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1218863

IMPACTS OF REWARD SYSTEM ON CUSTOMER SERVICE EMPLOYEES’

MOTIVATION AND ITS OUTCOMES ON THEIR AFFECTIVE ORGANIZATIONAL COMMITMENT

Name: Zsuzsanna Szucs

Student Number: 1218863

Course: MSc Management

Department: Brunel Business School

Supervisor: Dr Goudarz Azar

Submission Date: 12 September 2016

Word Count: 12 835

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ABSTRACT

Purpose – The aim of this research project is to investigate the human resource

management outcomes of reward systems among customer service employees in the UK. The

study in-depth examines the impacts of financial and non-financial rewards on employee

motivation and affective organizational commitment. The significant indicators of these

variables as well as the relatedness of employee motivation and organizational commitment

were identified.

Methodology – Both primary and secondary data were utilised in the investigation in order

to address the objectives of this study. Implementing a quantitative, survey method, snowball

sampling was carried out to employees holding part- or full-time customer service position in

the UK, aged 18 and above, with a sample size of 145. In order to test the developed

hypothesis Multiple Linear Regression analysis was carried out with control variables of age

and employment status (part- and full-time).

Results – The key findings revealed that customer service employees’ motivation is

significantly predicted by both financial and non-financial rewards. Particularly, fringe

benefits, pleasant working condition, friendly supervision and opportunities for career

development were found to show the strongest relationships. In contrast to the literature,

these results indicate the importance of hygiene factors in motivating labour-force.

Examining affective organizational commitment, monetary rewards did not show significant

results, while non-financial rewards, namely recognition, friendly supervision and autonomy

exert high levels of influence on front-line employees. Finally, the study highlights that

motivated workforce show higher willingness to share the organizational values and put extra

efforts on behalf of the organization to achieve its vision. Consequently, offering those

rewards that highly impact their motivation will advance the growth of their affective

commitment.

Conclusion – Based on the findings, recommendations were proposed to enhance front-line

employees’ motivation and affective organizational commitment. It was suggested to put

emphasis on the nature and level of non-financial rewards offered to workers since those

were found to be the strongest significant indicators of the dependent variables.

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ACKNOWLEDGEMENTS

First of all, I would like to express my sincere gratitude to my supervisor, Dr Goudarz

Azar for his excellent guidance throughout the whole progression of my dissertation.

Besides, I am grateful to all Brunel Business School lecturers who have taught me during

my studies and the tremendous help of the Graduate School tutors and Brunel University

librarians.

I would never have been able to finish my dissertation without the continued support of

my beloved parents and my brother who have been always there to encourage me. Also,

many thanks go to all of my friends for their understanding and patience.

Lastly, I would like to thank the help of all participants who completed the questionnaire

and all of those who forwarded it to identify potential further respondents.

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CONTENTS PAGE

1. INTRODUCTION

1.1 Introduction..........................................................................................................9

1.2 Background and Research Justification...........................................................10

1.3 Aim and Objectives.............................................................................................11

1.5 Chapter Synopsis.................................................................................................12

2. LITERATURE REVIEW

2.1 Reward Systems..................................................................................................13

2.2 Motivation Theories............................................................................................15

2.2.1 Maslow’s Hierarchy of Needs................................................................15

2.2.2 Herzberg’s Two-Factor Theory..............................................................16

2.3 Impacts of Rewards on Employee Motivation................................................17

2.3.1 Financial/Transactional Rewards...........................................................17

2.3.2 Non-financial/Relational Rewards.........................................................18

2.4 Organizational Commitment.............................................................................21

2.5 Impacts of Rewards on Affective Organizational Commitment..................22

2.5.1 Financial/Transactional Rewards...........................................................22

2.5.2 Non-financial/Relational Rewards.........................................................24

2.6 Relationship between Employees’ Motivation and their

Affective Organizational Commitment...........................................................27

2.7 Conceptual Research Framework.....................................................................28

2.8 Chapter Summary................................................................................................28

3. RESEARCH METHODOLOGY

3.1 Research Philosophy...........................................................................................29

3.2 Research Approach.............................................................................................30

3.2.1 Deductive or Inductive............................................................................30

3.2.2 Qualitative or Quantitative......................................................................30

3.3 Research Method.................................................................................................30

3.3.1 Primary or Secondary Data.....................................................................30

3.3.2 Questionnaire............................................................................................31

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3.4 Measurements......................................................................................................31

3.4.1 Independent Variables.............................................................................32

3.4.2 Dependent Variables................................................................................34

3.4.3 Control Variables......................................................................................35

3.5 Sample Selection and Data Collection.............................................................35

3.6 Pilot Study............................................................................................................36

3.7 Data Analysis.......................................................................................................36

3.8 Limitations...........................................................................................................36

3.9 Ethical Considerations........................................................................................37

3.10 Chapter Summary..............................................................................................37

4. FINDINGS AND ANALYSIS

4.1 Demographic Profile of Respondents..............................................................38

4.2 Multiple Regression Analysis...........................................................................39

4.3 Impacts of Rewards on Employee Motivation................................................41

4.3.1 Evaluation of the Reward Package Elements.......................................43

4.4 Impacts of Rewards on Affective Organizational Commitment..................44

4.4.1 Evaluation of the Reward Package Elements.......................................46

4.5 Relationship between Employees’ Motivation and their

Affective Organizational Commitment...........................................................47

4.6 Chapter Summary................................................................................................48

5. DISCUSSION

5.1 Impacts of Rewards on Employee Motivation................................................49

5.1.1 Financial/Transactional Rewards...........................................................49

5.1.2 Non-financial/Relational Rewards.........................................................50

5.1.2 Evaluation of the Control Variables......................................................52

5.2 Impacts of Rewards on Affective Organizational Commitment..................53

5.2.1 Financial/Transactional Rewards...........................................................53

5.2.2 Non-financial/Relational Rewards.........................................................54

5.2.3 Evaluation of the Control Variables......................................................56

5.3 Relationship between Employees’ Motivation and their

Affective Organizational Commitment...........................................................56

5.4 Chapter Summary................................................................................................57

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6. CONCLUSION AND RECOMMENDATIONS

5.1 Conclusion............................................................................................................58

5.2 Managerial Implications....................................................................................60

5.3 Suggestions for Future Research......................................................................60

REFERENCES..............................................................................................................61

APPENDICES

Appendix A.................................................................................................................76

Appendix B.................................................................................................................79

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LIST OF FIGURES

Figure 2.1 Components of Reward Systems.....................................................................14

Figure 2.2 Maslow’s Hierarchy of Needs.........................................................................15

Figure 2.3 Three Dimensions of Organizational Commitment.........................................21

Figure 2.4 Research Framework.......................................................................................28

Figure 3.1 Towers Perrin Model.......................................................................................32

Figure 4.1 Age of Respondents.........................................................................................38

Figure 4.2 Gender of Respondents....................................................................................38

Figure 4.3 Normal Probability Plots of the Regression Standardized Residuals..............40

Figure 4.4 Scatterplot of Regression Standardized Residuals...........................................40

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LIST OF TABLES

Table 2.1 Applying Maslow’s Hierarchy of Needs at the Workplace..............................16

Table 2.2 Herzberg’s Two-Factor Theory.........................................................................16

Table 3.1 Scales of Financial Rewards.............................................................................32

Table 3.2 Scales of Non-Financial Rewards.....................................................................33

Table 3.3 Scale of Employee Motivation..........................................................................34

Table 3.4 Scale of Affective Organizational Commitment...............................................35

Table 4.1 Employment Status of Respondents..................................................................38

Table 4.2 Intercorrelation Matrix among Variables..........................................................39

Table 4.3 Model Summary of MLR on Employee Motivation.........................................41

Table 4.4 ANOVA of MLR on Employee Motivation.....................................................41

Table 4.5 Regression Coefficients – MLR on Employee Motivation...............................42

Table 4.6 Disintegrated Model – Reward Package Elements on Employee Motivation.......................................................................................43

Table 4.7 Model Summary of MLR on Affective Organizational Commitment..............44

Table 4.8 ANOVA of MLR on Affective Organizational Commitment..........................44

Table 4.9 Regression Coefficients – MLR on Affective Organizational Commitment............................................................45

Table 4.10 Disintegrated Model – Reward Package Elements onAffective Organizational Commitment..........................................................46

Table 4.11 Model Summary of MLR on Employee Motivation and Affective Organizational Commitment..........................................................47

Table 4.12 ANOVA of MLR on Employee Motivation and Affective Organizational Commitment..........................................................47

Table 4.13 Regression Coefficients – MLR on Employee Motivation and Affective Organizational Commitment..........................................................47

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Chapter 1

INTRODUCTION

1.1 INTRODUCTION

Given today’s highly competitive business environment where the demands and expectations

of the customers have significantly increased during the past few decades; ongoing cost

pressures and continued slow growth force businesses to consider the sustainability and

competitiveness of their labour force and talent strategies. It has been recognised that success

of an organization depends on its employees, namely those who are motivated and engaged

with the organizational vision, mission and values. However, misconceptions about what

employees really want still exist, which make management practices inefficient to deliver the

desired outcomes (Towers Watson, 2012).

According to Armstrong and Taylor (2014) a reward strategy is driven by the business

strategy which ensures that reward management is carried out effectively to the benefit of the

organization and the employees who work there. Employee motivation is crucial aspect of

management, since it encourages workers to do their best to fulfil their work duties and put

extra efforts to complete the tasks given to them at the workplace (Armstrong and Taylor,

2014). Whereas, employees’ organizational commitment is a broader concept since it is

associated with their sense of attachment to and identification with the organization

(Mowday, Porter and Steer, 1982), while affective organizational commitment can be seen as

the workers’ willingness to display effort on behalf of the organization and support to

achievement of the organization’s strategic goals by helping to communicate its values and

performance expectations (Meyer and Allen, 1997).

Therefore, reward management has a vital role in not only attracting and retaining high

potential employees, but also motivating them to act in the best interests of the business (Fay

and Thompson, 2001). In return to their efforts, employees need to be rewarded in a way that

makes them feel valued and appreciated for their work. Social Exchange theory suggests that

the more favourable the reward to the employees the more it generates the desirable

behaviours (Chiang and Birtch, 2012). However, in reality insufficient attention is given to

employee preferences for different types of rewards (Cox, Brown and Reilly, 2010).

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1.2 RESEARCH BACKGROUND AND JUSTIFICATION

Research studies on how reward systems affect employee motivation (Ahamad et al., 2015;

Cameron and Pierce, 1994; Cox, Brown and Reilly, 2010; Brown, Hewett and Conway, 2015;

Hewitt and Reilly, 2013; Fay and Thompson, 2001; Harel and Tzafrir, 1999; Rynes, Gerhart

and Minette, 2004; Shaw and Gupta, 2015) and organizational commitment (Angle and

Perry, 1983; Benson, 2006; Farndale and Murrer, 2015; Kinnie et al., 2005; Mottaz, 1988;

Ogilvie, 1986) are broad and general but many researchers argue that employees’ behaviour

needs to be understood in a specific research context (Cox, Brown and Reilly, 2010; Fay and

Thompson, 2001; Kinnie et al., 2005 and Shaw and Gupta, 2015).

Despite the vast literature on the context of physical workers (Angle and Perry, 1983;

Kovach, 1987; Fein, 1973; Newman and Sheikh, 2012b; Young, Worchel and Woehr, 1998),

and intellectual labour (Ahamad et al., 2015; Chew and Chan, 2007; Hewett and Conway,

2015; Kanungo and Hartwick, 1987; Kuvaas, 2006; Nazir et al., 2016; Ogilvie, 1986; Paul

and Anantharaman, 2004); there is limited research on how different rewards affect the

motivation and organizational commitment of emotional, front-line labour. In the growing

service economy, investigation of employees who hold customer service roles is increasingly

important (Glomb, Kammeyer-Mueller and Rotundo, 2004). Their role is particularly crucial

since they are the workers who are in direct contact with the customers, thus they make an

immediate impact on the results of the business (Armstrong and Taylor, 2014; Brown and

West, 2005). Ensuring that staff not endangering company reputation, instead providing high

levels of customer service is essential; as it consequently increases the probability of

customer satisfaction and loyalty which in return benefits the business (Thorsten, 2004).

Nevertheless, a global research of Towers Watson (2014) found out that only four in ten

employees are highly committed, while 24% of the respondents are uncommitted, and 36%

detached from their job and the organization where they work, which points out the

importance of understanding the factors of reward systems that drive sustainable

commitment. These results might be explained by the Partial Inclusion Theory which argues

that employees belong to multiple social systems, thus only part of the individual is included

in the organisation (Katz and Kahn, 1978). It has been also discussed that part-time

employees might hold more non-work related roles, such as another job, family or studies,

than full-time employees which consequently have the potential to even more reduce their

involvement (Thorsteinson, 2003).

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Feldman (1990) emphasized that part-time employment status is especially common among

customer service roles since entire industries rely heavily on them, such as service and trade

industries in retail and hospitality sectors. The government recent statistics revealed, that

almost 27% of the UK labour force work part time, which has increased by 1.87 million in

the last four years, reaching 8.48 million (ONS, 2012 and ONS, 2016). Given the increase in

temporary and “zero-hours” employment contracts, might even more indicates the problem of

lack of motivation and commitment among this type of workforce. Therefore it provides a

perfect research context for the present study to investigate the impacts of reward systems on

customer service employees.

1.3 AIM AND OBJECTIVES

Aim

Having identified the research area and the current research gap, this study aims to

investigate the human resource management outcomes, namely motivation and

affective organizational commitment, of reward systems among customer service

employees in the UK.

Objectives

This research seeks to:

Examine the impacts of financial and non-financial rewards on motivation and

affective organizational commitment among customer service employees.

Identify the significant predictor variables of financial and non-financial reward

elements that influence customer service employees’ motivation and affective

organizational commitment respectively.

Investigate the relationship between customer service employees’ motivation

and affective organizational commitment.

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1.4 CHAPTER SYNOPSIS

In order to meet the pre-set objectives of the study, the report will follow the below structure.

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Chapter 2

LITERATURE REVIEW

This chapter aims to introduce the term of reward system and its elements,

discuss the two main motivational theories and explain the wide range of

definitions of organizational commitment. It critically reviews the literature on

the impacts of financial and non-financial rewards on employee motivation as

well as on affective organizational commitment. It also includes a critical

discussion about the correlation between employees’ motivation and

organizational commitment. Consequently, this chapter leads to the development

of five hypotheses and the introduction of the research framework.

2.1 REWARD SYSTEMS

Reward system of an organization is designed to reflect its integrated policies, processes and

practices for rewarding its employees according to their contributions, competence and the

overall value they create (Armstrong, 1996). It is developed in order to support the

achievement of the business goals by attracting and retaining talented workforce, promoting

high performance, the organizational culture and its core values (Armstrong and Taylor

2014). Armstrong and Murlis (1998) also emphasized the importance of recognizing

employees as stakeholders of the business, therefore rewarding them ‘fairly, equitably and

consistently in accordance with their value to the organization’ is essential (Armstrong and

Stephens, 2005: pp 3).

The core components of reward systems are the pay and benefits which include the

employees’ basic pay, contingent pay referring to financial rewards linked to performance

and contribution; and benefits such as pension, sick and holiday pay, healthcare and other

perks, like company car (Martin, 2010). This combination of rewards is usually referred to as

financial rewards, total remuneration or transactional reward package. These rewards are

considered as extrinsic since these are provided externally, by the organization (Deci, 1972).

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On the other hand, reward management also incorporates non-financial rewards, such as the

work environment (organizational culture, supervision, non-financial recognition and

feedback), the learning and development opportunities which allows employees to expand

their competences and progress their career; and also the increased responsibility and

autonomy (Martin, 2010). Non-financial rewards can be seen as extrinsic, such as praise or

recognition; or intrinsic associated with the job design, personal interest or satisfaction and

the belief that the work is valuable (Armstrong and Taylor 2014).

Figure 2.1 Components of Reward Systems (Adopted from: Armstrong and Brown, 2006)

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2.2 MOTIVATION THEORIES

2.2.1 Maslow’s Hierarchy of Needs

Maslow (1943) claimed that basic (low level) needs of individuals must be at least partially

satisfied before higher needs can affect their behaviour. However, once a lower need has been

satisfied, people no longer consider it as a strong motivator. He stated that only unsatisfied

needs can motivate an individual. The needs have been placed in a hierarchy, as Figure 2.2

shows below, and each group of needs are dependent on a group below.

Figure 2.2 Maslow’s Hierarchy of Needs (Adopted from: Mullins, 2011)

Although, Maslow’s model have not been applied to the work environment Steers and Porter

(1991) suggested a list of organizational factors that can be connected to the original model to

motivate employees (see Table 2.1). This model provides a basis for understanding

employees’ desire not only for financial incentives but also for recognition, social status and

self-advancement.

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Levels of Needs Organizational Factors

Self-Actualization Challenging Job, Achievement, Self-advancement

Esteem Social Recognition, Job Title, Feedback

Social Friendly Supervision, Cohesive Work Group

Safety Safe Working Conditions, Company Benefits, Job Security

Physiological Pay, Pleasant Working Conditions

Table 2.1 Applying Maslow’s Hierarchy of Needs at the Workplace

(Adopted from: Mullins, 2011)

2.2.2 Herzberg’s Two-Factor Theory

Herzberg (1959) adopted and further developed Maslow’s work; however, he divided the

features of the work environment into two major groups and made distinction between

intrinsic an extrinsic work rewards. He argued that there are two distinct sets of job-related

variables that affect employee motivation; motivators (job content variables) and hygiene

variables (job context) (Reif, 1986). Hygiene factors correspond to the bottom three layers of

Maslow’s pyramid, while motivators to the top two layers.

It was proposed that hygiene factors (factors of the work environment; salary, job security,

working conditions, good quality of supervision and interpersonal relations) have to be at

present at the workplace to avoid employee dissatisfaction. However, motivators, such as

sense of achievement, personal growth and advancement, recognition and increased

responsibility; are the primary reason for enhancing motivation (Armstrong, 1996).

Not Dissatisfied but No Motivation Satisfaction and Motivation

Hygiene Factors Motivational Factors

Pleasant Working ConditionsFriendly Supervision

SalaryFringe Benefits

Relations with co-workersJob security

AchievementCareer Advancement

Self-AdvancementPersonal Growth

RecognitionAutonomy

Table 2.2 Herzberg’s Two-Factor Theory

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2.3 IMPACTS OF REWARDS ON EMPLOYEE MOTIVATION

2.3.1 Financial/Transactional Rewards

Various articles have discussed that financial rewards have a significant influence on

employees’ motivation. Fein (1973) argued that extrinsic rewards, especially pay and

benefits, are more important factors for employee motivation than intrinsic ones, however

blue collar workers were only considered for his investigation. On the other hand, Reif’s

(1975) study with participants from all organizational levels and functional areas of six

different types of organizations (manufacturing, distributor, governmental and loan

association) have also found support for the more perceived value of monetary rewards, such

as salary, health insurance benefits and cost of living adjustments. The only intrinsic reward

that was scored high (fourth) on his survey was self-actualization, while personal growth and

development only thirteenth.

Cameron and Pierce (1994) have found that when extrinsic incentives (financial payments,

prizes, credits) were not offered the intrinsic motivation of employees were positive and

significant, but when it was offered the relationship was even stronger. Similarly to these

studies, Harel and Tzafrir (1999) stated money as ‘the most powerful motivator’. Although,

their study was based in the Middle East, their sample was extensive including participants

from different industries as well as from private and public organizations. Additionally,

recent studies of Huang, Lin and Chuang (2006) examining Taiwanese construction firm’s

employees, and Manolopoulos (2008) investigating employees from the Greek public sector

also revealed that monetary rewards are highly valued motivators for the workforce.

Likewise, employees in managerial position appeared to value salary as the most significant

indicator of motivation as well, while non-managers found to exert higher levels of

motivation when the combination of salary and fringe benefits are offered (Namasivayam,

Miao and Zhao, 2007). They suggested to greater attention to the level and the nature of the

benefits offered to workers. Similarly, Danish and Usman (2010) also found statistically

significant positive relationship between fringe benefits and employee motivation. Therefore,

these findings are in contrast to the theory of Herzberg; that employees are mainly concerned

with the features of the job itself, the higher order needs or so called ‘motivators’, and salary

and fringe benefits as hygiene factors do have motivational power.

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On the other hand, Werner and Ward (2004) concludes that, although, financial incentives

have a positive impact on work motivation, the significance of the relationship strength is

overestimated and it may reduce the intrinsic motivation of the workforce. Similarly, a

comparative study on pay systems carried out by Cox (2005) found no significant positive

impact of financial rewards on motivation; whereas, Shaw and Gupta (2015) argued that

financial incentives do not erode, in fact significantly enhance intrinsic motivation.

According to Deci (1972) financial rewards, such as competitive salary, benefits and

incentives are necessary factors for satisfying employees’ needs; however, those cannot

guarantee that workers will be motivated as well. He pointed out the importance of

administering financial rewards non-contingently, since it have the potential of keeping

higher order needs while satisfying lower ones. Whereas, contingency payment schemes (e.g.

piece rate) will most likely decrease intrinsic motivation. Nevertheless, Ahamad et al. (2015)

by conducting a research in a commercial bank in Israel found that compensation

significantly influences the motivation of employees which was measured through their

productivity and performance. Their extensive research enabled the comparison of the

impacts of financial incentives based on employees past and future performance as well and it

was argued that both type of incentive schemes, but especially future performance based, can

lead to higher motivation.

Emanating from the previous discussion the following hypothesis was developed;

H1. Financial rewards positively predict customer service employees’ motivation.

2.3.2 Non-Financial/Relational Rewards

Hackman and Oldham’s (1980) Job Enrichment Model proposed that high intrinsic

motivation is related to experiencing three psychological states at work; meaningfulness of

work, responsibility and knowledge of the outcomes; and these states are derived from certain

characteristics of a job. They argued that workers’ motivation will mostly likely positively

respond to jobs where skill variety, task identity, task significance, autonomy and feedback

are available. Since in customer service, employees’ status is relatively low, all of these non-

financial rewards have the potential to positively affect their work experience and

consequently their motivation (Malhotra, Budhwar and Prowse, 2007).

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However, examining the impacts of feedback, Deci (1972) suggested that the relationship of

feedback and intrinsic motivation is not monotonic. Too much of positive feedback may

make the employee dependent on it, thus it would decrease his intrinsic motivation. Similarly,

too much of negative feedback would most likely threaten his self-determination,

consequently reduce his intrinsic motivation. However, a very small amount of both types of

feedbacks could serve as a boost for his individual level outcomes. Similarly, Hewett and

Conway’s (2015) study concluded that verbal reward (feedback and recognition) positively

predict motivation. Although, their study included participants from the UK, the

organizations were public and their jobs mainly required professional, higher degree

qualifications which might contradict with the findings of the current study from the context

of emotional labour.

Another research, investigating white-collar workers in the U.S. found recognition and praise

from supervisor as the ‘most effective motivators’ along with personal growth and career

development, autonomy and feelings of worthwhile (Kanungo and Hartwick, 1987).

Moreover, participative management through involving employees in decision-making

appears to have motivational impacts as it satisfies intrinsic needs (Deci, 1973). It was argued

by Deci (1973) that all of these non-financial rewards derives from the workers’ personal

interests and need for challenges, which have the potential of giving the feeling of

satisfaction and accomplishment, thus increase their intrinsic motivation. Similarly Zani et al.

(2011) stated that non-financial rewards provide intrinsic value to employees, thus it is the

best way to motivate them.

According to Nohria, Groysberg and Lee (2008) employees need to bond with their

workplace to drive motivation. They argued that it can be fulfilled by providing employee

friendly working conditions and fostering good relationships among co-workers and with

supervisors. Similarly, friendly supervision style, in contrast to autocratic style, found to be

strongly and significantly correlated with employee motivation among salespeople in the

retail industry (Chowdhury, 2007). These findings support the theory of Herzberg (1959) that

managers need to provide effective, supportive and non-intrusive supervision as a basis in

order to motivate workers.

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Moreover, another element of the reward package, training, was found to be that training is

positively related to human resource outcomes, especially to motivation since it enhances

career opportunities and competences of the workforce Tharenou, Saks and Moore (2007).

Additionally, through training support can be gained from the management of the

organization, therefore it not only enables workers to enhance their skills, but also provides

an opportunity to them to bond with their superiors (Tharenou, Saks and Moore, 2007).

However, Fey et al. (2000) found that non-technical training is only marginally significant for

non-managers to increase their motivation, and technical training showed stronger positive

relationship for managers than for non-managers. These findings highlight the different

perception of training between workers and managers.

Despite to the widely argued importance of non-financial, social rewards, Rynes, Gerhart and

Minette (2004) discovered that most studies underreport the importance of monetary rewards

as a result of discrepancy of what surveyed employees tend to say and how they actually

behave. They identified money as an important motivator for employees. However, their

research focused on employee preferences at the point of recruitment which might lead to

different results compared to the phase when participants are doing the job. They also

emphasized that in contrary to Maslow’s theory, pay is not only low-order motivator to

satisfy the basic needs, but it is vital to assist in obtaining any level on the Hierarchy of

Needs Model, including social esteem and self-actualization. Nonetheless, they also

highlighted that money is not the only, and most importantly not the primary motivator for

most employees.

Therefore, the following hypothesis has been developed;

H2. Non-financial rewards positively predict customer service employees’ motivation.

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2.4 ORGANIZATIONAL COMMITMENT

Organizational commitment has been a subject of an extensively investigated research area,

therefore wide variety of definitions and measurements have been developed (Paul and

Anantharaman, 2004). The most common definition is emphasizing employees’ desire to

remain member of the organization; thus it associates organizational commitment with

workers’ loyalty to their employers (Becker, Randal, and Riegel, 1995; Meyer and Allen,

1997; Northcraft and Neale, 1996). However, other dimensions of organizational

commitment identify the integration of individual and organizational goals (Becker, Randal,

and Riegel, 1995; Cohen, 2013; Hall, Schneider and Nygren, 1970) sense of attachment to

and identification with the organization (Mowday, Steers and Porter, 1979; Porter et al.,

1974; Romzek, 1989) and willingness to exert high levels of effort on behalf of the

organization (Becker, Randal, and Riegel, 1995; Mowday, Steers and Porter, 1979;).

On the other hand, organizational commitment can be seen as a multidimensional concept as

well, which was proposed by Meyer and Allen (1997). Their three dimensional model

describes different ways in which organizational commitment develops among the workforce.

As Figure 2.3 presents, the first dimension was termed affective commitment, which identifies

the psychological attachment to and shared values with the organization; while the second

component, continuance commitment highlights the costs associated with leaving the

organization (Cohen, 2013). The final element, normative commitment, is linked with the

employees’ perceived obligation to remain with the organization (Meyer and Allen, 1997).

Since the aim of the present research is to investigate whether reward systems influence

customer service employees’ willingness to display effort on behalf of the organization and to

accept its values and goals, affective commitment was selected as the type of organizational

commitment which covers all of these criteria (Mowday et al., 1979 and Porter et al., 1974).

Figure 2.3 Three Dimensions of Organizational Commitment (Based on Meyer and Herscovitch, 2001, Adopted from: Padma and Nair, 2009)

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2.5 IMPACTS OF REWARDS ON AFFECTIVE ORGANIZATIONAL COMMITMENT

2.5.1 Financial/Transactional Rewards

A significant body of literature has investigated the financial factors that influence the

organizational commitment of employees. Research carried out by Ogilvie (1986) found

significant relationship between compensation and organizational commitment. He argued

that commitment levels can only be increased if the given benefits are clearly communicated

and administered to the employees. Since transactional rewards, such as pay raises, can be

more accurately communicated than non-financial, such as job characteristics; he concluded

that financial rewards help to achieve higher levels of affective organizational commitment.

Moreover, financial rewards cannot only communicated more clearly but also the criteria in

which employees usually financially rewarded is more objective and instructions on how to

attain them is more clearly understood (Marescaux, Winne and Sels, 2013).

Similarly, a cross-national study by Farndale and Murrer (2015) found that financial rewards

are positively related to affective organizational commitment. However, their research

findings from Mexico and the U.S. showed significant relationships; in the Netherlands the

same relationship was not found evident. It may be explained by the notion that countries

with higher masculinity and/or collectivist cultures value monetary rewards and economic

security more than intrinsic rewards, such as self-actualization (Huang and Vliert, 2003).

Likewise, studies in Chinese setting (Miao et al, 2013; Newman and Sheikh, 2012a, 2012b;

and Nazir et al., 2016) found that intrinsic rewards have only limited influence on

organizational commitment whereas extrinsic rewards showed strong relatedness. Miao et al

(2013) revealed only one intrinsic reward, autonomy; with high significance level whereas

Newman and Sheikh (2012a) identified salary and fringe benefits as the main factors for

influencing commitment.

Nevertheless, a study by Angle and Perry (1983) from the context of Western organizations

revealed similar results; that extrinsic rewards, compensation in particular, enhance

organizational commitment more effectively than intrinsic ones. Although, it was argued that

intrinsic factors are important as well, they strongly rejected the view that commitment is

related to an intrinsic need fulfilment. However, it was proposed that the findings vary by

occupation and their findings might not be generalized since only US public bus operators

with respondents mainly from lover educational levels were involved in their research.

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Evaluating the adaptation of fringe benefits packages, Emerson and Prang (2016) argued that

benefits are often seen to be complex to administer for the companies as a result of meeting

tax and legal compliance, while for employees benefits are often not easy to understand.

Therefore, many companies neglect to invest in them. However, Ahmad and Scott (2015)

investigating hotel managers revealed that most types of fringe benefits have strong (such as,

sports and social facilities, relocation allowance, free laundry service and birthday

celebration) or moderate correlation (such as, staff discount, staff party and personal

accident insurance) on employees’ organizational commitment, especially to affective

commitment. Whereas, Wang (2004) research suggested that fringe benefits are normally

guaranteed at companies, therefore it does not have impact on affective commitment to share

the values and goals of the organization, but only on their continuance commitment. They

proposed that employees might be afraid of losing those benefits by leaving the organization

but those will not make them to put utmost efforts.

While these studies indicate that financial rewards are strongly and significantly related to

employees’ affective organizational commitment, Kuvaas (2006) noted that for highly

educated knowledge workers financial rewards are not the main reason for performing well

and developing high levels of commitment but the intrinsic and social rewards. Although,

Paul and Anantharaman’s (2004) research investigating software professionals in India

revealed that compensation practices show high correlation with affective organizational

commitment, significant relationship was not found in the regression analysis. Consequently,

salary might be a crucial criterion in the choice of the organization but once knowledge

workers are part of the organization non-monetary rewards are more important to them. In

support to this, Chew and Chan (2008) recognized that pay alone is not sufficient for

increasing employees’ organizational commitment, but along with non-financial rewards it

can provide a more effective approach.

However, the aim of the current research is to investigate customer service employees’

perception of organizational rewards, hence studies in the context of knowledge workers

might limit the understanding of the behaviours of the target population. Therefore based on

the literature from outside of the knowledge workers context, the following hypothesis was

developed;

H3. Financial rewards positively predict affective organizational commitment among

customer service employees.

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2.5.2 Non-financial/Relational Rewards

Previous studies in the context of non-financial rewards and organizational commitment

identified training (Benson, 2006; Nazir et al., 2016 and Paul and Anantharaman, 2004),

supervisor support (Kuvaas and Dysvik, 2010 and Truss et al., 2006), recognition and

feedback (Chew and Chan, 2008; Kinnie et al., 2005; Paul and Anantharaman, 2004 and

Truss et al., 2006), career development (Malhotra, Budhwar and Prowse, 2007; Meyer and

Smith, 2000; Paul and Anantharaman, 2004 and Truss et al, 2006) and the nature of the

task, such as autonomy, (Chew and Chan, 2008; Malhotra, Budhwar and Prowse, 2007 and

Mottaz, 1988) as the main factors influencing employees attitudes towards the organization

they work for.

A research study conducted by Paul and Anantharaman (2004) with a sample of knowledge

workers proposed that all non-financial rewards play a significant role in determining

employees’ organizational commitment. Particularly, employee-friendly work environment,

career development, development-oriented appraisal and comprehensive training were scored

highest, in the regression analysis. Although this study included various elements of non-

financial rewards, cross-sectional nature of the study with respondents from the Far East

might limit the generalizability of the results.

On the other hand, Malhotra, Budhwar and Prowse (2007) by investigating front line

employees in the UK call centres interpreted that non-financial rewards are considered as

more important to employees than financial ones. Similarly to Paul and Anantharaman (2004)

they have identified career development as a significant factor. In addition to this, autonomy,

participation in decision-making and role clarity found to enhance employees emotional

attachment to the organization. They argued, that in customer service roles, workers status is

relatively low, therefore autonomy and opportunities given to them to participate in decision

making regarding their role can make them more involved with the vison of the organization

(Malhotra, Budhwar and Prowse, 2007). However, training and feedback was not found

significant in their research.

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Similary, Kinnie et al. (2005) conducting research in the UK by selecting participants only

from organizations where quality of HRM practices operates, known as they were listed on

Sunday Times 100, training was not found significant by them either. However, in contrast to

Malhotra, Budhwar and Prowse (2007) career opportunities and involvement were not

supported either, whereas, recognition, communication and openness were found to influence

organizational commitment. The reason for the contradictory results can be that Kinnie et al.

(2005) included different levels of employees, from professionals, line managers and workers

while Malhotra, Budhwar and Prowse (2007) only considered workers for their investigation.

Although, findings from Chinese setting contradicts previous research that non-monetary

factors are the main influence on affective organizational commitment (Miao et al, 2013;

Newman and Sheikh 2012a and 2012b), Nazir et al., (2016) argued that autonomy leads to

empowerment and more flexible decision-making about employees’ work; therefore it foster

commitment. Similarly, Mottaz (1988) highlighted that intrinsic rewards followed by social

rewards make the most positive impact on affective organizational commitment, particularly

the nature of the task, task autonomy, significance and involvement, were identified as the

primary antecedents of organizational commitment.

Furthermore, Nazir et al., (2016) also found a significant positive relationship between

training and organizational commitment. They observed that as a result of training, workers

feel more confident and satisfied in their work, consequently they become more committed.

However, Benson (2006) argued that the effectiveness of employee development depends on

the activity and the skills that can be gained. Employees who gained specific skills through

on the job training were more committed while general, marketable skills reduced their

organizational commitment. Similarly, Chew and Chan (2008) stated that employees not

necessarily increase their commitment as a result of receiving training. However, the

examined companies in their research might lacked of time, resources and training facilities,

thus the received training content might could not serve the workers’ need. In addition to this,

Marescaux, Winne and Sels (2013) suggested that receiving training may not be seen as a

reward or appreciation but a sign of incompetence, therefore it lower the organizational

commitment.

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In contrast, perceived supervisor support and the behaviour of immediate line-manager is

more strongly related to affective commitment than employee development (Kuvaas and

Dysvik, 2010; and Truss et al., 2006). Furthermore, performance appraisals that provide

regular feedback to workers along with recognition practices nurtures the sense of attachment

and belonging of the rewarded employee (Chew and Chan, 2008; Gagné, 2009 and Paul and

Anantharaman, 2004) as well as provide an opportunity to communicate the organization’s

vision and goals (Cabrera and Cabrera, 2005).

The above findings of previous literature suggest the following hypothesis;

H4. Non-financial rewards positively predict affective organizational commitment

among customer service employees.

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2.6 RELATIONSHIP BETWEEN EMPLOYEES’ MOTIVATION AND THEIR

AFFECTIVE ORGANIZATIONAL COMMITMENT

According to Rizal et al. (2014) motivated employees ‘will give a boost involvement in

various activities to achieve organizational commitment’. Significant results have been

revealed in their study and it was concluded that individuals’ motivation is strongly related to

organizational commitment, particularly to workers’ willingness to share the organizational

values and to help the business to achieve its goals. In similar vein, findings of Choong,

Wong and Lau (2011) show significant correlation between motivation and all the

components of organizational commitment (affective, normative and continuance), however,

the relationship between affective commitment and motivation, which is in context with

present research, revealed the strongest correlation. Despite the fact that Warsi, Fatima and

Sahibzada (2009) by investigating private sector employees of Pakistan, found that the link

between job satisfaction and organizational commitment is stronger than motivation and

organizational commitment the correlation of motivation and organizational commitment

showed significant positive results.

In contrast, Tella, Ayeni and Popoola (2007) found motivation to be negatively correlated to

organizational commitment by investigating library personnel in Nigeria. The controversial

result suggests the need for examining the relationship in specific research context as well.

As this research aims to investigate customer service employees working in the UK the

results might differ from the previously mentioned study. Furthermore, motivation was not

found to be strongly important for college student volunteers’ organizational commitment

(Nazilah, Rozmi and Fauziah, 2012). However, it might be explained by the notion that

volunteers differ from paid employees, thus they can be highly motivated to perform a task

without strongly committed to the organization.

Therefore, hypothesis can be stated as follows:

H5. Customer service employees’ motivation is positively related to their affective

organizational commitment.

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2.7 CONCEPTUAL RESEARCH FRAMEWORK

Employees’ motivation was discussed as workers’ intention to put extra efforts to complete

the given tasks to them and fulfill their best potentials (Armstrong and Taylor, 2014), while

the level of their organizational commitment determines workers’ willingness to share the

values and goals of the organization and to contribute to the success of the business

(Mowday, Porter and Steer, 1982). Both of these variables are seen as key factors in

achieving competitive advantage in today’s highly competitive business environment

(Towers Watson, 2012). It has been identified that both employee motivation and

organizational commitment are dependent on the organizations’ reward packages, namely

financial and non-financial rewards (Fay and Thompson, 2001). Moreover, it has been

identified that there is correlation between motivation and organizational commitment

(Choong, Wong and Lau, 2011; Rizal et al., 2014 and Tella, Ayeni and Popoole, 2007).

Therefore, the proposed research framework can be seen below.

Figure 2.4 Research Framework

2.8 CHAPTER SUMMARY

This chapter has defined the term of reward systems along with its elements, introduced

motivational theories of Maslow and Herzberg, and explained the concept of organizational

commitment. It critically reviewed the existing literature on the effects of financial and non-

financial rewards on employee motivation as well as on organizational commitment. The

correlation between employees’ motivation and organizational commitment has been

discussed. Consequently, five hypotheses have been developed along with the research

framework.

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Chapter 3

RESEARCH METHODOLOGY

This chapter aims to critically explain the available research strategies along with

the justification of why the adopted method serves the aim of the research to

investigate the impacts of reward systems on customer service employees’

motivation and affective organizational commitment. It provides the scales and

measurements used for this research as well as the sampling, data collection and

data analysis methods. Finally, limitations of the research as well as the ethical

issues that have been considered were addressed.

3.1 RESEARCH PHILOSOPHY

First of all, the research philosophy provides a crucial starting point for business research

since it not only influences what method is chosen but also how the data is collected,

analysed and understood. According to Saunders, Lewis and Thornhill (2016) two main

philosophies can be distinguished; positivism and interpretivism. Positivism entails observing

social reality and creating law-like generalisations by testing existing theory to explain and

predict behaviour in organizations (Gill and Johnson, 2010).

Although interpretivist research facilitates the new and in-depth understandings of a research

problem (Saunders, Lewis and Thornhill, 2016); as a result of its complexity and the close

involvement with the people being investigated it is a highly subjective approach (Bryman

and Bell, 2011). Therefore, in order to avoid influencing the findings, the present study is

based on the philosophy of positivism, since investigating the relationships of rewards and

employee motivation and organizational commitment requires objectivity and a detached data

collection about an observable reality (Crotty, 1998). Hence, existing theories will be tested

as well as regularities and casual relationships will be identified.

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3.2 RESEARCH APPROACH

3.2.1 Deductive or Inductive

Alongside with the positivist philosophy deductive research approach has been implemented

since first a theoretical framework and hypotheses were developed from the academic

literature and then it was tested by empirical observation (Collis and Hussey, 2014). Hence,

the logic moved from the general to the particular to investigate the impacts of reward

systems on customer service employees’ attitudes. Whereas inductive approach does not aim

to approve or negate the existing theories, but pursue to create new outlines and significances

in a more subjective, qualitative way (Collis and Hussey, 2014).

3.2.2 Quantitative or Qualitative

According to Saunders, Lewis and Thornhill (2016) quantitative and qualitative research

techniques can be seen as two ends of a continuum. Quantitative method examines

relationships between variables by theory testing, and it uses and generates numerical data

through a standardised data collection technique, such as questionnaires (Saunders, Lewis

and Thornhill, 2016). Despite the fact, the qualitative method enables the investigation of

reasons behind a phenomenon and exploration of new areas of the research problem,

quantitative method can better determine and quantify the degree of relationships between

concepts and variables and enables highly structured empirical investigation and statistical

analysis (Blumberg, Cooper and Schindler, 2011). Moreover, quantitative data collection is

perceived as more anonymous and more objective as there is no influence from the researcher

side (Saunders, Lewis and Thornhill, 2016), which is highly important to investigate sensitive

topics such as rewards and employees’ behaviours towards their jobs and organizations;

therefore quantitative approach is the most suitable for the present study.

3.3 RESEARCH METHOD

3.3.1 Primary and Secondary Data

In order to meet the pre-set objectives of the study, both secondary and primary data was

used. Secondary data was obtained from academic journals and textbooks in order to identify

the gap in the existing literature and develop hypotheses. Since secondary data is ‘gathered

and recorded by someone else prior to the current need of the researcher’s (Zikmund, 2002,

pp.136) it cannot provide the most relevant and up to date data (Bryman and Bell, 2011).

Therefore, primary data was collected by using a self-administered questionnaire.

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3.3.2 Questionnaire

As it has been discussed, survey method was designed to gather primary data for the research

since it has the potential to reveal attitudes and expectations of a representative sample of

individuals (Zikmund, 2002). Self-administered questionnaires cannot only be distributed

faster and cheaper, but also a larger sample size can be reached, thus it can provide more

accurate information about the population than qualitative methods, such as observation and

interviews (Cooper and Schindler, 2011). However, the lack of presence of the researcher at

the time of the data collection prevents the respondents to get clarification from the

researcher if misunderstandings occur (Bryman and Bell, 2007). In order to reduce the

occurrence of that problem to the lowest level, a pilot study was conducted beforehand (see

Section 3.5).

The survey was designed with closed-ended questions and respondents were asked to state

their level of agreement on a five-point Likert Scale (see Appendix A). The reason for

choosing such types of questions was to enhance the comparability of answers since it makes

easier for the researcher to quantify and show relationships between variables (Bryman and

Bell, 2011). Moreover, in this way higher response rates can be achieved as questions can be

answered quicker and more easily by participants (Zikmund, 2002).

3.4 MEASUREMENTS

Measurements used in the present study were already developed and published in high-

quality ABS (3 and 4 stars) listed journals in order to ensure reliability and validity of the

scales. Furthermore, the adopted scales have been tested for their reliability by employing

Cronbach’s alpha. Results were acceptable and all values were positive thus it indicates that

items were measuring the same underlying characteristics (Pallant, 2010).

All items on the questionnaire were linked to a five-point Likert scale ranking, where 5 meant

‘strongly agree’ and 1 ‘strongly disagree’. Since this type of scale does not force participants

to indicate simple ‘yes or no’ answer, a better understanding of the level of their agreement

can be reached (Zikmund et al., 2013). Moreover, it allows neutral and undecided feelings to

be presented (Zikmund et al., 2013). In addition to this, reversed items were included on the

research survey in order to diminish the risk of biases (Cooil and Rust, 1994).

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3.4.1 Independent Variables

Since the present research aims to investigate the impacts of reward systems on employees’

behaviours towards their jobs and the organizations they work for, financial and non-financial

rewards are the independent variables in the study. Towers Perrin model, shown in Figure

3.1, was adopted in order to identify pay and benefits as financial (transactional) elements of

the reward system; as well as work environment and learning and development as non-

financial, or so called relational rewards.

Figure 3.1 Towers Perrin Model (Adopted from Armstrong and Taylor, 2014 pp 366)

Financial/Transactional Rewards

Financial rewards were measured by two indicators; pay and fringe benefits, developed by

Malhotra, Budhwar and Prowse (2007) and have been well accepted for demonstrating high

reliability and validity (Newman and Sheikh, 2012b). In the current study, Cronbach alpha

coefficient was .812. The responses for each indicator (pay and benefits) were summed and

averaged to yield a satisfaction with the financial benefits. Items included are listed in Table

3.1.

Pay I am satisfied with the amount of pay I receive for the job I do.

I feel I am paid fairly considering the work I do.

I am satisfied with my pay considering other organizations I know of.

Benefits I am satisfied with the fringe benefits package.

The fringe benefits package is as good as other organization offer.

Table 3.1 Scales of Financial Rewards

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Non-Financial/Relational Rewards

Based on the Towers Perrin Model two main indicators were identified; learning and

development and work environment, and several sub-scales were selected and adopted from

Malhotra, Budhwar and Prowse (2007), see Table 3.2. Promotional opportunities was

captured by a reduced scale of Mottaz (1988) while training was measured by a two-item

scale, originally generated by Boshoff and Allen (2000). Scales to measure supervision was

used by Singh (1998) and Teas (1983) while reduced scale of autonomy was adopted from

the Job diagnostic survey developed by Hackman and Oldham (1976). Finally, three-item

scale was taken from Hackman and Oldham (1976) to measure satisfaction with feedback.

The developed scale has good internal consistency, with a Cronbach alpha coefficient of .902.

Similarly to the financial rewards, the responses for each item were summed and averaged to

yield a satisfaction with the non-financial benefits. The items included on the survey are

listed in Table 3.2.

Learning and Development

Promotional opportunities

There is enough opportunity for advancement on my job.

Training

I receive induction training before coming in contact with customers.

I receive regular training to keep me updated for good service.

Work Environment Working condition

The working conditions are adequate to perform a good job.

Supervision

My supervisor is approachable.

My supervisor helps make my job more pleasant.

Autonomy

The job allows me to use personal initiative in carrying out the work.

Feedback (non-financial recognition)

Superior gives me feedback on how well I am performing on my job.

I am praised by my superior for providing good service to customers.

I receive recognition by superior for providing good service.

Table 3.2 Scales of Non-Financial Rewards

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3.4.2 Dependent Variables

Since the current study investigates the influence of rewards systems on human resource

management outcomes, employee motivation and affective organizational commitment are

the dependent variables in this study.

Employee Motivation

Employee motivation was measured by job satisfaction since it has been identified and used

as a motivational factor for employees (Mak and Sockel, 2001). The scale was accepted

since it was tested for reliability and validity checks have been performed by conducting

confirmatory factor analysis (CFA) (Mak and Sockel, 2001). In the current study, Cronbach

alpha coefficient was .627 which is a bit low, however, as it only consists of four items the

result (>0.5) is acceptable (Pallant, 2010). Items included are presented in Table 3.3.

Items

1. All in all, I am satisfied with my job.

2. In general, I like working here.

3. I will probably not be looking for a job outside of customer service.

4. I seldom think about quitting. (R)

Table 3.3 Scale of Employee Motivation

Affective Organizational Commitment

It was measured using a reduced 7-item organizational commitment questionnaire (OCQ)

scale developed by Mowday et al. (1979) which fit well with the purpose of the present study

since it only measures affective commitment, in contrast to the other highly cited scale of

Allen and Meyer (1990). Moreover, OCQ of Mowday et al. (1979) was preferred for its

strong consistency and coherence as it is designed to be unidimensional in nature (Reichers,

1985). Since there is substantial evidence regarding the reliability and validity of this measure

(Mowday et al., 1979) it has been widely used in academia (Angle and Perry, 1981; Paul and

Anantharaman, 2004; Whitener, 2001). In the current study, the Cronbach alpha coefficient

was .864. Table 3.4 exhibits the revised items of OCQ developed by Mowday et al. (1979).

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Items

1. I am willing to put in a great deal of effort beyond that normally expected in order to help this organization be successful.

2. I talk up this organization to my friends as a great organization to work for.

3. I feel very little loyalty to this organization. (R)

4. I find that my values and the organization’s values are very similar.

5. There’s not too much to be gained by sticking with this organization indefinitely. (R)

6. I really care about the fate of this organization.

7. Deciding to work for this organization was a definite mistake on my part. (R)

Table 3.4 Scale of Affective Organizational Commitment

3.4.3 Control Variables

Previous studies suggest that comparing the attitudes of part- and full-time employees is

particularly crucial in service and trade industries, in retail and hospitality sectors (Feldman,

1990 and Rotchford and Roberts, 1982). There are studies indicating differences between

part- and full-time employees’ attitudes (Clinebell and Clinebell, 2007; Lee and Johnson

(1991); Jacobsen (2000); Rotchford and Roberts, 1982; Stamper and Van Dyne, 2003 and

Thorsteinson, 2003). They argue that full-time employees are more involved with their work

and workplace as a result of the more working hours, consequently they are more motivated.

Moreover, researchers (Marescaux, De Winne and Sels, 2013 and Meyer and Allan, 1997)

have found a correlation between age and affective commitment. It was assumed that age can

be associated with seniority which provides an option for higher position within the same

organization. Therefore, age and employment status were added as control variables.

3.5 SAMPLE SELECTION AND DATA COLLECTION

Selecting a segment of the population for investigation a convenience non-probability

approach, called snowball sampling method (Saunders, Lewis and Thornhill, 2016) has been

applied to the present research as a result of budget and time constraints. Several individuals

were approached from the relevant population, who were identified as holding a customer

service position, and they were asked to complete and forward the questionnaire to

individuals from the same population and even those respondents identified further cases. By

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doing so, this method proved to be efficient technique to gather large number of responses in

short period of time; however, a possible limitation of this sampling can be the homogeneity

of the sample which restricts the generalization of the findings across the wider population

(Wilson, 2010). In order to reduce the probability of bias, potential respondents were

approached from different age groups, employment status, organization and geographical

locations (UK wide).

The questionnaire was carried out on a sample size of 145, with respondents who were aged

18 or above, currently holding a customer service role and based in the UK. The sample size

enables fair representation of the control variable (occupation status) and gathers sufficient

data from the population. Therefore, the results of the data analysis would be significant.

3.6 PILOT STUDY

In order to ensure that the survey questions operate well and can be easily and clearly

understood (Bryman and Bell, 2011) a test was conducted before distributing it to potential

respondents. Feedback was asked from the supervisor about the clarity of scales and the items

on the questionnaire. Moreover, the design and the flow of the questions along with the

grammar and spelling mistakes were also checked by asking two potential participants from

each employment status to complete and make comments on the survey. The participants’

feedback on the layout and the order of the sections were considered and minor changes were

made on the final version. Moreover, the time it took for them to fill it out was summed and

averaged in order to be able to provide information on the length of survey to respondents.

3.7 DATA ANALYSIS

For this study, the statistics software SPSS was used in order analyse the collected data since

it allows the quick and accurate generation of various graphs and statistical tests. Descriptive

statistics were used to summarize the numerical details and determine consistent patterns,

while inferential statistics were adopted to test the hypotheses and carry out multiple linear

regression analysis between dependent and independent variables (Wilson, 2010).

3.8 LIMITATIONS

The chosen research method is suitable for addressing the purpose of the study to investigate

the impacts of reward systems on employees’ motivation and organizational commitment;

however, it cannot provide deeper understanding and further insight into the reasons behind

participants’ behaviours. Qualitative research approach with in-depth interviews or

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observations could have been served the researcher to gather more information about the

reasons behind employees’ attitudes towards their jobs and organizations. Furthermore, as a

result of time constraints a relatively smaller sample size was achieved by convenience and

snowball sampling which might limit the generalizability of the results to the whole

population. More accurate findings may have been obtained by either extending the sample

size or specifying the type of customer service positions, such as retail, supermarkets or

hospitality sectors; for investigation. Moreover, since the research is UK based it limits the

understanding of customer service employees’ attitudes in a Western European context.

3.9 ETHICAL CONSIDERATIONS

In order to adhere to the Brunel University Code of Research Ethics several ethical issues

were taken into account. First of all, before the data collection procedure ethical review and

approval was obtained from the Brunel University Research Ethics Committee.

Secondly, a well-detailed Participation Information Sheet (see Appendix A) was displayed at

the beginning of the online survey providing clear information about the nature and the

purpose of the study. Moreover, it was highlighted that participation is completely voluntary

and the right to withdraw it at any time was made clear. Furthermore, anonymity,

confidentiality and privacy was ensured by avoiding questions requiring personal information

and ensuring that the collected data is kept securely, on a password protected Brunel

University server, and only used in an aggregated form in the project report.

Finally, contact details of the researcher was provided in order to enable participants to raise

any questions regarding the research project, while the contact details of the supervisor and

the Chair of the Research Ethics Committee were stated to allow respondents to make any

complaints.

3.10 CHAPTER SUMMARY

This chapter outlines the overall methodology of the present study that was adopted in order

to address the aim and to meet the pre-set objectives of the research. The chosen research

philosophy, approach and method were critically reviewed along with the justification of why

those were used for the current study. Scales for measuring dependent and independent

variables as well as the control variables were introduced. Moreover, sampling technique,

data analysis and limitations of the study were discussed and steps taken to ensure the

research complies with the University Code of Research Ethics were explained.

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Chapter 4

FINDINGS AND ANALYSIS

This chapter presents the results of the analysis based on the data that were

collected through the conducted questionnaire. The first section illustrates the

descriptive statistics, the demographic profile of respondents. It was followed by a

section explaining the reasons, why multiple linear regression analysis was

adopted to examine the strength of relationship between the reward package

constructs and customer service employees’ motivation and affective

organizational commitment. After that, the results of the examined relationships

between dependent, independent and control variables were presented.

4.1 DEMOGRAPHIC PROFILE OF RESPONDENTS

A total number of 145 questionnaires were used for this analysis. Out of the 145 respondents,

71 (49%) were male and 74 (51%) were female (see Figure 4.1). The majority of the

participants, 72 (49.66%) belonged to the age group of 18-24, and 44 (30.3%) to the 25-34

while responses from older age groups were limited (see Figure 4.2). As Table 4.1 highlights,

responses based on the control variable of occupation status were gathered closely equally in

order to obtain fair representation of both part-time 76 (52.4%) and full-time 69 (47.6%)

employees.

Figure 4.1 Age of Respondents Figure 4.2 Gender of Respondents

Employment Status

Frequency Percent Valid Percent Cumulative Percent

Valid

Part-time 76 52,4 52,4 52,4

Full-time 69 47,6 47,6 100,0

Total 145 100,0 100,0

Table 4.1 Employment Status of Responses

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4.2 MULTIPLE LINEAR REGRESSION ANALYSIS

A multiple linear regression (MLR) analysis was adopted throughout this chapter to meet the

pre-set objectives of the study. This analysis type was selected since non-violation of

assumptions, discussed by Pallant (2010) was found. First of all, correlation among the

variables was checked. Strong correlation was found between motivation and non-financial

rewards, organizational commitment and non-financial rewards; moderate between

motivation and financial rewards, motivation and organizational commitment; and small

between financial and non-financial rewards, and financial rewards and organizational

commitment (See Table 4.2). Regarding the control variables, age and motivation showed

weak relatedness, while employment status and motivation and organizational commitment

were moderate.

Descriptive Statistics (N=145)

Variable Mean SD 1 2 3 4 5 6

1. Financial Rewards 3.1117 .86727 -

2. Non-financial Rewards 3.4807 .90870 .252** -

3. Motivation 3.1207 .79391 .402** .543** -

4. Organizational Commitment 3.2414 .84205 .145 .793** .487** -

5. Age 0.76 0.900 -.118 -.107 .048* 0.030 -

6. Employment Status 0.48 0.501 -.165* -.174* .234** .173* .441** -

**Correlation is significant at the 0.01 level (2-tailed).*Correlation is significant at the 0.05 level (2-tailed).

Table 4.2 Intercorrelations among Variables

Secondly, the sample size of 145 was accepted since a calculation using a formula of

Tabachnick and Fidell (2007) gave 68 responses as the minimum requirement. Moreover,

multicollinearity (VIF=1.068 and Tolerance=0.937) was checked to avoid high correlation

between the independent variables. Multicollinearity was rejected as the results are less than

10 and more than 0.10 respectively, the benchmark values to be compared against (Pallant,

2010).

In addition to these, normality and linearity was tested for motivation and organizational

commitment (see Figure 4.3) and no major deviations were detected. Residuals closely

followed the diagonals which is the requirement of the normal distribution (Pallant, 2010).

Alongside with these, the independences of residuals are presented on Figure 4.4. Therefore,

the results of this investigation supported the use of MLR as an appropriate statistical analysis

for this part of the study.

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Figure 4.3 Normal Probability Plots of the Regression Standardized Residuals

Figure 4.4 Scatterplot of Regression Standardized Residuals

In order to determine the statistical significance of the results, which consequently enables

the acceptance or rejection of the developed hypotheses, 5% significance level was chosen.

This significance level is well accepted in academia and business research, therefore it was

deemed to be appropriate for this investigation (Bryman and Bell, 2011).

Due to the multiple types of rewards, composite variables were developed to compute the

mean of financial and non-financial reward elements. These variables were adopted on the

integrated model, while on the disintegrated model the mean of each financial and non-

financial indicator were separately computed.

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4.3 IMPACTS OF REWARDS ON EMPLOYEE MOTIVATION

The proportion of explained variance, as measured by the R square, for the regression

analysis is 0.415 as it shown on Table 4.3. In other words, financial and non-financial

rewards are explaining 41.5% of variance in employee motivation. Consequently, it means

that high proportion, about 58.5%, of employee motivation is explained by other variables.

Model Summary

Model R R Square Adjusted R Square Std. Error of the

Estimate

1 ,644a ,415 ,398 ,61588

a. Predictors: (Constant), Age, Non-financial Rewards, Financial Rewards, Occupation

Table 4.3 Model Summary of MLR on Employee Motivation

The ANOVA model test in Table 4.4 support the existence of relationship between financial

and non-financial rewards and employee motivation, since the significance value (p) is 0.000

which is less than 0.05, the benchmark value to be compared against (Bryman and Bell,

2011).

ANOVAa

Model Sum of Squares df Mean Square F Sig.

1

Regression 37,659 4 9,415 24,820 ,000b

Residual 53,104 140 ,379

Total 90,763 144

a. Dependent Variable: Motivation

b. Predictors: (Constant), Age, Non-financial Rewards, Financial Rewards, Occupation

Table 4.4 ANOVA of MLR on Employee Motivation

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The regression coefficients table (Table 4.5) highlights that both independent variables,

financial and non-financial rewards have a statistically significant impact (p=0.000) on

employee motivation. Beta value shows that out of these variables, non-financial rewards

make the largest unique contribution to employee motivation (b=0.431), while financial

rewards make contribution of 0.331.

Control variables of employee motivation revealed that employment status have a significant

impact on the dependent variable (p=0.012) with a beta value of 0.192. On the other hand,

age did not show significant effect on it.

Coefficientsa

Model Unstandardized Coefficients Standardized

Coefficients

t Sig.

B Std. Error Beta

1

(Constant) ,645 ,282 2,287 ,024

Financial Rewards ,303 ,063 ,331 4,839 ,000

Non-financial Rewards ,377 ,061 ,431 6,162 ,000

Employment Status ,304 ,120 ,192 2,531 ,012

Age ,043 ,065 ,049 ,663 ,508

a. Dependent Variable: Motivation

Table 4.5 Regression Coefficients – MLR on Employee Motivation

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4.3.1 Evaluation of the Reward Package Elements on Employee Motivation

As another objective of the present study, the primary research also aimed to identify the

elements of the reward package, both financial and non-financial, which indicate high

employee motivation. Before conducting a multiple linear regression analysis with the

multiple indicators of financial and non-financial rewards multicollinearity was checked (see

Appendix B) and rejected, thus the analysis could be carried out. The results of the multiple

linear regression analysis are presented on Table 4.6.

As it can be seen on Table 4.6 both indicators of financial rewards show significant

relationships with employee motivation. Although, pay was found to exert a significant

impact on customer service employees’ motivation (p=0.020) with beta value of 0.197 and t

value of 2.355, it is less influential compared to fringe benefits (p=0.001, b=0.292, t=3.495)

Analysing, the non-financial elements of the reward package, working condition was found to

make the most unique contribution to employee motivation (p=0.000, b=0.423, t=5.372).

Moreover, friendly supervision was scored the second most important factor (p=0.005,

b=0.328, t=2.847) followed by career development opportunities (p=0.33, b=0.162, t=2.157).

Although, training appears to have significant impact on employee motivation (p=0.021, b= -

0.186, t= -2.338), it indicates a negative relationship. Whilst, autonomy (p=0.969), feedback

(p=0.765) and recognition (p=0.507) do not show significant results.

Independent Variables beta t R2 p

Financial Rewards 0.170 0.000*

Pay 0.197 2.355 0.020*

Fringe Benefits 0.292 3.495 0.001*

Non-financial Rewards 0.440 0.000*

Working Condition 0.423 5.372 0.000*

Supervisor 0.328 2.847 0.005*

Career Development 0.161 2.157 0.033*

Training -0.186 -2.338 0.021*

Recognition 0.081 0.666 0.507

Feedback -0.034 -0.300 0.765

Autonomy -0.004 -0.039 0.969

Dependent Variable: Employee Motivation*p < 0.05

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Table 4.6 Disintegrated Model –Reward Package Elements on Employee Motivation

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4.4 IMPACTS OF REWARDS ON AFFECTIVE ORGANIZATIONAL COMMITMENT

The proportion of explained variance, as measured by the R square presented on Table 4.7 for

the rewards impact on customer service employees’ affective organizational commitment is

0.645. It can be argued that approximately 64.5% of the variation in commitment is explained

by rewards. This result is substantially higher than the 41.5% of variance in employee

motivation (Table 4.3). Therefore, it can be deduced that rewards have more significant

impact on employees’ affective organizational commitment than on their motivation.

Model Summary

Model R R Square Adjusted R Square Std. Error of the

Estimate

1 ,803a ,645 ,635 ,50877

a. Predictors: (Constant), Age, Non-financial Rewards, Financial Rewards, Occupation

Table 4.7 Model Summary of MLR on Affective Organizational Commitment

In addition to this, the existence of the relationship between rewards and affective

organizational commitment is supported by the ANOVA model in Table 4.8 as well, which

provides the significance value (p) of 0.000.

ANOVAa

Model Sum of Squares df Mean Square F Sig.

1

Regression 65,864 4 16,466 63,613 ,000b

Residual 36,239 140 ,259

Total 102,103 144

a. Dependent Variable: Organizational Commitment

b. Predictors: (Constant), Age, Non-financial Rewards, Financial Rewards, Occupation

Table 4.8 ANOVA of MLR on Affective Organizational Commitment

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However, when examining financial and non-financial rewards’ impact on organizational

commitment the significance levels show controversial results. The regression coefficients

Table 4.9 do not show statistically significant results for financial rewards (p=0.315) with

negative - 0.054 contribution to organizational commitment. Whereas, non-financial rewards

highly contribute (b=0.827) to organizational commitment with a significant (p=0.000) value.

Interpreting the impacts of the control variables on organizational commitment, employment

status was not found to influence the dependent variable. On the other hand, age revealed

small relatedness with a beta value of 0.129 at a significance level of 0.027.

Coefficientsa

Model Unstandardized Coefficients Standardized

Coefficients

t Sig.

B Std. Error Beta

1

(Constant) ,556 ,233 2,386 ,018

Financial Rewards -,052 ,052 -,054 -1,008 ,315

Non-financial Rewards ,766 ,051 ,827 15,159 ,000

Employment Status -,062 ,099 -,037 -,629 ,531

Age ,120 ,054 ,129 2,242 ,027

a. Dependent Variable: Organizational Commitment

Table 4.9 Regression Coefficients – MLR on Affective Organizational Commitment

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4.4.1 Evaluation of the Reward Package Elements on Affective Organizational Commitment

Similarly, to section 4.3.1, multiple linear regression analysis was carried out to investigate

the different elements of the reward package, both financial and non-financial since

multicollinearity between the variables was rejected. Although, financial rewards were not

found to be significant in affecting customer service employees’ affective commitment,

fringe benefits separately have a positive significant impact (p=0.000, b=0.337, t=3.859).

Whereas, pay do not show significance (p=0.131) in fact indicates negative relationship.

On considering only non-financial elements of the reward package (see Table 4.10)

recognition appeared to be the strongest indicator in predicting affective commitment

(p=0.001, b=0.343, t=3.488). It was followed by friendly supervision (p=0.009, b=0.244,

t=2.636) and autonomy (p=0.043, b=0.146, t=2.046). Whereas, career development

opportunities (p=0.082), training (p=0.254) and feedback (p=0.409) were not found to exert

significant influence on the dependent variable.

Independent Variables beta t R2 p

Financial Rewards 0.095 0.001*

Pay -0.123 -1.517 0.131

Fringe Benefits 0.337 3.859 0.000*

Non-financial Rewards 0.638 0.000*

Recognition 0.343 3.488 0.001*

Supervisor 0.244 2.636 0.009*

Autonomy 0.146 2.046 0.043*

Career Development 0.105 1.752 0.082

Training 0.073 1.144 0.254

Feedback 0.072 0.828 0.409

Dependent Variable: Organizational Commitment*p < 0.05

Table 4.10 Disintegrated Model –Reward Package Elements on Affective Organizational Commitment

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4.5 RELATIONSHIP BETWEEN EMPLOYEES’ MOTIVATION AND THEIR AFFECTIVE ORGANIZATIONAL COMMITMENT

The R square value of examining customer service employees’ motivation on affective

organizational commitment is 0.238 as it can be seen on Table 4.11 Consequently, it suggests

that low proportion, approximately 24% of organizational commitment is explained by

employee motivation. However, the relationship is still appears to be significant, with a p-

value of 0.000, as Table 4.12 presents.

Model Summary

Model R R Square Adjusted R Square Std. Error of the

Estimate

1 ,487a ,238 ,232 ,73783

a. Predictors: (Constant), Motivation

Table 4.11 Model Summary of MLR on Employee Motivation and Affective Organizational Commitment

ANOVAa

Model Sum of Squares df Mean Square F Sig.

1

Regression 24,254 1 24,254 44,552 ,000b

Residual 77,849 143 ,544

Total 102,103 144

a. Dependent Variable: Organizational Commitment

b. Predictors: (Constant), Motivation

Table 4.12 ANOVA of MLR on Employee Motivation and Affective Organizational Commitment

On examining Table 4.13 Regression coefficients of employees’ motivation show positive

significant results. The beta value of 0.487 indicates that customer service employees’

motivation make a large unique contribution to their organizational commitment with a t

value of 6.675.Coefficientsa

Model Unstandardized Coefficients Standardized

Coefficients

t Sig.

B Std. Error Beta

1(Constant) 1,628 ,249 6,530 ,000

Motivation ,517 ,077 ,487 6,675 ,000

a. Dependent Variable: Organizational Commitment

Table 4.13 Regression Coefficients – MLR on Employee Motivation and Affective Organizational Commitment

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4.6 CHAPTER SUMMARY

Conducting multiple linear regression analysis, the existence of rewards’ influence on

employee motivation and affective organizational commitment, as well as employee

motivation on affective organizational commitment was found. The results of the significance

levels, beta, t, R2 values were presented. The research findings along with the hypothesis tests

will be critically discussed in relation to the prior literature in the following chapter.

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Chapter 5

DISCUSSION

This chapter is divided into three main sections to address the objectives of the

present research. Impacts of rewards on employee motivation and affective

organizational commitment respectively, along with the evaluation of the reward

package elements and the influence of the control variables (age and employment

status) has been critically discussed in relation to the literature review. Moreover,

the relationship between customer service employees’ motivation and affective

organizational commitment has been addressed.

5.1 IMPACTS OF REWARDS ON EMPLOYEE MOTIVATION

5.1.1 Financial/Transactional Rewards

Examining the impacts of financial rewards on employee motivation, a statistically

significant, positive relationship was found (p=0.000, t=4.839, b=0.331) which consequently

leads to the acceptance of hypothesis 1. This finding of the study reinforces Maslow’s theory

(1943) that if workers receive financial incentives it will increase their motivation levels. The

results are also consistent with previous studies of Ahamad et al. (2015) Huang, Lin and

Chuang (2006) Manolopoulos (2008) and Shaw and Gupta (2015) that financial rewards lead

to higher employee motivation.

However, it does not support the argument of Fein (1973), Reif (1975) and Harel and Tzafrir

(1994) that pay and fringe benefits are the most important factors for motivating workers

since Table 4.5 shows higher level of beta value for non-financial rewards (b=0.431).

Similarly, Cameron and Pierce (1994) findings that financial incentives enhance the

motivation of employees more effectively than non-financial were not supported. The reason

for the contradictory results might be partly explained by that customer service employees,

emotional labour, differ from the examined population (knowledge and blue-collar workers)

of the previously mentioned articles. Moreover, as it was discussed by Deci (1972) and

Werner and Ward (2004) possible explanation can be that although financial incentives have

a positive impact on employees’ motivation those cannot guarantee high overall motivation

levels as they might reduce workers’ intrinsic motivation.

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On examining the elements of the financial rewards, both indicators; salary (p=0.020,

b=0.197, t=2.355) and fringe benefits (p=0.001, b=0.292, t=3.495) revealed significant

relation to employee motivation. It supports the study of Namasivayam, Miao and Zhao

(2007) that employees in non-managerial position will not exert high levels of motivation by

only receiving a satisfying base salary but by the combination of salary and fringe benefits.

Similarly, the importance of fringe benefits was also highlighted in the research of Danish

and Usman (2010). These results entailed that the higher implementation of fringe benefits,

along with satisfying base salary will advance the growth of motivation among customer

service employees.

5.1.2 Non-financial/Relational Rewards

Evaluating the results of the regression analysis, non-financial rewards significantly predict

customer service employees’ motivation (p=0.000, t=6.162, b=0.431), therefore hypothesis 2

can be accepted. This study finding reinforce the theory of Herzberg (1959), that non-

financial rewards, such as personal growth and advancement, increased responsibility and

sense of achievement are the primary reason for enhanced motivation among the workforce.

Similarly, findings of Deci (1973) and Kanungo and Hartwick (1987) were supported that

personal development opportunities and friendly supervision need to be present at the

workplace in order to reach higher levels of motivation.

Controversially, argument of Rynes, Gerhart and Minette (2004) that non-monetary rewards

cannot contribute to reaching higher order needs in the motivation hierarchy, is not consistent

with the present findings since non-financial rewards were found to be highly important for

customer service employees. However, a possible explanation for the controversial results

can be that their research focused on employees’ behaviours at the point of their recruitment,

while the present research included participants who were already doing the job. This might

explain the differences in the results, since at the point of joining an organization, monetary

rewards can be easily evaluated and compared against other companies, thus serve as a

motivator. However, after some time relational and social rewards make high impact on the

daily work routines of the employees, thus affects the motivational levels continuously.

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Evaluating the non-financial elements of the reward package, working condition (p=0.000,

b=0.423, t=5.372) and friendly supervision were found to be the strongest indicators of

employee motivation. Therefore the argument of Nohria, Groysberg and Lee (2008) that

employees need to bond at their workplace to drive motivation was supported. They argued

this bond can be achieved by providing pleasant working condition and good relationships

among co-workers and supervisors. These results postulates that hygiene factors of

Herzberg’s model (1959) cannot only prevent from employee dissatisfaction but have

motivational power as well.

On the other hand, career development (p=0.033, b=0.161, t=2.157) was only scored the

third most significant non-monetary reward. It indicates that for customer service employees

the so-called ‘motivators’ (Herzberg, 1959) only have moderate effect on their motivation.

Kanungo and Hartwick (1987) examining white-collar workers revealed stronger relationship

between career-development opportunities and motivation. The contradictory nature of

findings can be explained by that in customer service roles, workers have limited

advancement opportunities and they are aware of that at the point of recruitment, thus they

become motivated by other factors (Malhotra, Budhwar and Prowse, 2007).

Although training (p=0.021, b= -0.186, t= -2.338) was found to be a significant indicator of

employee motivation; it revealed negative results in contrast to Fey et al. (2000) and

Tharenou, Saks and Moore (2007). The reason for that can be explained by the argument of

Chew and Chan (2008) that training which does not serve the workers’ need as a result of

lack of time, resources and facilities cannot enhance positive human resource management

outcomes. Moreover, training may not be seen as a reward but a sign of incompetence

consequently lower employee motivation (Marescaux, Winne and Sels, 2013).

Regardless of the significant findings of previous literature on verbal rewards, feedback and

recognition, (Deci, 1972; Hackman and Oldham, 1980; Hewett and Conway, 2015 and

Kanungo and Hartwick, 1987) and on autonomy (Hackman and Oldham, 1980 and Kanungo

and Hartwick, 1987), these rewards did not suggest significant impact on customer service

employees’ motivation. These study findings entails, that organizations need to put higher

emphasis on ‘hygiene’ factors to drive sustainable employee motivation among front-line

workers than on ‘motivators’.

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5.1.3 Evaluation of the Control Variables

The results of the added control variables indicated that age is not significant in determining

employee motivation, whereas employment status has a significant (p=0.012) effect on it with

a beta value of 0.192. Although, Eberhardt and Shani (1984) suggested that part-time

employees are more motivated as a result of lack of knowledge and negative information

about the occurring events at their workplace and organizational politics, the present research

revealed that full-time employees are more motivated. However, it might be explained by the

argument of Clinebell and Clinebell (2007) and Thorsteinson (2003) that the more working

hours of full-time employees prevents them to engage in many other non-work related

activities, compared to part-time employees, thus it makes them more involved with their

work and workplace. Thereby, the higher levels of involvement make them more motivated.

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5.2 IMPACTS OF REWARDS ON AFFECTIVE ORGANIZATIONALCOMMITMENT

5.2.1 Financial/Transactional Rewards

Evaluating the results of the regression analysis on affective commitment, the findings are in

contrast to the theory that compensation and financial benefits increase employees’ affective

organizational commitment (Marescaux, Winnie and Sels, 2013 and Ogilvie, 1986);

therefore, hypothesis 3 needs to be rejected. This finding also differs from those from Asian

setting (Miao et al., 2013, Newman and Sheikh, 2012a, 2012b and Nazir et al. 2016) who

revealed strong relatedness between these variables. However, regardless that Paul and

Anantharaman (2004) found strong correlation between monetary rewards and affective

commitment, their regression analysis did not reveal significant relatedness either. Moreover,

despite that Marescaux, Winnie and Sels (2013) found significant impact of monetary

rewards on commitment, their research provided evidence for the more perceived

favourability of socio-emotional, non-financial rewards.

The reason for the controversial results can be partly explained by the study of Farndale and

Murrer (2015) which compared the impacts of financial rewards on affective commitment in

three different countries; Mexico, the U.S. and the Netherlands. They did not find significant

relationship in the western European context while the other two countries showed evident

relationships. Therefore, the present UK based study on customer service employees also

supports the view of Huang and Vliert (2003) that workers who belong to a more feminine

and/or individualist cultures less likely to value monetary rewards and economic security

more than intrinsic, relational rewards. In addition to this, another reason might be that

monetary rewards (fringe benefits, bonuses and financial promotions) are limited among

front-line employees and the instructions on how to attain extra monetary rewards might not

communicated and administered clearly in the organizations where the investigated

participants work (Ogilvie, 1986). Consequently these factors decrease affective commitment

levels.

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Despite the previously discussed findings that financial rewards significantly did not predict

organizational commitment, the investigation of the separate indicators revealed that fringe

benefits (p=0.000, b=0.337, t=3.859) are perceived as influential in determining commitment

levels. While this finding supports the study of Ahmad and Scott (2015) that most fringe

benefits have strong or moderate impact on affective organizational commitment, it is in

contrast to argument of Wang (2004) that those can only affect their continuance

commitment, to stick with the organization but will not make them to put high levels of

efforts on behalf of the organization. However, the present study findings suggest that

investment into fringe benefits have the potential to contribute to the enhancement of front-

line employees’ affective commitment.

5.2.2 Non-financial/Relational Rewards

Investigating the impacts of non-financial rewards, statistically significant, strong positive

relationship was found with customer service employees’ affective organizational

commitment (p=0.000, t=15.159, b=0.827). This evidence suggests that non-financial,

relational rewards play a significant role in determining employees’ commitment to the

organization where they work, which supports previous research conducted by Chew and

Chan (2008) Gagné (2009) and Paul and Ananthataman (2004). Research outcomes of

Mottaz (1988) that intrinsic and social rewards make stronger positive impact on this variable

than monetary rewards were also reinforced. Likewise, the present study is also consistent

Malhotra, Budhwar and Prowse’s (2007) research from a similar research context, that non-

financial rewards are perceived as more important to customer service employees’ affective

commitment than financial compensation. Consequently, it leads to the acceptance of

hypothesis 4.

Although, Chew and Chan (2008) recognised that non-financial rewards are sufficient to

enhance workers’ affective commitment, they argued that financial rewards are as important

in determining high levels of commitment. The present finding, strongly reject this view,

since non-financial rewards at beta value of 0.827 show significantly stronger contribution to

organizational commitment of customer service employees than financial ones b= -0.57. In

addition to this, as a result of high relatedness of non-financial rewards and affective

commitment, the present study also rejects the view of Angle and Perry (1983) that

organizational commitment is not related to an intrinsic need fulfilment which can be

achieved by recognition, autonomy and career development.

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Evaluating different types of rewards which are non-monetary in nature, recognition

(p=0.001, b=0.343, t= 3.488) was highlighted as the most significant indicator of affective

commitment. It is consistent with the study of Chew and Chan (2008), Gagné (2009), Kinnie

et al. (2005) and Paul and Anantharaman (2004) that performance appraisals nurtures the

sense of attachment and belongingness of the rewarded employee. The strong relatedness

between these variables can be explained by the argument of Cabrera and Cabrera (2005) that

with recognition practices not only the appreciation of a good performance can be

communicated, but also the organizational norms, vision and objectives. Moreover, by

publicizing the individual achievements among the workforce, not only the rewarded

employee but the rest of the workers can get familiar with the organizational values.

Recognition was followed by employee friendly supervision (p=0.009, b=0.244, t=2.636)

with a significant contribution to organizational commitment, which supports the findings of

Kuvaas and Dysvik (2010) and Truss et al. (2006). As it has been discussed at the employee

motivation section, good relationship with immediate line-managers creates a bond between

the workers and the management; therefore it has not only have a retention effect but the

organizational expectations along with the values can be communicated on a daily basis as

well (Nohria, Groysberg and Lee, 2008).

Finally, autonomy (p=0.043, b= 0.146, t=2.046) was found to show significant relationship

to customer service employees’ affective commitment. Findings of Mottaz (1988) that nature

of the task, especially autonomy and involvement are the primary antecedents of

organizational commitment were reinforced by the current study. Similarly, it was recognised

by Nazir et al. (2016) that autonomy leads to empowerment, thus it foster commitment. Since

in customer service roles workers’ status is relatively low, opportunities given to them for

flexible decision-making about their work can positively enhance their emotional attachment

to the organization (Malhotra, Budhwar and Prowse, 2007).

Although, the current study posited that non-financial rewards significantly predict affective

organizational commitment, in contrast to the previous literature career development

(Malhotra, Budhwar and Prowse, 2007; Meyer and Smith, 2007 and Paul and Anantharaman,

2004), training (Benson, 2006; Nazir et al., 2016 and Paul and Anantharaman, 2004) and

feedback (Chew and Chan, 2008; Gagné, 2009 and Truss et al. 2006) were not found to

significantly influence the above mentioned variable.

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5.2.3 Evaluation of the Control Variables

On evaluating the control variables on organizational commitment, in contrast to Lee and

Johnson (1991) and Jacobsen (2000) employment status was not found to have a significant

influence on affective organizational commitment among front-line customer service

employees. Whereas, age showed some relatedness (p=0.027, b=0.129, t=2.242) which

supports the study of Marescaux, De Winne and Sels (2013) and Meyer and Allan (1997). It

has been explained by that age can be associated with seniority which provides an option for

higher position within the same organization. Consequently, it enhances the workers’

willingness to support the organizational vision and act as the best interest of the business

since in return promotion and career advancement can be expected by them.

5.3 RELATIONSHIP BETWEEN EMPLOYEES’ MOTIVATION AND THEIR AFFECTIVE ORGANIZATIONAL COMMITMENT

Following analysis of Table 13 it can be deduced that the relationship between customer

service employees’ motivation and their affective organizational commitment show strong

positive relatedness (p=0.000, b=0.487, t=6.675). Consequently, hypothesis 5 can be

accepted, as motivated employees’ will most likely to have higher commitment to the

organization where they work. It supports the findings of Choong, Wong and Lau (2011) and

Warsi, Fatima and Sahibzada (2009) that affective commitment is significantly predicted by

motivation. Similarly, discussion of Rizal et al (2014) that motivated workforce show higher

willingness to share the organizational values and help the business to achieve its goals was

reinforced.

However, argument of Tella, Ayeni and Poopola (2007), who found negative correlation

between these variables among library personnel, suggest that individuals’ beliefs in the

development of a shared vision is essential in developing commitment even among motivated

workforce. It proposes that in the present research context, motivated employees hold values

regarding the acceptance of organizational goals. Furthermore, Nazilah, Rozmi and Fauziah

(2012) research investigating college student volunteers, was found to be in contrast to the

present findings; however, it reinforces the argument that volunteers differ from paid

employees. Overall, it can be deduced that for paid employees holding customer service

roles, motivation is a significant indicator in determining their organizational commitment.

Therefore, high implementation of those rewards that affect their motivation will advances

the growth of their affective commitment, to act as the best interest of the business and to

share the values and goals of the organization.

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5.4 CHAPTER SUMMARY

After analysing the results, this chapter provided a critical discussion about the main findings

of the study. The findings were evaluated in relation to the literature and similarities and

controversies along with the possible explanations were highlighted. Therefore, the research

addressed and met the pre-set objectives of the study.

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Chapter 6

CONCLUSION AND RECOMMENDATIONS

This chapter is aimed at providing an overall conclusion of the research study

followed by managerial implications to provide recommendations on which

reward package elements have the potential to enhance customer service

employees’ motivation and affective organizational commitment. Moreover,

suggestions for future research to identify new research scopes as well as to

overcome the limitations of the present study have been addressed.

6.1 CONCLUSIONReward systems have a vital role in today’s highly competitive business environment since

those have the potential to enhance motivation and affective organizational commitment of

the workforce. Successful reward strategies encourages employees to act in the best interests

of a business, put extra efforts to complete the tasks given to them and support the

achievement of the organization’s strategic goals by helping to communicate its values and

vision. It has been recognised that in the growing service economy, investigation of

employees who work in customer service roles is crucial since they are in direct contact with

the customers; consequently they have an immediate influence on the results of the business.

Therefore, the current research aimed to investigate the impacts of financial and non-financial

rewards on front-line employees’ motivation and affective organizational commitment.

Prior literature was critically reviewed and primary research through questionnaires was

conducted in order to meet the pre-set objectives of the study. Firstly, investigation into

employee motivation has revealed that both financial and non-financial rewards significantly

predict high motivational levels. Therefore, both H1 and H2 were accepted. However, the

results suggested that non-financial rewards are perceived as more important factors for

workers to put utmost efforts. From the financial package, both fringe benefits and salary,

while from the non-financial package pleasant working condition, friendly supervision and

opportunities for career development were found to be the main motivators. These results

indicate that hygiene factors of Herzberg’s model (1959) cannot only prevent from employee

dissatisfaction, but have motivational power as well among emotional labour in the UK.

Although, training was found to be a significant indicator, the relationship was negative,

whereas feedback, recognition and autonomy did not suggest significant influences.

Moreover, age was not discovered as a predictor of motivation among the examined

population, while employment status (part- and full-time) was.

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The second objective of the research was to investigate the impacts of financial and non-

financial rewards on a broader concept, on affective organizational commitment of front-line

workers. Although, the findings revealed that monetary rewards do not significantly predict

affective commitment (H3 needed to be rejected), the investigation into the separate

indicators, showed that fringe benefits are important to employees in determining their

commitment levels. On the other hand, the analysis of non-financial rewards’ impacts

postulated significant strong positive relationship, thus H4 was accepted. Particularly,

recognition, friendly supervision and autonomy were found to enhance affective commitment

of emotional labour. Furthermore, it has been discussed that age predicts organizational

commitment, since it is associated with seniority and higher position in the organization.

In response to the third objective of the study, it can be concluded that for paid employees

holding customer service roles in the UK, motivation is a significant indicator of determining

their affective organizational commitment, hence H5 was accepted. This study finding

highlights that motivated workforce show higher willingness to share the organizational

values and put extra efforts on behalf of the organization to achieve its vision. Consequently,

offering those rewards that highly impact their motivation will advance the growth of their

affective commitment.

Despite the limitations of the present research, it provides key findings about the impacts of

rewards on customer service employees’ motivation and on their affective organizational

commitment. Analysis of the results and critical review of the prior literature enable the

suggestion of practical implications to human resource managers to further enhance the

positive outcomes of reward management among front-line employees in the UK.

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6.2 MANAGERIAL IMPLICATIONSFrom the findings, it can be deduced that it would be beneficial for organizations to put

higher emphasis on the ‘hygiene’ factors to foster sustainable employee motivation. One

strategy may involve the higher implementation of fringe benefits, along with a satisfying

base salary. However, the results not only reinforced the importance of satisfying employees’

economic needs but also their need for bonding at the workplace. Therefore, another strategy

could be to provide pleasant working conditions, employee friendly, fair and approachable

supervisors and some career development opportunities. These methods are relatively

inexpensive compared to monetary rewards, but still appears to have high motivational

effects.

The study further argued that in customer service roles, workers’ status is relatively low;

therefore it is necessary to focus on practices that express the appreciation of employees and

make them involved and valued at their workplace to drive affective commitment. In order to

nurture sense of attachment and the willingness to display efforts on behalf of the

organization; recognition practices as well as supervisor support seem to be effective

methods, since these non-monetary rewards help to promote the acceptance of organizational

norms, values and objectives among the labour force. While, providing greater autonomy

regarding employees’ work leads to higher involvement and empowerment which fosters

commitment. Thereby, overall the findings suggest that before investing into monetary

reward packages the nature and level of non-financial rewards need to be enhanced since

those were found to be the strongest significant indicators of customer service employees’

motivation and affective organizational commitment.

6.3 SUGGESTIONS FOR FUTURE RESEARCHFurther research may best use the current objectives by attempting to investigate wider range

of financial (such as bonus schemes, holidays, health-care and insurance benefits) and non-

financial rewards (such as leadership, communication and performance management) on a

larger sample size. Moreover, implementation of a mixed method would enable a more in-

depth understanding of the employees’ perceptions of rewards.

Furthermore, rewards’ impact on organizational commitment can be further investigated by

adopting normative and continuance commitment and comparing with affective commitment.

In addition to this, adding more control variables, such as education, tenure, income and

gender, as well as analysing their mediating effects could provide scope for future research.

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APPENDIX A

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APPENDIX B

Coefficientsa

Model Collinearity Statistics

Tolerance VIF

1

(Constant)

Pay ,837 1,195

Fringe Benefits ,837 1,195

Multicollinearity of Financial Rewards

Coefficientsa

Model Collinearity Statistics

Tolerance VIF

1

(Constant)

Career Development ,731 1,368

Training ,644 1,553

Working Condition ,660 1,514

Supervisor ,309 3,241

Autonomy ,517 1,934

Feedback ,317 3,155

Recognition ,273 3,659

Multicollinearity of Non-Financial Rewards

Employee MotivationCoefficientsa

Model Unstandardized Coefficients Standardized

Coefficients

t Sig.

B Std. Error Beta

1

(Constant) 2,005 ,227 8,818 ,000

Pay ,158 ,067 ,197 2,355 ,020

Fringe Benefits ,212 ,061 ,292 3,495 ,001

a. Dependent Variable: Motivation

Regression Coefficients –Financial Rewards on Employee Motivation

Coefficientsa

Model Unstandardized Coefficients Standardized

Coefficients

t Sig.

B Std. Error Beta

1 (Constant) 1,000 ,270 3,707 ,000

Career Development ,106 ,049 ,161 2,157 ,033

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Training -,148 ,064 -,186 -2,338 ,021

Working Condition ,389 ,073 ,423 5,372 ,000

Supervisor ,202 ,071 ,328 2,847 ,005

Autonomy ,002 ,056 ,004 ,039 ,969

Feedback -,020 ,068 -,034 -,300 ,765

Recognition ,048 ,072 ,081 ,666 ,507

a. Dependent Variable: Motivation

Regression Coefficients –Financial Rewards on Employee Motivation

Affective Organizational CommitmentCoefficientsa

Model Unstandardized Coefficients Standardized

Coefficients

t Sig.

B Std. Error Beta

1

(Constant) 2,900 ,252 11,509 ,000

Pay -,113 ,074 -,132 -1,517 ,131

Fringe Benefits ,260 ,067 ,337 3,859 ,000

a. Dependent Variable: Organizational Commitment

Regression Coefficients –Financial Rewards on Affective Organizational Commitment

Coefficientsa

Model Unstandardized Coefficients Standardized

Coefficients

t Sig.

B Std. Error Beta

1 (Constant) ,989 ,183 5,411 ,000

Career Development ,074 ,042 ,105 1,752 ,082

Training ,062 ,054 ,073 1,144 ,254

Supervisor ,160 ,061 ,244 2,636 ,009

Autonomy ,098 ,048 ,146 2,046 ,043

Feedback ,046 ,056 ,072 ,828 ,409

Recognition ,215 ,062 ,343 3,488 ,001

a. Dependent Variable: Organizational Commitment

Regression Coefficients –Non-Financial Rewards on Affective Organizational Commitment

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