Role Of Non-Financial Incentives On Employee Performance In Hospitality Sector

Background

Dissertation Proposal: HRM & Leadership

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The research will analyze the impact of non-financial incentives on the performance of employees in the hospitality industry. Thus, the study will aim to identify the various factors essential for influencing the performance of employees in the hospitality sector.

Globalization has changed global business and competition has become very intense. Organizations are facing issues in maintaining their long-term sustainability and competitive advantage in the market. Workforce is an essential component for organizational success so improving the quality of performance of the employees is essential for every organization in the market. Motivation plays an important role in increasing productivity of the workforce (Al-Refaie 2015). Managers, in a bid to motivate their employees and improve the quality of their work, have used the different theories of motivation. However, there have been claims that these theories of motivation have become outdated and their applicability in the modern business environment is questionable. Non-financial incentive is one such component of employee needs which motivates them to perform at their full potential.  Rewards can be of two types, one is intrinsic and the other is extrinsic. Non-financial incentives fall within the category of intrinsic rewards that provides employees with personal growth, a boost in self-esteem and a feeling of accomplishment. The employees are further motivated to perform in a better way due to these factors (Malik, Butt and Choi 2015).  However, there is still no clarity about the factors which will motivate the employees of any organization.

Research conducted in employee motivation has not been able to demonstrate the basic factors for motivating the workforce. Various organizations try to motivate their workforce based on simplistic ideas, which consist of monetary benefits. However, there are other factors, which will be essential for motivating the workforce which may not be by financial incentives.  Non-financial incentive is a method of acknowledging and praising the workforce for their effort. However, it does not mean that the provided recognition will not have any monetary value but appreciating their effort could change the overall level of motivation of the workforce.  The method of showing appreciation is more memorable to the employees than a sum of money credited to their account. The changes in needs of the employees in global organizations are difficult to handle.  As stated by (Garbers and Konradt 2014), the effect of monetary incentives is short term and in order to have a strong profound long-term impact on employees, non-financial incentives are also required. Therefore, effective non-monetary policies are required for improving the quality of the workforce. The hospitality industry faces intense competition and the organization is dependent on the performance of the employees to remain competitive. Therefore, motivating employees in the hospitality sector is very important as the employees deal with consumers on a regular basis (Wang, Tsai and Tsai 2014). Moreover, most of the services offered by the industry are non-tangible so providing the consumers with the best possible experience is essential for retaining the existing consumers and acquiring new target market segments.  

Literature Review

 The stress levels among employees in the hospitality sector are high due to the rigorous time schedule they have to follow. As such, the turnover rate in the hospitality industry is quite high as most employees tend to lose their motivation level and leave their respective job roles for better opportunities (Brown, Thomas and Bosselman, 2015).  The increase in turnover rate means that the cost structure of the organization will rise due to the increase in human resource management spending. Therefore, in order to reduce their cost structure, organizations should be able to incorporate effective employee motivation policies. It is evident then, that both financial and non-financial incentives have significant contribution in increasing the level of enthusiasm of employees and decreasing the turnover rate. The importance of non-financial incentives is even greater due to the changing nature of the workforce and their subsequent changing needs.

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This research study will analyze the various non-financial incentive factors that are responsible for motivating the employees. This study will identify the significance of the research in the global business environment and provide valid recommendations. The different non-financial incentive tools will be discussed to examine the effect of these policies on the performance of the employees.

Aim of the Research

This research is aimed at highlighting the effect of non-monetary incentives in the hospitality sector.  The different elements of non-financial incentives will be identified and the influence of these elements on employee performance will be evaluated. Furthermore, the study will focus on evaluating the extent and nature of the association between the dependent (employee performance) and the independent variable (non-financial incentives).

Research Hypothesis

H0 – Non-financial incentives have no impact on employee performance

H1 – Non-financial incentives have impact on employee performance

Research objectives

  • To critically evaluate the role of non-financial incentives on employee performance in the hospitality industry
  • To identify the significance of non-financial incentives on employee performance in the hospitality industry
  • To recommend suitable strategies for improving employee performance in the hospitality industry

Research Question

  • What is the role of non-financial incentives on employee performance in the hospitality industry?
  • What is the significance of non-financial incentives on employee performance in the hospitality industry?

Employees in an organization can be a source of competitive advantage and management of employees in an effective manner is essential in this context. Employee engagement, employee motivation, rewards, recognition, financial incentives, non-financial incentives and performance management systems are all linked to each other and have a significant influence on workforce performance. It is essential to foster a suitable work environment for improving the employee performance and non-financial incentives is one means of achieving it.  Employee motivation is a way of achieving excellence in employee performance and non-financial incentives can motivate employees. The existing literature reflects the fact that continuous improvement in employee motivation is needed for maintaining the quality of the workforce. This literature review will critically evaluate various motivational theories and non-financial incentive theories for having a better understanding of its impact on employee performance.

Research Objective

The hospitality industry falls under the service industry. The very focus of this industry is to satisfy customers by providing specific services to the customer and to fulfil their need of having a quality service. Moreover, the hospitality industry needs to emphasise customer satisfaction due to the type of need served. According to the hierarchy of needs theory of Maslow as explained by (Kaur 2013), this particular need falls under the social needs of a human being that makes them choose between services available. Employees in the hospitality industry are in face-to-face interaction with the customers that positions them among the determining factors in the industry. Performance of employees in the hospitality industry largely determines the level of satisfaction of the customers that helps in increasing customer loyalty and in building a strong customer base. Simultaneously it can also be understood that the leaders and managers in different forms of organisations, counting even those inside the hospitality industry, are required to help their employees in identifying their interests within the company so that they can effectively motivate them. Henceforth, this part of the report will identify the impact of non-financial incentives on employee performance in the hospitality industry, which facilitates increasing customer satisfaction.

According to Herzberg, Mausner and Snyderman (2011), intrinsic motivation can be obtained by using employee participation and it is the key to activating employee motivation. Employee engagement can be obtained by using participation, which makes the work more meaningful for the employees. Thus, intrinsic motivation within the organization can be increased using active participation. Aktar, Sachu and Ali (2012) states, motivational theories have supported the fact that participation will have a positive impact on employee performance. Maslow’s hierarchy of needs states that social and self-actualization can be fulfilled by using participation as a tool. The Hertzberg motivational theories state that participation is a key factor for increasing motivation and creates job satisfaction among employees. Competence and autonomy is the basic need for every individual in Cognitive Evaluation Theory Hypothesis. Participation has the possibility of influencing the work, employees are doing.

One of the dominant theories of intrinsic motivation, the self-determination theory, plays an important role in addressing the motivation for behaviour and performance of employees. Bellé (2013) commented, based on the theory, that there is a significant relation between intrinsic motivation and the choice of direction. The identification of the task provided to the employees as enjoyable makes them endorse and engage in the task responsibilities (Cerasoli, Nicklin and Ford 2014). On the other hand, under self-determination theory, employees finding any task more intrinsically motivating, tend to contribute more towards the productivity. Researchers assumed the same as the result of enhanced performance through the intrinsic motivation as implied by self-determination theory (Nyaribo 2016). Therefore, literature for the chosen topic emphasizes intrinsic motivation as one of the important theoretical approaches.    

Research Questions

Considering the fact of employee motivation influencing the performance of the employees, Langfred (2013) identified autonomy being one of the major influential aspects of the non-financial incentives. The study conducted by him is focused on two perspectives of employee autonomy: autonomy of the employees for job satisfaction and the autonomy of the employee for productivity. It must be noted that both aspects of employee autonomy indicate towards the performance of them in their workplace. Along with this, Christ et al. (2012) mentioned that the individual autonomy of the employees also affected the workplace in terms of culture and structure as the result of employee performance. The level of individual satisfaction controls the workplace behaviour that alters the culture of the workplace. For instance, highly satisfied employee reflects optimistic and encouraged attitude in the workplace that helps creating a positive environment in the organisation.

As stated by Kooij et al. (2013), non-financial incentives are used as a tool for motivating employees in the organization. Non-financial incentives consist of factors such as recognition, feedback, autonomy, promotion, career and participation. These are factors which will provide intrinsic motivation to employees in the organization.

Promotion

Promotions influences the employees in terms of need satisfaction, which enhances their job performance in the organizational workplace. In this regard, the motivational theory of Maslow’s Hierarchy of Needs mentions that the higher needs work as the motivation for the employee to perform their job in a better way than before (Khan et al. 2012). This particular theoretical approach to the improvement of employee performance as the result of non-financial incentives represents promotion as one of the motivation for the employees. However, Ijaz and Khan (2013) argued that promotion, to a certain extent, is related towards financial incentives, as the promotion of employees automatically increases their salary. Therefore, the relation of promotion with employee performance is not always non-financial.

On the other hand, Kooij et al. (2013) stated that promotion is one of the most effective categories of the non-financial incentives that is capable of affecting employee performance. Promotion helps in attaining esteem needs of the individual by recognising his or her effort towards the organisation. As commented by Nyaribo (2016), promotion works as a motivational approach for employees in order to develop the performance of the employee.  

Rewards and Recognition

With regard to the research topic of this particular paper, recognition is another component of the non-influential incentives that can affect employee performance positively. Aktar, Sachu and Ali (2012) stated that recognition and rewards has a direct impact on the performance of employees in terms of increasing the efficiencies of them. Recognition is considered the acknowledgment of the employee by the organization in terms of his or her performance in the organizational workplace. The company evaluates the overall performance of employees and accordingly recognizes the best one. Recognition is one of the most effective ways to motivate the employee to be engaged with their job and perform their responsibilities accordingly. In accordance to Bari, Arif and Shoaib (2013) the firm identifies a specific effort or activity or behaviour of the individual employee towards the success and achievement of the organizational goals, based on which, recognition is awarded. Hence, the accomplishments of an employee are referred to, based on their performance and contribution towards organizational success.

Hypothesis

As stated by Anitha (2014), reward is another aspect that is attached to recognition. In fact, rewards and recognition are interlinked. Recognition evaluates the existing performance of the employees and rewards them based on the result. The motivation that works in rewards and recognition is valuing the performance, activities and behaviours of the employees. Ijaz and Khan (2013) found out that non-financial incentives plays an influential role on the employees in order to establish confidence and satisfaction within them which further results into the enhancement of the employee performance. However, Silverman (2004) argued that rewards and recognition does not always succeed in enhancing employee performance. The scholar stated that non-monetary incentives could not always effectively affect employees in terms of developing their performance.

Empirical studies depict that employees receiving rewards and recognition develop self-confidence, self-esteem and are ready to take innovative steps and challenges (Erbasi and Arat 2012). In this regard, Nyaribo (2016) observed that employees who are appreciated and valued by the organization are more likely to stay in the company for longer and their performance often exceeds organizational expectations. As a result, employees are motivated to carry out the activities allocated to them by the organisation. Consequently, the employees pay attention to the development of their performance.  

Feedback

It is very important to provide the employees with feedback from organizational management. Feedback is the way to provide opinions of the employees by the management. As stated by Farooq and Khan (2011) feedback is considered as one of the influential tools for enhancing motivation of employees which leads them to improve their performance. De Stobbeleir, Ashford and Buyens (2011) commented that feedback adds value to the performance of the employee and works as an effective tool of motivation. In regard to this, Wildenbeest et al. (2013) pointed out that feedback is the basic source to educate people in terms of removing any existing barriers they encounter in performing their activities towards their target within the respective workplace. Therefore, it can be assumed that feedback boosts the confidence level of the employee through motivation.

Battistelli, Montani and Odoardi (2013) mentioned that employees seek performance oriented feedback through either tactic of enquiry or more covert tactic of monitoring. With the help of inquiry individual employee is capable of directly asking for feedback from others. Exemplifying the organizational workplace, employees can deliberately choose sources of asking for feedback. Research depicts that this feedback-seeking behaviours contribute towards the development of the employee performance (Kuhnen and Tymula 2012). On the other hand, researchers found that organizations tend to provide feedback as one of the profitable and effective tools in terms of enhancing the employee performance, which further influences the organisational performance. Considering the fact of non-financial incentives impacting on the employee performance, a significant relationship between feedback, employee performance and attitude has been identified (JB Govaerts et al. 2013). Feedback directly influences the behaviours of employees and works as the underlying motivation for improvement of performance in the respective workplace.

Methodology

Inside the hospitality industry, employee motivation has been a major element of interest for many researchers and scholars over the years. The industry is comprised of different segments like restaurants, resorts, hotels, nightclubs, pubs and travel agencies. The performance of the people working inside this industry can be understood by the appearance, friendliness, alertness, behaviour, and attitude and job performance. Conversely, it can be said that the performance inside the hospitality organisations must be able to create a good level of client satisfaction for them to get repeated customers. Thus, the success of the organisations inside this industry is based on the management of the workers, who are actually carrying out the different tasks. Therefore, it can be inferred that the most valuable asset of the organisations inside this industry are its employees, both at the management and non-management levels. This can be said as for the organisations to achieve high levels of organisational success, they need to be able to provide proper leadership direction for the managers, who would not just be accountable for management, but also for increasing the capabilities and productivity of the workers (Kara et al 2013).

Human resource issues related to the non-financial incentives have larger implications in the field of hospitality industry. AlBattat and Som (2013) in their study identified that the hospitality industry faces a huge employee turnover and fail to retain their employees due to ineffective human resource management that properly addresses job satisfaction issue faced by the employee. Decreased job satisfaction is identified as one of the major issues faced by the organisations in hospitality industry. One of the major reasons attributed by the authors is the non-financial incentive policies and transparency in incentive distribution that results in degradation of satisfaction levels. The similar study conducted by Zopiatis, Constanti and Theocharous (2014) on Cyprus Hotel offers understanding of the relation between employee associations, involvement, satisfaction and commitment with employee performance and turnover rate. The study reveals that modification in any of the above facilitates in altering the others. Hence, negative results in employee association results in decreased employee performance and increased turnover rate.  

Moral can be considered as another challenge faced by the human resource management within the hospitality industry. The executives operating in the human resource management team of a hospitality organisation often overlook the concern of morale. As commented by Paek et al (2015), a large number of organisations operating in the hospitality industry face the challenge of low employee morale that significantly reduces the service standards and quality. The author further attributed the low morale of the business to lack of professional training, lack of skills, variation of skills between colleagues, stress and limited reward system of the organisation. The authors further argued that the importance of high morale is greater in case of hospitality industry due to the constant interaction of the employees with customers. This requires an encouraged attitude of the employees to provide an efficient service to customers that will successfully satisfy their needs.

Expected Outcomes

Another issue identified by Hanif (2013) is the lack of training and its relation with high rate of turnover. The hospitality industry reflects a high rate of employee turnover, which may lead to HR management cutting down training sessions after recruiting new employees in the organisation. This helps the management in reducing the expenses, but also degrades the quality of employee output. Moreover, the high turnover rate supplements in promoting unskilled or half-skilled employees into managerial post. Hence, it creates issues in managerial level.

Vlachos and Bogdanovic (2013) on continued investigating the employee performance issue and related it to the shrinkage. Low skilled employees often increase the expenditure of the company due to the increased wastage of resources. Employee training can potentially solve the issue by acquainting them with the job and the process. This will help reducing resource wastage.

Karatepe (2013) in his study identified that employer performance is largely dependent on organisational politics, which again have implications on a number of related factors such as employee commitment, extra-role performance and turnover that alters the outcome. The research further proposes the use of training programs for employees, that work as a non-financial incentive. This helps in having a positive effect on the organisational politics that may hinder organisational performance. The training helps in establishing a fair workplace environment that facilitates in maintaining transference and in building trust among the workers contributing in the organisation. These, as argued by Schnackenberg and Tomlinson (2016), are important elements in increasing employee performance as well as the overall organisational performance, irrespective of industry. According to the authors, trust between the stakeholders in increasing the performance level and revenue generation, is regardless of industry sector.

Abdullah and Wan (2013), on the other hand, commented that the rewards system is an influential element that facilitates in increasing job satisfaction among the employees. Increase satisfaction further facilitates in increasing employee performance in any industry. These are the tangible rewards paid by the organisations in the hospitality industry based on performance. These drive the employees to provide greater productivity to attain the non-financial incentives.

Lee, Tsang and Pan (2015) focused on employee loyalty and retention and argued that both financial and nonfinancial or social rewards have an implication in increasing employee loyalty and retention. The non-financial or social reward system largely effects the employee’s behaviour, which alters the workplace environment. Negative workplace environments, as argued by the authors, are likely to hinder both employee and organisational performance. Anitha (2014) supported the relation between the workplace environment and employee performance with her findings on small-scale organisations. Her study revealed that employee engagement is altered according to the workplace environment and co-worker relationship. Proper synchronisation with the co-worker is essential in the hospitality industry to increase employee performance.

Significance of the Study

Feedback systems, as previously identified, also impact employee performance and provide an opportunity for the employee to provide greater creative ideas in task performance. Hon, Chan and Lu (2013), in their study on 265 full time Chinese employees in the hospitality industry of China and Beijing, reflects the positive impact of the feedback mechanism incorporated by the organisations. The results suggest that increased creativity of the employees can be achieved by appreciating their effort.

Another study conducted by Karatepe, (2013) reveals the relationship between employee engagement, high performance work practice and job performance, where employee engagement works as a mediator. The study recommends the utilisation of appraisal training, empowerment and other non-financial rewards systems that facilitate in achieving the same by triggering job performance and enhanced customer service.

This section of the research paper identifies the gaps of the literature for certain research topics. This chapter discusses the review of literature on the non-financial incentives as the influential tools for employee performance. Though there are a number of literature present on the human resource management issues faced by the hospitality industry, only a little evidence is present that communicates the resolution of the same. Moreover, a number of literature explores and addresses the benefits of using non-financial incentives for increasing employee performance. The studies reveal that employee performance levels increased using non-financial rewards and is channelled through employee motivation, job satisfaction and other related factors. The empirical researches identify that non-financial incentives are directly related with and influence the factors related to employee performance. However, limited literature provides information related to the effectiveness of non-financial incentives in increasing employee performance. The process of implementation is not properly communicated in the literature, which creates a gap in knowledge development. Hence, it is possible to conduct a study focusing on this particular gap in the literature and try to investigate, in more detail, the relationship between non-financial incentive and employee performance in the hospitality industry. The research will cover the implementation process and its effect on the factors that are involved in improving overall employee performance levels.  

Conclusion

It can be concluded that motivation works as the key factor for the performance of employees in the organizational workplace. The focus of the literature review, being on the non-financial incentives, presents various elements of the same. This chapter highlights the different elements and their impact on employee motivation for the enhancement of the employee’s overall performance. The literature review presents a detailed explanation of various research studies on the different elements of the non-financial incentives along with the impact on employee performance improvement. The chapter also shed light on the issues faced by the hospitality industry in attaining greater performance, which again can be solved using non-financial incentives. The primary issues that have been identified from the literature are employee turnover, job satisfaction, employee training program, workplace environment and co-worker collaboration and others. A few possible impact of implementing non-financial incentives, with the aim of addressing the issues identified have been put forward as communicated in the limited existing literature.  In addition, this chapter includes the gaps of the literature review that need to be addressed by means of acknowledging the limitations in the entire research study.

Conclusion

As stated by Best and Kahn (2016), research methodology is the organized way of accumulating raw data and translating it into knowledge that is meaningful in context to the research. Research methodology will consist of various approaches, methods and designs used in the study. The methodology will also provide a valid reason for choosing each of the approaches and, the various positives and negatives of these methods. The methodology will set a few rigid conjectures that will be important for proceeding with the task. Research methods have been classified into different types based on the research design and purpose, general classification, and nature of the study. These criteria will determine whether a research is applied or fundamental, descriptive or analytical, conclusive or exploratory and qualitative or quantitative (Flick 2015). In this project, the research topic has objectivity linked to it so applied research is the best possible methodology to be used. The research topic itself has established the premises of the study whereby the conclusion of the study has already been drawn. The impact of non-financial incentives on employee performance is the hypothesis that will be proven in the study and the findings can be used in real life scenarios to mitigate problems faced by business organizations.

The different methods used in the current study will be identified using the research philosophy. The assumptions and beliefs are set at first so that researchers are aware of them. Research philosophy should be selected based on the practical requirement of study. Various research philosophies used in social research are interpretivism, pragmatism, positivism and realism (Kumar 2014). In this present research, positivism has been chosen as the research philosophy. In positivism, factual knowledge is gained through observations. Therefore, in positivism data will be collected and interpreted according to develop relevant findings. The data collected through positivism philosophy is quantifiable therefore; statistical analysis is conducted to develop findings. Ontological view is appropriate while using positivism philosophy as this facilitates in developing elements that are discrete and observable.

The hypothesis formed in the first chapter of the study can be easily proven using the positivism philosophy. Moreover, it improves the scope of observation due to the objectivity of the research.  The conclusion and the founding principles are well known in the study but positivism will reveal the facts that are hidden within the observations. By selecting positivism as the research philosophy, it becomes easier to select the other approaches.  The theories discussed in the literature review can be proven using positivism.

References

As stated by Sekaran and Bougie (2016), deductive, inductive and abductive are the three different types of approaches used in research.  The significance of the hypothesis determines whether to use an inductive or deductive approach in the study. On the other hand, abductive initiates by presenting shocking facts and the rest of the process are focused on establishing the reason for these facts. Deductive approach will design a strategy so that developed hypothesis can be tested. Inductive approach is applied in order to formulate new theories and concepts. Deductive approach has been selected to prove theories proposed in the literature review.

The existing theories can be easily validated using deductive approach and the concept can be easily measured quantitatively using this approach. The theory and the hypothesis have been established and the deductive approach will observe relevant data to confirm the theory.

The method of collecting and analyzing data is known as the research design. Exploratory and conclusive researches are the two types of designs used in academic and business research papers (Silverman 2016). Explorative research does not provide any relevant conclusion and will only explore the research question. As the problems are defined specifically in some research studies, explorative study provides alternative solutions. However, in this study, conclusive research has been used so the given problem can be identified and a relevant solution can be provided.

In this study, mono method has been used which means there will be a single research that designs the study.  Initially, secondary analysis of data has been conducted to collect data form relevant journals, articles and web articles to form the literature review. However, primary data collection will be used where quantitative analysis is the basis of evaluation. Therefore, a survey will be conducted which will consist of a close-ended questionnaire (Orkin 2014). A close-ended questionnaire will be given to the respondents, so that time can be saved and relevant answers, relating to the topic, can be obtained. The question will be asked to the lower level employees in the hospitality industry as the impact of non-financial incentives is the highest among them.

The questionnaire consists of twelve close ended questions so that it will facilitate quantitative analysis of data. The first three questions (1-3) are demographic questions which will provide a brief idea about the demographics of the participants in the survey. The next questions (4-8) are about non-financial incentives which use a Likert scale consisting of five different ratings, varying from strongly disagree to strongly agree.  The final questions (9-12) are based on the different elements of employee performance. The questions are developed in such a way that regression analysis can be conducted by comparing the means of both the data set.

Data Analysis

As a positivist and deductive approach has been selected, quantitative analysis of data is the most suitable method (Panneerselvam 2014). In quantitative analysis, research tools will be used convert the raw data into relevant findings.  This will consist of identifying frequency of the respondents in the form of graphs, tables and charts. Microsoft Excel is the statistical tool that has been used for the calculation of mean, mode and median. Regression analysis will be utilized to establish the relationship between employee performance and non-financial incentives.

Sampling

Sampling is the means of selecting a population sample from the whole populace. In academic research, when the sample size is large, sampling is executed to minimize sample size for ease of calculation. The sample population is selected in such a way that it will symbolize the overall data set. Non- probabilistic sampling and probabilistic sampling are the two methods of sampling. Systematic sampling, Stratified sampling, cluster sampling and simple random sampling are the four probabilistic methods of sampling (Creswell and Poth 2017). In cluster sampling method, all the other sampling methods are used as it is a multi staged sampling method. In cluster sampling method, the population is divided into clusters where random population is selected from the different clusters. In simple random sampling, the population samples are selected randomly, which provides each respondent an equal opportunity of being chosen. In stratified sampling, the population is divided into that are not over lapping and sample population is randomly selected from it. In systematic sampling, a sample will be chosen at a given interval (Taylor, Bogdan and DeVault 2015).

Snowball sampling, extensive sampling, judgement sampling, quota sampling and convenience sampling are the different methods of sampling in non-probabilistic approach (Treiman 2014). Non-probabilistic sampling is used where the population is known and consist of small number of samples. It is also used in identifying hidden population in the study where it is difficult to find respondents. In this study, simple random sampling has been chosen as the method for randomly selecting population sample. Initially, the survey was planned for 100 respondents and simple random sampling has been executed to select 30 respondents from the overall data. These respondents are lower level employees in the hospitality industry having different age, tenure, gender and experiences.

Reliability and Validity

Reliability is the capability to replicate the result of the study using different data samples to obtain similar results.  The different types of reliability methods are internal consistency reliability, parallel form reliability, inter-rated reliability and test rated reliability (Einstein 2014). Initially pilot testing has been conducted where sample questionnaires were sent out to identify the appropriateness of the questionnaire. Then test rated reliability has been used to conduct sample analysis using different data sets to examine whether the results are similar or not. Validity signifies the precision of the instruments used in the study.  The different methods of validity measurement are face validity, concurrent validity, content validity, external validity, criterion validity, internal validity and construct validity (LoBiondo-Wood and Haber 2014). This research has conducted construct validity, where appropriateness of each of the measurement apparatus has been analyzed. This has helped in reaching greater precision in terms of the results and findings.

Research ethics is crucial in conducting academic papers where all the methods should be within the bounds of ethics. The respondents have been kept secret in order to guard their privacy and personal data. The secondary data has not been plagiarised from any other journal or article (Brannen 2017). In order to maintain the objectivity of the study, the respondents have been made conscious about the research purpose and objective as they were provided with a Participant Information Sheet (appendix 1).  The data collected in this study has been used for solely for academic purpose. Moreover, the respondents have participated of their own accord, each having signed a consent form (appendix 2). Participants have the option to pull out at any given time and to be assured that their responses will stay anonymous, thereby encouraging more authentic responses as they feel safe to express their opinions. The research has not taken manipulated data for deriving the desired conclusion.

Limitations

The limitations in this project are constraints of time, resource, access and potential bias (Creswell 2014). The time taken for conducting the study is less due to the short time span of conducting the project. The sample population for the study are the lower level employees of the organization so the overall population are not fully represented. Personal bias is a factor affecting the study but measures have been taken to maintain the objectivity of the study. Further bias could also be evident in the snowball sampling effect whereby participants pass the questionnaire on to people they know to complete who may be very similar to themselves (Cohen and Arieli 2011).  As closed responses have been taken the exact reason for their answer is still not known. This could have been analyzed more effectively by qualitatively analyzing the quantitative data that has been collected via follow-up face-to-face interview.

The chapter 4 will examine the facts collected from the quantitative analysis techniques to derive relevant findings. This will consist of demographic and quantitative questions on each of the variables used in the study.

Demography 

  1. Tenure?

Row labels

No of response

Percentage of response

Total respondents

less than a year

7

23.33%

30

1-2 years

7

23.33%

30

2-5 years

8

26.67%

30

more than 5 years

8

26.67%

30

The question will identify tenure of the participants in their respective organizations. The data is almost equally distributed where 23.33% of the participants have been in the organization for less than 1 year and 23.33% of the participants have been in their organization for 1-2 years. Moreover, 26.67% of the participants have been in the organization for between the ranges 2-5 years and 26.67% of the participants have been in their organization for more than 5 years. The data is normally distributed which suggest that perspective of population with varied experience can be analyzed. This will provide a different dimension to the study and will be essential in achieving the objectives of the study.

  1. Gender

Row labels

No of response

Percentage of response

Total respondents

Male

20

66.67%

30

Female

10

33.33%

30

The question is aiming to classify the gender of the respondents in the study. The findings states that 66.67% of the participants are male and rest are female. Thus, the perspective of both the genders may throw light on some hidden factors in the study, although it is borne in mind that the majority of respondents are male.

  1. Your age?

Row labels

No of response

Percentage of response

Total respondents

less than 25

6

20%

30

25-30

9

30%

30

31-40

6

20%

30

41 and above

9

30%

30

The question will examine the age of the respondents in the study. The results show that 20% of the participants are under the age group of 25, 30% of the participants fall within the age group of 25-30, 20% of the employees fall under the age group of 31-40 and remaining are higher than the age group of 40. This shows that majority of the respondents have been working in the sector for a considerable amount of time span and they will present useful insights on different aspects of employee performance. The driving factors of different groups may vary and this can be identified by analyzing the findings of the remaining questions.

  1. Are you satisfied with the current non-financial incentives schemes in your organization?

Row labels

No of response

Percentage of response

Total respondents

Highly satisfied

12

40%

30

Satisfied

12

40%

30

Indifferent

5

16.67%

30

Dissatisfied

0

0%

30

Highly dissatisfied

4

13.33%

30

Findings

The current question highlights whether employees are satisfied with the non-financial incentive schemes in their particular organizations. The findings show 40% is highly satisfied with the non-financial incentive schemes and policies in their respective organizations. 40% respondents support the majority of the respondents and 16.67% of the respondents are indifferent to the question. On the contrary, 13.33% of the employees strongly disagree with majority and they are not satisfied with the non-financial schemes and policies in their respective organizations. According to motivational theories, the respondents that are highly satisfied and satisfied with the non-financial incentives in their respective organization are expected to perform in a better way than the employees that are dissatisfied with the policies. This can be understood by the perspective and opinions of the respondents to different factors that are included in the conceptual framework.

Quantitative Questions on non-financial incentives

  1. How far do you agree that reward and recognition are essential components of non-financial incentives?

Row labels

No of response

Percentage of response

Total respondents

Strongly Agree

12

40%

30

Agree

12

40%

30

Indifferent

2

6.67%

30

Disagree

3

10%

30

Strongly disagree

1

3.33%

30

Findings

This question will aim to identify whether reward and recognition are essential component of non-financial incentives or not. The results show that 40% of the employees are in agreement, reward and recognition is a key element of non financial incentives and they have been supported by 40% of the participants. However, 6.67% of the participants are neutral to the research question and 13.33% of the respondents are in disagreement. Therefore, the majority of the respondents are driven by rewards and recognitions but there are some of the respondents for who rewards and recognition is not a motivating factor. However, the importance of rewards and recognition in respect to non-financial incentives cannot be validated only based on the data that has been collected.

  1. How far do you agree that organizational opportunities are important component of non-financial benefit?

Row labels

No of response

Percentage of response

Total respondents

Strongly Agree

12

40%

30

Agree

9

30%

30

Indifferent

2

6.67%

30

Disagree

4

13.33%

30

Strongly disagree

3

10%

30

Findings

The question will portray the importance of organizational opportunities in respect to non-financial incentives. The result suggests that 40% are in strong agreement that organizational opportunity is an essential component of non-financial incentives and they have been favoured by 30% of the participants. On other hand, 6.67% are indifferent to the question and 23.33% of the employees are in disagreement that organizational opportunity is an indispensable constituent of non-financial incentives. Therefore, for majority of the respondents providing effective opportunity within an organization will be a driving factor of performance. On the contrary, the respondents that are not in agreement with the majority do not consider opportunity in the organization as an essential factor in the organization.

  1. How far do you agree that flexibility in organization is an essential component of non-financial benefits?

Row labels

No of response

Percentage of response

Total respondents

Strongly Agree

15

50%

30

Agree

9

30%

30

Indifferent

0

0%

30

Disagree

3

10%

30

Strongly disagree

3

10%

30

Flexibility

Findings

This question will portray that flexibility is an essential component of non-financial incentives. The results suggest that 50% of the participants are in strong agreement of the fact that flexibility is an essential component of non-financial incentives and they have been supported by 30% of the respondents. On the other hand, 0% is indifferent to the question and 20% of the employees disagree that flexibility is a critical part of non-financial incentives. Therefore, for majority of the respondents flexibility in work is essential and they feel that flexibility is a form of non-financial incentive, which may motivate the employees in an organization. However, the respondents that do not agree are also justified, as according to human resource management theories, flexibility in work schedule is mostly required for married employees and female employees. The female employees require flexibility in work schedule after they get married as they have to play different role in different aspect of their lives and flexibility will facilitate in performing in a better way. The male employees will have similar issues if they are married and have kids. They will have to maintain a work life balance and flexibility is essential for maintaining it. However, the validity of the theory is only possible after the conducting the regression analysis between all the components mentioned in the study.

  1. How far do you agree that employee growth is an essential component of non-financial incentives?

Row labels

No of response

Percentage of response

Total respondents

Strongly Agree

12

40%

30

Agree

12

40%

30

Indifferent

1

3.33%

30

Disagree

2

6.67%

30

Strongly disagree

3

10%

30

Findings

This question will highlight if employee growth is an essential component of non-financial incentives. The result suggests that 40% of the respondents are in strong agreement that employee growth is an essential component of non-financial incentives and they have been favoured by 40% of the respondents. However, 3.33% of the respondents are indifferent to the question and 16.67% of the employees are in disagreement that employee growth is an necessary section of non-financial incentives. According to human resource management theory, employee growth is essential component of non-financial incentives. Employees in any organization will want o grow at both at organizational and personal level. Employee growth provides better motivation and they are able to perform ion a better way. The resultis indicating the same thing and it is expected to acquire positive result from the study.

Quantitative Questions on employee performance

  1. How far do you agree that employee motivation will have positive impact on employee performance?

Row labels

No of response

Percentage of response

Total respondents

Strongly Agree

14

46.67%

30

Agree

8

26.67%

30

Indifferent

2

6.67%

30

Disagree

1

3.33%

30

Strongly disagree

5

16.67%

30

Findings

The question will depict the effect of employee motivation on employee performance. The results suggest that 46.67% of the participants strongly agree that employee motivation will affect the productivity of the employees and 26.67% have favoured the respondents. Moreover, 6.67% of the respondents are indifferent to the question and 20% of the employees are in disagreement with the fact that employee motivation has impact on employee performance in the organization. As stated by the various human resource theories, motivation is an important factor for enhancing the productivity of the employees. In this currents study, most of the respondents are in agreement with the question, which shows that motivation is a driving factor for these respondents. On the contrary, the performances of the remaining respondents are not affected by employee motivation.

  1. How far do you agree that organizational culture will have a positive impact on employee performance?

Row labels

No of response

Percentage of response

Total respondents

Strongly Agree

13

43.33%

30

Agree

12

40%

30

Indifferent

0

0%

30

Disagree

3

10%

30

Strongly disagree

2

6.67%

30

Findings

The question will draw attention to the impact of organizational culture on employee performance. The results suggest that 43.33% of the respondents strongly agree to the fact that organizational culture will have a positive influence on employee productivity and they have been favoured by 40% of the respondents. On the other hand, 0% of the respondents are indifferent to the question and 16.67% of the employees are in disagreement with the fact that organizational culture positively affects employee performance in the organization. According to human resource theories, organizational culture will have a positive effect on employee performance as it defines common value, rules and goals. These factors will motivate the employees to perform at their full potential and it is the case for the majority of the respondents.

  1. How far do you agree that leadership will have a positive impact of employee performance?

Row labels

No of response

Percentage of response

Total respondents

Strongly Agree

13

43.33%

30

Agree

12

40%

30

Indifferent

0

0%

30

Disagree

3

10%

30

Strongly disagree

2

6.67%

30

Findings

The question will depict the impact of leadership on employee performance. The result suggests that 43.33% of the respondents strongly agree that leadership will have a positive impact on employee productivity and 40% have agreed to the majority of the participants. On the other hand, 0% is indifferent to the question and 16.67% of the employees disagreed that leadership have positive effect on employee performance in any organization. The human resource theories have stated the same thing and effective leadership will have a positive impact on the performance of the employees.  The finding of the study is indicating the same thing and majority of the respondents will be able to make improvements in their performance if the leadership strategies are effective in their respective organization.

  1. How far do you agree that work life conflict will have an impact on employee performance?

Row labels

No of response

Percentage of response

Total respondents

Strongly Agree

15

50%

30

Agree

10

33.33%

30

Indifferent

0

0%

30

Disagree

3

10%

30

Strongly disagree

2

6.67%

30

Findings

The question will highlight the impact of work life conflict on employee performance. The result shows that 50% of the respondents strongly agree that work life conflict will have a positive impact on employee performances and 33.33% have agreed with the majority. On the other hand, 0% of the respondents are indifferent to the question and 16.67% of the employees are in disagreement with the fact that work life conflict has a positive impact on employee performance in the organization.  According to various studies, work life conflicts facilitate in employee growth and are essential for team bonding.  There will be difference in opinion among the employees in the organization and these experiences will assist in employee growth. The results are indicating that the same thing and the respondents that have experienced work life conflict are the ones agreeing to this question.

SUMMARY OUTPUT

Regression Statistics

Multiple R

0.935857461

R Square

0.875829187

Adjusted R Square

0.871394516

Standard Error

0.281483222

Observations

30

ANOVA

df

SS

MS

F

Significance F

Regression

1

15.64814815

15.64814815

197.4958264

3.29244E-14

Residual

28

2.218518519

0.079232804

Total

29

17.86666667

Coefficients

Standard Error

t Stat

P-value

Lower 95%

Upper 95%

Lower 95.0%

Upper 95.0%

Intercept

0.140740741

0.146363256

0.961585201

0.344489151

-0.159070794

0.440552

-0.15907

0.440552

X Variable 1

0.962962963

0.068522093

14.05332083

3.29244E-14

0.822601819

1.103324

0.822602

1.103324

PROBABILITY OUTPUT

Percentile

Y

1.666666667

1

5

1

8.333333333

1.25

11.66666667

1.25

15

1.5

18.33333333

1.5

21.66666667

1.5

25

1.5

28.33333333

1.5

31.66666667

1.5

35

1.5

38.33333333

1.5

41.66666667

1.75

45

1.75

48.33333333

1.75

51.66666667

2

55

2

58.33333333

2

61.66666667

2

65

2.5

68.33333333

2.5

71.66666667

2.5

75

2.5

78.33333333

2.75

81.66666667

2.75

85

2.75

88.33333333

3

91.66666667

3

95

4

98.33333333

4

  

Two sample T-Test

t-Test: Two-Sample Assuming Equal Variances

Variable 1

Variable 2

Mean

2.066666667

2

Variance

0.616091954

0.581896552

Observations

30

30

Pooled Variance

0.598994253

Hypothesized Mean Difference

0

df

58

t Stat

0.333613059

P(T<=t) one-tail

0.369937351

t Critical one-tail

1.671552763

P(T<=t) two-tail

0.739874703

t Critical two-tail

2.001717468

This study aims to identify the impact of non-financial incentives on the employee performance. The results identified in the previous chapter will be evaluated in this chapter. Regression analysis has been conducted in the previous chapter of the study, which will identify the relationship between the independent and the dependent variable.  Non-financial incentive is the independent variable and employee performance is the dependent variable. The regression analysis in the previous chapter has been able to identify the relationship between both the variables.

Regression analysis is a method of identifying the relationship between the dependent and the independent variable in the study. Regression analysis will also identify the degree of relationship between both the variables. Regression analysis can be of various types such as linear regression, multiple regression, linear multiple regression and logistic regression.  There are only two variables in the study so linear regression has been used and represent the relationship in terms of straight-line equation, y= mx +c. + Ei.  In this equation, x is the independent variable, y is the dependent variable, m is the slope of the equation and c is the intercept in the equation. These are generally the main components of linear regression in ideal conditions but while conducting practical research an error term is included as collecting a standard normalized data is impossible to collect in this study. Thus, the error term will represent the deviation from the ideal value. In this study, least square method has been used for reducing the error term by choosing suitable coefficients.

Multiple R is correlation coefficient, which determines the degree of relationship between non-financial incentive and employee performance. According to correlation theories, if the value of R is 1 or close to 1 then there is positive correlation among both the variables. When the value of R is 0, it means that there is no correlation between the dependent and the independent variable in the study. Similarly, if the value of R is -1 or close to -1, there is negative correlation between both the variable in the study. The value of multiple R in this study is 0.935857461 that means that there is strong positive correlation between both the variables. Moreover, if the value of R is greater than 0.8 then it means that the goodness of fit of the regression line is high. The goodness of fit will determine the degree of closeness between the predicted and the observed value in the developed model. When the degree of goodness of fit is high, it means that majority of the values will fall with the straight-line equation of regression.

Similarly, R2 is known as the coefficient of determination, which will determine the number of points that fall within the regression line. In this study, the value of R2 is 0.875829187, which means that 87.58% of the values will fall with the regression line. R2 will determine the ability of the independent variable to explain the dependent variable. In this study, the independent variable has been able to explain 87.58% of the variance in dependent variable. The remaining 13.42% of variation is due to random variability and the explaining capability of the independent variable is quite high. The linear regression equation shows how the value of y changes with one-degree change in value of x.

The F value in this study is 3.29244E-14, which is less than 0.05, and that means that null hypothesis in the study shall be rejected. Thus, the alternative hypothesis has been accepted and that means that there is an impact of non-financial incentives on employee performance. Moreover, the value of multiple R is 0.935857461, which shows that there is positive impact of non-financial incentives on employee performance. The strong positive correlation between both the variables is the reason that with increase in one variable will increase the other variable. Therefore, from the regression analysis it can be deduced that there is strong positive correlation between non-financial incentive and employee performance.  The regression equation for this study is y = 0.9095x + 0.1203, which shows the strong positive relation between the variables.

Now, the study will aim to find out the amount of increase in employee performance with a 1 unit increase in non-financial incentives. Therefore, the value of x=1 will be put into the equation and the calculated value of y is 1.0298 that shows that increasing non-financial incentive by 1 unit will increase the value of employee performance by 1.03 unit.

The normal probability plot is determine whether the data collected in the study is following the pattern of a normal distribution. The data collected has been plotted against a theoretical normal distribution to obtain a approximate straight line. Therefore, the straight line indicates that the data is following the normal distribution. In this study, the normal probability graph is following the pattern of a straight line and this can be said that the graph is following a normal distribution.

The two sample T-test is used for testing of hypothesis and compares the means of the two variables to identify if there is difference in the means. In this study it can be seen there is no significance difference between the means of two variables which signifies that µ1-µ2 is 0. Therefore, the null hypothesis can be rejected and the alternative hypothesis is accepted. The mean values of both the variables are almost and the variance is almost equal which shows that all the conditions have been met. The p-value is within the rejection region of the standard normal distribution curve so the p value can be rejected.  Thus, two-sample t test has been able to validate the result from regression analysis. This means that there is impact of non-financial incentives on the performance of the employees. However, T test will be unable to measure the degree of relationship between both the variable sin the study.

This study has been conducted with the objective of identifying the significant impact of non-financial incentives on employee performance in the hotel industry.  In order to identify the significant impact, it was essential to identify the different elements of both the independent and the dependent variable.  The literature review of the study has facilitated in identifying the different elements of both the variables.  The literature review has also described the perspective of different authors and the theories of human resource management.  The research hypothesis formed in the study is essential for setting the premise of the study. This current study is objective by nature, which means that the conclusion of the study has been predefined and out of the two conclusions mentioned in the study one will be achieved. Even though this is an applied study, the problem related to a specific issue for a given industry, which has been addressed in order to provide solution. Non-financial incentives are an essential factor for providing employees in the hospitality industry with motivation; furthermore, the hospitality industry is a rigorous industry with extreme levels of work pressure. The motivation of employees depends on certain factors and financial incentives can be a big motivating factor for most of the employees. However, the level of motivation financial incentives provide has been limited and becomes stagnant after a certain point of time. At this point of time, non-financial incentives have come into play, as it will fulfill the intrinsic needs and wants of the employees. The various elements of non-financial incentives are rewards, recognition, organizational opportunities, flexibility, and employee growth. Similarly, the factors affecting employee performance are employee motivation, organizational culture, work life conflict and leadership.

These factors are interlinked with each other and each element of non-financial incentives will have an impact on one of the factors of employee performance. Reward and recognition will affect the motivation level of the employees, as it will assist in boosting their confidence and their level of morale. Moreover, non-financial incentive is a crucial aspect of rewards and recognition.  Organization opportunity will affect the culture of an organization as the culture of an organization is set by definite rules and regulations. Flexibility will influence the leadership of the organization and increasing flexibility with the organization is one of the essential aspects of leadership.  Employee growth is an essential component of work life conflict and employees grow with differences in opinion. Team bonding is developed by discussing differences of opinion amongst employees. Thus, the employees grow at both a personal and professional level.

The research methodology has been selected depending upon the needs of the research paper. The research has used positivism as the philosophy of research and quantitative analysis of data is used for improving the overall scope of the study. The study is objective in nature and for validation of the hypothesis developed in the first chapter, quantitative analysis is necessary. In this study, in order to improve the reliability and validity of the data, randomization has been used as a sampling method. Simple random sampling has increased the accuracy of the data that has been collected and the sample population has been able to successfully represent the data that has been collected.  Ethical aspect of the study has been increased by maintaining the anonymity of the respondents in the study.  However, in this study, a broader aspect has been addressed and no specific problem related to a specific organization has been addressed.  The resulthave shown that there is positive impact of non-financial incentive on employee performance. The patterns in the answers to different questions show that answers vary depending upon gender, age and employment tenure.  The study has been able to portray that the impact of non-financial incentive on employees should be same in all the industries. There is no exception to other industries and the existing theories in the study have been validated.

Conclusion

In this chapter of the study, the findings will be linked with the objectives to evaluate the outcome. The two objectives in the study will be described in detail to deduce the conclusion.

Objective 1: To evaluate critically the role of non-financial incentives on employee performance in the hospitality industry  

The finding of the study states that non-financial incentives will have an impact on employee performance in the hospitality industry. The regression analysis is the quantitative method where the degree of relationship between both the variables has been calculated to identify nature of correlation. The value of multiple R is 0.93, which is almost close to 1 that means that there is positive correlation between the dependent and the independent variable.  Moreover, the F value is 3.29244E-14, which is less than .05 so null hypotheses has been rejected and the alternative hypothesis can be accepted. The alternative hypothesis states that there is impact of non-financial incentives on performance of the employees. In the hospitality industry, the performance of employees is crucial as it mostly consists of intangible products. Therefore, replicating the services in this industry is difficult so providing the employees with motivation is essential for maintaining their quality of performance. Non-financial incentives are essential for providing the employees with confidence and elevating their self-esteem. Human resource theories state that non-financial incentive is an essential component of motivation and different motivational theories emphasized fulfilling both the external needs and internal needs of the employees.

Objective 2: To identify the significance of non-financial incentive on employee performance in the hospitality industry

The value of R2 in the regression analysis is 0.87, which means that the dependent variable can explain 87% of the independent variable.  This shows that non-financial incentives have a significant impact on employee motivation.  Non-financial incentives included various elements such as rewards, recognition, flexibility, organizational opportunity and employee growth.  These elements are used to fulfil the internal needs and wants of the employees. The main issue faced by the organizations in the hospitality industry is employee turnover rate and employee attrition. Employee turnover can only be reduced by motivating and satisfying the employees otherwise increase in employee turnover will increase the overall cost structure of the organization. In this current study, if the employees are not satisfied, performance appraisal policies are essential for maintaining their long-term sustainability and competitive advantage.  In the regression equation, , if the value of x=1 is put into the equation then the calculated value of y is 1.03 that shows that increasing non-financial incentive by 1 unit will increase the value of employee performance by 1.03 unit. Thus, it can be seen that there is a significant influence of non-financial incentives on employee performance. The two-sample t test has proved that there is a significant impact of the independent variable on the dependent variable.  

Objective 3: To recommend suitable strategies for improving employee performance

Thus, in order to improve the quality of their workforce and make improvements in their performance, organizations will have to focus on satisfying their employees. The satisfaction level of the employees is essential for improving their motivation level.  The organization will have to make the employees feel a crucial part of the organization in order to motivate the employees. The leadership style of the organization is also an important factor as it defines the organization culture and various opportunities that they will provide the employees (Shin and Konrad 2017). The employers will have to provide enough opportunity for employees grow, both professionally and personally. The organization will have to provide rewards and recognition to their employees so that they can grow at an organizational level. The organization should provide flexibility to their employees as providing flexibility would be more productive for the organizations. Employees who have family commitments may wish to work flexible shifts so that they can maintain a positive work-life balance (Chen et al. 2017). The organization should commence training and development programs for improving the employees’ skills from time to time.  The organizations should conduct a program to motivate their employees and improve the level of team bonding within the organization. There should be growth within the organization so that the employees can fulfil their personal goals. The employees that feel stagnated within an organization will definitely leave by a certain point of time. The organization will have to develop an effective organizational culture so that the workforce can perform at an optimum level. Thus, it can be concluded that the above measures are necessary for improving the performance of the employees in any organization.

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