The fundamental intention of a memberof staff working in any association is to earn money and other non-monetarybenefits. Banking industry plays a vital role in the development of a growingeconomy.
Habib Bank Limited has developed its reputation in the market as notonly just adamant for the economic part of the economy, but also very importantfor a healthy and flourishing society. Like every organization, Habib BankLimited is responsible for upgrading of work life of its workforce. Human ResourceDepartment, though, can develop effective strategies for development of highlevels of employee engagement.
There are many organizations in the world whichfocus on maintenance of skills labors and workers through regards and otherbenefits. The most far and wide recognized name connected with employeeengagement is the Gallup Organization. It really is common finding thatintroduction of monetary rewards could gain extra efforts of the employee toextent where extra amount is paid to him/her. Lazear (1986) also optimisticallyadvocated that by adding financial rewards to the remuneration of employees forthe sake of inspiration can exert a pull on more geared workers to theorganization. He also elaborated that introduction of monetary rewards couldgain extra hard work of the employee to that level where the insignificantvalue added is equal to the insignificant cost paid for that extra work.
Thisshows that financial incentives are some types of paid value to workforce inreturn for their extra efforts. Lazear (2000) showed a constructive relation betweenemployee engagement and plunder and firm performance. Fundamental rewards have gained momentoussignificance in recent years (Thomas, 2009).
They mention managerial supportand their participation to elevate the level of intrinsic motivation in employeesby causative in inherent rewards, as building blocks. They state that,intrinsic rewards are based on the positive feelings that employees get fromtheir work engagement. According to Thomas (2009), theseintrinsic rewards strengthen the self management efforts and motivate employeesto be unswerving with work. An Implementation of fundamental reward createspositive mindset and experiences among employees and management. In the last few decades, manyorganizations have curved their focus on skill-based pay plans.
By which the paymentof employees is based on employee’s new skills and knowledge and secrecy aptitudeto a certain extent thanfor holding same position in organization. Byimplementation of skill-based plans, employees work moreEffectively and focuson their new skills and it creates the innovation performance system. Thissystem of skill based pay focuses on constant wisdom and creates culture, whereemployee’s concealed skills are painted (London and Smither, 1999). However,this system of skill-based pay plans is still based on monetary recompense and economicexchange between the employee and employer. Based on the study of Osterlohand Frey, (2000), inventive personnel have two main reasons for being essentiallyaggravated. And these reasons must be addressed by organizations for betterperformance. First reason, inherent motivation is desirable for creating andexchanging the knowledge and ideas. They found that, motivated employees areinherently interested towards rendezvous with their work.
Also, these employeeswill share more information with colleagues, and by this fact, they generate orcreate more knowledge throughout the organization. Second, essential motivationis to improve the time, which is owed to job-related tasks and to improve the efficiencylevel of individuals in the organization. By giving this knowledge, employeeshave relative watchfulness about the time for these productive activities,their willingness to give over the time for these productive actions, is decisivefor the triumph of organizations. In their study, Shives and Scott(2003) recommended that the gain allocation approach to discuss the impact ofrewards on employee motivation and commitment towards the organization.
The organizationalefficiency can be improved to the great levels through gain sharing approach.Through gain sharing approach financial bonuses can enhance the productivity ofemployees and employees should be rewarded with financial incentives for extraefforts.This approach for the most part focuses to diminish the costs for a segmentof that reduction should be converted into bonuses to employees to motivatethem. On the other hand, profit sharing is dissimilar from daily basis productivitygain.
Profit sharing bonuses are yearly paid bonuses and most of the employeesoften believe, managers will forget their promises and would not pay thesebonuses (Burton Kelli, 2012). According to Van Zyl (2000) regardlessof having lots of proof of the motivational impact of essential rewardsonemployee job performance, many managers still count cash as the mainmotivational tool for employees and focus on money. in addition, VanZyl (2000),accomplished that a bonus or 13th check is a great consideration amongemployees and even it could remain as a great motivation for employees to be engagewith their jobs and remain with the firm. He argued that money is always agreat motivational tool from the start of the job in any area.
Al-Wathnani (1998) also conversethe incentive’s role on the competence of employees. Al Wathnani (1998) checkedthe impact of incentives on the job contentment of employees in the securityorganization. Incentivesare positively related to employee work engagement andjob satisfaction, but the most important and valued incentives are chipping- inin decision making, financial allowances, promotions, leaves and allowances formedical treatment.
Less demanded incentives and less motivational incentivesare verbal appraisals, letter ofthanks and financial allowances for work atdistant and isolated areas. Jeffery (2002), in his study,investigated non-monetary incentives and their aptitude to control the varietyof psychosomatic needs and that’s why non-monetary incentives have a deeper andlong-term effect than monetary incentives on motivation. The study elucidatedthat non-monetary incentives are highly visible and have superior value as an award.Non-monetary incentives bring a higher utility level.
Jeffery (2002) also consideredthetrophy value index of non-monetary incentives to check argument. In hisstudy, results showed that employees enjoyed the gifts, pride, respect andrecognition for long term period. Employees enjoy telling their family and friendsabout their respect and gifts. Drastically higher trophy value of non-monetarygift is showed by the results. By analyzing the motivational strategies,Jeffery (2002), states that cash incentives don’t match the level of satisfactionwhich is gained by non-monetary incentives (Trophy value). By amplification indetail in his work, he portray that cash incentives’ benefit is short-term;while the non-monetary incentives have long term benefits.
In his study,monetary rewards are mentioned as compensation, while non-monetary rewardsrepresentthe respect and recognition. Kube et al. (2008) accreditedmore output in non-monetary gift as compared to monetary gifts. Non-monetary giftsare very useful and contribute a great deal to employee contentment that leadsto long-term results. Kube et al.
(2008) also carries the social exchange observablefact. In his study, results show the higher impact of nonmonetary incentives onsocial exchange theory compared to monetary rewards. In another study Kube etal.
(2006), that shows monetary rewards are beneficial/effective in short-termperiod and ineffective for long-term period.He also states that non-monetaryrewards have a momentous and consistent effect on their satisfaction. Due to the growing importance ofincentives in every field, Steen (1997) conducted the study in IT field.
He observedthat the IT professionals are keen to gain the non-monetary incentives ascompared to higher level positions within firms or the increment in pay. They havea preference on the non-monetary incentives and which also includethe elasticityin working hours and take home work. Schaufeli et al. (2002) concerningemployee engagement described in detail the three proportions of work engagementin his study. Vigors illustrated as the energetic behavior of the employee and alsodedicated hardwork to one’s work and job, even in any of challengingsituations. And the second dimension of Schaufeli (2002) was dedication. Dedicationdemonstrates the employee experience about work, his pride about his work, and meaningfulnessof his work. According to this study, the contents of enthusiasm are muchinspiring.
The thirdand last dimension of work engagement is amalgamation.Absorption is, how employees get engrossed in their work and also from whichfactors employees are engaged in work and get pleasure and satisfaction aboutthe job. Absorption also showed that employee must contemplate on his work andmust be awarded with rewardsfor their work done for the betterment of theorganization. Six areas of the work environment will lead to either the burnoutor engagement to work. For example, control, workload, social support,community, superficial fairness and values, and the last one are rewarded andrecognitions.
They argued that those six factors are thebase of employeeattitude or behavior towards their work. The level of employee engagement andcontrol high turnover can be raised by manipulating these factors in well-organizedmanner. Saks (2006) carried out a studyto examine the employee engagement role in service sector employees in eight differentEuropean countries. They focused on four economic sectors, retail trade,finance & banking, telecoms, and public hospitals. They observed countrywise differences in the matter of employee engagement. The engagement of employeesis based on job demands and job resources, for example job independence andsocial support. Social support includes different types of motivational factorslike job enrichments, job empowerment and monetary and non-monetary rewards.
They also projected that engagement of employees towards organization can beachieved by implementing and creating a socially supportive environment.Whereasthe job demand negatively relates to the work engagement. They represent thework engagement as the outcome of job demand and job resources. It is rather a common observation that workerswill move to other organization where they are offered more handsome Salarypackages In my research I will focus on the employees of the Habib Bank Limitedand demonstrates what is the impact of salaries and other non-monetary benefitson the employees turnover of Habib Bank Limited The study will reveal that evenin a huge organization like Habib Bank Limited, people when offered highsalaries are willing to leave the jobs and switch to some other organization.Following will be the outcome of the research:Numbersof workers in HBL who will leave bank for higher salariesImpactof monetary and non-monetary benefits of employees turnoverHowto retain skilled workers in an organization