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Satisfaction
I, Ajish Raju hereby declare that this report titled Impact of Incentives and Work life
balance on Job Satisfaction is a bonafide record of the Dissertation work done by me as part
of partial fulfillment of the award of the degree, Post Graduate Diploma in Management program
from Rajagiri Business School, Kochi.
I also declare that this report has not been submitted to any other university /board for the award
of any degree/diploma.
Place: Kochi
Ajish Raju
Date:
ACKNOWLEDGEMENT
The satisfaction that implies the success of any task would be impossible without the mention of
the people who made it possible, whose guidance and encouragement are valuable to me.
First of all I thank the God Almighty for his immense grace and blessings at each and every
stage of my dissertation.
Then I would like to express my gratitude to Dr.Binoy Joseph, Principal,Rajagiri Business
School, for granting me the opportunity to do the study.
I am thankful to my Faculty Guide, Prof. Shelly Jose faculty, Rajagiri Business School, Kochi,
for giving me his valuable guidance to execute the study as per the institution requirements and
for all the support he gave throughout my dissertation. I would also like to thank Dr. Imran
Khan and Prof. Saji George, Jury Members who extended their helping hands at various stages
of my study.
I would also like to thank my parents for their invaluable support and guidance, without which
this report would not have been possible.
I would like to thank all the respondents who cooperated whole heartedly and patiently in
providing me with the data by filling the questionnaire.
I am also thankful to all other faculty and friends who had extended their support and
contributions, which helped me in improving my dissertation.
Thanking You,
Ajish Raju
TABLE OF CONTENTS
PAGE
DESCRIPTION
ABSTRACT..................................................................................
..
CHAPTER 1 INTRODUCTION..
1.1 Relevance.........................................................................................
1.2 Background.
1.3 Objectives ..........................................................................................
1.4 Research Question..
CHAPTER 2 LITERATURE REVIEW
NO.
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2
2
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2.1 Theory.
2.2 Research Model....
2.3 Hypothesis.
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LIST OF TABLES
Serial
no.
Page
No.
Table 3.1
Table 4.1
Result of reliability
Correlation between F, NF and WFB with Job Satisfaction
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17
Table 4.2
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Abstract
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1.1 Relevance
2
1.2 Background
Incentive is the concept which has become a key aspect for attracting, encouraging
and retaining the efficient employees in the organization. According to Bennett and
Minty(2005), incentives are viewed from two broad perspectives. They are
financial incentives and Non-financial incentives. The study of Kreitner and
Kinicker(2001) revealed that financial incentives has a short term result in
encouraging and stimulating workers for higher performance. But Dorenbosch, De
3
Reuver & Sanders (2006) explained in their study financial reward goes a long way
in determining their effectiveness and commitment towards their goals and
objectives. When high performances are recorded for employees, it must be
supported with a basis for recognition and promotions.
In the recent trends, many companies have been using some kind of incentive
system to motivate and reward their employees. Companies are using up lots of
money in their incentive system because of its popularity. A study, for example did
their research on companies of Finland, and about 65% companies have developed
new reward system in the last three years (Salimki, Sweins, Heiskanen &
Laamanen 2009, p.6). The rapid growth and development in the world has created
new activities and new doors for all business organization. The globalization trend
has put the organization hard to retain their competitive advantage.
Organizational changes due to downsizing, mergers/ acquisitions and radical
changes in technology have changed the work setups. The employees in present are
more involved in their jobs than in the last decade. The long working hours, work
pressure, high demanding jobs, use of sophisticated technology made it difficult for
employees to keep a balance between their job and work commitments. Changing
societal trends, such as an increase in the number of women entering the workforce
combined with an economy that requires dual incomes support an average standard
of living, contribute to work life conflicts.
Personal life and work life are two sides of the same coin. According to various
surveys on work life balance, 65% of the people are finding it difficult to find a
balance between their personal and professional life. Traditionally creating and
managing a balance between the work-life was considered to be a woman's issue.
But increasing Work pressures and Globalization have made it an issue with both
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the gender, all professionals working across all levels and all industries throughout
the world. Achieving "work-life balance" is not as simple as it sounds.
The crucial function of Human Resource management is to implement practices
that enhance the satisfaction of employees with their jobs. Consequently,
enhancing job satisfaction is considered to be a win-win proposition. Indeed, job
satisfaction has been the focus of thousands of studies in management since
Hoppocks (1935) analysis. Employees expect financial and non-financial rewards
for their services and effort. In the absence of equitable pay, training and
development opportunities and recognition, employees do get dissatisfied and do
not perform the standards. The benefits that employees foresee for them and their
families motivates them to give their best.
There has been a long discussion about the success of incentives on the motivation
of employees in the literature, which claim that it has a positive effect on it. But at
the same time, there are also many others, which also argue that it has low or
negative effect. Hence, it is really important for the companies to know at what
extent these incentives affect the job satisfaction levels of employees. Therefore, it
is important to know which incentives do they accept and which do not serves its
purpose.
According to research conducted by the Corporate Executive Board among 50,000
global workers, Work life balance ranks as the second important workplace
attribute behind compensation. Employees tend to work 21 percent harder who feel
that they have better work life balance.
1.3 Objectives
5
2.1 Theory
There are many studies in the literature that examine the effects of incentives and
work life balance on several variables. Scheepers (2009) also examined the extent
to which incentives system affected the motivation of employees at IT firms.
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Many changes in the industries and workplaces have changed and affected the
work and personal lives. These changes have risen in recent years as a result of
large numbers of working people and the entry of more women in the labor force.
Good WLB is a vital reason for the organisations success because it leads to
higher productivity (Bloom et al. 2006). Organizations always look for higher
productivity from their employees, whereas employees always look for deriving
satisfaction from their work and family life. The interests of both the employee and
the employer may conflict quite often, which results in dissatisfaction both among
employees and for the employer. Organisations may believe that they need to
exploit all the abilities of a worker and they will normally turn a blind eye towards
the personal needs of the employee.
Financial incentives and Job satisfaction:
Salau et al. (2014) studied the adoption of financial incentive in motivating
employees for higher performance at a state hospital. Nelson and Quick (2005)
analyzed the role of pay on job satisfaction. The use of monetary reward has
become indispensable in stimulating employees performance. In every
organization, especially in the manufacturing sectors, the use of pay, bonus,
compensation, profit sharing, etc has played a major role in motivating and
retaining workers for higher performance and commitments (Osibanjo, Adeniji,
Falola, and Heirsmac, 2014). Studies have indicated that when salaries of workers
are paid consistently, then it motivates them for to work willingly without the use
of coercion, while the absence of this leads to intention of workers to leave,
absenteeism, labour turnover, pilfering, lower commitment and low job satisfaction
levels. People work for organizations in exchange of money to satisfy their
immediate needs. The pay which comes in exchange for work done gives
employees a sense of satisfaction and eventually facilitates employee retention. So,
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work when they get frequent promotions and job security in their work place;
while some also argued that factors such as promotion, training and career
development, as well as appreciation and improved work environment give
employees greater opportunities and that these will either directly or indirectly
influence their satisfaction on the job.
Work life- balance and Job satisfaction:
Grove and Crooker, (1995) have mentioned that flexible work hour and childcare
polices could increase employees satisfaction and commitment to the organisation.
It is not necessary that family and social commitments associated with the workers
are all the same. In other words, no two workers are alike as far as their social and
family commitments are concerned. For example, the family and society
commitments of a single person may be less compared to a married person. So it
may not be possible for a married person to extend his/her working hours like a
bachelor and still be able to achieve WLB.
Well managed firms have realized the importance of WLB in increasing the
productivity of an employee. They have realized that only an employee with a
peaceful mind will be able to concentrate on his/her work and to increase his/her
productivity.
Work life balance is not only about families and childcare, but also about working
less. It is about working smart (Almidani, 2008. p.13). Asadullah and Fernandez
(2008) examined the role of work-life balance practices and jobs satisfaction in
Gender Gap in the UK and they found that WLB practice has a positive
relationship with job satisfaction as the females reported higher level of job
satisfaction than men. Also, their results prove that having good WLB practice
increase job satisfaction.
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Job Satisfaction
2.3 Hypothesis
H1: There exist a positive relation between financial incentives and job satisfaction
levels
H2: There exist a positive relation non- financial incentives and job satisfaction
levels.
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H3: There exists a positive relation between Work life balance and job satisfaction
levels.
12
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Variables:
Independent variable: Financial incentives, Non-financial incentives and Worklife balance
Dependent variable: Job Satisfaction
Definition of variables:
Financial incentives:
Theoretical definition- According to Armstrong (2012) financial rewards comprise
all rewards that have a monetary value and add up to total remuneration. These
rewards include base pay, merit pay, skills based pay, incentives, and service
related pay, bonuses, financial recognition schemes and benefits such as pensions,
sick pay and health insurance
Operational definition- Financial incentives like bonus, allowances, pay hike and
discounts offered to consumers, employees and organizations to encourage
behavior or actions which otherwise would not take place.
Non-financial incentives:
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Financial
incentives
0.63
Non-financial
incentives
0.672
Work
balance
0.795
life Job
satisfaction
0.898
Cronbachs
alpha
Table 3.1: Result of reliability
It can be seen from the table, the Cronbachs alpha was found to be financial
incentives (0.63), non-financial incentives (0.672), work life balance (0.795) and
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Job satisfaction (0.898). Hence, the scales used in this study are reliable with
acceptable level of internal consistency.
4.2Correlation Analysis
The tools used for the analysis are Karl Pearsons Correlation Coefficient and
Regression analysis. The Karl Pearson correlation coefficient is a measure of linear
association between two variables. The significance level (or p-value) is the
probability of obtaining results as extreme as the one observed. If the significance
level is very small (less than 0.05) then the correlation is significant and the two
variables are linearly related. The sign of the correlation coefficient indicates the
direction of the relationship (positive or negative). The absolute value of the
correlation coefficient indicates the strength, with larger absolute values indicating
stronger relationships. The significance level (or p-value) is the probability of
obtaining results as extreme as the one observed. If the significance level is very
small (less than 0.05) then the correlation is significant and the two variables are
linearly related. If the significance level is relatively large (for example, 0.50) then
the correlation is not significant and the two variables are not linearly related
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Hypothesis 2: There exist a positive relation between non- financial incentives and
job satisfaction levels.
The value for Correlation between Non-financial incentives and Job satisfaction is .
775, which states that the above hypothesis is correct.
Hypothesis 3: There exists a positive relation between Work life balance and job
satisfaction levels.
The value for correlation between Work life balance and Job satisfaction is .828,
which states that the hypothesis holds true in this case. The value which is closer to 1
is highly correlated, which indicates that work life balance is highly correlated with
job satisfaction levels than financial incentives and non-financial incentives.
Regression analysis
To find the degree to which financial incentives influences job satisfaction levels
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Table 4.3: Regression model for Financial, Non-financial incentives and work life
balance with Job satisfaction
From the above table we can arrive at the following equation
Y=.111+.748X; where
Y stands for the dependent variable Job satisfaction and X stands for the
independent variable Financial incentives.
Y=.111+.908X; where
Y stands for the dependent variable Job satisfaction and X stands for the
independent variable Non-financial incentives.
Y=.111+1.009.X; where
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Y stands for the dependent variable Job satisfaction and X stands for the
independent variable work life balance.
The model summary table indicates R and R square value. The R value represents
the simple correlation and is 0.884 (the "R" Column), which indicates a high
degree of correlation. The R2 value (the "R Square" column) indicates how much
of the total variation in the dependent variable, Job Satisfaction can be explained
by the independent variable-Financial incentives. In this case, 78.1 % can be
explained, which is very large.
The ANOVA table indicates that p < 0.0005, which is less than 0.05, and indicates
that, overall, the regression model statistically significantly predicts the outcome
variable (Job satisfaction) (i.e., it is a good fit for the data).
Since observed value of VIF are 3.214, 2.524 and 2.659, there is no
multicollinearity symptoms between the independent variables.
The coefficient table indicates that Beta value of financial incentives (.236), Nonfinancial incentives (.285) and work life balance (.448). Higher the beta value,
higher will be the impact of independent variables on dependent variable compared
to other independent variables which is measured in terms of standard deviation
units.
5.1 Findings
Refering to Table 4.2, the Correlation value observed is .797 which indicates that
there is a significant relation between financial incentives and Job satisfaction.
Similarly for Second hypothesis, the Correlation value observed is .775 which
indicates that there is a significant relation between Non-financial incentives and
Job satisfaction.
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Lastly for Third hypothesis, the Correlation value observed is .828 which indicates
that there is a significant relation between Work life balance and Job satisfaction.
Referring to Table 4.3, the observed R square value is .781(78.1%) which indicates
the variation in the job satisfaction levels that can be explained by financial
incentives, Non-financial incentives and Work-life balance.
It can be observed from the beta value of all the three variables, Work life balance
(.448) leaves higher impact on Job satisfaction levels followed by non-financial
(.285) and non-financial incentives (.236).
5.2 Recommendations
Since the study was conducted among the random employees of Info Park, Cochin.
Organizations pertaining to that area need to focus more on their work life
arrangements such as flexi time hours, Job share arrangements, Maternity leave
arrangements, Compassionate leave arrangement, Emergency care of dependents
etc
Many researches has been conducted on incentives and work life balance affecting
job satisfaction whereas while given an alternative to choose among the three
variables, many employees have more positively responded to work life balance
rather than incentives. One can further extend the research by including variables
pertaining to satisfaction of employees from their job.
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6.1 Conclusion
The study focused on finding out to what extent incentives and work life balance
affects the job satisfaction levels of employees. The researcher based on the
responses collected and the analysis done was able to reach an outcome, which
showed that significant relationship exists among financial incentives, nonfinancial incentives and work life balance on job satisfaction levels. Hence it
validates the hypothesis as true. Analysis part was done using self administered
questionnaires among the employees at info Park, Cochin. The results are in line
with the previous studies with a slight difference in impact of independent
variables on job satisfaction.
Based on the regression analysis, it was observed that work life balance (.448)
leaves higher impact on job satisfaction levels compared to non-financial
incentives (.285) and non-financial incentive (.236). There are also some limitation
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Annexure
Note: 5-point Likert scale (1-Strongly disagree, 2- Slightly Disagree, 3Neutral, 4- Slightly agree, 5- Strongly agree)
In my job, I am getting enough
payment to meet the requirements
of life
In my job, incentives are paid
according to my performance
My organization is keenly
interested in sharing its profits with
me
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4
5
26