Effects of Financial and Non-Financial Rewards on Employee Motivation: the Case of Information Network Security Agency (INSA)

Abstract

Motivating factors have been a long discourse in the theory of motivation and empirical studies since such factors cannot be easily assessed. This study examined the effects of financial and non-financial rewards on employee motivation of Information Network Security Agency in Addis Ababa. To achieve the objective an explanatory research design and quantitative approach was employed. A random sample of 259 respondents were participated in the questionnaire survey from three job families aka strata. Multiple linear regression model using SPSS 25 was employed to get the expected relationship between the outcome variable employee motivation and the explanatory variables: availability of achievement, availability of recognition, availability of responsibility, availability of influence, availability of personal growth, and compensation package. All the six variables held statistically significant and positive linear relationship with employee motivation. Availability of recognition, being a non-financial factor, is the highest motivating factor while the least motivating factor is availability of influence. This shows that Information Network Agency’s employee motivation is directly affected by both the financial and non-financial rewards provided by the organization. Thus, Information Network Security Agency’s top-level managers should give focus for all the six reward factors and review earlier practices held at the company towards the motivation and start new programs so by designing effective strategies. Particular attention should be given to recognition package for employees who succeeded the organizations’ goal.