THE EFFECT OF COMPENSATION ON EMPLOYEE MOTIVATION

THE EFFECT OF COMPENSATION ON EMPLOYEE MOTIVATION

CHAPTER ONE

1.0     INTRODUCTION

1.1     Background of the Study

Motivation can be defined as the set of factors that cause people to behave in certain ways (Schwartz, 2006). Motivation is derived from the term motive which is a reason for doing something (Amstrong, 2008), the reason can either be internal (intrinsic) or external (extrinsic) factors (Herzberg et al, 1957). Motivation can be described as goal-oriented behavior (Amstrong, 2008). Drafke (2002) defines motivation as simply an incentive to act.

Motivation is among the key concerns of organizations in the modern business environment, as it has been identified to be critical in achieving business goals and objectives. This means giving close attention to how individuals can best be motivated to achieve objectives set for them (Amstrong, 2008). Amstrong (2008) continues to say that motivation can be through incentives, rewards, and positions all aimed at ensuring that the individuals deliver results in accordance with expectation of management.

Motivation determines how a person will exert his or her effort. It represents the effort will be exerted (DeNisi and Griffins, 2008). Because of motivation’s role in understand and to structure the work environment to encourage productive behaviors and discourage those that are unproductive. (Jex and Britts, 2008). Motivation is important in team-based environments as well as where employees work independently. Motivation involves aligning employee goals and values with the organization’s mission and vision in order to create and maintain high levels of performance (Campbell, 2007). Campbell (2007) adds that as the marketplace becomes increasingly competitive, it is evident that firms must especially appreciate the role of employees towards establishing a competitive edge and that individuals motivated are top performers who consistently provide high quality results; maintain high levels of productivity and overcome challenges and obstacles.

Motivation has also been defined as the act of stimulating someone to take desired course of action (Ghosh, 2000). Clegg and Birch (2002) defines motivation as the stimulation of action towards a goal, whether the stimulus is conscious or unconscious.  Motivation theory examines the process of motivation, it explains why people at work behave in the way they do in terms of their efforts and directions they are taking. The aim in understanding and applying motivation theory is to obtain added value through people (Amstrong, 2008), the other key reason is about getting people to move in a certain desired direction to achieve a result (Amstrong, 2008). Cole (2002) when discussing motivational theories argues that different people have different view when it comes to motivation which ranges from rational-economic view, social view, self actualizing view and complex view. Beardwell et al. (2004) explains that understanding of motivation is important within the reward and development of reward strategies for it enables organization to humanize work for employees, make the jobs more satisfying, and finally it enable the management to control the behavior of subordinates more effectively .

Maintaining highly motivated employees is therefore a strategic move to keep employees committed to working hard and ultimately contributing their optimal capability towards achieving the organization’s goals (Frey and Osterloh, 2002). Motivation differs depending on whether you are motivating an individual, a team or a large group of people (Clegg and Birch, 2002).

On the other hand, according to Amstrong (2008) de-motivated employees exhibit signs of low morale, this can have destructive implications in the organization. Amstrong (2008) continues to say that among the more significant warning signals of de-motivated employees are high rates of absenteeism, tardiness, high levels of employee turnover, sabotage, low pride in their work, wastage, low job satisfaction, endless grievances, indiscipline and lack of team spirit (Armstrong, 2008). In order to curb these and other problems that can escalate into more serious crises in the organization, de-motivation should be detected early and necessary actions taken, these may include counseling of de-motivated employees, clearly explaining their roles, responsibilities and rewards and ensuring their expectations match those of the organization.

Key factors that determine employee motivation are satisfaction, recognition, appreciation, inspiration and compensation (Bowen, 2000). Organizations that recognize the importance of motivating employees often implement strategies that consistently motivate their employees to achieve the organizations objectives. Such strategies for improving motivation include compensation, employee participation, feedback and work environment which ensure that employees’ needs and requirements are met (Bowen, 2000). Clegg and Birch (2002) argues that the thought of incentive is in itself motivational, in fact most motivation comes from anticipation than the delivery of the incentive itself.

Compensation is one of the key drivers of motivation because humans are naturally inclined to perform better when they perceive that they will get sufficient payment or returns from their efforts. While people exert effort for different reasons, today’s competitive economic environment coupled with the consumer society has made compensation arguably the most important motivation factor. Most people are motivated by money at least for their basic needs and wants.

Compensation in any form is the most obvious extrinsic reward; it provides the carrot that most people want. (Amstrong, 2008). DeNisi and Griffins (2008) defines compensation as the set of rewards that organizations provide to individuals in return for their willingness to perform various jobs and tasks within the organization.

Mr. Biggs Abuja group of companies consists of Mr. Biggs Abuja (K) Ltd, Mr. Biggs Abuja (T) Ltd, Battery Masters (U) Ltd and Mr. Biggs Abuja (R) Ltd. The company was first introduced to Kenya in 1963 as part of Chloride group PLC in the UK to retail and distribute Mr. Biggs Abuja Batteries. It has since become the largest battery and solar systems distributor with 17 branches spread across Kenya and three other fully fledged sister companies in Tanzania, Uganda and Rwanda. The company has its head offices located in the Industrial Area of Nairobi at Exsan House off Enterprise road; it has depots in other major towns in Kenya.

1.2     Statement of the Problem

While compensation is arguably one of the key drivers of motivation and one of the most studied areas, doubts have been cast by Herzberg et al. (1957) and Amstrong (2008) on the effectiveness of compensation. They argued that, while lack of it causes dissatisfaction, its provision does not result in lasting motivation. The effects of compensation on motivation vary from organization to organization.  Most people are motivated by money at least for their basic needs and wants (DeNisi and Griffins, 2008). Employee motivation through compensation can be in several forms including salary raises, performance bonuses, commissions, profit sharing and other extra benefits such as vacations, cars and other tangible items that are used as rewards (Campbell, 2007). These compensation systems can be categorized as direct financial payment and indirect financial payments (Dessler, 2004).

Nelson and Spitzer (2003) states that in today’s work environment, there is more change and uncertainty, there is increased need for empowered employees, there is decline in traditional incentives, there is rise of nontraditional incentives and there is increased use of variable compensation. Studies have also shown that compensation programs and the methods of administration affect employee motivation (Bowen, 2000). Many researchers have focused on satisfaction, recognition, appreciation and work environment as employee motivators in different organizations (Kosgei, 2011). However none has studied employee compensation at Mr. Biggs Abuja.

It is not clear what methods were used to determine employee compensation, what direct and indirect financial programs were offered at Mr. Biggs Abuja and their effects on employee motivation and lastly the non-financial benefits offered and their effect on employee motivation. This study sought to address this gap by enquiring on the effect of compensation on employee motivation at Mr. Biggs Abuja group of companies.

1.3     General Objective

The general objective of this study was to enquire on the effect of compensation on employee motivation at Mr. Biggs Abuja.  

1.4     Specific Objectives

1. To establish the methods used to determine employee’s compensation at Mr. Biggs Abuja.
2. To establish the extent to which the direct financial payments affect employee’s motivation at Mr. Biggs Abuja.
3. To establish the extent to which benefits affect employee’s motivation at Mr. Biggs Abuja.

1.5     Significance of the Study

Having studied Mr. Biggs Abuja, an entity in the motor vehicle industry and a market leader in distribution of the automotive batteries and renewable energy solutions, the study is important to a number of stake holders as follows:-

Mr. Biggs Abuja Management and Staff

The study will assist the overall management team in the company as it will show the trade off point between compensation and employee motivation. This is particularly important to the departmental heads that will need to the knowledge on how to motivate their staff to achieve the set objectives effectively and efficiently. Specifically to the Human Resources Manager, the study will help highlight any areas of concern and strength. This will help in attracting and retaining the staff.

Researchers

Currently the motor vehicle industry is operating under a very highly dynamic environment, characterized by high competition and fast technological changes. The study will be of importance to other researchers in future who may be interested in studying motivation under these very high dynamic conditions and also the “dot com” generation.

Government

Mr. Biggs Abuja is a privately owned regional organization specializing in provision of renewable energy solutions. The study will be important for the Governments of Nigeria, to understand what motivates the staff and hence contributes to the company growth. It would be important for the government policy makers to know of areas in which they can provide the company with further incentive, for such a worthy course of growing the reliance on renewable energy.

1.6     Scope of Study

The study examined the employees of Mr. Biggs Abuja Group of Companies who were employed on permanent and those on contract.

This research project examined the impact of compensation schemes by examining previous studies and literature on the issue and by conducting a study on employees at Mr. Biggs Abuja. The research data was collected from 37 respondents out of 41 requests. Some of the limitations experienced included distance related in reaching some of the intended respondents and availability of personal time to fill the questionnaire. To mitigate the effects of these limitations, the researcher used emails to reach far respondents and individually telephoned the respondents to explain the purpose of the study and give assurance that confidentiality would be upheld. Through this the researcher got a response of 90%.

1.7     Definition of Terms

Motivation: A motive is a reason for doing something; motivation is concerned with factors that influence people to behave in certain ways. Motivating people is about getting them to move in the direction you want them to go to achieve results (Armstrong, 2008). There are two types of motivation as originally identified by Herzberg et al. (1957) that is, intrinsic motivation (self generated factors for example interest, responsibility) and extrinsic motivation (from others for example increased pay, praise, punishment, criticism).

Compensation: This is the package of quantifiable rewards an employee receives for his or her labour. It includes three components: base compensation, pay incentives and indirect compensation/ benefits. (Gomez et al, 2012).

Productivity: Defined as the individual output; this may be in the form of units per person or revenue generated per person (Amstrong, 2008).

EFFECT OF COMPENSATION ON EMPLOYEE PERFORMANCE IN ICON INSURANCE COMPANY ABUJA

EFFECT OF COMPENSATION ON EMPLOYEE PERFORMANCE IN ICON INSURANCE COMPANY ABUJA

ABSTRACT

This study seeks to examine the effects of compensation on employee performance in Icon Insurance Company Abuja. The study specifically to evaluate the effects of direct financial compensation on employee performance Icon Insurance Company Abuja, to determine the effects of indirect compensation on employee performance Icon Insurance Company Abuja, to examine the effects of Non-financial compensation on employee performance Icon Insurance Company Abuja. The study  adopted a descriptive research design that enabled the use of questionnaires as research instruments. The target population consisted of one fifty (150) employees of performance Icon Insurance Company Abuja. These will include management staff, support staff and subordinate staff in the establishment. Stratified proportionate random sampling was used to obtain a sample size of 45 respondents. The data will be analyzed using the descriptive statistic through the use of tables and percentage. The findings of the study shows that compensation has significant effects on employee performance in Icon Insurance Company Abuja. Finally the study recommends that the organization should ensures that their employee are compensated using financial and non-financial means so as to ensure optimum performance.

CHAPTER ONE

INTRODUCTION

1. Background of the Study

Globalization requires a person to always keep up with times, starting from thoughts and knowledge to generate some useful new inventions to facilitate human to do some work, especially in a company. Increased business competition due to rapid technological and environmental changes makes a company must have strength competitiveness. The old paradigm of human resources places employees as an asset to company, but now there has been a growing new paradigm that employees are partners for a company. Human resource management has a very strategic position for company sustainability. This is because inadequate basic materials such as performance, motivation, and job satisfaction and productivity will cause disruption to company’s life sustainability.

The main driving factor for company good development is qualified human resources to encourage the company better. Compensation is one factor to affect job satisfaction of an employee. Sirait (2006) defines compensation as something received by an employee, either financial or non money reward for employee’s contribution to organization. Compensation management is a very important activity to make employees quite satisfied in their work.

Compensation is defined as the ability and responsibility of a company to contribute to its employees for their achievement of task and to appreciate their performance. Each organization should strive to improve employee satisfaction by providing a fair and competitive compensation program. High job satisfaction is expected to make employees become more loyal to organization; more motivated in work, feel happy in work, and ultimately will increase productivity.

Performance reflects how well employees meet the requirements of a job. Basically every individual has a different portion of work. It can be seen from individual’s skills and potential that directly affect on their performance. Mangkunegara (2005) explained performance as the work of quality and quantity achieved by an employee in performing their duties in accordance with responsibilities given. The work alone can be divided into two, namely hard work and smart work. Hard work includes people who always exert all their strength to work but the results are less satisfactory, while intelligent work is a work that uses a strategy to minimize the energy to do a job to get better outcome than hard work.

Lai (2011) shows a positive correlation between employee and job satisfaction based on payment, skill-based payments and performance-based payments. In addition, some demographic variables reveal a moderate effect on this relationship. The goal is to study the correlation between compensation system design and overall employee satisfaction. Nawab (2011) explains that employee compensation influenced organizational commitment and job satisfaction. Njoroge et al. (2015) shows a positive correlation between compensation and performance.

However, the performance of an organization is jointly determined by the employees’ capacity and their willingness to put in their best (William, 2016). Willingness and ability are important, since it implies that beyond a certain level, lack of ability cannot be compensated for willingness to high motivation and conversely lack of willingness cannot be compensated for employee’s ability to high level performance. Willingness and ability are necessary components of effective performance in every organization. It is on this note that this study seek to examine the effect of compensation on employee performance in Icon Insurance Company Abuja.

1. Statement of the Problem

The current era is highly competitive and organizations regardless of size, technology and market focus are facing employee retention challenges. Workers’ performance could be of low standard, in condition of inadequate compensation and motivation. Most employees leave there place of work, because of insufficient compensation. Some are willing to stay, because they know that what they benefit in terms of welfare packages (salaries, bonuses, free expense paid trips and some other tips) are not often available somewhere else. The major problem is how to compensate employees to achieving higher performance in Icon Insurance Company Abuja. Thus the need to increase productivity and efficiency in the work place or any organization has led to increasing academic interest in the area of compensation over the years. Scholars have been keenly  interested in knowing what factors are responsible for stimulating the will to work. Thus compensation has become an issue of concern for both scholars and practitioners of personnel management. Employees in both public and private sector organization are becoming increasingly aware that compensation increases productivity. Lack of proper motivation may result in losses which may eventually lead to low staff turnover, poor attitude towards work, low output level and low profitability. It is in the light of these that the study intends to examine the effect of compensation on employee performance in Icon Insurance Company Abuja.

1.3       Objectives of the study

The general objective of this study is to establish the effects of compensation on employee performance in Icon insurance Company Abuja.

1.3.1    Specific Objectives

1. To examine the effects of direct financial compensation on employee performance in Icon Insurance Abuja.
2. To assess the effects of indirect financial compensation on employee performance in Icon Insurance Company Abuja.
3. To establish the effects of non-financial compensation on employee performance in Icon Insurance Company Abuja.
   1.        Research Questions
4. What is the effect of direct compensation on employee performance in Icon Insurance Company Abuja?
5. What is the effect of indirect compensation on employee performance in Icon Insurance Company Abuja?  
6. What is the effect of non-financial compensation on employee performance in Icon Insurance Company Abuja?
   1.       Statement of Hypothesis

H0: Compensation has no significant effects on employee performance in Icon Insurance Company Abuja

H0: Compensation has  significant effects on employee performance in Icon Insurance Company Abuja

1.6       Significant of the Study

The management of Icon Insurance Company Abuja

The findings of this study will assist Icon Insurance Company Abuja to formulate better and acceptable compensation strategies in order to enhance an affirmative outlook among employees and motivate them toward doing their work hence a better service quality and a high productivity.

Other Researchers

This study will be of significance to other researchers by assisting them have a better understanding of the subject under study for relevant resources in the future. This can be done through identification of gaps in knowledge and offer recommendations for further studies.

1.7       Scope of the study

The study will explore the effects of compensation on employee performance, a case study of Icon Insurance Company Abuja. The population targeted will be 150 employees that will include the Management Staff, Support Staff and the customers of the organization.

1.8       Limitation of the Study

Notwithstanding the areas covered by this research work, the study was greatly affected by certain constraints. The following limitations were inherent in the study.

Time Factor: This research was constrained by time limit. Time posed a threat to the successful coverage intended in the course of this study.

Cost Constraint: It is not unusual to state that the prevailing economic predicament posed a limitation to the researcher in procuring the whole material information and other relevant data needed to make this research a thorough work.

Confidentiality: The frequent rescheduling of interviews by management staff and their unwillingness to disclose some relevant information on staff motivation and training which they consider very confidential to the organization constitute one of the major limitations to this study.

1.9       Operational Definition of Terms

Compensation: Financial compensation refers to the act of providing a person with money or other things of economic value in exchange for their goods, labor, or to provide for the costs of injuries that they have incurred.

Incentive: Incentive is an act or promise for greater action; it means additional remuneration or benefit to an employee in recognition of achievement or better work. Incentives provide a spur or zeal in the employees for better performance. It is a natural thing that nobody acts without a purpose behind.

Performance: This indicates how well or satisfactory a person is fulfilling the requirement of his position on the basis of result achieved and his/her action on the job. The researcher looked at performance as the assessment of output in a giver task or work with a view of achieving result.

Productivity: Melli(2017) defined productivity as the measure of how well resources are brought together in an organization and utilized for accomplishing a set of result. The researcher sees productivity as reaching the highest level of performance with less expenditure of resources.

Job Satisfaction: According to Locke (2016) defined Job satisfaction as a situation in which a worker’s job fulfills what he values.

Intrinsic Motivation: According to Fritz Heider (2015) said intrinsic motivation comes from rewards inherent to a task or activity itself. Hertzberg (1959) “said” intrinsic motivation, develop internally and comes from, something the workers want to do.

Extrinsic Motivation: Fritz Heider(2011) said that this motivation comes from outside of the performers money is the most obvious example but coercion and threat of punishment are common extrinsic motivation.

Salaries / Wages: These are refers to as financial compensation for work done. Salaries are financial compensation for work done by standing professional or clerical personnel whose salaries are paid monthly.

Incentive and Fringe Benefits: These are defines as additional incomes that accrue to a worker in addition to his salaries and wages. They are used to induce people to contribute their efforts towards achieving organizational goals.

EFFECT OF COMPENSATION ON EMPLOYEE PERFORMANCE IN ICON INSURANCE COMPANY ABUJA

EFFECT OF COMPENSATION ON EMPLOYEE PERFORMANCE IN ICON INSURANCE COMPANY ABUJA

SOLD BY: Enems Project| ATTRIBUTES: Title, Abstract, Chapter 1-5 and Appendices|FORMAT: Microsoft Word| PRICE: N2000| BUY NOW |DELIVERY TIME: Within 24hrs

CHAPTER ONE

INTRODUCTION

1. Background of the Study

Globalization requires a person to always keep up with times, starting from thoughts and knowledge to generate some useful new inventions to facilitate human to do some work, especially in a company. Increased business competition due to rapid technological and environmental changes makes a company must have strength competitiveness. The old paradigm of human resources places employees as an asset to company, but now there has been a growing new paradigm that employees are partners for a company. Human resource management has a very strategic position for company sustainability. This is because inadequate basic materials such as performance, motivation, and job satisfaction and productivity will cause disruption to company’s life sustainability.

The main driving factor for company good development is qualified human resources to encourage the company better. Compensation is one factor to affect job satisfaction of an employee. Sirait (2006) defines compensation as something received by an employee, either financial or non money reward for employee’s contribution to organization. Compensation management is a very important activity to make employees quite satisfied in their work.

Compensation is defined as the ability and responsibility of a company to contribute to its employees for their achievement of task and to appreciate their performance. Each organization should strive to improve employee satisfaction by providing a fair and competitive compensation program. High job satisfaction is expected to make employees become more loyal to organization; more motivated in work, feel happy in work, and ultimately will increase productivity.

Performance reflects how well employees meet the requirements of a job. Basically every individual has a different portion of work. It can be seen from individual’s skills and potential that directly affect on their performance. Mangkunegara (2005) explained performance as the work of quality and quantity achieved by an employee in performing their duties in accordance with responsibilities given. The work alone can be divided into two, namely hard work and smart work. Hard work includes people who always exert all their strength to work but the results are less satisfactory, while intelligent work is a work that uses a strategy to minimize the energy to do a job to get better outcome than hard work.

Lai (2011) shows a positive correlation between employee and job satisfaction based on payment, skill-based payments and performance-based payments. In addition, some demographic variables reveal a moderate effect on this relationship. The goal is to study the correlation between compensation system design and overall employee satisfaction. Nawab (2011) explains that employee compensation influenced organizational commitment and job satisfaction. Njoroge et al. (2015) shows a positive correlation between compensation and performance.

However, the performance of an organization is jointly determined by the employees’ capacity and their willingness to put in their best (William, 2016). Willingness and ability are important, since it implies that beyond a certain level, lack of ability cannot be compensated for willingness to high motivation and conversely lack of willingness cannot be compensated for employee’s ability to high level performance. Willingness and ability are necessary components of effective performance in every organization. It is on this note that this study seek to examine the effect of compensation on employee performance in Icon Insurance Company Abuja.

1. Statement of the Problem

The current era is highly competitive and organizations regardless of size, technology and market focus are facing employee retention challenges. Workers’ performance could be of low standard, in condition of inadequate compensation and motivation. Most employees leave there place of work, because of insufficient compensation. Some are willing to stay, because they know that what they benefit in terms of welfare packages (salaries, bonuses, free expense paid trips and some other tips) are not often available somewhere else. The major problem is how to compensate employees to achieving higher performance in Icon Insurance Company Abuja. Thus the need to increase productivity and efficiency in the work place or any organization has led to increasing academic interest in the area of compensation over the years. Scholars have been keenly  interested in knowing what factors are responsible for stimulating the will to work. Thus compensation has become an issue of concern for both scholars and practitioners of personnel management. Employees in both public and private sector organization are becoming increasingly aware that compensation increases productivity. Lack of proper motivation may result in losses which may eventually lead to low staff turnover, poor attitude towards work, low output level and low profitability. It is in the light of these that the study intends to examine the effect of compensation on employee performance in Icon Insurance Company Abuja.

1.3       Objectives of the study

The general objective of this study is to establish the effects of compensation on employee performance in Icon insurance Company Abuja.

1.3.1    Specific Objectives

1. To examine the effects of direct financial compensation on employee performance in Icon Insurance Abuja.
2. To assess the effects of indirect financial compensation on employee performance in Icon Insurance Company Abuja.
3. To establish the effects of non-financial compensation on employee performance in Icon Insurance Company Abuja.

1.4 Research Questions

What is the effect of direct compensation on employee performance in Icon Insurance Company Abuja?

What is the effect of indirect compensation on employee performance in Icon Insurance Company Abuja?  

What is the effect of non-financial compensation on employee performance in Icon Insurance Company Abuja?

1.5 Statement of Hypothesis

H0: Compensation has no significant effects on employee performance in Icon Insurance Company Abuja

H0: Compensation has  significant effects on employee performance in Icon Insurance Company Abuja

.5       Significant of the Study

The management of Icon Insurance Company

The findings of this study will assist Icon Insurance Company Abuja to formulate better and acceptable compensation strategies in order to enhance an affirmative outlook among employees and motivate them toward doing their work hence a better service quality and a high productivity.

Other Researchers

This study will be of significance to other researchers by assisting them have a better understanding of the subject under study for relevant resources in the future. This can be done through identification of gaps in knowledge and offer recommendations for further studies.

1.6       Scope of the study

The study will explore the effects of compensation on employee performance, a case study of Icon Insurance Company Abuja. The population targeted will be 150 employees that will include the Management Staff, Support Staff and the customers of the organization.

1.7       Limitation of the Study

Notwithstanding the areas covered by this research work, the study was greatly affected by certain constraints. The following limitations were inherent in the study.

Time Factor: This research was constrained by time limit. Time posed a threat to the successful coverage intended in the course of this study.

Cost Constraint: It is not unusual to state that the prevailing economic predicament posed a limitation to the researcher in procuring the whole material information and other relevant data needed to make this research a thorough work.

Confidentiality: The frequent rescheduling of interviews by management staff and their unwillingness to disclose some relevant information on staff motivation and training which they consider very confidential to the organization constitute one of the major limitations to this study.

1.9       Operational Definition of Terms

Compensation: Financial compensation refers to the act of providing a person with money or other things of economic value in exchange for their goods, labor, or to provide for the costs of injuries that they have incurred.

Incentive: Incentive is an act or promise for greater action; it means additional remuneration or benefit to an employee in recognition of achievement or better work. Incentives provide a spur or zeal in the employees for better performance. It is a natural thing that nobody acts without a purpose behind.

Performance: This indicates how well or satisfactory a person is fulfilling the requirement of his position on the basis of result achieved and his/her action on the job. The researcher looked at performance as the assessment of output in a giver task or work with a view of achieving result.

Productivity: Melli(2017) defined productivity as the measure of how well resources are brought together in an organization and utilized for accomplishing a set of result. The researcher sees productivity as reaching the highest level of performance with less expenditure of resources.

Job Satisfaction: According to Locke (2016) defined Job satisfaction as a situation in which a worker’s job fulfills what he values.

Intrinsic Motivation: According to Fritz Heider (2015) said intrinsic motivation comes from rewards inherent to a task or activity itself. Hertzberg (1959) “said” intrinsic motivation, develop internally and comes from, something the workers want to do.

Extrinsic Motivation: Fritz Heider(2011) said that this motivation comes from outside of the performers money is the most obvious example but coercion and threat of punishment are common extrinsic motivation.

Salaries / Wages: These are refers to as financial compensation for work done. Salaries are financial compensation for work done by standing professional or clerical personnel whose salaries are paid monthly.

Incentive and Fringe Benefits: These are defines as additional incomes that accrue to a worker in addition to his salaries and wages. They are used to induce people to contribute their efforts towards achieving organizational goals.