a systematic literature review methodology in collecting secondary information from past studies that looked at the study’s topic. Data obtained was evaluated qualitatively. This study concluded that extrinsic tools that is; salary, promotion and training have a major impact on employee performance and satisfaction.
Job satisfaction represents pleasurable feelings by employees resulting from job performance. The process starts from recruitment of qualified employees, as well as continuous practice of working programs to ensure employees remain engaged and committed to the company. De Gieter and Hofmans (2015) indicate that companies with quality human resource perform better and deliver high and continuous returns to shareholders. Sustainable competitive advantage is linked to satisfied workers that must commit and be retained at the firm to use their knowledge base to enhance organizational performance. Competitive firms including Coca-Cola depend on their workers to offer innovative, beneficial and original solutions to problems the company face (Caillier, 2013). Employees are the company’s intangible asset, forming part of the firm’s value.
Simatwa (2011) assert that job satisfaction has a positive correlation to the satisfaction of an employee’s personal needs when accomplishing his job roles. More so, employees are satisfied and productive when their jobs give them economic security, and the employer addresses their grievances, offering them an opportunity to give and implement their innovative ideas, as well as engage in the decision-making process. Cahill et al. (2014) assert that employees appreciate when the employer clearly defines their roles, opportunities for growth and promotion, fringe benefits, effective payment structure, bonuses and incentive plans. Other factors employees appreciate include health and safety needs, social security, two-way communication structure, and a working environment, where employees feel respected (Rumpel & Medcof, 2006). Organization environment is changing rapidly and companies have to implement more competitive, aggressive, adaptive and flexible strategies. The strategies are attainable by gaining maximum benefits from employee participation, hence the need for a satisfied workforce.
Dale (2008) defines employee satisfaction as the level which workers like their job, depending on their varied perceptions, thoughts, as well as feelings (Adewale, Joseph & Joachim, 2014). It is essential to maintain employees’ high morale, to enhance production, encourage commitment and reduce on absenteeism. Enhance employee satisfaction levels translates into increased returns and improved productivity. Employee satisfaction represent an all-round module of a firm’s human resource strategies. Many organizations suffer from voluntary turnover, hence the need for the labour market to adapt and ensure performing employees remain in the company. This is possible by satisfying the workers in the company, with Jones (2006) indicating that an average worker changes jobs ten times between the age of 18 and 37.
According to McCrea (2001), employees change jobs frequently in cases where they lack loyalty and poor talent management strategies. The major cause for that is poor reward management systems where employees feel that rewards are not fair and equitable (AlBattat & Som, 2013). A company’s productivity depends on employee’s job satisfaction because satisfied workers offer quality performance increasing profitability. Satisfied employees show creativity and innovative culture, developing new and valuable products for the market, hence the competitive advantage (Caillier, 2013). Despite the benefits associated with job satisfaction, the concept is challenging for many companies, because of the effect of other variables that affect the concept directly and indirectly. The variables include having the right talent in all fields, employee-leadership relationships, competition and varied expectations by employees (Alfes et al. 2013). Other factors are employer-related such as high cost of hiring qualified workers, hence the need to strategize and satisfy employees to enhance retention rates and reduce costs linked to high employee turnover. In this research study, we focus on the extrinsic motivation tools that management can use to enhance job satisfaction as well as performance.
1.2 Problem Statement and study aim
Employee benefits include the financial returns, tangible services and other benefits employees received as part of the compensation. Compensation decision by an employer affect cost of doing business, as well as a company’s ability to improve its products competitive price in the market. It also affects the employer’s capacity to attract and retain qualified employees in a competitive labor market (Bryson, Forth & Stokes, 2015). Compensation has a direct impact on employees’ attitudes and behavior towards the company, either in form of cash or non-monetary benefits. Majority of compensation packages is in form of cash, while the rest is non-cash such as healthcare.
According to AlBattat and Som (2013) when employees are not satisfied, they seek the satisfaction from elsewhere, from either a new employer or engaging on other non-beneficial activities such as drinking alcohol, which directly affects their performance. Despite performance at a company pegged on customer satisfaction, improved performance relies on motivating employees that can ensure the customer is satisfied. Evans (2015) assert that Coca-Cola Company depends on employees to deliver to attain their objectives, thus the need to consider the relationship between job satisfaction and employee benefits, because it has a direct effect of work performance and service delivery in a working environment.
Besides understanding the impact of employee benefits on employee satisfaction, there is need to understand other related factors and their influence on company performance. This will help companies understand variables to address to ensure employees are well compensated to enhance job satisfaction. Most studies have failed to link other variable factors associated with employee compensation, hence the need for this study to fill the gap by understanding the link between employee benefits and employee satisfaction, using Coca-Cola Bottlers as a case study. Since the benefits offered in most organizations are broad, the dissertation will focus on three extrinsic motivational rewards used. They include; salary, promotion and training.
The study’s purpose is investigating the effect of extrinsic motivation rewards such as; salary, promotion and training. It will also be important to analyze how the working environment affects employees’ job satisfaction, using Coca-Cola as a case study.
1.3 Research Objectives
- To determine the relationship between job satisfaction and employee performance
- To understand the relationship between extrinsic motivation and employee satisfaction
- To understand the role of working environment on employees’ job satisfaction.
1.4 Research Questions
- What is the relationship between job satisfaction and employee performance?
- How does extrinsic motivation affect employee satisfaction?
- What is the role of working environment on employees’ job satisfaction?
1.5 Study Significance
The study findings will help Coca-Cola Company and similar firms to understand best ways to achieve employee satisfaction. More so, the knowledge gained from the research on extrinsic motivation rewards effects of employee satisfaction will help firms understand ways to transform their workers into assets and enhance productivity and long-term competitive advantage. The study will also be used as a reference by scholars to future studies, when seeking to understand the benefits of employee compensation on job satisfaction. The research will also add to existing knowledge on the influence employee compensation has on enhancing their satisfaction levels, as a yardstick for successful human resource management policies.
2.1 Literature Review
As mentioned in the previous chapter, this study examines the relationship between extrinsic motivation; monetary and non-monetary rewards and job satisfaction amongst workers at any given firm using the example of the Coca Cola Company. So as to gain a comprehensive understanding on this issue, a thorough examination shall be undertaken on archival literature that have discussed the topic of extrinsic motivation and its ability to transform job satisfaction. In addition to that varied definitions linked to the topic shall be outlined. The primary subtopics will be based on these terms: monetary benefits, non-monetary benefits, job satisfaction, job performance and compensation.
Common terms that shall be found within the study include;
Job satisfaction: This is an attitude that a person has towards one’s job (Armstrong, 2006).
Job Performance: How good or bad work is done (Armstrong, 2006).
Compensation: this is a total amount of money that a worker can expect to be paid for working in a firm (Landry, 2017).
Job Rewards: these are benefits that are a result for varied efforts in roles within a company (Dorris, 2017).
Incentives: this is a thing that motivates an individual to carry out a specific duty (Abdullah & Wan, 2013).
Monetary Rewards: In a modern setting, this is a transferable physical means of meeting a worker’s fundamental requirements (Dorris, 2017).
Non-Monetary Rewards: These are intangible benefits in a company that do not involve any direct money (Dorris, 2017).
Motivation: this is a positive feeling which results from an appraisal of one’s job. It is also defined as a positive and pleasurable emotional state that results from appraisal of one’s tasks (Kianto, 2016).
Extrinsic Motivation: These are the forces that impact individuals to the extent that the take certain action so as to attain desirable objectives in the long run (Kianto, 2016).
Job Training: These are the conditions under which workers are imparted skills for a specific profession (Landry, 2017).
Retention: This is the act of not losing one’s employees (Abdullah & Wan, 2013).
2.2 Job Satisfaction and its Relation to Job Performance
According to Mary and Stephen (2004), a worker with high levels of job satisfaction always develops a positive attitude towards their assigned tasks. On the other hand, a worker who is dissatisfied develops a negative attitude towards assigned tasks. When scholars discuss on employee attitude, they normally are focusing on the issue of job satisfaction (Judge et al, 2001). At Coca Cola, job satisfaction is quite a crucial matter since it is highly linked to performance which is a high determinant in the revenues attained (Coca Cola, 2016). Over the years, the company has developed an interest in promoting job satisfaction at all departments. This has been contributed by the realization that most personnel are interested in understanding what the company has to offer for their efforts. The Human Resource is therefore always looking for new ways to please the workers for their hard work which contributes to job success (Adewal et al, 2014). Employees are constantly engaged to learn the type of benefits that are likely to motivate them. Coca Cola is well known of offering varied types of compensations that shall be discussed below. The compensations are highly driven by the level of occupation that each worker holds. The higher the level of occupation, the more the compensations. This is a concept applied in most large firms (Kianto et al, 2016).
Compensations and benefits are perceived as a powerful drive towards organizational priorities and goals (Aziri, 2011). A company’s management expects the latter to be achieved through the help of human labor. Human labor compensation is therefore a sensitive matter which most workers are passionate about. Currently, most human resources related issues have to be handled with immediate effect. Financial aspects such as benefits and compensation continue to stand out. This means that the two play a huge role in any company. According to a survey carried out by the Society for Human Resource Management, compensation plays a crucial role in the promotion of good performance and positive attitude at any workplace (Ahmad, 2010). Job satisfaction is an essential element that should be measured frequently in an organization.
The topic of satisfaction amongst employees is essential due to the implications it has towards the following: turnover, productivity and absenteeism (Judge et al, 2001). Besides that, it is also a comprehensive indicator of how workers feel about their occupation and a good predictor for certain work behaviors. Ahmed, (2010) states that job satisfaction is a good mediator in merging personality variables and expected work behaviors.
Employee turn-over rate is the best metric for a company to measure or rather benchmark employees’ satisfaction. The HR metric acts as a measurement to comprehend the number of workers leaving a company and the reasons that contribute to this. Workers can leave a firm either voluntarily or involuntarily. There are high costs faced by an organization when workers decide to leave or shift a firm. The employee turn-over rate is defined as the percentage of workers who leave an organization in certain time period. The percentage can be taken on a monthly or an annual basis. The rate is attained by dividing the total number of workers who leave a firm by the total number of workers present within the organization in a certain period. The number is then multiplied by a hundred to obtain the turn-over rate. The turn-over rate is a factor that should be highly considered while trying to retain workers. There is a strong relation between turn-over and retention in that by studying the causes of a turn-over, the Human Resource Management can create strategies to ensure that their staff do not leave the organization. Over the years, there has been a high turn-over rate in the Coca Cola Company based on a report carried out by the Glassdoor recruitment company (Groen et al, 2017). The Human Resource Management in the company is highly dissatisfied by the number making them develop new strategies to ensure that employees do not quit or retire at an early age. Job satisfaction is one element that the management is using to lower turn-overs at the company.
2.2.1 Employee Motivation and Performance
Extrinsic and Intrinsic motivation are primary factors in the promotion of job achievement and performance (Kianto, 2016). Fisher (2015), noted that the impact made by extrinsic motivation is paramount especially when it comes to personal and organizational performance. Extrinsic motivation can be termed as the forces that that impact individuals to the extent that the take certain action so as to attain desirable objectives in the long run (Groen et al, 2017). In this pursuit they are likely to expect gains such as; material compensation, monetary funds, recognition, promotion and reputation. Employees strive at garnering extrinsic rewards by elaborately working on their performance beyond a company’s expectations. In a study carried out on performance and extrinsic motivation, Qureshi (2009) realized that there is a positive correlation when it comes to employee performance & satisfaction and extrinsic rewards such as; training, salaries and promotion. Other scholars noted that negative extrinsic elements such as poor remuneration and job insecurity can have a negative implication towards job satisfaction and performance. Despite being a powerful technique, less studies have been undertaken on extrinsic motivation.
Putting up performance measurement metrics in a company is a relevant means of measuring progress in an organization. The knowledge of learning how varied areas of a company are performing is essential hence the need of having a good measurement system. Key Performance Indicators (KPIs) are the central means of measuring performance in an organization. Through this tool, management can measure; profit, employee productivity, losses and company growth. Our Case study organization has a performance measurement procedure that identifies whether the company is on the right track or not. The firm has a systematic means of tracking performance which is carried out by an audit team. At Coca Cola, the key performance indicators measure; social, environmental and economic performance. Talent management strategies in this company aim at making sure that top performers are always motivated and satisfied to carry out their daily duties.
2.3 Extrinsic Motivational Rewards that affect Job Satisfaction
2.3.1 Effect of Salaries on Job Satisfaction
This factor is considered as an extrinsic motivational element. Most firms use this measure as an acknowledgement of employees’ efforts (Armstrong, 2006). As an extrinsic motivational factor, employers utilize systems through which they can promote salary as a means of promoting job satisfaction. For instance, Coca Cola auditing team is given the task of measuring employees’ efforts annually in order to identify workers that should be retained., After the audit process, results obtained are verified to reveal employees who should obtain a salary and those that should not get any increase. Salary increment should be an aim towards obtaining great job performance from dedicated workers (Albattat & Som, 2013). The latter can easily be obtained through incentives and other rewards. However, a salary cannot work as the only motivational factor in an organization. This factor should be incorporated with other elements so as to get better results. Salary given to workers should always be confidential but transparent (Hashim et al 2015).
2.3.2 Impact of Promotions on Job Satisfaction
Opportunities related to promotions are very crucial especially when it comes to career growth (Dorris, 2017). Coca Cola is committed towards offering equal professional development for its workers. This consideration creates some sense of fairness amongst employees which boosts their job satisfaction. Promotion in a multinational company majorly occurs through ranks to develop a sense of management amongst subordinates (Bryson et al, 2015). Before promotion occurs workers should be given adverse training to make them ready for the next assigned role. Incorporation of promotion and other benefits such as training is a good means of motivating workers. The two act as a great way of developing self-belief and confidence in workers (Shaw et al, 2001). Plans to do with future expansion are also a means of creating promotion insights in workers in the future. It prevents workers from being demotivated because of the lack of vision of having future professional growth or promising opportunities (Armstrong, 2014).
2.3.3 The Effect of Training on Job Satisfaction
Training is a preparation that is given to workers to improve their skills and capacity when it comes to undertaking their duties at work. Robbins, (2009) states that training is a great means of improving employees job satisfaction and performance since it enhances their; attitudes, skills and knowledge. Most workers join companies not only to get a specific position but also to develop their professional growth. The chance to obtain training aids employees to advance their capabilities and skills in their assigned roles (Mearns et al, 2015). Through such sessions, workers are able to realize their goals that they would want to achieve in the long run. Workers obtain education about various aspects referring to an organization. With this type of engagement, workers get motivation which enhances their job satisfaction especially after attaining milestones.
A workforce that is made up of individuals who are eager to learn new knowledge portray the need to get constant training and development lessons (Armstrong, 2006). It is also eminent that workers who are always engaged with their jobs are always ready to get new skills. The desire to adopt skills and knowledge is a clear indicator that training is an extrinsic motivation towards job satisfaction and job performance (Nelson, 2012). Workers can get job satisfaction through comprehending their duties and how their efforts bring about an organizations’ success. Through training workers are able to improve the performance quality which leads to the organization offering them better incentives (Javaweera, 2015). Organizations that comprehend the value of their employees will always strive at promoting loyalty through the use of training (Alfes et al 2013). In any firm, there is always a niche when it comes to specific knowledge or skills needed to undertake a certain task. Training has been tested to be a sure way of getting employees to be excited about their roles in a firm (Awan & Tahir, 2015). Therefore, training can be stated to be a great investment through which employers can get better attitude from their employees; it is also a factor that can lead to job satisfaction and job performance (Stringer et al 2011). Employees also look forward to gathering managerial skills after getting training in their field of career (Raziq & Maulabaksh, 2015). Training is a great indicator for employers to show that they appreciate workers’ contributions. Upon this realization, workers are likely to strive and work harder so as to get more recognition. In summary, training acts as a natural way to create an enthusiasm and attachment with dependable staff.
2.4 Workplace Environment Effects on Job Satisfaction and Performance
Workers are very essential assets in a company. A great firm is that which takes care of its workers which is a primary policy at Coca Cola Company. How well a workplace engages its workers impacts their will to learn new skills and their desire or motivation to perform. In a company that often pays close attention to the workplace environment, employees spend quite some substantial time within their workplace while undertaking their day to day duties (Shaw et al 2001). According to Abdullah & Wan, (2013), a workplace environment is crucial in influencing one’s emotional and cognitive state. Other factors that are affected include; concentration, behavior, actions, abilities and one’s attitude. All these elements are important since they affect an employee’s performance. It is therefore right to say that a workplace environment has a great impact on a large firm such as Coca Cola especially in the maintenance of workers’ productivity which concurrently affects the organization’s performance (Coca Cola, 2016).
2.5 Theoretical Framework
A number of theories explain how certain behaviors affect job satisfaction or job performance amongst individuals. The theories are classified into two which are process and content approaches. Content Approaches are linked to authorities such as; David McClelland, Abraham Maslow and Fredrick Herzberg (Sadegi, 2013). These authorities assume that human individuals have specific definable needs such as; power, social life, money and self-esteem. They also state that motivation within a work environment is achieved when such needs are satisfied. Job satisfaction is also met when these needs are met. The process approaches are conventional and are based on different assumptions. In these theories, motives are neither universal or predefined and that people’s actions are not determined their need (Daily, 2004) s. In the process approaches, the theories are related to; equity, expectancy and goals. Over the years, job satisfaction has been a topic of significance. As such, various theories have been created with the attempt of clarifying and defining the forces behind job satisfaction. Boshoff (2002) observed that most studies job satisfaction are based on the need theories constructs. The hierarchy of needs theory and the ERG theory are most fundamental when it comes to the topic of job satisfaction. According to Jones (2012), the needs theory is made up of three components which include; task performance, inputs and outputs. Inputs include; skills, experience, education and time lead to one’s performance. These factors are analyzed in terms of work quantity and quality. Outcomes include; job satisfaction, motivation, job security and job performance. In order to promote job satisfaction, employers should identify employee needs and then expect controlled outcomes. Hereby are theories that exemplify individual needs;
2.5.1 Maslow’s Hierarchy Theory
Maslow described human beings as wanting animals whose needs can be categorized in to five categories (Callul et al, 2015). The needs can be placed in a hierarchical order as follows;
At the bottom is the physiological needs which are the most basic needs. The second from physiological needs is security needs which is followed by social needs, self-esteem and lastly self-actualization needs. Physiological needs are the most primary and are made of biological requisites which help in adaptation and survival. These basic needs include; shelter, water and air. Security needs are those which portray that one is safe from physical and psychological harm (De Gieter & ofmans, 2015). Social needs include the treasure for healthy relationships, acquisition of social support and the need to be loved. Esteem needs reflect a desire to gain; respect, status, success and prestige. Finally, self-actualization is the desire to reach one’s full potential through the acquisition of knowledge, understanding and wisdom. At this stage one has an individual determination to be creative and independent.
In an organizational set up, physiological needs may be perceived in terms of salary and wage based on one’s role at the organization. Security needs in a company refers to the physical safety of a worker in a job depending on organizational stability, work environment and job security. The availability of these safety needs contribute to motivation and job satisfaction. Social needs at work refer to those needs which bring about good relations with acquaintances, managers and friends. Employee participation in team assignments and recreational activities promote one’s social needs. Esteem needs are brought about by; recognition, encouragement, respect and appreciation from workmates. Factors such as compliments, promotions and acknowledgement of achievements can contribute to a high esteem. Kressler (2003) states that self-actualization at work is achieved by giving workers independence when they want to explore their creativity in undertaking tasks. Training employees and offering them challenging tasks can help them achieve self-actualization needs. Independence at work helps in gaining satisfaction by using one’s talents and skills to realize one’s potential. Organizations ought to note that that the hierarchy of needs should be met consequentially whereby the most basic need should be the first one to meet. All needs at each segment should be met fully. According to Maslow, employees are motivated to attain one set of need before shifting to the next level and therefore needs should be pursued in a specific order without skipping any. Employers should be keen on meeting all needs to promote job performance at work.
2.5.2 Alderfer ERG Theory
This is an improvement of Maslow’s Hierarchy Theory. It relates to job satisfaction by mainly focusing on elements that influence specific behavior. This theory can be utilized by management to explain and predict behavior of employees. The ERG theory can be used in determining why workers make certain choices during their daily operations while at work (Caulton, 2012). The founder of the theory states that human beings are mainly motivated by three types of needs which include; growth, relatedness and existence. Existence needs is the lowest in the rank whereas growth is the highest amongst the three (Shahzadi, 2014). Existence needs is made up of safety and physiological needs as listed within the Maslow’s theory. Relatedness needs are the needs for sustaining and developing helpful interpersonal relationships and can be compared to social acceptance needs in Maslow’s Theory. Lastly, Growth needs refer to the desire to gain personal development, self-actualization and self-fulfillment. The ERG theory is different from Maslow’s theory since it specifies on job satisfaction and job motivation. It specifically looks at; work benefits and employee relations (Shahzadi, 2014). Additionally, it affirms that employees can be motivated by highly ranked needs even when lower ranking needs are not met. In that sense, needs at different categories can influence workers simultaneously (George & Jones, 2012)
2.5.3 Expectancy Theory
The theory is different from the above mentioned theories in that its focal point relies on perceptions and thoughts as portrayed by employees. The theorist behind this theory believed that one’s perceptions and thoughts can affect their job performance and job satisfaction. George & Jones (2012) states that this theory is based on two arguments. The first one argues that workers are only motivated to do better if the improvement will lead to satisfied outcomes. The second argument is that workers engage in certain activities if they only believe that they have the ability to do so regardless of possible results. According to Belle (2015), when outcomes of a task are likely to bring out positive yields, the worker gets more motivation to carry out the task. Job satisfaction in such cases is also higher. According to this theory, job satisfaction is determined by three factors; instrumentality, valence and expectancy. Valence is defined as a worker’s valuation of a performance results and the desire to attain that result (Vives et al 2014). This is measured in terms of values, goals and needs. Employees are likely to attain job satisfaction if positive outcomes are anticipated and achieved (Armstrong, 2006).
Instrumentality is the belief by workers that attaining first level outcomes creates a pathway for attainment of second level outcomes. Employees, therefore believe that an improvement in performance has a high chance of affecting one’s job satisfaction positively through benefits and rewards given for an extra effort. Instrumentality mainly happens where high outcomes contribute to a higher valence such as salary increment. Lastly, expectancy is the probability of a specific performance leading to a desired outcome. Expectancy is developed by past experiences, self-efficacy and one’s individual ability to carry out a task (Deery & Jago, 2015). The perceptions of instrumentality, valence and expectancy has the potential to affect one’s job satisfaction in the tasks carried out while at work. They also have the ability to affect one’s performance and motivation to pursue their daily roles.
2.6 Theoretical Gaps
Motivation theories have a niche when it comes to capturing the complexities of organizational behavior. The Maslow’s theory has obtained too much criticism due to its inflexible description of a human need. The theory which is strictly based on hierarchical functions specifies that an individual has certain needs that should be met at a particular time based on their significance. According to Claydon (2007), the Maslow’s theory is not clear on definite relationships between human behavior and their needs; tis makes it hard to predict when specific needs should be dealt with. Finally, we have the Maslow’s hierarchy of needs that just focuses on growth and development and lacks to exemplify on work motivation (Shahzadi, 2014). Aldefer’s theory has limitations in that, it does not shed light on job performance and its link to employee satisfaction. In addition to that it does not give content on how satisfiers implicate employee performance. It is similar to the Maslow’s Hierarchy of need’s theory in that it is rigid in outlining the elements that affect employee motivation and fails to highlight on human behavior complexity. The latter is a primary factor in making motivational factors defer based on one’s life and work situation. In conclusion, the expectancy theory is criticized for lacking to exemplify on the fact that motivational factors are different and that human preferences can never be the same (Raulf, 2014).
2.7 Study Rationale
The rationale of this study is to understand the topic of job satisfaction when it comes to international organizations. Job satisfaction is the attitude that a person has towards their job which is affected by different variables within one’s work place. Job satisfaction affects how good or bad a job is done also known as job performance. For that reason, it is important to study what makes employees satisfied, committed, dissatisfied or not committed to their assigned roles. The topic of job satisfaction is important for companies who are focused on attaining maximum performance from their workers. A research study of Job Satisfaction is therefore of benefit for both employees and employers. The Human Resource Management will be able to comprehend the means through which job satisfaction is achieved. Human resource administrators are constantly involved in controlling workforce in order to get paramount performance for the company. This dissertation, therefore, offers the best advice to a Human Resource team that may want to see positive results from their workers. Since job satisfaction increases one’s commitment at work, this topic should be constantly taught to the HRM so as that they can get the best out of employees. The rationale of the study is based on outlining and comprehending the most outstanding factors that affect job satisfaction which include; work environment, monetary and non-monetary benefits. The study therefore, intends to establish the effect of an effective reward system that could ensure employees feel satisfied and are motivated to work. If the study shows that organizational commitment and job satisfaction are correlated, then employers should strive at increasing one variable which in this case is job satisfaction.
Job performance within Coca Cola is different based where employees are situated. The Multinational organization has branches all over the world and this creates a platform for diversified results when it comes to job satisfaction and job performance. Hofstede’s taxonomy exemplifies five dimensions that may affect workers’ attitudes. The dimensions are important in understanding the concept of job performance variation at Coca Cola based on where a branch is situated. Studying employees’ needs at Coca Cola and the manner in which the firm tries to satisfy them helps other managers to comprehend the attributes that lead to the company’s success.
2.8 Chapter Summary
After studying vast literature on the factors that affect job satisfaction, extrinsic rewards stood out. A positive correlation was observed between job satisfaction and extrinsic motivation. Past studies illustrate that extrinsic rewards can contribute to a better job performance amongst workers. Expectancy and needs theories also illustrate that the ability to meet extrinsic needs such as; job security, salary, wages, social acceptance and promotion can influence and motivate workers to release better results while at work. These theories highlight that naturally, beings have certain needs that they believe should be met. The needs are based mainly on one’s needs to meet their personal growth goals. In a company set up, job performance is the only channel through which one’s needs can be met and satisfied. Therefore, the best mode for employees to get their needs expansively met is by putting more hard work. These desired outcomes push employees to be; creative, industrious and motivated to attain exemplary job performance. In the process of attaining the best job performance, job satisfaction is achieved. This proves that there is a positive correlation between; job performance, extrinsic motivation and job satisfaction
The research study methodology in this paper revolved around the archival literature research design. However, a brief case study was carried out on the Coca Cola Company. A thorough research was taken on varied electronic databases, books and journals which had helpful data for the topic. Varied search terms were important throughout the methodology process where the following key names were used; job satisfaction, job performance, monetary and non-monetary rewards. In this chapter, a deep scrutiny is undertaken to distinguish the varied methods through which relevant information was gathered, the nature of the whole research and techniques utilized in ensuring that data included in the dissertation was valid. The limitations faced during the whole process are also discussed.
3.2 Research Philosophy
A research philosophy is defined as the belief that guides a researcher on how to link information with a certain phenomenon (Brannen, 2017). There are varied types of philosophies in research methods but the two common one include; positivism and interpretivisim. The positivism philosophy utterly relies on scientific evidence such as statistics and experiments. Interpretivisim, on the other hand, is open to subjectivity. The interpretive research on the other hand, is a framework which relies on social science research in order to comprehend social reality. The interpretive approach was used in this study so as to understand the subject of satisfaction amongst employees. Through the utility of this philosophy, the researcher was able to garner enough information that would be of help to the study. The philosophy was also used in the dissertation so that the researcher could hypothesize the existence of positive link between employee performance and extrinsic motivation.
3.3 Research Approach and Design
The research design for a dissertation is composed through an analogous plan which points out methods that are appropriate for meeting one’s research objectives. Saunders, a Research methods expert, developed the Research Onion Model which has been used over the years in undertaking research studies. The design is composed of varied layers which outlines the various designs that one may use in their research. The diagram of the model is as follows;
According to Saunders (2009), there are two primary types of research approach which include; inductive and deductive reasoning. A deductive approach is concerned with the development of a hypothesis through the use of existing theories. The deductive approach was ideal for this study since over the years the topic of employee performance and motivation has obtained significant interest. These past studies have reported a positive correlation between the two variables hence the approach helped in creating a strong hypothesis. In conclusion, the deductive approach was viewed as the most effective since it is less time consuming.
The research study adopted an explanatory design which helped in comprehending the relationship between different variables. In this dissertation, the relationship between job performance and extrinsic motivation was studied by evaluating extrinsic motivation variables such as; training, promotion and salary. Their value in promoting employee performance was also analyzed. Based on the research findings obtained, the research identified that extrinsic motivation is a primary factor in the improvement of employees’ performance. 3.4 Nature of Research
The dissertation aimed at including authentic data by gathering information form published and proficient authors. The data collected had; to have sufficient answers for the study’s research questions as highlighted in the latter chapter as follows:
- What is the relationship between non-monetary benefits and job satisfaction?
- What is relationship between monetary benefits and employee satisfaction?
- What is the role of working environment on employees’ job satisfaction?
The research was objective by nature to reduce the chances of invalidity or outlining any biased information in the findings section.
3.5 Research Strategy
Saunders (2009) refers a research strategy as an elaborate road map used in helping a researcher obtain one’s research study’s objectives. In the onion model, common research strategies include; ethnography, case study, archival literature research, grounded theory and experiments (Bryman, 2017). In this dissertations, a systematic archival literature research strategy was used. The strategy was chosen due to the fact that it can help attaining the study’s purpose. The strategy involves the collection and analysis of information from past books or any other literature resources (Saunders, 2009). In addition to this, a case study methodology will be applied. This type of research strategy involves the examination of a real life present phenomenon. The strategy also involves in-depth examinations of a study subject and contextual conditions. In this study, a case study was undertaken on the Coca Cola company. Case studies are mainly used in exploratory research studied so as to generate new ideologies on the topic being studied. Through the study of Coca Cola Company means of rewarding employees, the study will identify the best approaches that can help in boosting job satisfaction.
The best choice for the dissertation was qualitative in nature whereby answers derived from the literature was used in the findings section for evaluation. Throughout the process, the researcher ensured that the research strategy was in line with existing knowledge about the topic and the objectives mentioned in the first chapter.
3.6 Method of Data Collection
In any research, a researcher has the platform of using single data methods also known as mono methods or use various data collection strategies known as multiple methods (Bryman, 2017). Mixed methods mainly entail quantitative and qualitative methodologies (Creswell, 2012). The researcher of this dissertation opted to use the mono method which was qualitative in nature. In order to come up with logical findings there was a need to develop a criterion for the whole process. In studying archival literature, there is always a need for developing a procedure in which information is gathered and arranged in order to come up with a concrete study (Saunders, 2009). In this dissertation, the following procedure was followed
Framing: the archival literature to be chosen for this study was framed in these values; strong theoretical framework, uniqueness, organized and a lack of biasness. The framed attributes made sure that content chosen from literature was fit for the study.
Search and Assessment Phase: this phase involved looking out for relevant literature materials mainly looking at books and journals that have been published as authentic. The procedure independently relied on the goals and objectives set for the dissertation. The particular books included in the second chapter were chosen through this method. Common data bases used in finding the right information included; CINAHL, Researchpub and Google Scholar. Keywords used in these databases included; benefits in Coca Cola Company, job satisfaction, job performance, monetary and non-monetary rewards. The databases produced over 1, 000 citations that could not be all used in the study hence the researcher chose a few books that were quite direct on the topic and those that shared the same objectives with the dissertation.
Synthesis Phase: The basic aim of synthesizing is trying to elaborate what previous studies have outlined about the topic of ‘job satisfaction’. Knowledge obtained from the phase was used in structuring the fourth chapter entitled “Findings and Discussions”.
Interpretation Phase: Content found in the archival literature had to be interpreted so as to identify facts and any underlying issues that may have not be critically looked at by past literature. The gaps discovered were important since they can act as a platform for future research.
Conclusion Phase: the phase involved the compilation of distinct data collected from archival literature. In this phase, the researcher drafted; key insights, unavoidable biases, limitations and the lessons learnt from the whole process. The phase was vital in writing the conclusion chapter as well as recommendations.
In order to meet a dissertation’s standards, a researcher has to meet the following; validity, consistency and reliability (Bryman, 2017). Reliability is a term used in research methods to refer to consistency when it comes to obtaining results of a study. Any bias noted in a source for information acts as a threat to reliability (Brannen, 2017). This research study strived at ensuring that validity and reliability was maintained throughout the whole process. Any exaggerations or understatements from the archival literature was not included in the dissertation to maintain the three. A great means of maintaining consistency was chosen literature materials that had shared objectives with the research.
Issues of ethics are considered as comparative in any research study especially when deriving information from outside sources (Brannen, 2017). Authors always have their own guidelines on how readers should use information hence the researcher was careful not to go against the standards. To avoid any ethical repercussions, no information was plagiarized or transferred directly in the various chapters of the dissertations. To enhance research ethics, the following were considered throughout; fairness, integrity and uprightness.
3.9 Research Limitations
While collecting secondary data, various limitations were faced. Data regarding rewards offered by the Coca Cola Company were not easily found. The objectives of the study were to highlight each and every reward given in monetary or non-monetary form. This however, was not easy to find in archival literature. A lot of time too was spent in finding the right sources from the data bases. All in all, the barriers were faced and the methodology chosen was of utility.
4.0 Findings and Discussion
4.1 Effects of Extrinsic Motivation on Job Satisfaction
In the current fast moving universe, diversity has made it more important for big companies to ensure that they have an integrated and holistic approach when it comes to the provision of rewards. Due to the tight competition in the beverage industry, Coca Cola has now more than before required the support of a more involved, motivated and informed employees. Extrinsic motivation can be termed as the forces that that impact individuals to the extent that the take certain action so as to attain desirable objectives in the long run. Extrinsic motivational tools are varied based on organizational set ups. These tools can either be monetary or non-monetary. Based on the vast literature studied, it is important to note that monetary and non-monetary benefits act as a primary motivator in promoting job performance and satisfaction.
There are vast opinions that run amongst stakeholders of the Coca Cola companies on the effects of monetary and non – monetary rewards on job performance. This indicates that each reward has its own pros and cons. It is surprising that monetary rewards do not have an adverse effect on motivation as expected. Perceptions amongst human beings are different and this affects the effectiveness of each reward. Monetary rewards are termed as the incentives given to workers of a company in a physical form of money (Landry, 2017). Some workers are actually motivated to perform if there is money involved. In Coca Cola Company, monetary incentives are provided based on an employee’s performance. Monetary incentives offered to a worker are direct benefits to appreciate one’s efforts in their duties. These benefits given by Coca Cola Company include: salaries, bonuses, profit sharing, commissions, stock options and merit pay (Coca Cola, 2016). Hereby are definitions of the most used monetary incentives in this multinational organization.
A base salary is considered as the average annual or monthly salary rate given to employees. The salary is based on personnel policies assigned to each worker’s position. Base salary is a representation of straight time worked in an organization. In Coca Cola, the standard time for work weekly amounts to 40 hours (Coca Cola, 2016). According to Belle, (2015), base salary should be a periodic payment that an employer should offer an employee according to what is stated in the contract. This is a contrast to piece wages whereby each hour or job is paid separately rather than following a periodic system. Base salary in a company is a cost that is paid for acquiring specific human resource labor.
Overtime payment is always offered in form of cash as a compensation for excess time worked in a company. At Coca Cola, overtime Payment is considered as premium time and rates given in form of monetary terms; the compensation is normally 1.5 times of the normal base pay per hour (Coca Cola, 2016). Bonus refers to cash payment that is offered to workers based on their job performance. For instance, a company can choose to offer cash incentives to an employee for attaining certain targets. According to Hsieh, (2010) a bonus is a single lump-sum payment which can be in form of stock or cash. It can also be defined as any payment that workers are not paid regularly. These type of payments are given for either collective or individual performance. Coca Cola distributes its bonuses randomly and the amount given is determined by one’s contract.
Monetary incentives are easy and straight forward channels to bring out specific behaviors (Temminck et al, 2015). The means of compensation does not require extensive personalization since everyone in an organization always gets paid. This type of reward is mostly utilized in attaining short term goals for companies, accelerating productivity and minimizing problematic issues. A good incentive scheme that offers fair monetary rewards aids in improving employees’ attitudes and improving the work environment. It can also be a great way of motivating top performers for their efforts.
At Coca Cola, top performers are most given promotions which come with higher monetary rewards (Coca Cola, 2016). An element of control is felt in the organization due to the well-arranged paying schemes from subordinates to highly ranked employees. If incentives are only based on a competitive scale in the company, a negative environment is promoted where workers are always trying to outshine their acquaintances (Fisher, 2015). On the surface that sounds like it can positively affect performance of employees, but in reality, it can sabotage team work efforts. This is mainly because workers focus on their own goals which is not a good element in promoting organizational performance. Monetary incentives come at a cost especially when it comes to implementation.
A non – monetary reward is a benefit given to workers of a firm so as to increase their job satisfaction, loyalty, job performance and morale (Allen & Helms, 2002). As the name suggests the reward does not involve any direct money. Non – monetary rewards gets benefits such as; promotions, flexible timings, insurance policy, food coupons and company under forms (Fisher, 2015). According to varied literature studied, non – monetary rewards have more advantages to a company since it involves emotional bondage with the worker which utterly effects their loyalty (Groen et al 2017). The latter is paramount in promoting work performance.
Non – monetary rewards such as development programs and training in a firm has positive effects on workers’ satisfaction (Fisher, 2015). The incentive has been surveyed to prove that indeed it can help boost proficiency amongst workers. These rewards are mostly incorporated with special rewards programs which tend to recognize all workers’ efforts. The utility of non – monetary rewards such as training in Coca-Cola Company has always brought out better results in organizations (Rumpel & Medcof, 2006). Leaders in charge set up elaborate training programs which target to incorporate certain skills in the employees. The attainment of skills in an organization creates a sense of fulfillment amongst workers which motivates them to improve in their assigned roles.
4.2 Workplace Environment Effects on Job Satisfaction
A workplace environment is alluded to be any entity which surrounds an employee and affects the way one works (Jayaweer, 2015). It made up of both external and internal conditions which can affect a worker’s working spirit. A workplace environment and satisfaction are mostly viewed as opposites by some companies (Shaw et al 2001). This is due to the fact that they perceive the factor as non-productive hence it should not have too much consideration. Such management believe that productivity within employees should be attained by working on employees’ skills. It is ignorant to have an opinion that a workplace environment is not important since most productivity issues arise from the environment that employees work in (Awan & Tahir, 2015). Any management should be aware that low job satisfaction should be an indicator of a malfunction within the workplace. It is therefore right to state that “The type of work environment offered to workers is a high determinant in how they perform”. (Groen et al, 2013). Workers’ productivity is viewed as the soul of any multinational organization. The success of a company is quite dependent on how the workers operate while at their workplace. Employees who always put some extra effort make a huge difference towards organizational excellence (Kvaloy et al, 2015). Workplace environment is a huge platform for breeding an employee’s performance this is due to the fact that it is the immediate ground where the employer and employee coexist to achieve organizational goals. Coca Cola Company has strived to create a habitable environment in which workers can co-exist and carry out their duties with less hurdles. Both internal and external conditions are well maintained to ensure that the organizational performance is not tampered with due to bad conditions. A company’s work environment, therefore, is significant in affecting workers; satisfaction and performance while at work.
4.3 Limitations of Extrinsic Motivation
Extrinsic motivation is a great way of enhancing workers’ performance (Nelson, 2012). Nevertheless, the impact of extrinsic tools of motivation is utterly limited by several factors. The most paramount one is that once the tools of extrinsic motivation are initiated, be it, monetary or non-monetary, an organization has to continually sustain the tools in order to maintain the anticipated level of performance. Groen et al (2017), noted that workers tend to put forth minimal effort in their roles when extrinsic motivational tools are offered and cease to produce results if they are withdrawn. For example, salaries initiate a short term excitement at the point when they are given hence its effect is temporary. Rewarding workers with monetary and non-monetary incentives such as; promotions, salary increments and training can contribute a negative effect on employee teamwork since the workers tend to focus on individual productivity (Aziri, 2011). Extrinsic incentive systems are therefore likely to face challenges while trying to promote employee performance.
Chapter 5: Conclusion and Recommendations
As noted by Belle, (2015), any form of compensation can act as an essential contributor only if it has relevance towards the people receiving it and it is basically tied to the worker’s job satisfaction in a manner which is credible. Without the implementation of job rewards’ programs, a firm is opening chances for; low productivity, long term failure and high turnover. Herman (2005) states that rewards aids workers to focus on their duties and positions; and it also strives to impact a worker’s present and future work performance based on how satisfied they are with their job. Workplace performance extrinsic motivators include both non – monetary and monetary rewards (Abdula & Wan, 2013). Both rewards are varied though they have a large effect on a worker’s job satisfaction which has an impact on their performance. Monetary rewards within a modern setting is a transferable physical means of meeting a worker’s fundamental requirements (Landry, 2017). It is apparent that social requirements, protection and physiological satisfaction can be achieved by the use of money (Kianto et al 2016). A salary is considered as an extrinsic motivational element. Most firms use this measure as an acknowledgement of employees’ efforts (Armstrong, 2006). Salary given to workers should always be confidential but transparent so that workers can feel secure working for a firm. Opportunities related to promotions are very crucial especially when it comes to career growth (Dorris, 2017). A company should always be committed towards offering equal professional development for its workers. Training is a great means of improving employees job satisfaction and performance since it enhances their; attitudes, skills and knowledge. Most workers join companies not only to get a specific position but also to develop their professional growth. The chance to obtain training aids employees to advance their capabilities and skills in their assigned roles (Judge et al, 2001). It is therefore important for companies to create training sessions that can help workers feel secure about their professional growth; this ultimately helps in achieving better performances from employees. Workplace environment is a huge platform for breeding an employee’s performance this is due to the fact that it is the immediate ground where the employer and employee coexist to achieve organizational goals. When a company provides a conducive environment, employees absolutely get satisfied being within the company which boosts their loyalty.
This dissertation establishes that extrinsic factors which include monetary and non-monetary rewards such as; promotion, training and salary have a significant effect on workers’ performance. Enhanced performance is attained by utilizing various forms of motivation (Allen & Hems, 2002). Thereby, the study concludes that the incorporation of the various extrinsic motivational tools is a great means of motivating workers and boosting their job satisfaction. The research study also discovers that the value of these factors may lose its relevance at a certain point. The management should be accurate when creating and developing new incentive systems so that they can always meet the needs of their workers. By being keen on workers’ needs, an organization can now expect paramount performance and job satisfaction from its employees.
Extrinsic motivation is the best platform that a company can use in motivating its workers. In most firms, the tool is used and has aided tremendously in ensuring that maximum performance is achieved. Factors discussed in this study have huge impacts on workers. These tools include; training, promotions and salary. The utility of each of them has been pointed out as a foundation for improving performance. Based on this research study there are varied recommendations that can be applied by both established and upcoming organizations. They include;
- Firms should develop a constructive appraisal program that can enhance employee performance tremendously. This system should be constructed with consideration of each employee’s effort. The focus of this system should be to push workers to strive harder in order to get recognition from the established appraisal system.
- So as to motivate employees, the management should look in to improving the staff’s working environment. This is an extrinsic mode of ensuring that the workers have some motivation to produce exemplary results.
- Leadership styles can either motivate or demotivate members of staff. Management should therefore be careful in how they deal with workers. The latter’s needs should always be put first and should be catered for maximally. Developing an upright relationship with employees can improve their attitude at work thereby making them release good results from their tasks.
- An exemplary remuneration system should be crafted in a firm so as to offer workers with better salary incentives and bonuses. Monetary benefits such as salary boost is great means of ensuring workers are highly stimulated.
- A great interpersonal relationship should be developed amongst workers. The act of boosting team work in a company motivates employees to be hardworking and highly motivated in a workplace. The same cooperation should be seen between supervisors and managers.
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