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Satisfaction
I, Ajish Raju hereby declare that this report titled Impact of Incentives and Work life
balance on Job Satisfaction is a bonafide record of the Dissertation work done by me as part
of partial fulfillment of the award of the degree, Post Graduate Diploma in Management program
from Rajagiri Business School, Kochi.
I also declare that this report has not been submitted to any other university /board for the award
of any degree/diploma.
Place: Kochi
Ajish Raju
Date:
ACKNOWLEDGEMENT
The satisfaction that implies the success of any task would be impossible without the mention of
the people who made it possible, whose guidance and encouragement are valuable to me.
First of all I thank the God Almighty for his immense grace and blessings at each and every
stage of my dissertation.
Then I would like to express my gratitude to Dr.Binoy Joseph, Principal,Rajagiri Business
School, for granting me the opportunity to do the study.
I am thankful to my Faculty Guide, Prof. Shelly Jose faculty, Rajagiri Business School, Kochi,
for giving me his valuable guidance to execute the study as per the institution requirements and
for all the support he gave throughout my dissertation. I would also like to thank Dr. Imran
Khan and Prof. Saji George, Jury Members who extended their helping hands at various stages
of my study.
I would also like to thank my parents for their invaluable support and guidance, without which
this report would not have been possible.
I would like to thank all the respondents who cooperated whole heartedly and patiently in
providing me with the data by filling the questionnaire.
I am also thankful to all other faculty and friends who had extended their support and
contributions, which helped me in improving my dissertation.
Thanking You,
Ajish Raju
TABLE OF CONTENTS
PAG
DESCRIPTION
E
NO.
ABSTRACT..........................................................................
..........
INTRODUCTION.
LITERATURE REVIEW.
RESEARCH DESIGN
ANALYSIS AND INTERPRETATION.
FINDINGS AND RECOMMENDATIONS
CONCLUSION
BIBLIOGRAPHY.
ANNEXURE......
1
2
5
10
17
27
29
30
31
LIST OF TABLES
Serial
no.
Table 4.1
Table 4.2
Result of reliability
Correlation between F, NF and WFB with
Satisfaction
Regression model for Financial incentives and
satisfaction
Regression model for Non-Financial incentives and
satisfaction
Regression model for Work life balance and
satisfaction
Table 4.3
Table 4.4
Table 4.5
Page
No.
Job
17
19
Job
21
Job
22
Job
25
Abstract
Impact of incentives and work life balance on employees motivation represents an
issue that continuously provokes interest for discussion and research. The aim of
this paper is to evaluate the extent to which incentives and work life balance leaves
an impact on job satisfaction levels of employees. The questionnaires prepared for
this purpose were distributed to random employees. The data obtained from the
research are analyzed via several techniques by using SPSS 20.0 program.
According to the results of the analysis, a significant relation is observed between
the financial, non-financial incentives and work life balance with the job
satisfaction levels of employees. But among the three, work life balance has higher
impact on job satisfaction level followed by financial incentives and non-financial
incentives.
1. Introduction
Incentive is the concept which has become a key aspect for attracting, encouraging
and retaining the efficient employees in the organization. According to Bennett and
Minty(2005), incentives are viewed from two broad perspectives. They are
financial incentives and Non-financial incentives. The study of Kreitner and
Kinicker(2001) revealed that financial incentives has a short term result in
encouraging and stimulating workers for higher performance. But Dorenbosch, De
Reuver & Sanders (2006) explained in their study financial reward goes a long way
in determining their effectiveness and commitment towards their goals and
objectives. When high performances are recorded for employees, it must be
supported with a basis for recognition and promotions.
In the recent trends, many companies have been using some kind of incentive
system to motivate and reward their employees. Companies are using up lots of
money in their incentive system because of its popularity. A study, for example did
their research on companies of Finland, and about 65% companies have developed
new reward system in the last three years (Salimki, Sweins, Heiskanen &
Laamanen 2009, p.6). The rapid growth and development in the world has created
new activities and new doors for all business organization. The globalization trend
has put the organization hard to retain their competitive advantage.
Organizational changes due to downsizing, mergers/ acquisitions and radical
changes in technology have changed the work setups. The employees in present are
more involved in their jobs than in the last decade. The long working hours, work
pressure, high demanding jobs, use of sophisticated technology made it difficult for
employees to keep a balance between their job and work commitments. Changing
societal trends, such as an increase in the number of women entering the workforce
2
combined with an economy that requires dual incomes support an average standard
of living, contribute to work life conflicts.
Personal life and work life are two sides of the same coin. According to various
surveys on work life balance, 65% of the people are finding it difficult to find a
balance between their personal and professional life. Traditionally creating and
managing a balance between the work-life was considered to be a woman's issue.
But increasing Work pressures and Globalization have made it an issue with both
the gender, all professionals working across all levels and all industries throughout
the world. Achieving "work-life balance" is not as simple as it sounds.
The crucial function of Human Resource management is to implement practices
that enhance the satisfaction of employees with their jobs. Consequently,
enhancing job satisfaction is considered to be a win-win proposition. Indeed, job
satisfaction has been the focus of thousands of studies in management since
Hoppocks (1935) analysis. Employees expect financial and non-financial rewards
for their services and effort. In the absence of equitable pay, training and
development opportunities and recognition, employees do get dissatisfied and do
not perform the standards. The benefits that employees foresee for them and their
families motivates them to give their best.
There has been a long discussion about the success of incentives on the motivation
of employees in the literature, which claim that it has a positive effect on it. But at
the same time, there are also many others, which also argue that it has low or
negative effect. Hence, it is really important for the companies to know at what
extent these incentives affect the job satisfaction levels of employees. Therefore, it
is important to know which incentives do they accept and which do not serves its
purpose.
3
2. Literature review
There are many studies in the literature that examine the effects of incentives and
work life balance on several variables. Scheepers (2009) also examined the extent
to which incentives system affected the motivation of employees at IT firms.
According to the result of the study, an entrepreneurial reward system tends to
focus on formal acknowledgement, social incentives and organizational freedom of
4
Good WLB is a vital reason for the organisations success because it leads to
higher productivity (Bloom et al. 2006). Organizations always look for higher
productivity from their employees, whereas employees always look for deriving
satisfaction from their work and family life. The interests of both the employee and
the employer may conflict quite often, which results in dissatisfaction both among
employees and for the employer. Organisations may believe that they need to
exploit all the abilities of a worker and they will normally turn a blind eye towards
the personal needs of the employee.
Financial incentives and Job satisfaction:
Salau et al. (2014) studied the adoption of financial incentive in motivating
employees for higher performance at a state hospital. Nelson and Quick (2005)
analyzed the role of pay on job satisfaction. The use of monetary reward has
become indispensable in stimulating employees performance. In every
organization, especially in the manufacturing sectors, the use of pay, bonus,
compensation, profit sharing, etc has played a major role in motivating and
retaining workers for higher performance and commitments (Osibanjo, Adeniji,
Falola, and Heirsmac, 2014). Studies have indicated that when salaries of workers
are paid consistently, then it motivates them for to work willingly without the use
of coercion, while the absence of this leads to intention of workers to leave,
absenteeism, labour turnover, pilfering, lower commitment and low job satisfaction
levels. People work for organizations in exchange of money to satisfy their
immediate needs. The pay which comes in exchange for work done gives
employees a sense of satisfaction and eventually facilitates employee retention. So,
for organization to survive and be productive, the employees must be attracted,
rewarded and retained (Burgess Simon, & Ratto Marisa, 2003; Cheng & Ho, 2001;
Bartlett, 2001)
6
employees greater opportunities and that these will either directly or indirectly
influence their satisfaction on the job.
Work life- balance and Job satisfaction:
Grove and Crooker, (1995) have mentioned that flexible work hour and childcare
polices could increase employees satisfaction and commitment to the organisation.
It is not necessary that family and social commitments associated with the workers
are all the same. In other words, no two workers are alike as far as their social and
family commitments are concerned. For example, the family and society
commitments of a single person may be less compared to a married person. So it
may not be possible for a married person to extend his/her working hours like a
bachelor and still be able to achieve WLB.
Well managed firms have realized the importance of WLB in increasing the
productivity of an employee. They have realized that only an employee with a
peaceful mind will be able to concentrate on his/her work and to increase his/her
productivity.
Work life balance is not only about families and childcare, but also about working
less. It is about working smart (Almidani, 2008. p.13). Asadullah and Fernandez
(2008) examined the role of work-life balance practices and jobs satisfaction in
Gender Gap in the UK and they found that WLB practice has a positive
relationship with job satisfaction as the females reported higher level of job
satisfaction than men. Also, their results prove that having good WLB practice
increase job satisfaction.
Herzbergs two-factor theory explained how best employees needs can be met and
satisfied. The study argued that the factors leading to job satisfaction are separate
and distinct from those that lead to job dissatisfaction; hence, the term two-factor
theory which simply refers to motivators which are related to job content. Herzberg
revealed that the job content or the motivators focus on task significance, task
identity and the notion a worker has on his/her job. It includes the following: the
work itself, respect, advancement, a sense of achievement and responsibilities. On
the other hand, Herzberg recognized the second factor as the hygiene factors which
are related to the job context. The job context refers to the environment in which
the job is performed. It also includes: Company policy and procedure, supervision
and administration, pay, working conditions and relationship with superior and coworkers
3. Research Methodology
Title of the study:
Impact of Incentives and Work-life balance on Job Satisfaction
Statement of Problem
To examine the impact that incentives and work life balance leaves on job
satisfaction levels.
Purpose of the study:
Hence, the purpose of the study is to know to what extent incentives and work life
balance affect the job satisfaction levels. This study will help the organization to
focus accordingly on those variables that adds more value to ones satisfaction with
9
the job. The findings of this study will help the organization to implement rewards
as well as work life balance arrangements in an effective way.
Aims and Objectives:
The aim of this study is to determine as to what extent incentives and work life
balance affects the job satisfaction levels.
To analyze the attitudes of employees towards financial incentives
To analyze the attitudes of employees towards Non-financial incentives
To analyze the attitudes of employees towards work life balance.
To analyze the relationship between financial incentives and job satisfaction
To analyze the relationship between Non-financial incentives and job
satisfaction
To analyze the relationship between work life balance and job satisfaction
To analyze the effectiveness of each
10
The former involves identifying what workers value and their confidence in doing
their job sufficiently well to receive rewards, as well as their expectation of getting
the rewards they desire.
Work life balance practices are organizational changes designed to reduce work
family conflict. These work life balance practices enable employees to be effective
in both work and personal roles. The more control an employee has on their lives
the more able they are to balance work and family.
(Iqan lazar, 2010) Conclude that, a successful balance between work and non work
roles are beneficial for both employee and employer. And this balance in work and
life domains enhances quality of personal relationship and organizational
outcomes.
Variables:
Independent variable: Financial incentives, Non-financial incentives and Worklife balance
Dependent variable: Job Satisfaction
Definition of variables:
Financial incentives:
Theoretical definition- According to Armstrong (2012) financial rewards comprise
all rewards that have a monetary value and add up to total remuneration. These
rewards include base pay, merit pay, skills based pay, incentives, and service
11
related pay, bonuses, financial recognition schemes and benefits such as pensions,
sick pay and health insurance
Operational definition- Financial incentives like bonus, allowances, pay hike and
discounts offered to consumers, employees and organizations to encourage
behavior or actions which otherwise would not take place.
Non-financial incentives:
Theoretical definition- A non cash award given in recognition of a high level of
accomplishment or performance such as customer care or support to colleagues,
which is not dependent on achievement of a pre-determined target.(Rose 1998)
Operational definition- Non-financial incentive is a method of identifying either
individual employees or teams for particular praise or acknowledgement.
Work-life balance:
Theoretical definition- Clark (2000) defines work-family balance as satisfaction
and good functioning at work and at home, with a minimum of role conflict
Operational definition- The act of achieving a balance between the two competing
demands of work and personal life
Job satisfaction:
Theoretical definition- A pleasurable or positive emotional state resulting from the
appraisal of one's job or job experiences (Locke,1976)
Operational definition- Job satisfaction means a positive or pleasant emotional
state that principals and educators experience when their work is in harmony with
their needs and values
Background:
12
This chapter explains the different research options that were used in this study
such as the design of the research, sample characteristics, the variables of
hypotheses which will be tested, data collection and analysis. In addition this study
intends to investigate the relationship between Financial incentives (pay, bonuses,
profit sharing), Non-financial incentives (develop skills and abilities, social
security and health benefits and career opportunities), work life balance and Job
satisfaction levels (pay, working condition, supervisor, steady employment, co
workers, feeling of accomplishment and praise)
Financial incentives
Non-financial incentives
Job Satisfaction
Furthermore, the study intends to explain to what extent incentives and work life
balance have an impact on Job satisfaction levels. Job satisfaction will be
considered as a dependent variable because it depends on multiple factors such as
employees salary, promotion, supervisor style, co-workers and tasks. On other
hand, financial incentives, non-financial incentives and work life balance can be
considered as independent variables. Regression and correlation analysis will be
used to examine the relationship between independent variable and dependent
variables. Therefore the questionnaire method was considered to be one
appropriate method for this study.
The data was collected from full time employees in the companies based in
Infopark, Kochi. A total number of 129 employees from middle and bottom
13
14
Job satisfaction: This variable was measured using 9 items scale developed by
Suliman (2002) using Likers five point format. The scale included items of job
satisfaction.
Research Hypothesis
H1: There exist a positive relation between financial incentives and job satisfaction
levels
H2: There exist a positive relation non- financial incentives and job satisfaction
levels.
H3: There exists a positive relation between Work life balance and job satisfaction
levels.
15
Financial
incentives
0.63
Cronbachs
alpha
Table 4.1: Result of reliability
Non-financial
incentives
0.672
Work
balance
0.795
life Job
satisfaction
0.898
It can be seen from the table, the Cronbachs alpha was found to be financial
incentives (0.63), non-financial incentives (0.672), work life balance (0.795) and
Job satisfaction (0.898). Hence, the scales used in this study are reliable with
acceptable level of internal consistency.
16
Correlation Analysis
The tools used for the analysis are Karl Pearsons Correlation Coefficient and
Regression analysis. The Karl Pearson correlation coefficient is a measure of linear
association between two variables. The significance level (or p-value) is the
probability of obtaining results as extreme as the one observed. If the significance
level is very small (less than 0.05) then the correlation is significant and the two
variables are linearly related. The sign of the correlation coefficient indicates the
direction of the relationship (positive or negative). The absolute value of the
correlation coefficient indicates the strength, with larger absolute values indicating
stronger relationships. The significance level (or p-value) is the probability of
obtaining results as extreme as the one observed. If the significance level is very
small (less than 0.05) then the correlation is significant and the two variables are
linearly related. If the significance level is relatively large (for example, 0.50) then
the correlation is not significant and the two variables are not linearly related
17
18
Hypothesis 2: There exist a positive relation between non- financial incentives and
job satisfaction levels.
The value for Correlation between Non-financial incentives and Job satisfaction is .
775, which states that the above hypothesis is correct.
Hypothesis 3: There exists a positive relation between Work life balance and job
satisfaction levels.
The value for correlation between Work life balance and Job satisfaction is .828,
which states that the hypothesis holds true in this case. The value which is closer to 1
is highly correlated, which indicates that work life balance is highly correlated with
job satisfaction levels than financial incentives and non-financial incentives.
Regression Analysis
Regression analysis was undertaken hierarchically to test for significant interaction
effects over and above the simple effects of the independent variables. R, the multiple
correlation coefficients, is the correlation between the observed and predicted values
of the dependent variable. The values of R for models produced by the regression
procedure range from 0 to 1. Larger values of R indicate stronger relationships. R
squared is the proportion of variation in the dependent variable explained by the
regression model. The values of R squared range from 0 to 1. Small values indicate
that the model does not fit the data well. The sample R squared tends to optimistically
estimate how well the models fit the population. Adjusted R squared attempts to
correct R squared to more closely reflect the goodness of fit of the model in the
population.
Table 4.3: Regression model for Financial incentives and Job satisfaction
From the above table we can arrive at the following equation
Y=4.494+2.525X; where
Y stands for the dependent variable Job satisfaction and X stands for the
independent variable Financial incentives.
20
The model summary table indicates R and R square value. The R value represents
the simple correlation and is 0.797 (the "R" Column), which indicates a high
degree of correlation. The R2 value (the "R Square" column) indicates how much
of the total variation in the dependent variable, Job Satisfaction can be explained
by the independent variable-Financial incentives. In this case, 63.6% can be
explained, which is very large.
The ANOVA table indicates that p < 0.0005, which is less than 0.05, and indicates
that, overall, the regression model statistically significantly predicts the outcome
variable (Job satisfaction) (i.e., it is a good fit for the data).
The coefficient table indicates that Beta value of financial incentives (.797).
Higher the beta value, higher will be the impact of independent variables on
dependent variable compared to other independent variables which is measured in
terms of standard deviation units.
21
Table 4.4: Regression model for Non-financial incentives and Job satisfaction
The model summary table indicates R and R square value. The R value represents
the simple correlation and is 0.775 (the "R" Column), which indicates a high
degree of correlation. The R2 value (the "R Square" column) indicates how much
of the total variation in the dependent variable, Job Satisfaction can be explained
by the independent variable-Financial incentives. In this case, 60.1% can be
explained, which is very large.
22
The ANOVA table indicates that p < 0.0005, which is less than 0.05, and indicates
that, overall, the regression model statistically significantly predicts the outcome
variable (Job satisfaction) (i.e., it is a good fit for the data).
The coefficient table indicates that Beta value of financial incentives (.775).
Higher the beta value, higher will be the impact of independent variables on
dependent variable compared to other independent variables which is measured in
terms of standard deviation units.
23
Table 4.5: Regression model for Work life balance and Job satisfaction
The model summary table indicates R and R square value. The R value represents
the simple correlation and is 0.828 (the "R" Column), which indicates a high
degree of correlation. The R2 value (the "R Square" column) indicates how much
of the total variation in the dependent variable, Job Satisfaction can be explained
24
25
Similarly for Second hypothesis, the Correlation value observed is .775 which
indicates that there is a significant relation between Non-financial incentives and
Job satisfaction.
Lastly for Third hypothesis, the Correlation value observed is .828 which indicates
that there is a significant relation between Work life balance and Job satisfaction.
Referring to Table-2, the observed R square value is .636(63.6%) which indicates
the variation in the job satisfaction levels that can be explained by financial
incentives.
Referring to Table-3, the observed R square value is .601(60.1%) which indicates
the variation in the job satisfaction levels that can be explained by Non-financial
incentives
Referring to Table-4, the observed R square value is .686(68.6%) which indicates
the variation in the job satisfaction levels that can be explained by Work-life
balance.
It can be observed from the beta value of all the three variables, Work life balance
(.828) leaves higher impact on Job satisfaction levels followed by financial (.797)
and non-financial incentives (.775).
Recommendations
Since the study was conducted among the random employees of Info Park, Cochin.
Organizations pertaining to that area need to focus more on their work life
arrangements such as flexi time hours, Job share arrangements, Maternity leave
arrangements, Compassionate leave arrangement, Emergency care of dependents
etc
26
Many researches has been conducted on incentives and work life balance affecting
job satisfaction whereas while given an alternative to choose among the three
variables, many employees have more positively responded to work life balance
rather than incentives. One can further extend the research by including variables
pertaining to satisfaction of employees from their job.
6. Conclusion
The study focused on finding out to what extent incentives and work life balance
affects the job satisfaction levels of employees. The researcher based on the
responses collected and the analysis done was able to reach an outcome, which
showed that significant relationship exists among financial incentives, nonfinancial incentives and work life balance on job satisfaction levels. Hence it
validates the hypothesis as true. Analysis part was done using self administered
questionnaires among the employees at info Park, Cochin. The results are in line
27
28
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Annexure
Note: 5-point Likert scale (1-Strongly disagree, 2- Slightly Disagree, 3Neutral, 4- Slightly agree, 5- Strongly agree)
In my job, I am getting enough
payment to meet the requirements
of life
In my job, incentives are paid
according to my performance
My organization is keenly
interested in sharing its profits with
me
30
4
5
31