The role of employees in an organization

Research Topic

The topic of this research work is to assess the impact of reward system on the motivation and performance of caregivers in the health sector of Saudi Arabia. Implementation of effective human capital and enhancing their productivity has become one of the major challenges in all organizations, especially in healthcare organizations. Aktar et al. (2012) stated that, in present time, most of the organizations consider employees as an important asset of a company. When it come to employees, taking care of them means, satisfying their needs both financially and non-financially. Kehoe and Wright (2013) mentioned that, if a company is unable to fulfill the desires of employees, then they try to leave companies in health sector for better opportunity.

However, investing a large amount of money to enhance productivity of employees will become useless, if the organization fails to motivate them to work hard (Safiullah, 2014). The leaders of an organization needs to understand how recognize and reward efficient employees. Jehanzeb et al. (2012) stated that, in addition with money, most of the employees prefer to receive recognition, praise and commitment. All these factors can motivate employees to work had, which become beneficial for a company. Hence, in order to become successful in the highly competitive market it has become essential for companies to motivate their employees for high preference. In order to do so, they have to focus on both intrinsic and extrinsic rewarding systems.  

Relevance of the research topic and gap

It has been found that the country Saudi Arabia is mainly dependent on its oil industry. Over the last two decades the country is facing issues related with availability of talented and skilled workforce where it is important to get talented and skilled workforce through managing rewards (Shields et al., 2015). It is more prominent in other industries except oil industry such as healthcare. It has been found that low level of employee motivation in the healthcare sector of Saudi Arabia has decreased the overall organizational performance of the country. Unavailability of appropriate rewarding system in the healthcare organizations of Saudi Arabia is the major reason behind this issue. Management of most of healthcare organizations of this country is unable to understand this simple fact. The management in unable to understand that as there are not sufficient amount of reward systems in the health care industry such as incentives, bonuses and increments, the employees are not feeling motivated to deliver better performance.

Rewards and motivation in healthcare organizations

It has been found that there are mostly two categories of rewards like intrinsic and extrinsic rewards can motivate workers to perform well. Awadh and Alyahya (2013) stated that, an organization culture where there is reward system, play significant role in the success and failure of an organization. Companies have to understand that caregivers do not work for free. Rewards and recognition is the only thing that can motivate employees to work hard and work more effectively. There is not much research can be found that can depict whether intrinsic or extrinsic rewards can motivate employees in healthcare of Saudi Arabia and improve their performance.

Hence, this study had been developed to analyze the impact of reward system of the motivation of workers and the performance level of employees in the healthcare sector of Saudi Arabia. It is an attempt to find out how intrinsic and extrinsic rewards can motivate caregivers and enhance their overall performance.          

Research objectives

Major objectives of the study are such as:

• To accesses the affiliation between rewards, employee performance and employee motivation in health sector of Saudi Arabia
• To analyze the impact of extrinsic rewards on employee motivation and employee performance in health sector of Saudi Arabia
• To assess the influence of intrinsic rewards on employee performance employee motivation and employee performance in health sector of Saudi Arabia

Major research questions for this research work are such as:

1. What is the influence of rewarding system on employee motivation and employee performance in health sector of Saudi Arabia?
2. Which kind of rewards is more effective to improve employee motivation and their performance in health sector of Saudi Arabia?

Previous research works

Ngo, Sherry and Bauhoff (2016) had developed a research work to find out the impact of pay for performance on the performance of health sector in Saudi Arabia. The research project has been aimed to identify the direct influence of pay-for-performance policy on the service providers’ performance as well as the quality of the entire health system. The research project has been successful to identify that the pay-for performance policy has a greater contribution in increasing provider availability as well as facility operation. Gayathiri et al., (2013) has successfully conducted an effective research that states how the economic factors enhances the work life quality as well as increases the job satisfaction and performance. It has been identified through the research project that the rewarding and compensation policy of the organization had direct relationship with the organizational performance. Eijkenaar et al., (2013) effectively investigated the influence of pay for performance program on the health care system. In this context, the research project has been able to identify that the pay-for-performance has been proven to be cost effective. However, the research project has not been able to draw a strong conclusion despite of having wide varieties of data available.

Intrinsic and extrinsic rewards

Gayathiri et al. (2013) stated that, there are mainly two categories of rewards can be found in majority of the organization. They are such as extrinsic and intrinsic rewards. Rewards includes bonus, incentives, flexible schedule, appreciation and many more.  Intrinsic rewards are also known as psychological rewards or intangible rewards. In fact an intrinsic reward highly depends on the perception of individuals about their work and organization which is a new concept of reward systems in business organizations (Lepper & Greene, 2015). It is inherent in the content of job itself. Major intrinsic rewards are like appreciation, caring attitude, and feeling of accomplishment, meeting new challenges and taking pride on employees.

Types of rewards in healthcare organizations

On the other hand Yasmeen et al. (2013) mentioned that extrinsic rewards are the tangible rewards that employees get from employers. It had been found that extrinsic rewards can improve the financial condition of employees that can motivate them towards hard work (Aktar et al., 2012). Extrinsic rewards of an organization include incentives, bonuses, paid vacation, retirement plans and paid sick leaves. Non-financial or intrinsic benefits cannot improve the financial condition of employees, but it can make their job and life more attractive for them.

Concept of employee motivation

Dobre (2013) stated that motivation is powerful tool that can enhance reinforce the behavior of employees and trigger the tendency of employees to continue working efficiently for an organization. Dobre (2013) also added by saying that motivation is an internal force that can drive employees to satisfy their unsatisfied needs and to achieve their certain goals.

Garbers and Konradt (2014) mentioned that, in comparison with financial resource, human resources have the ability to provide competitive advantage to an organization. It had been found that performance level of employees in healthcare depends on various factors. They are like training and development, job satisfaction, motivation, rewards and appraisals. However Cerasoli et al. (2014) argued that, among all these factors, employee motivation has the most significant role in both individual and organizational performances.  Dobre (2013) stated that motivated workforces have their objectives and goals aligned with that of the company and direct their labors in that direction. It had been analyzed that, these companies are more successful as their workers continuously look to find out ways to improve their performance. Miao et al. (2013) argued that, getting workers to achieve their full potential under nerve-racking condition is a main challenge in healthcare sectors. It is tougher in countries like Saudi Arabia due to the lack of skilled and talented workforce. However, it can be achieved with the help of appropriate motivation. It had been found that, with the help of effective rewarding system organizations can motivate their employees to work more efficiently.

Rewards as Motivational factor

Dee and Wyckoff (2015) stated that that with the increase of competition in business, the workplace is changing rapidly. Motivated employees are the most essential requirements of a changing workplace. Most of the companies in health care sector consider employees as the sole strategic assets that can make an organization in health care sector successful. For this reason, management in health care sector has to recognize what motivates workers within the context of the roles they perform in a company. Management of a company can motivate their workforce by introducing various rewards and recognition programs along with various other benefits (Paillé et al., 2014). They have to develop an appropriate compensation system which can fulfill various other objectives like labor cost control, perceived fairness towards all employees and legal compliances. Ma et al. (2014) also mentioned that there is direct relation between pavement and productivity. On the other hand, it has been found that reward system depends upon the size of the organization. For instance, small organizations mainly focus on intrinsic rewards like appraisal, while large companies have both intrinsic and extrinsic rewards for their employees. They develop a separate team to analyze the performance of employees and reward them accordingly. It includes incentives, promotions, bonus, holiday benefits and many more. All these rewarding system can attract employees to join an organization. It also help the management team to retain talented employees for long term as well.    

Impact of reward system on the motivation of caregivers

However, Dee and Wyckoff (2015) argued that reward and recognition system has significant impact on both success and failure of a company. If the reward and recognition system is appropriate with the kind of job role that workers have to play in a company, then they will become motivated. Otherwise they will be de-motivated and their performance level will be decreased.  

It is already mentioned that there are mainly two types of reward systems which are intrinsic and extrinsic. In most of the health care organizations, none of these methods are applied. In some organizations under health care sector, mostly monetary rewards are implemented. However, it is true that not all the employees can be motivated through monetary rewards. Some employees put their families before money. In order to motivate such employees, it is important to implement rewards such as flexible work hours, additional holidays, health care benefits and transportation systems. These systems will allow the employees to think that the organization think about them which will motivate them to perform better.

Maslow’s need of hierarchy

Maslow’s need of Hierarchy had divided human needs into five major categories (Kaur, (2013). They are such as psychological needs, survival needs, safety needs, love and esteem. In order to increase motivation at workplace, leaders of an organization have to analyze the needs and desires of individuals. From the Maslow’s Pyramid model, it had been found that lower order needs required to be fulfilled to pursue higher level motivators.

Figure 1: Maslow’s need of hierarchy

(Source: Kaur, (2013)

1) Self actualization: Maslow (1954) mentioned that self actualization is the uppermost requirement that can convince anemployee. However, Yousaf et al. (2014) argued due to the open nature of the needs, it can never be totally fulfilled.

2) Esteem needs: Maslow (1954) stated that, employees need to fill that they are essential part of the organization. It will make them motivated both internally and externally.

3) Social needs: It includes social activities like friendships, groups, societies or any type of socialized groups.

4) Safety needs: Maslow (1954) stated that safety is the need that can liberate people from the fear of harm. In case of organizations, safety needs are related medical insurance, healthy workplace and job security.

5) Psychological needs: Maslow (1954) mentioned that psychological needs are the driving force for human beings that are required to sustain life. They are like food, air, water and sleep.

Impact of reward system on the performance of caregivers

Theory X and Theory Y

McGregor had mentioned in this theory that, a company with hierarchical pyramid and centralized decision making process, is based on a variety of assumptions about human nature and motivation. These assumptions are known as Theory X. Porter et al. (2016) stated that, in Theory X, most of the employees of an organization want to be directed. In addition, they value safety above all. This theory also assumed that employees can only be motivated by financial rewards and by the threats of punishments.  Dobre (2013) mentioned that managers of adopted theory X, prefer to supervise their employees as they perceive that an external force is required to deal irresponsible employees.

On the other hand, Theory Y is focused on developing pleasant working environment and relates them with individual aims of employees.  Dobre (2013) stated that, companies adopted Theory Y, have high level of productivity as workers happily come there to work. In addition, they are also able to meet the objectives set by their superiors. Theory Y considers that people are not lazy and they are reliable. Managers, who adopt Theory Y, do not prefer to supervise their workers. Because, they perceive that employees can become self directed and creative if they are motivated properly.  Dobre (2013), argued that although in most of the cases it is assumed that implementation of Theory Y is more efficient. However, in many cases, it had been found that direct controlling is required to help people to develop their responsibility and creativity. 

Conceptual framework

Figure 2: Conceptual Framework

(Source: created by author)

References

Awadh, A. M., &Alyahya, M. S. (2013). Impact of organizational culture on employee performance. International Review of Management and Business Research, 2(1), 168.

Cerasoli, C. P., Nicklin, J. M., & Ford, M. T. (2014). Intrinsic motivation and extrinsic incentives jointly predict performance: A 40-year meta-analysis. Psychological bulletin, 140(4), 980.

Dee, T. S., & Wyckoff, J. (2015). Incentives, selection, and teacher performance: Evidence from impact. Journal of Policy Analysis and Management, 34(2), 267-297.

Dobre, O. I. (2013). Employee motivation and organizational performance. Journal of Management and Socio-Economic, (1). 53

Eijkenaar, F., Emmert, M., Scheppach, M., & Schöffski, O. (2013). Effects of pay for performance in health care: a systematic review of systematic reviews. Health policy, 110(2), 115-130.

Eijkenaar, F., Emmert, M., Scheppach, M., & Schöffski, O. (2013). Effects of pay for performance in health care: a systematic review of systematic reviews. Health policy, 110(2), 115-130.

Garbers, Y., &Konradt, U. (2014). The effect of financial incentives on performance: A quantitative review of individual and team?based financial incentives. Journal of occupational and organizational psychology, 87(1), 102-137.

Research studies related to reward system in healthcare industry

Gayathiri, R., Ramakrishnan, L., Babatunde, S. A., Banerjee, A., & Islam, M. Z. (2013). Quality of work life–Linkage with job satisfaction and performance. International Journal of Business and Management Invention, 2(1), 1-8.

Gayathiri, R., Ramakrishnan, L., Babatunde, S. A., Banerjee, A., & Islam, M. Z. (2013). Quality of work life–Linkage with job satisfaction and performance. International Journal of Business and Management Invention, 2(1), 1-8.

Kaur, A. (2013). Maslow’s need hierarchy theory: Applications and criticisms. Global Journal of Management and Business Studies, 3(10), 1061-1064.

Kehoe, R. R., & Wright, P. M. (2013). The impact of high-performance human resource practices on employees’ attitudes and behaviors. Journal of management, 39(2), 366-391.

Lepper, M. R., & Greene, D. (Eds.). (2015). The hidden costs of reward: New perspectives on the psychology of human motivation. Psychology Press. 10-15.

Ma, Q., Jin, J., Meng, L., & Shen, Q. (2014). The dark side of monetary incentive: how does extrinsic reward crowd out intrinsic motivation. Neuroreport, 25(3), 194-198.

Miao, Q., Newman, A., Sun, Y., & Xu, L. (2013). What factors influence the organizational commitment of public sector employees in China? The role of extrinsic, intrinsic and social rewards. The International Journal of Human Resource Management, 24(17), 3262-3280.

Ngo, D. K., Sherry, T. B., & Bauhoff, S. (2016). Health system changes under pay-for-performance: the effects of Rwanda’s national programme on facility inputs. Health Policy and Planning, czw091.

Ngo, D. K., Sherry, T. B., & Bauhoff, S. (2016). Health system changes under pay-for-performance: the effects of Rwanda’s national programme on facility inputs. Health Policy and Planning, czw091.

Njanja, W. L., Maina, R. N., Kibet, L. K., &Njagi, K. (2013). Effect of reward on employee performance: A case of Kenya Power and Lighting Company Ltd., Nakuru, Kenya. International Journal of Business and Management, 8(21), 41.

Olafsen, A. H., Halvari, H., Forest, J., & Deci, E. L. (2015). Show them the money? The role of pay, managerial need support, and justice in a self?determination theory model of intrinsic work motivation. Scandinavian journal of psychology, 56(4), 447-457.

Paillé, P., Chen, Y., Boiral, O., &Jin, J. (2014). The impact of human resource management on environmental performance: An employee-level study. Journal of Business Ethics, 121(3), 451-466.

Porter, T. H., Riesenmy, K. D., & Fields, D. (2016). Work environment and employee motivation to lead: Moderating effects of personal characteristics. American Journal of Business, 31(2), 66-84.

Safiullah, A. B. (2014) Impact of Rewards on Employee Motivation of the Telecommunication Industry of Bangladesh: An Empirical Study.IOSR Journal of Business and Managemen, 16(12), 22-30

Sequeira, P., Melo, F. S., &Paiva, A. (2014). Learning by appraising: an emotion-based approach to intrinsic reward design. Adaptive Behavior, 22(5), 330-349.

Shields, J., Brown, M., Kaine, S., Dolle-Samuel, C., North-Samardzic, A., McLean, P., … &Plimmer, G. (2015). Managing Employee Performance & Reward: Concepts, Practices, Strategies. Cambridge University Press. 5-10

Yousaf, S., Latif, M., Aslam, S., &Saddiqui, A. (2014). Impact of financial and non-financial rewards on employee motivation. Middle-East Journal of Scientific Research, 21(10), 1776-1786.