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relationship between rewards and motivation of employee

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  • i

    RELATIONSHIP BETWEEN REWARDS AND MOTIVATION OF EMPLOYEE PERFORMANCE AT KULIM HI-TECH INDUSTRY, KEDAH

    FATIN INANI BINTI ZAKARIA

    This report submitted in partial fulfilment of the requirements for the award of Bachelor of Technopreneurship

    Faculty of Technology Management and Technopreneurship Universiti Teknikal Malaysia Melaka

    JUNE 2015

  • ii

    SUPERVISORS CONFIRMATION

    We acknowledge that we have read this thesis and in our opinion, this thesis is sufficient in

    terms of scope and quality for the award of Bachelor of Technology Bachelor of

    Technopreneurship (Honours)

    Signature :

    Supervisors Name : P.M. DR. Ahmad Rozelan Yunus

    Date :

    Signature :

    Evaluator Name : En. Hasan Bin Saleh

    Date :

  • iii

    DECLARATION

    "I admit that this report is my own work except the summary and excerpts of each of which I have mentioned the source"

    Signature :

    Name : Fatin Inani Binti Zakaria

    Date :

  • iv

    DEDICATION

    To

    My Mother

    Thank you for always be with me and all the advices given.

    My Father

    Thank you for supporting and encourage me to believe in myself.

    My Family

    Thank you for all the support that you gave to me.

    My Supervisor

    Thank you for all your guidance during the completion of this project.

  • v

    ACKNOWLEDGE

    I felt thankful for the blessing of Allah S.W.T gave to me, in a chance for me to

    finish this Final Year Project. The special thanks go to everyone around me who always

    give me a support from behind. Thank you my supervisor, Profesor Madya Dr. Ahmad

    Rozelan bin Yunus for giving me all guidance and support during the completion of this

    project.

    Special thanks to my friends who always give me ideas and support, and sharing

    their thoughts with me. I would like to thank you my parents for giving me advices and

    support me during my studies.

    Lastly, special to all respondents, for everyone those are contributed to this

    project directly and indirectly. Without them, this Final Year project cannot be complete.

  • vi

    ABSTRACT

    Human resource is one of the important assets that organization owns. Reward

    helps management to retain efficient and experienced workforce in an organization. This

    research work examined the relationship between rewards and motivation of an

    employee's performance among employees in Kulim Hi-Tech Industry, Kedah. There

    are two types of reward that contributed to this research, which are the extrinsic reward

    of compensation and intrinsic reward of recognition. The data and information are

    collected by using questionnaires, which are distributed to the three organisations in the

    Kulim Hi-Tech Industry which are AMREC Sirim, First Solar and Inokom. Structured

    questionnaire was used to collect data from one hundred (100) participants through

    simple random sampling method and data were analyzed by simple regression analysis

    with the aid of statistical package for social science (SPSS) version 20. As for the result,

    all of two independent variables (extrinsic reward of compensation and intrinsic reward

    of recognition) that have been studied in this research have significant relationships

    towards dependent variable (motivation of employee performance) among employees in

    Kulim Hi-Tech Industry, Kedah.

    Keywords: Extrinsic reward of compensation, intrinsic reward of recognition,

    motivation, employee performance, Kulim Hi-Tech, Kedah

  • vii

    ABSTRAK

    Sumber manusia adalah salah satu aset penting yang harus dimiliki organisasi.

    Ganjaran membantu pengurusan untuk mengekalkan tenaga kerja yang cekap dan

    berpengalaman dalam sesebuah organisasi. Pengkaji membuat pemeriksaan hubungan

    antara ganjaran dan motivasi prestasi pekerja di kalangan pekerja di Kulim Hi-Tech

    Industri, Kedah. Terdapat dua jenis ganjaran yang menyumbang dalam penyelidikan ini

    iaitu ganjaran ekstrinsik pampasan dan ganjaran intrinsik pengiktirafan. Data dan

    maklumat yang dikumpul dengan menggunakan soal selidik yang diedarkan kepada tiga

    organisasi di Kulim Hi-Tech Industri iaitu AMREC Sirim, First Solar dan Inokom. Soal

    selidik berstruktur digunakan untuk mengumpul data dari satu ratus (100) orang peserta

    melalui kaedah mudah persampelan rawak dan data dianalisis dengan analisis regresi

    mudah dengan bantuan pakej statistik bagi sains sosial (SPSS) versi 20. Hasilnya,

    semua dua pembolehubah bebas (ganjaran ekstrinsik pampasan dan ganjaran intrinsik

    pengiktirafan) yang telah dikaji dalam kajian ini mempunyai hubungan yang signifikan

    terhadap pembolehubah bersandar (motivasi prestasi pekerja) di kalangan pekerja di

    Kulim Hi-Tech Industri, Kedah.

    Kata kunci : Ganjaran ekstrinsik pampasan, ganjaran intrinsik pengiktirafan,

    motivasi, prestasi pekerja, Kulim Hi-Tech Industri, Kedah.

  • viii

    TABLE OF CONTENT

    CHAPTER 1

    INTRODUCTION PAGE

    1.1 Background of the Study 1 1.2 Statement of the Problem 2 1.3 Research Question 3 1.4 Research Objective 3 1.5 The Scope of the Study 4 1.6 Limitation of Study 4 1.7 Important of Study 5 1.8 Summary 5

    CHAPTER 2 LITERATURE REVIEW 2.1 Introduction 6 2.2 Reward 7 2.3 Motivation 8 2.3.1 Theoretical Foundation of Motivation 9 2.4 Intrinsic Reward 11 2.4.1 Sense of Meaningfulness 12 2.4.2 Sense of Choice 12 2.4.3 Sense of Competence 12 2.4.4 Sense of Progress 12 2.5 Intrinsic Reward of Recognition 13 2.5.1 Verbal and Written Recognition 14 2.5.2 Social Recognition 15 2.5.3 Work-Related Recognition 16 2.5.4 Symbolic Recognition 16

    2.6 Extrinsic Reward 17 2.7 Extrinsic Reward of Compensation 18 2.7.1 Direct Compensation 18 2.7.1.1 Wages and Salaries 18 2.7.1.2 Bonuses 19 2.7.2 Indirect Compensation 20 2.7.2.1 Sick Pay 21 2.7.2.2 Payment for Time Not Worked 22 2.7.2.3 Total and Permanent Disability 22

  • ix

    Insurance 2.8 Performance 23 2.9 The Relationship between Rewards as a of

    Motivation Tool and Employee Performance 23

    2.10 Research Framework 24 2.11 Hypothesis 25 2.12 Summary 26

    CHAPTER 3

    METHODOLOGY

    3.1 Introduction 28 3.2 Research Design 29 3.2.1 Description Studies 30 3.3 Methodological Choices 31 3.3.1 Quantitative Method 31 3.4 Primary Data and Secondary Data Sources 32 3.4.1 Primary Data 32 3.4.2 Secondary Data 33 3.5 Time Horizon 33 3.5.1 Cross-Sectional Studies 33 3.6 Location of Research 34 3.7 Research Strategy 35 3.7.1 Survey Instrument 36 3.8 Questionnaire Design 36 3.9 Sampling Design 37 3.10 Validity and Reliability of Instruments 38 3.10.1 Validity 38 3.10.2 Reliability 39 3.11 Statistic Tools 40 3.11.1 Simple Linear Regressions 40 3.14 Summary

    41

  • x

    CHAPTER 4 DATA ANALYSIS 4.1 Introduction 42 4.2 Distribution of Demographic Profile 43 4.2.1 Gender Distribution 43 4.2.2 Group Age of Respondent 44 4.2.3 Education Level of Respondent 45 4.2.4 Period of Service 46 4.3 Result and Analysis 47 4.3.1 Reliability for research 47 4.4 Hypothesis Testing 48 4.4.1 Objective 1 48 4.4.2 Objective 2 50 4.5 Summary 53

    CHAPTER 5 CONCLUSION AND RECOMMENDATION

    5.1 Introduction 54 5.2 Demographic of respondents 55 5.2.1 Gender distribution 55 5.2.2 Group Age of respondent 55 5.2.3 Education Level of Respondent 55 5.2.4 Period of service 56 5.3 Finding of study 56 5.3.1 Reliability 56 5.4 Discussion 56 5.4.1 Hypothesis 1 57 5.4.2 Hypothesis 2 59 5.5 Implication Of The Study 60 5.6 Limitation 62 5.7 Recommendation For Future Research 63 5.8 Conclusion 64

    REFERENCES 65 APPENDIX 74

  • xi

    LIST OF TABLES

    TABLES NAME OF TABLES PAGE

    3.1 Reliability Test 39

    4.1 Gender 43

    4.2 Group of Age 44

    4.3 Education Level 45

    4.4 Period of Service 46

    4.5 Reliability of Research

    47

    4.6 Relationship between Extrinsic Reward of

    Compensation and Motivation Employee

    Performance

    48

    4.7 Relationship between Intrinsic Reward of

    Recognition and Motivation of Employee

    Performance

    50

  • xii

    LIST OF FIGURES

    FIGURES NAME OF FIGURES PAGE

    2.1 Maslows Theory 9

    2.2 Research Framework of Relationship

    between Rewards and Employees

    Performance

    25

    4.1 Gender

    43

    4.2 Group of Age 44

    4.3 Education Level

    45

    4.4 Period of Service

    46

    5.1 Model of Hypothesis Study for Hypothesis 1 56

    5.2 Model of Hypothesis Study for Hypothesis 2 58

  • xiii

    LIST OF APPENDICES

    APPENDICES TITLE PAGES A Survey questionnaire 72

    B Gantt Chart 77

  • 1

    CHAPTER 1

    INTRODUCTION

    1.1 Background of the Study

    An organization nowadays is highly based on the employee work motivation

    because it is one of important part in organization development. This is because;

    employees are the engine of organization vehicles while reward is the fuel. No

    organization can achieve its stated objectives without employees (Sajuyigbe et al. 2013).

    Therefore, it is essential for an organization to find out the factors that motivates its

    employees, so that the organization can plan a suitable reward system that can give a

    better result in employees performa

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