Reward program influences : employees perceptions in Malaysian private organizations

Abstract

Previous researches on non-monetary rewards have explored ways in which psychological phenomena can enhance the motivational power which may reduce or eliminate any inherent advantage of cash as an incentive to employees. However research on reward program influences in Malaysian private organizations is almost non-existent. Literature also suggests that non-monetary rewards alone do not motivate. This study focuses on the antecedents of cultural orientation, Islam Hadhari’s principles and environmental factors (internal and external) that may influence the perception held by exempt employees of Malaysian private organizations on non-monetary and monetary rewards. This study further investigates the relationship between the Malaysian cultural orientation, Islam Hadhari’s principles, environmental factors and perceptions of non-monetary and monetary rewards toward the reward program influences. The other important aim of the study is to identify the moderating role of organizational characteristics, i.e. organization size and ownership status between cultural orientations, Islam Hadhari’s principles, environmental factors (internal and external) and perceptions of non-monetary and monetary rewards.The study adopted a positivist paradigm and a two-phase sequential mixed method research design consisting of qualitative and quantitative approaches. A tentative research model was first developed based on an extensive literature review. In the first phase, the qualitative field study was then carried out to explore the perceptions of non-monetary and monetary rewards in the Malaysian private organizations. The findings from the qualitative study were then combined with initial research model and literature review to develop the final research model, which was then used to develop measures and instruments. In the second phase of the study, data were collected by questionnaire survey of 1000 exempt employees in Malaysian private organizations. 329 valid questionnaires were obtained. The responses were analyzed using Partial Least Square (PLS) based Structural Equation Modeling (SEM) approach.The results of this study showed that femininity orientation, Islam Hadhari’s principles specifically mastery of knowledge and good quality of life, and external environmental factors have positive influences on employees’ perceptions of non-monetary and monetary rewards. However, surprisingly the relationship between internal environmental factors, Islam Hadhari’s principles of balance and comprehensive economic development, and also cultural and moral integrity and non-monetary and monetary rewards were found to be non-significant in this study.This study also confirmed the influence of non-monetary rewards on reward program influences of employees’ contribution, productivity, loyalty except employees’ turnover was found to be non-significant in this study. The results also showed that perception of monetary rewards was significant in relation to employees’ contribution, productivity, loyalty as well as turnover. The findings also revealed the negative/positive, and also significant and nonsignificant relationships between the factors tested in this study in the existence of the moderating variables of organizational size and ownership status. The detailed of the results were discussed comprehensively in the thesis.This study contributes to the existing literature as there has been little evidence and attention found in the literature relating to cultural orientation, Islam Hadhari’s principles and environmental factors (internal and external) with non-monetary and monetary rewards. This study also indicates that Islam Hadhari’s principles does play a very important role in encouraging the intellectual, spiritual (intrinsic rewards) and physical development in Malaysia. The study also will benefit the human resource practitioners theoretically and practically by providing direction and suggestions in designing and implementing the nonmonetary and monetary rewards for Malaysian private organizations from Islamic perspectives.