Abstract

This study explores the impact of intrinsic and extrinsic rewards on employee performance,

focusing mainly on the public sector. It aims to provide a comprehensive understanding of to

what extent these rewards influence the motivation, satisfaction, and overall productivity of

public sector employees. It draws on existing literature and the empirical data related to

studies and examines relationships between rewards and employee performance, but with a

particular focus on unique challenges and dynamics of the public sector and governmental

organizations.

The public-sector organization comprises a heterogenous environment, people coming from

different cultures and backgrounds. The findings reveal that although both rewards to a great

extent contribute to employee performance, in the perception of these rewards there is a huge

difference; each employee to some extent perceives such rewards differently. This may be

due to different cultures and different backgrounds of the individuals. The study concludes

with recommendations for public sector organizations to strategically balance both reward

types to optimize employee performance and achieve organizational goals.

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Impact of intrinsic & extrinsic rewards on employee performance in the public sector

Introduction

Motivation of an employee plays an important role in enhancing his or her productivity in an

organization & fostering his or her performance. When the rewards system is just & properly

organized it positively influences employee motivation (Shafiq & Naseem,2011.). Employees

perform significantly better when they are highly motivated & employees tend to be more

motivated when they receive recognition from their management (Tehseen & Hadi, 2015).

Intrinsic rewards have gained significant amount of attention in fields such as organizational

behavior & human resource management. It is one of the fundamental aspects which

motivates employees & acts as a catalyst for success. Intrinsic rewards come from intrinsic

fulfillment & satisfaction contrary to extrinsic rewards which is made up of materialistic

things such as pay & compensation.

Intrinsic rewards play an important role in motivating employees & fostering their

performance, it aligns closely with the principles of self-determination theory. According to

SDT theory individuals have psychological demands such as autonomy which is the desire

that they should have control over their actions & should have free will to make choices &

stand by it, second need is competence which is the basic need to feel competent & capable to

seek opportunities which may develop their skills & they may foster in their respective field,

lastly is relatedness which is the desire to feel connected & be cared for by other individuals

in the work setting or any place as human is a social animal it strives for recognition &

thrives on positive relationships. These psychological needs are fundamental to who they are

& it greatly influences their intrinsic motivation when such demands are met.

Intrinsic rewards are such rewards which do not have physical existence we can only feel

them, such rewards have an utmost important impact on the behavior of the employees of an

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organization. Intrinsic rewards may include sense of achievement, praise or recognition from

the management, advancement, autonomy, freedom & responsibility which has been

delegated from the upper management. Intrinsic rewards tend to have a long-lasting effect

than fiscal rewards (Yousaf, Latif, Aslam, & Saddiqui,2014).

In the contemporary era employees are looking for job security & having a suitable working

environment which would make them feel motivated. There has been a trend for matrix

organization in which organizations now focus more on intrinsic rewards to motivate their

employees to make sure that organizational goals are accomplished & they are able to

compete in the global market (Yusoff & Kian,2013).

There are certain companies which have incorporated intrinsic rewards into their workplace

culture such as google which encourages its employees to spend 20% of their work time on

the projects of their choice, the projects which they are most interested in this would foster

autonomy & creativity which would later on satisfy their psychological needs.

There have been numerous studies which have suggested that the employees who are driven

by intrinsic motivation usually demonstrate higher level of job satisfaction, creativity. Such

employees tend to have great resilience & are more likely to experience sense of

accomplishment from the work that they have done.

Furthermore, the importance of intrinsic rewards is widely acknowledged throughout the

world yet the companies have difficulties in utilizing on this source of motivation as it takes a

rational design, a harmonious company culture, individual preferences aligning to create a

work environment that would foster intrinsic drive.

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Reward system is very important to the organizations as it has become in controlling

employee’s performance. Over the past 25 years, other elements have evolved to give

employers with a vast scope of reward, and thus, it motivates the employees. The reward

systems are either directly or indirectly involved in the mission and vision of the organization

that yields logic to employee that a reward system will provide benefit to both parties. A

study conducted by Latham (2012) to keep employees motivated and motivation is an

important element of human resources and management in the organization. Reward systems

have a large impact on organizations to maintain and motivate the employees and as a result

of achieving higher levels of performance (Barber and Bretz, 2000). Thus, organizations must

develop incentive programs such as reward systems to meet employees’ necessities and

motivate them to work.

Many of the organizations have issues to make the right reward system and that reward

system should suit the most employees. A properly managed system of rewards can yield

quality performance. If the organization does not operate under a proper reward system, it

will make path to problems such as low employee morale, the low performance of the

employees, or it could lead to a high turnover rate of employees (Wilson, 2004).

Edward and Christopher (2006) have mentioned that a larger number of employees will not

automatically get motivated to work, continue to work or work hard for the organization. A

latest study by Anitha (2013) explained employee performance as an indicator of financial or

other result of the employee which has direct relation with the performance of the

organization as well as its achievements. The organization needs high performing employees

to achieve its goals, products and services and to meet competitive advantage in the market

(Ojeleye, 2016). Performance is vital, just like reward system because when employees meet

high level of performance, they also want an appropriate reward in return.

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If they cannot meet desired goal and demonstrate low performance in the organization, it may

result in dissatisfaction (Ojeleye, 2016).

A motivated person will show good performance as the employee knows there is a reward

waiting at the end of every month. Reward systems have larger impact on organizations in

keeping employees and pushing them to work in the organization as a result of achieving

higher level of performance (Barber and Bretz, 2000). Reward strategy and systems are

competitive elements which can make employee perform well and motivate them to work in

the organization.

As an outcome of huge competitive environment organizations try their best to attain

competitive edge and develop their items, overall operational activities and management

system in business. Organizations utter focus is to reach set plan and targeted goals (Nisar Et

al., 2014) to achieve their vision and mission organization motive their employees through

two ways intrinsically and extrinsically (Kapelner & Chandler, 2010; Harter, 1981). A

developing organization always pays attention to make its employees satisfied and enhanced

their performance through rewarding then on their achievement, rewarding system is a best

strategy to boost performance and satisfaction of its human resources.

According to Spector (1997) employee’s satisfaction rely on their mentality, thinking, and

feeling for their job. Because of heavy workload competition companies have to face many

problems in order to control its human resource question is that how much satisfied

employees are and how much effectively and efficiently they played their role on other side

representation of the employee’s important role to extend in growth of the organization as

well as individual workers career improvement (Peng & Meyer, 2006). The status quo era has

ended now the world have become a global village and change can come in technology so

fast and the change triggers stress in employees mind and company can decrease this stress

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level by considering a person as unique and different person and make them satisfied for their

performance enrichment.

Firms are trying to keep their organization up to date to assure themselves from competition

of new firm by new technology and well skilled labors hiring. To maintain labor force

motivated they pay best and fair rewarding system and judges and investigate their

employee’s mentality personally whether they preferred intrinsic reward consists of job

significance, autonomy, promotions, opportunity increasing holidays, family benefits and

other side extrinsic rewards contain edge benefits, pay, salary, contract of services the work

and the environment of work.

Executives of the organization must maintain a good relationship with their employees by

checking their employee’s state of mind and urge or preference intrinsic or extrinsic reward.

It is impossible for the organization to attain set plat and targeted goals without consideration

of balanced rewarding system. It is important for organizations that rewards should be

reliable and given on periodic basis. Motivate employee will be more productive and quality

oriented as compared to non-motivated. Incentive system improve encouragement in

employees makes them more diehard for the organization.

Organizations facing more problems is because they do not focus on employee’s satisfaction,

not by judging their way of thinking and needs that vary from employee to employee. They

serve much of their time for organization so that’s why employee’s intrinsic and extrinsic

value play a vital role in their performance as well as organization’s outcome. If

organizations pay attention to the needs and demand of employee it will eventually make

them satisfied and will result in organization’s success by using tricks of extrinsic and

intrinsic motivation. Then for sure employee’s devotion and productivity towards their job

will be improved

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Research Gap

There has been numerous research on impact of intrinsic & extrinsic rewards on employee

motivation & performance. Quetta remains undiscovered in the context of specific & socio-

economic dynamics. Quetta being the capital city of the province Baluchistan, advanced &

surrounded by different cultural context. It represents a society which is characterized by

tribal traditions & modern influences. This vast background influences employee perceptions

& responses to different rewards systems in distinctive ways.

The existing studies are centered around western & Asian contexts such as China & India.

The unique socio-cultural fabric of Quetta includes diverse ethnic groups such as Hazara,

Pathan, Baluch & Punjabi communities. They all bring different perspectives to the table &

leads to different reward preferences & motivation drivers. The existing researches does not

adequately address how economic mishaps impact the effectiveness of intrinsic & extrinsic

rewards. Quetta region faces challenges including high unemployment rates, limited

industrial development. Integrating Hofstede’s Cultural dimensions theory & public

administration can illuminate the gaps & provide a deep understanding.

For instance, the region Quetta may exhibit high collectivism as it is embedded by tribal &

communal traditions which could influence a stronger preference of extrinsic rewards

benefiting the group rather than intrinsic rewards. Additionally, power distance which is

another dimension of the Hofstede’s dimensions might be higher in Quetta, Baluchistan

because of hierarchical structures.

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Most of the studies in Pakistan are primarily focused in big cities like Lahore, Islamabad,

Karachi which leave a significant research gap in understanding the motivational dynamics in

culturally diverse cities like Quetta.

Lastly there are gender & social norms in quetta which play a significant role in shaping

employee response towards rewards. There is conservative social norms which are prevalent

in the region which might influence the perception of different type of rewards.

Addressing mentioned gaps is essential for the development of society. Future studies should

aim to embody the unique cultural, economic & societal characteristics of the region,

furthermore being guided by Hofstede’s cultural dimensions & the insight from public

administration. By filling these gaps, the grass root level practitioners can contribute to more

effective human resource management practices which may enhance employee satisfaction &

performance in this unique context.

Research Questions

1. To what extent, are there variations in the perceived effectiveness of intrinsic &

extrinsic rewards across different diverse groups or individuals?

2. What are the perceptions regarding equity & fairness of intrinsic & extrinsic rewards

among employees who belong to various gender & diversity groups?

Objectives of Research

1a. To assess variations in the perceived effectiveness of intrinsic & extrinsic rewards across

diverse groups & individuals

1b. Examining whether there are differences in the perceived values & impact of intrinsic &

extrinsic rewards among diverse groups

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2a. To examine perceptions of fairness & equity of such rewards among employees of

different demography.

2b. To identify potential disparities in the perceived fairness of intrinsic & extrinsic rewards

across different demographic groups & its impact on employee motivation & performance.

Significance and scope

1. Subject Focus

The research investigates the impact of intrinsic & extrinsic rewards on employee

performance with a particular emphasis on how do these rewards influence employee

performance in the public sector

2. Sector Specific

Limited to understanding how do these rewards influence performance in the

government sector & to what extent does their perception vary, if they belong to

different culture

3. Geographical Context

The research was conducted in Quetta; therefore, the findings are contextual to the

public sector within this region & city. This may reflect unique socio-economic,

cultural & organizational factors present there

4. Population Studied

The study focuses primarily on public sector employees including diverse range of job

roles & levels within the organization. The questionnaire & unstructured interview

was conducted in: National Bank, Waqafi Mohtasib, BMC, PPHI, DC Office,

Emergency Operation Polio Center, University of Baluchistan

5. Methodological Scope

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 The research employees quantitative & qualitative methods to gather data on

employee perception of their rewards & their impact on performance

6. Relevance

This research aims to provide insights that can be used by public sector organizations

to improve their reward systems & enhance employee performance. It may assist in

policy making, management practices within the public sector.

LIMITATIONS

1. Generalizability

The research is confined to public sector of Baluchistan. There might differences in

structures & reward systems & perception across different provinces & cities

2. Focus

The research focuses specifically on intrinsic & extrinsic rewards. It overlooks other

factors that may influence employee performance such as job security, work life

balance etc.

3. Potential Biases

Maintaining objectivity is challenging but essential for ensuring the credibility

4. Ethical Considerations

Ensuring that participants are fully informed & provide genuine response may be

challenging. Data protection needs to be carefully managed to maintain integrity.

5. Measurement Challenges

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 The study relies on data reported from questionnaire & unstructured interview. This

may introduce inaccuracies. Participants may provide socially desirable responses.

6. Resource Constraints

Time & accessibility resources are at play. These two factors can restrict the scope of

study.

Literature Review

Intrinsic Rewards & Performance

Intrinsic rewards refer to internal or psychological factors which the employees derive from

within their organization, it can be in the form of recognition & respect from supervisors, it’s

not just limited to these categories but its rewards are a vast subject as well. In recent years,

researchers have delved into understanding the interplay between rewards & employee

performance.

Intrinsic rewards tend to bring out positive emotions while it keeps the employee happy &

motivated & encourages people to keep doing better & maintaining this positive behavior for

the long term (Ryan and Deci,2020). Once the work is done, the feeling of inner-satisfaction

arises & this feeling which tingles inside an employee motivates him or her to complete her

tasks with integrity just so they can feel the bliss of positive emotions again & again.

Furthermore, the intrinsic rewards complement it. Tymon Jr et al. (2010) state that Intrinsic

rewards are very crucial if you want to retain the employee in the organization, maintain their

satisfaction level within the organization & lead the organization & career to success.

There have been major studies to maintain the organization efficiency & effectiveness in the

contemporary world. Stump et al. (2013) undertook a study to reduce dissatisfaction within

the organization & reduce the rate of turnovers, his study found a positive correlation

between intrinsic rewards & employee satisfaction within the organization.

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Devaro et al. (2017) conducted research where they examined training & internal motivation

in both profit & non-profit organizations, here they found that non-profit organizations tend

to invest more in training than for-profit organizations, if looking at wages then non-profit

organizations tend to pay less.

The reciprocal of dissatisfaction & withdrawal are satisfaction & rewards, so to further

decrease dissatisfaction the manager has to increase the number of intrinsic rewards given.

According to Bassett-Jones & Lloyd (2005) intrinsic rewards are far more important than

money and bonuses while, Ajila and Abiola (2004) state that although intrinsic rewards have

a significant impact on the performance of the employees but if it is compared to extrinsic

rewards such as pay, bonuses & promotions, it is less influential.

Intrinsic Rewards & Employee Motivation

Lack of rewards may create an un-pleasant environment; lack of rewards may hinder

performance. As individuals would not put in all of their efforts into the job because they

know they will not be recognized & there will be no rewards even if they work overtime or

perform better than the benchmark.

Although the main purpose of rewards are to keep the employees attracted towards the

organization & make them bring the best version of themselves out.

Motivation acts as a drive to allow employees to achieve their goals (Kleinginna &

Kleinginna, 1981). Motivation can be gained after looking at an inspirational leader or after

the employee has completed his task & has gained acknowledgement for it.

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Social cognitive theory claims that the if the manager or anyone with higher authority

rewards the employee after his completion of a challenging task, it would result in high

motivation drive within the employee. (Schunk, 1989; Netz & Raviv, 2004).

Stringer et al. (2011) delved into relationship between intrinsic & extrinsic rewards with

employee motivation. The result of the studied provided insight that Intrinsic motivation was

positively associated with job satisfaction, while extrinsic motivation was negatively

associated with job satisfaction.

It is clear that the impact of intrinsic rewards on motivation appears to be different across

different industries & organizations. These are influential factors which shape the employee

behavior & their engagement within the organization.

Elements of Intrinsic Rewards

There are certain elements of intrinsic rewards the first one is recognition which is the

appreciation of employees’ efforts to achieve the set goal of the organization or the

accomplishment of their assigned task or responsibilities (Baskar & Prakash Rajkumar,

2015). Certain behaviors are reinforced when the individual is recognized for their efforts as

it allows employees to realize that they are valued & appreciated in the organization.

According to Neslon (1994) Recognition improves self-esteem & confidence which

furthermore increases their interest in the job.

Training is a methodical & systematic process which is considered to enhance employees’

attitudes & skills in the organization so they can perform their tasks more precisely

(Armstrong & Brown,2006). Training usually plays a crucial role in motivating employees

positively just so their work skills match with the tasks they are about to get assigned to or for

the position which will be vacant in the near future. While development is the overall growth

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of an employee to perform their current tasks better & they can fill the potential vacancies in

future. T&D is conducted to boost the competence of individual & of organization which

would lead to improved employee performance & career advancement in the long run.

Third element is the work environment in which the employees operate, work environment

includes physical settings & the facilities which are provided by the work. Work environment

also comprises of interactions at the work place (Halbesleben & Wheeler,2007). If the work

environment has a positive impact, it fosters employees’ willingness to work while a negative

working environment can deter motivation even when the employee has potential.

When an individual seems, capable there is decentralization of power, employee participation

in decision making means that inputs are taken from the employees & their point of view is

taken into consideration for various organizational matters (Wagner III,1994). Employee

participation encourages employees to give their point of views & come up with something

efficient this diminishes the gap between the management & the employees of the

organization. Participation in decision making results in employees being more committed

toward the organization & the goals of the organization (Ford & Myron,1995).

Lastly another element is the flexibility of the workplace which is another way to provide

intrinsic reward to the employee. It allows employees to choose their working hour, tasks

(Bal & De Lange, 2014). This workplace flexibility is useful for employees to balance their

work life & personal life, due to this they can give considerate amount of time to their

families & the work. This allows employees to feel motivated & feel empowered, another

advantage of this element is that it attracts & retains employees in the long run (Zlate,2004).

Employee performance

Employee performance as defined and explained by academics, it relies on the kind of reward

procedure placed in the organization (Bari, Arif and Shoaib, (2013). Research by Anitha

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(2013) proved that employee performance is an signal of financial or other results that have

direct relation with the outcome of the organization as well as its achievement. Employees in

management such as higher, lower furthermore middle management plays a significant part

in outcome (Xanthopoulou et al, 2009a). Recruiters noticed that it is critical to understand the

attitude of employees and how to catch the interest, keep and encourage them for a longer

period of in the organization as their behavior is not constant.

In a firm’s perspective of outcome, employee outcome is measured as the extent to which a

firm’s member takes part in obtaining the goals of firm. Employee outcome is crucial to a

firm as they play as a substantial mechanism that led to the success of a firm. Most firms can

estimate employee outcome through the quantity of fruit, quality of fruit, timeliness of fruit

and labor productivity (George, 2015). The individual’s performance will affect the image of

the firm. The flourishing employee supervision, creation and empowerment are vital basis of

firm’s performance (Christensen, 2011). That is why, performance achieved by the employee

could be measured by using index that can describe employee’s pattern of outcome over the

time (Ying, 2012).

Relationship Between Employee Performance and Salary

In conformity with Agburu (2012), salaries and wages are prominent and also, he argued that

wages must show a few elements of equity instead of focusing on wages. This is because a

reasonable salary will provide satisfaction and improve their outcome in a firm. An individual

in a firm wants to earn income either in the form of financial or non-financial. Previous,

studies by Kanzunnudin (2007) indicated the number of wages paid to the employee must be

reasonable to meet their needs in daily life. Fringe benefits and nature of the working work

environment are the important factors that influence employee outcome (Edirisooriya, 2014).

A positive fluctuation in salary by the employer such as salary increment or increasing the

size of the present salary of the employee will push them to better their performance in the

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organization. A study done by Edirisooriya (2014) claimed that there is strong certain

relationship between employee performance and financial rewards such as salary and wages.

Relationship Between Employee Performance and Bonuses

Bonus is a form of income that is not expected by the employees and the old line to some of

the organization (Bardot, 2014). The decision was made to give bonus either to a group or a

person. The management has to decide what should be the measurement to reward the

previous achievements of the employee. For example, employee meets the specific profit or

achieves the sales target for the organization, and influence employees’ behavior to get the

objectives by providing an incentive such as a bonus to present an incentive as progressive

plan for the employee. The incentive is prone to work towards the goals.

Another definition of bonus by scholar, it is defined as one payment made at the end of the

year to reward hardworking employees who achieved goals (Romanoff, 2008). Most of the

bonuses are tangible reward such as cash. Although there is difference in bonuses and

incentives, both are designed to motivate employee. Some directly give the employee money.

Rewards based on completion against executing plan, quality or different norms might be

utilized as prompt money related motivating forces. According to William (2010), the board

recompenses by rewards have got accustomed in a few organizations as ways of equipping

representatives with a prompt buster for culmination of an action. Many of the organizations

use monetary pay in intention to motivate their employee or workers. Last research conducted

by Hameed et.al (2014) and Sayuyigbe (2014) has claimed that outcome of reward such as

bonus has positive effect towards employee performance.

Relationship Between Employee Performance and Health Care benefits

Being sure of, what impacts employee satisfaction with Health Care Benefits can provide

reasonable information that makes employer capable to take the right step for the workplace.

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A study conducted by Hernandez and McDonald (2010) analyzed employee satisfaction as

per specific industry of health care and alongside with the expenses and benefits of

individuals with and without inabilities. They also expressed that employers are surer of

people with disabilities and invest more in healthier people. This will make healthier workers

dissatisfied if their health care benefits are not equally compared with disabled ones.

Dulebohn, Molloy, Pichler and Murrary (2009) stated that employee benefits are among the

“most relevant for remaining competitive in the labor market” (p. 86). The medical cost is not

cheap; thus, employees want organizations to understand their financial burden by making

effective health care benefits. Research by Tanya (2013) showed a positive result that health

care benefit has care a prominent effect on employee performance.

Extrinsic motivation

Extrinsic motivation can be referred as tangible thing that is given to an individual on an

achievement of set target or goal, sometimes it is based on valuable tangible assets in nature,

if it financial reward is concerned it is referred to safety and security of the employee

working in a company within specific work environment or work. it is noted that Money and

Extrinsic rewards are not always primary motivator for the employees (“Employee”, 2005).

Furthermore, Tifflin & McCornick (2007), extrinsic motivation is “interjected regulation”

that means internal adjustment is still manageable reason is that workers accomplish certain

jobs with pressure in order to avoid anxiety (Ryan, 1982). A traditional summary of

representation, introjections are self-pride interference in employees, in addition, perceived

research showed that extrinsic motivation can stand out intrinsic rewards(deci,1999). Hezberg

was the first individual who came up with the concept of intrinsic and Extrinsic motivation

and vividly defined the significance of both variables (Staw.,1976). However, another

research shows that extrinsic rewards are not best motivator among workers and often can be

cause of de-motivation in workers (Perry Et al., 2006). A financial aid has push individuals

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towards effective achievements in profit vise (Sinclair et al., 2005). One more study

introduced that a worker who obtains an individual encouragement by accomplishing an

activity their interest and way of thinking vary from person to person towards rewards they

had been given (Lehr’s & Bergum, 2004).

Bonuses: often yearly based rewards in the form of salary paid to the employee in order to

motivate them in order to put in all activities and effort during the year to perform well

satisfactorily. The bonus packages differ from organization to organization some give due

amount annually while some base it on performance level.

Salary raises: is attained after hard work and efforts of workers, bt learning new skills or

academic certificates as per organization requirements. This type of motivation is considered

beneficial because it pushes employees to learn new skills and it offers long term satisfaction

to employees.

Gifts: are said to be short term positive reinforcement. Certainly, presented as gesture of

appreciation for an achievement. An employee would applaud a gift that boosts their self-

esteem and satisfaction

Promotion: impacts the long-term satisfaction of employees, it could be done by elevating

their positions. Which increases the title, responsibility, and accountability.

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Extrinsic rewards and outcomes

Researchers showed that extrinsic rewards have direct and positive impact on employee

satisfaction. Earlier researchers undoubtedly did a good job on extrinsic reward impact

however some points were not paid attention these must be included in order to polish the

significance of Extrinsic Rewards. According to recent research extrinsic and intrinsic as well

have positive effect on employee’s content. Both rewards have positive impact (Reily et al.,

1991). Additional studies showed that extrinsic rewards (financial reward) are significant in

Pakistan for workers satisfaction. Results showed absolute relation between extrinsic reward

and employee satisfaction. After most researchers proposed that not only extrinsic rewards

are significant but intrinsic rewards should be considered too. There are some logical factors

that are missed by the researchers and these must be included. There is no objection that both

of the rewards have significant impact but extrinsic must be kept on upper level because

money is very important element in employee’s satisfaction. In previous study some points

were continuously neglected by the researchers is that they emphasized on the extrinsic

reward that it was related with employee’s satisfaction while the intrinsic reward was said to

be of no use. But We ought to focus on Intrinsic reward as well but extrinsic reward should

be kept high level priority (Ali & Akram; 2013, 2012).

Likely, many researchers proposed to give medical allowance to employees because they

focus on medical allowance. As per outcomes extrinsic rewards have positive effects on

employee satisfaction. One more researcher shows the positive effect of extrinsic reward on

employee satisfaction by emphasizing on the promotion of employee, but here are some curbs

in last studies that is just medical allowances and promotions are applauded as extrinsic

rewards ought to be appealing in the form of salaries. Salary should be reasonable and

sufficient (Nayadema et al., 2014).

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Research strategy

Objective of this research is to probe into elements and factors that contribute in influencing

the employee performance and motivation and to develop a predictive model.

1. Study Design

Collecting new data in accordance with heterogeneous employees in different organizations

in Quetta (Balochistan), Especially this study was focused in public sectors

2. Population and Sample

Population: Atleast 30 employees in each organization

Sample: Randomly selected 154 employees from different public organizations

3. Data Collection

A questionnaire based data collection method was used in order to assess the employee

satisfaction through different questions & structured interview.

4. Variables

Dependent variable: In this study dependent is performance.

Independent variables: Intrinsic and Extrinsic Rewards

5. Timeline

March - April: Planning and Proposal

- March 1 - March 15: 2 weeks

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- March 16 - March 31: 2 weeks

- April 1 - April 15: 2 weeks

- April 16 - April 30: 2 weeks

April - May: Data Collection

- April 16 - April 30: 2 weeks

- May 1 - May 15: 2 weeks

- May 16 - May 31: 2 weeks

June: Data Analysis

- June 1 - June 15: 2 weeks

- June 16 - June 30: 2 weeks

July: Interpretation and Reporting

- July 1 - July 15: 2 weeks

- July 16 - July 31: 2 weeks

August: Finalization and Submission- No specific timeline provided

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 March April May June July August

Identifying Refining proposal Collecting Organizing Interpretation of the Finalizing the

research data data results research

1st -
question
15th

Proposal Finalizing proposal+ Data Analyze Drafting the research

drafting evaluating data verification data (thesis) report

16th-
collection and
30th
methodologies validation

Choice of the research

Questionnaire based research is methodology of collecting data which is widely used by

different scholars. It is used in different fields such as social sciences, health care, marketing,

and education to collect self-reported data from participants. This method involves designing

and administering questionnaires, surveys, or polls to gather data, attitudes, values, opinions

and beliefs from a sample population.

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Advantages:

1. Cost benefits and efficiency

2. Large sample size can be measured

3. Can be used in both form online and offline

4. Enables both type of collection quantitative and qualitative

Type of Questionnaire used:

i) Structured questionnaires: Closed-ended questions with fixed response options

Design Considerations:

1. Understandable language has been used for better understanding of respondent.

2. Relevant questions asked from respondent.

3. Appropriate question type used such as likert-scale.

Ethical Considerations:

1. Questions asked with the consent of respondent.

2. Identity and information of the respondent is kept confidential.

3. Biased questions were avoided.

Research Philosophy

In conducting the research on impact of intrinsic & extrinsic rewards on employee

performance the philosophical stance aligns with interpretivist approach. According to

interpretivism philosophy humans create meanings to the things they interact with as they

belong to different culture & past they bring new meanings to the things they interact with.

This stance emphasizes subjective interpretations, meanings that may influence individuals’

work performance & experiences within the organization

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The purpose of this approach is it create new rich understandings. According to the

epistemological stance knowledge is socially constructed which means that knowledge is

constructed through interaction with others as each individual has a different upbringing,

furthermore he has different knowledge of certain things & knowledge is context dependent.

Individuals would interpret rewards & fairness based on their unique perspectives, values &

their lived experiences. By taking a subjective stance this research would uncover rich

insights into how diverse employee groups perceive & respond towards rewards & fairness in

the workplace & to what extent they believe that it would impact their work performance in

the organization.

According to the ontological perspective which refers to assumptions regarding nature of

reality, how you see things, you might have different perceptions & suggestions.

Ontologically reality is multifaceted & dynamic. Reality is shaped by subjective

interpretations & the interactions. Some might perceive rewards as a catalyst for their good

performance & some might not see it as a catalyst. Questionnaires would provide structured

data collection which would be later on open to interpretation.

Research Approach

According to the Hofstede’s cultural dimensions there are six dimensions which comprises of

power distance, uncertainty avoidance, individualism versus collectivism, masculinity versus

femininity, long versus short term goals & lastly indulgence versus restraint.

The hypothesis according to this context is that the impact of intrinsic & extrinsic rewards on

employee motivation & performance varies from culture to culture, each culture perceives the

24
rewards differently. There are individuals who prioritize personal achievements more than

group harmony, collective success, secondly there is cultural competitiveness masculine

culture prioritize competitiveness & monetary benefits focusing more on short term goals vis-

à-vis females who emphasize caring for others & quality of life.

To examine this hypothesis, the research will follow a deductive approach which is guided by

Hosftede’s cultural dimension theory & the research is expected to reveal significant

variations in how different cultural people perceive & respond to intrinsic & extrinsic

rewards. As quetta is embedded by different cultural contexts.

Hypothesis

H1: Intrinsic rewards influence varies across different cultural contexts as described by

Hofstede’s cultural dimension theory

25
H2: Impact of intrinsic & extrinsic rewards on employee motivation & performance varies

from culture to culture, each culture perceives the rewards differently

H3: There is vital and positive relationship between intrinsic & Extrinsic rewards and

employee job performance

26
Data Analysis & Interpretation

Descriptive Statistics

Statistics

Gender Age Education

Valid 154 154 154

N
0 0 0

Interpretation: The data comprises of 154 valid responses with no missing values as shown

in the table above.

27
Frequency Table

Gender

Frequency Percent Valid Percent Cumulative

Percent

28
 Male 116 75.3 75.3 75.3

Valid Female 38 24.7 24.7 100.0

Total 154 100.0 100.0

Age

Frequency Percent Valid Percent Cumulative

Percent

16-25 26 16.9 16.9 16.9

26-35 80 51.9 51.9 68.8

Valid 36-45 40 26.0 26.0 94.8

46 and above 8 5.2 5.2 100.0

Total 154 100.0 100.0

Education

Frequency Percent Valid Percent Cumulative

Percent

Valid Masters 110 71.4 71.4 71.4

Bachelors 42 27.3 27.3 98.7

29
 Phd 2 1.3 1.3 100.0

Total 154 100.0 100.0

DESCRIPTIVES VARIABLES=Intrinsic Extrinsic Motivation Performance

/STATISTICS=MEAN STDDEV MIN MAX.

Gender Interpretation: The majority of the respondents are male as they comprise 75.3% of

the total sample while females represent the 24.7% of the total sample. This indicates a

greater gender imbalance in the respondent pool, With higher number of males.

Age Distribution Interpretation: The majority of the respondents fall within the 26-35 age

group, which are contributing to the 51.9% of the total sample, while the second largest group

are those of who are aged 36-45, contributing to the 26.0% of the total sample. Respondents

aged 16-25 & 46 above constitute 16.9% & 5.2% respectively of the sample. This proposes

that sample is mostly composed of younger to middle aged participants.

Education Distribution Interpretation: The majority of the respondents who were part of

the sample hold a master’s degree as they account for 71.4% of the total sample. While those

who hold a Bachelor’s degree make up 27.3% of the sample while those who hold a Phd

account for 1.3% of the sample. This indicates highly educated respondent pool as most

individuals have completed postgraduate education.

Descriptive Statistics for key variables interpretation

Intrinsic Motivation: The mean score for intrinsic motivation is 3.5227 with a standard

deviation of 0.65390, this indicates that there exists moderate to high level of intrinsic

motivation among respondents.

30
Extrinsic Motivation: The mean score is 3.5244 with a standard deviation of 0.74810, this

proposes that extrinsic motivation is also moderate to high as similar to the intrinsic

motivation

Overall Motivation: The mean score is 3.7511 with a standard deviation of 0.81677, this

shows that there is relatively high level of motivation when considering both factors of

motivation which are intrinsic & extrinsic.

Performance: The mean score is 3.5009 with a standard deviation of 0.70578, this indicates

a moderate to high level of perceived performance among sample.

Reliability Analysis

To ensure the validity, consistency & reliability of the measurement scales used in research

study, Cronbach’s Alpha was calculated for the 29 times as included in the survey.

Interpretation of Reliability: Cronbach’s Alpha is a way of assessing reliability by

comparing amount of shared covariance. It also presents internal consistency indicated

how closely related a set of items are in the group. The value 0.931 suggests a lofty level

of internal consistency. As Cronbach’s Alpha value which is above 0.7 is considered

acceptable & above 0.9 is considered to be perfect. Therefore the measurement scales

which were used in the study are highly reliable.

31
Regression

Model Summary

Model R R Square Adjusted R Std. Error of

Square the Estimate

1 .688a .473 .466 .51574

a. Predictors: (Constant), Extrinsic, Intrinsic

ANOVA

Model Sum of df Mean Square F Sig.

Squares

Regression 36.050 2 18.025 67.766 .000b

1 Residual 40.164 151 .266

Total 76.214 153

32
a. Dependent Variable: Performance

b. Predictors: (Constant), Extrinsic, Intrinsic

Coefficients

Model Unstandardized Standardized t Sig.

Coefficients Coefficients

B Std. Error Beta

(Constant) .966 .231 4.190 .000

1 Intrinsic .285 .103 .264 2.757 .007

Extrinsic .434 .090 .460 4.798 .000

a. Dependent Variable: Performance

33
CORRELATIONS

VARIABLES=Intrinsic Extrinsic Motivation Performance

PRINT=TWOTAIL NOSIG

MISSING=PAIRWISE.

Model summary

R. Refers to the correlation coefficient, which quantifies the strength of the relationship

between intrinsic and extrinsic predictors and the performance outcome variable. In this

situation, it's 0.688, which refers to moderate to strong correlation.

R Square. Is the proportion of variance explained by the predictors, which is 0.473, means

about 47.3% of changes in performance can be predicted by Intrinsic and extrinsic.

Adjusted R Square. An adjusted version of R square counts the number of predictors. That

is 0.466, which is same like R square but imposed for having number of predictors.

Std. Error of the Estimate. The average gap between observed and predicted values of

performance. That is 0.51574, showing intermediate percentage of error in predicting

performance.

34
ANOVA

Sum of squares. All variation showed by the predictor is 36.050 and the unpredictable

variation is 40.164.

Df, Degrees of freedom, that is the independent pieces of information utilized to predict the

variance.

Mean Square. The average of the Sum of Squares, used to calculate the F statistic.

F.Is the statistic, that refers to the ratio of mean square value. Which is 67.766, showing that

predictors essentially explaining the variation in performance.

Sig. It is indicating that the relationship is statistically significant.

Coefficients

Unstandardized Coefficients (B). A one unit increment in intrinsic is connected with a

0.285 increase in performance.

Standardized Coefficients (Beta). A one unit change in intrinsic is associated with a 0.264

standard deviation increase in performance.

t. the t statistic, it is utilized to measure p-value (Sig.).

Sig. The p-value, is to observe if the hypothesis is null, that is no relationship were there.

This analysis shows that both intrinsic and extrinsic elements have statistically significant

relation with Performance, showing about 47.3% of its variation.

35
Correlations

Intrinsic Extrinsic Motivatio Performance

Pearson
1 .788** .661** .627**
Correlation

Intrinsic
Sig. (2-tailed) .000 .000 .000

N 154 154 154 154

Pearson
.788** 1 .788** .668**
Correlation
Extrinsic
Sig. (2-tailed) .000 .000 .000

N 154 154 154 154

Pearson
.661** .788** 1 .732**
Correlation
Motivation
Sig. (2-tailed) .000 .000 .000

N 154 154 154 154

Pearson
.627** .668** .732** 1
Correlation

Performance 36
Sig. (2-tailed) .000 .000 .000

N 154 154 154 154

correlation matrix shows the relationships between intrinsic rewards, extrinsic rewards,

motivation, and employee performance. Here is the interpretation of the results:

1. Intrinsic rewards are significantly and positively correlated with extrinsic rewards (r

= .788, p < .01), motivation (r = .661, p < .01), and employee performance (r = .627, p < .01).

This indicates that as intrinsic rewards increase, extrinsic rewards, motivation, and

performance also tend to increase.

2. Extrinsic rewards are significantly and positively correlated with motivation (r = .788, p

< .01) and employee performance (r = .668, p < .01). This suggests that as extrinsic rewards

increase, motivation and performance also tend to increase.

3. Motivation is significantly and positively correlated with employee performance (r = .732,

p < .01). This means that as motivation increases, employee performance also tends to

increase.

4. All correlations are significant at the 0.01 level, indicating a strong relationship between

the variables.

In summary, the results suggest that both intrinsic and extrinsic rewards are positively

associated with motivation and employee performance, and motivation is positively

associated with employee performance. These findings support the hypothesized relationships

between the variables.

37
38
Conclusions & Recommendations

Given that there are differences in perception of rewards due to cultural & individual

backgrounds, it can be tackled by the government of Pakistan if handled efficiently &

effectively. There are certain recommendations to effectively enhance employee performance

of each individual whether they belong from different cultures or not & each individual can

improve equally & efficiently.

1: Customization of reward systems, public sector should develop flexible reward systems

that can be tailored to cultural diverse backgrounds & the individual preferences of

employees. In an organization there are different sectors, employees should be allowed to

choose those rewards which align with their values & motivations

2: Cultural sensitivity training, before designing intrinsic & extrinsic rewards there should be

training programs for management & HR Personnel to increase awareness of cultural

differences in reward perception.

3: Balanced Reward strategy: Organizations should aim for a balance approach in both

intrinsic & extrinsic rewards. Although intrinsic rewards are usually valued in every

organization. Extrinsic rewards should not be neglected.

4: Employee Involvement in Reward Design: Engage employees in creating reward system

by using surveys and focus group. This involvement can help organizations understand what

kind of rewards does the employees prefer and then they can build more effective reward

strategies

5: Regular Feedback: Continuously gather feedback from employees about the effectiveness

of the new reward system and be open to make adjustments. This regular feedback process

39
ensures that the reward system remains relevant and effective over time, adapting to evolving

employee needs and other dynamics.

6: Recognition of Diverse Motivations: Acknowledge that employees may have different

motivations based on their cultural background and personal experiences. Organizations

should aim to know and reward a wide range of achievements and contributions, not just

those traditionally and typically valued by the dominant culture

40
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 Appendix

Impact of intrinsic & extrinsic rewards on employee performance mediated by

motivation.

Dear participants, this questionnaire is for the purpose of research that will neither be

shared with anyone nor will be used for any commercial purpose. This is purely

confidential.

Gender: Male Female

Age Group: 16-25 26-35 36-45 45 years or above

Education: Master’s Bachelors Phd

Note: 1= Strongly Disagree, 2= Disagree, 3= Neutral, 4= Agree, 5= Strongly Agree

S.N

o Intrinsic Rewards SD D N A SA

1 The chance to do something that makes use of my abilities

2 The feeling of accomplishment I get from the job

3 The chance to do different things from time to time

4 The chance to try my own methods of doing the job

5 The freedom to use my own judgment

6 The chance to work alone on the job

7 The way my job provides for steady employment

8 The chance to tell people what to do

48
 Extrinsic Rewards

1 Co-workers (Extrinsic) The way my coworkers get along with each other

2 Recognition (Extrinsic) The praise I get for doing a good job

3 Advancement (Extrinsic) The chances for advancement on this job

Supervision—Human Relations (Extrinsic) The way my boss handles his/her

4 workers

Supervision—Technical (Extrinsic) The competence of my supervisor in

5 making decisions

6 Company Policies (Extrinsic) The way company policies are put into practice

7 Compensation (Extrinsic) My pay and the amount of work I do

8 Working Conditions (Extrinsic) The working conditions

49
 Motivation

1 I feel a sense of personal satisfaction when I do my work well

2 My view of for myself goes unhappy when I do the work unwell.

3 I feel satisfaction in doing my work well as I can.

4 I feel down when my effort is not up to my standard.

5 I work harder because my subordinates appreciate it.

6 I try to think if ways of doing my work efficiently and effectively

Employee Performance

1 I am aware that the work that I do is important for the organization

The work that I perform needs competent personnel, and everyone cannot

2 perform it.

3 The work that I perform is worth doing

4 I can use my potential completely in my work

5 My performance is much better than the same qualified colleagues.

6 I mostly fail to complete important responsibilities

7 I am happy with my performance because it is generally satisfying and better.

50
51