CHAPTER 1

INTRODUCTION

All kinds of benefits from cash payments to working conditions are defined as rewards
(Camilleri, 2002). In order to improve human resources outcomes, organizations provide
inherent and foreign rewards to members (Meye&Allen,1984). The reward system
should be aligned with a strategy - compatible motivation to employee performance and
attract and maintain people with the knowledge, skills and abilities to achieve the
strategic goal of the company and create a culture and structure for the company (Meye
& Allen, 1984). In addition, alignment of the award system with organizational strategies
helps to determine the effectiveness of the organization.
According to Camilleri (2002), Reward systems are strategically designed when rewards
are linked to activities, attributes and work outcomes that support the organization’s
strategic direction and that foster the achievement of strategic goals. Such connections
can lead to an increase of knowledge or skills, flexibility, commitment, retention and
productivity for employees. Camilleri (2002) adds that a system of compensation is
likely to have a direct impact on employee direction.
Because of the massive competitive atmosphere, companies aim at achieving a
competitive edge and improving their products over all business operations and
management systems. Companies want to meet their pre - plan and planning objectives
(Nisar et al., 2014) In order to motivate their staff to achieve their desired vision and
mission organization through two intrinsically and extrinsically inspiring methods
(Kapelner and Chandler, 2010 ; Harter, 1981). The prosperity of a successful firm has
been designated by many companies as the strategy of increasing its employees '
performance and satisfaction (Khan, Rasli, Yusoff, Ahmed, Rehman and Khan, 2014).
The company is always committed to improving its employees ' performance through
rewarding. The satisfaction of employees depends on their mentalities or perception,
thinking and feeling for their jobs, according to Spector (1997). Because organizations
have had a large workload competition problem managing their human resources, the
question arises: How more satisfied employees are and how better and better they have
been able to show the employee's play a key role in expanding the growth of
organizations and the improvement in the career of individual workers (Peng and
Meyer, 2006, Khan, 2006). The status quo era has been over a few days, and the world
is becoming a world village and technology changes happen so swiftly.
Change can lead to stress in the mind and organization of employees and make them
happy for their performance. Organizations try to keep their companies up - to - date to
protect themselves from rivalry with new companies by using new technologies and
employing skilled workers. They offer the most efficient and fair recompense system
and judges to retain the employee's personal motivation to examine the mentality of
their workers individually whether they prefer intrinsic recompense: task importance,
autonomy, promotions, holiday increases, family benefits, etc. (Qureshi, Iftikhar, Abbas,
Hassan, Khan, and Zaman, 2013).
Top managers of companies must search through a check on their employees ' mindset
and preferences (intrinsic and external) in order to maintain a well - organized
relationship with their workers and organizations. There can be no origin without a fair
and balanced pay-off system without achieving its pre-program and desired objective. It
is integral for companies which should be reliable and given periodically. In comparison
to non-motivated staff, motivated staff produce more high-quality output. The incentive
system develops employee encouragement and makes them more committed,
tremendous and energetic. This incentive system The most important thing now is that
companies facing many problems one day make their employees more satisfied by
assessing the way they think, prefer or need to change from employee to high
performance employee. They take more time to promote an organization, which is why
employees play a major role both intrinsically and extrinsically in the growth of
employees and organisations. If organizations are careful, they need and require their
employees because employees fight their work and they are successful in using intrinsic
and foreign motivation tools. they will try to appear in the list of fortune 500 companies.
Then the productivity and commitment of employees to their jobs will certainly be
improved.

BACKGROUND OF THE PROBLEM:

In terms of performance and profitability, the dynamic state of global business has a
strong influence on companies. A business is very dependent on its employees '
performance. Poor performance of employees harms any company, while effective
performance of employees is an important source of business success. Rewards are
directly associated with employee performance in most organizations (Zaman 2011).
Dewhurst et al (2010), defines rewards for good job performance or the performance of
assigned duties, as set out in the organizational structure, strategy, policies or
processes as both financial and non-financial benefits for employees. Zaini, Nilufar, and
Syed (2009) define employee rewards as tangible financial benefits and services, and
other non-tangible benefits given to employees for playing their part in an organization.
Richard, Ryan and Deci (2010) say that organizational rewards significantly influence
employee performance in organizations.

Employee rewards have for decades been used to recognize and appreciate the
performance of employees. Taylor (1911) conducted a study on the levels of motivation
for employees who received a parcel fee based on production hours or units in early
studies on employee rewards, motivation and performance. He concluded, in his study,
that salary motivation is fully met. Moreover, when they know the monetary rewards that
are associated with performance, the company concluded that employees are inspired
to perform better and produce more production units. But Mayo (1940), who argues that
monetary income isn't enough to inspire performance, was later criticising Taylor's
conclusion, since employees tend to be bored of routine jobs, which reduces
performance regardless of money income.

In Europe and America, reward systems began with Skinner's (1953) strengthening
theory in the early 1950's, which argues that the workforce generally increases with
good performance. In other words, employees tend to strengthen the positive
performance that generated the rewards if they are well-paid for their works. Maslow
(1943) has developed a hierarchy of needs in which the performance of employees is
improved when their requirements meet. The rewards systems are one way to address
employees ' needs. If employees feel motivated sufficiently by rewards, they tend to
perform much better than the others. The rewards for improving employee performance
in Asian countries have been used over decades (Thomas 2009). Countries like
Malaysia, Japan and Singapore had used reward systems to increase employee
performance before multinationals started operating in Asia.

STATEMENT OF THE PROBLEM:

Prior literature has mainly remained conceptual when this link between rewards and
outcomes was discussed. Authors agree, but researchers are not in agreement on
which rewards best achieve people goals (Allen and Helms 2001). This should and
should happen. It would seem logical for some rewards to be more effective than
others, but proposals concerning rewards have largely not been proven and more
scientific research in this field is needed. However, the literature on reward assessment
tends to concentrate on a limited number of specific programs.
For example, nearly all research investigating the financial impact on organizations of
pay systems focuses on base and / or incentive pay while ignoring other important
remuneration elements, such as recognition awards. Moreover, almost no studies
consider the joint impact of multiple approaches to rewards or the interplay between
various elements of the rewards mix. Nearly every research focuses on the potential
results, e.g. financial impact, staff attitudes, of a premium system. (Thompson and Fay
2001). There seems to be a general consensus on the importance of rewards for
individual outcomes. However, there is no agreement that provides more effective
specific types of reward practices. It is also worth noting that non - motivated employees
can not become interested in their organizations, that certain may spread rumors about
the organization and threats of strikes, demonstrations that will create management
problems. On the other hand, non - committal employees may be more satisfied, absent
and unsatisfactory. Failure to train and develop employees in an organization can lead
to incompetence, inefficiency, inefficiency, inaccuracies and insufficient knowledge.
PURPOSE OF THE STUDY:

The purpose of this study was to establish effects of rewards on employee performance
in the private educational sectors.

RESEARCH OBJECTIVES:
1. To examine impact of extrinsic and intrinsic rewards on employee’s performance.
2. To check the impact of extrinsic and intrinsic rewards on employee’s job
satisfaction.
3. To examine the mediating role of rewards system between the relationship of
intrinsic rewards, job performance and job satisfaction.
4. To examine the mediating role of rewards system between the relationship of
extrinsic rewards, job performance and job satisfaction.

RESEARCH QUESTIONS:
This research study was guided by the following research questions.
1. To what extent do intrinsic rewards influence employee performance?
2. To whet extent do extrinsic rewards influence employee performance?
3. To what extent do other factors influence employee performance?

SIGNIFICANCE OF THE STUDY:

To The Universities:
The findings of the study will benefit all private sector universities to gain clear
understanding how reward affect employee performance. The recommendations of the
study will provide management with mitigation measures for any adverse effects that
can be attributed to presence or lack thereof of employee benefits.

To Researchers And Scholars:

This study will add value and knowledge to the body of researchers and academicians.
Researchers can utilize these findings as a basis for testing hypothesis, or conducting
further research, while academicians can utilize it for literature review, conducting
further studies, or confirming findings through study hypothesis on the same.
Scope Of The Study:
This study was conducted among four private universities. It focused on the combined
population of 100 employees in four universities in Peshawar, Pakistan. The researcher
collected data from both management staff and teaching staff. The researcher made
effort of gathering information from employees which include management staff,
teaching, and administration. The study took place over a period of 6 months between
October 2018 and March 2019.

DEFINITION OF TERMS:
Employee Performance:
Employee performance has to be defined as a success of a selected employee's or
group of employees ' tasks, duties or tasks based on defined performance targets and
efficiency indicators and efficient utilization of the available resources (Dewhurst et al.,
2010).

Intrinsic Rewards:
Intrinsic rewards are defined by Richard, Ryan and Deci (2010), which are those
rewards that are inherent in an job and available in the job, such as employees,
appreciation, awareness, challenges and performance, as well as comportements that
demonstrate understanding and concern to increase awareness, skill and trust in a
manager.

Extrinsic Rewards:
Farooqui and Nagendra (2014) define extrinsic benefits as employees benefit from an
organization on the fringen and pay advantages. This includes promotion opportunities,
career progress and a favorable working environment.

Performance Evaluation:
Kumari and Malhotra (2012) define performance assessment as the assessment of an
employee's work against the expected results over a specified period of time. This is
done by examining actual performance versus defined key task, effort, and specification
performance indicators.

Chapter Summary:
This chapter presents the background of the study on effects of rewards on employee
performance. The statement of the problem that articulates the gap and need for this
study is also presented. This chapter has also presented the purpose of the study,
research questions, the significance of the study and the definition of terms that have
been used in the study.
Literature review is presented in chapter two; research methodology in chapter three;
results and findings in chapter four, while the study discussion, recommendations and
conclusions are presented in chapter five.

CHAPTER 2
INTRINSIC REWARDS:

Intrinsic rewards are defined as those rewards inherent in or within an employee by

Richard, Ryan and Deci (2010). Employee capacity, recognition, trust and achievement
are part of the intrinsic awards (Farooqui & Nages, 2014). There are inherent rewards for
the work itself. Examples include success, diversity, challenges, autonomy, responsibility
and personal and professional development. They also contain status, appreciation, the
praise and satisfaction of superiors and collaborators and self – esteem (Mahaney and
Lederer 2006: 43). Self-respect and fulfillment are enhanced intrinsically by the rewards
(Honig-Haftel and Martin 1993: 261).

Intrinsic rewards are drawn from the substance of the job itself. These rewards include
interesting and challengeable tasks, self leadership and responsibility, diversity,
creativity, abilities and feedback on the effectiveness of one's work (Mottaz 1985: 366).
The people believe that their efforts are important to the success of the team and that
their jobs are fun, challenging and rewarding (Mahaney and Lederer 2006: 50). Their
results can be obtained by working hard to achieve quality results if their work is proud of
their work.

Intrinsic and extrinsic rewards are strongly related to the performance of their employees
(Olsson and Kvaløyr, 2008, 2013). Last researchers have efficiently added and improved
our concepts on intrinsic rewards and impact on employee performance, but in this field
of research there are some limitations. Researchers in previous studies almost ignored
that rewards intrinsically do not always depend on the mentality of individuals varying
from person to person insignificantly with employee performance.

Another study found that appreciation and empowerment have a negative impact on the
performance of employers but are sometimes considered to be significant among intrinsic
variables (Hafiza et al., 2011). Recent studies have also ignored how important
psychological (intrinsic) satisfaction is to the workplace. In a recent study, it has been
examined how companies can manage the creative environment and the performance of
their employees.

Likewise, Cheema, Alam and Shujaat (2013) pointed out that three of five intrinsic
variables training, performance identification, chances of career progression, effective
contact channels, and workplace security are significant positive relationships,
communication channels, and direct employment safety relations with previous employee
study performances. However, there has been some research which shows that how
organizations recognize their employees' needs and that is really important money for
improving employee performance. Combined positive repercussions of external and
intrinsic benefits on employee performance and demographics such as age and gender,
but nearly ignoring the intrinsic drive for good performance of employees (Convington &
Mueller, 2001).

Earlier researchers concluded that if staff are intrinsically motivated, the reputation and
profitability of companies will be increased, but nearly ignored that it is emotionally linked
reward (Tausif, 2012). By contrast, Locke (1976) found that the staff's emotion for intrinsic
rewards was almost ignoring the intrinsic emotions attached to intrinsic rewards (Ayesha
et al., 2014). Intrinsic rewards have also been directly relevant in the performance of the
employees and the results have shown that intrinsic rewards are significantly positive
when non-monetary rewards are exercised by satisfactory employees (Abdullah and
Caniago, 2012, 2013). Another study showed that if employers are effectively responsible
for managing intrinsic rewards, they are almost unaware of why the intrinsic rewards are
needed to increase the performance of their employees, both for employees and for
employing employees (Kittur et al., 2008).
EMPLOYEES ABILITY:

In a study in Pakistan on the effect of compelling rewards on the performance of an

employee, Roukhmani, Ramesh, and Jayakrishnan (2010) found that the capacity of an
employee is strongly related to its performance. The performance assessment score of
the employees was assessed against their belief that they were able to carry out their
duties. Employees who showed that they trust their capacity to perform did well in the
performance evaluation compared with people who did not trust in their capacity.
Leadership is a major factor influencing employees ' perceptions. Effective leaders know
how important it is for workers to model their way to build their trust in their ability to do
their job. In a study carried out by Possenried & Plantenga (2011) in the United Kingdom
on the effects of rewards on the performance of employees, it was found that a strong
relation exists between the ability of employees and employee performance.

The study also found that performance had significantly increased in hotels where
managers had established mechanisms for enhancing employee ability. Most employees
suffer to a considerable extent if their supervisors fail to demonstrate confidence in the
employee's performance capabilities (Tippet & Kluvers, 2010). Managers therefore, have
the ability to enhance or diminish employees’ ability to perform. Training organizations
and other training programs have greater capacity building skills and are positive in the
overall corporate performance (Rukhmani et al., 2010).

Njambi (2014) found that when an employee has trust in the ability to work his
performance is assured in a study aiming at identifying factors which influence the
motivation of the employee in Amref Health Africa in Kenya. However, if an employee
does not have confidence in his ability to fulfill tasks as set out in the job description, its
performance is affected. This is because employees reflect their managers ' performance
expectations. She proposes that organizations seeking to improve performance should
first improve employee skills, knowledge and expertise.

TRUST:
Deutsch - Salamon and Robinson(2011) define faith, by placing positive expectations on
an employee's good intentions to achieve and attain organizational objectives, as the
management's capacity or the organization's willingness to be vulnerable. The trust is
more important to the employee performance that the individual confidence Zhou, Zhang
and Montoro - Sánchez, (2011). They argue moreover that a similar way of thinking
ensures that employees work together to achieve a common goal and therefore improve
performance. Employees who are more willing to shoulder their trust and take additional
steps to ensure that they meet the organizational performance objectives (Tippet &
Kluvers, 2010). Deutsch - Salamon and Robinson (2011) have carried out a report on
confidence's impact on organizational performance and have established that confidence
between employees leaded to a high degree of accountability for the performance of their
organization and the willingness of employees.

Management trust and organizational performance have a strong relationship (Zare,

2012). In another study carried out by Richard, Ryan and Deci (2010) in Canada, they
have identified significant relationships between trust and employee performance ; r
(0.762) ; p < 0.05. The study was carried out by 20 independently operated enterprises,
mainly in the hotel industry. The main aim was to examine the facts of improving
organizational performance that trust employees felt from their managers. It found that if
employees received the confidence of their managers, they worked extra to improve and
validate their beliefs, thereby improving their performance.

Where employees feel that their managers or supervisors do not trust them, there is a
lack of drive to do so. In these cases, most employees give their job descriptions only the
lowest minimum (Hafiza et al., 2011). Staff confidence in their managers or supervisors
is a reciprocal game (Zaini, Nilufar & Syed, 2009). To give an organization more,
employees must feel that the organization will give them more. Managers who have
confidence from their employees generally have more confidence in their employees.
Organizations that encourage a culture of trust have good internal communication and
coordination which are significant for internal operations and employee performance
(Markova, & Ford, 2011).
RECOGNITION:

Rukhamani et al. (2010) identify and recognize that a senior manager or supervisor can
identify and recognize an employee for something positive that has been done in the
course of his work. Management should recognize and identify its employees for their
exemplary performance. Wang (2014) argues that recognition is a fundamental
motivation to make people feel valued. Hafiza et al. (2011) found a direct connection
between employee recognition and employee performance in a study conducted in
Singapore's hospitality industry ; r (0.644), p≤0.05.

The study was conducted with 400 people and showed that there was a significant
increase of performance in cases where managers recognize employees for their well
done work on a timely basis. Employees were asked to explain why their performance
increased due to their managers ' recognition. A majority of respondents (72 %) said they
felt their managers appreciated and felt that their work was important. Hafiza et al. (2011)
concluded that hospitality managers should consistently assert and recognize their
employees as a means to improve their performance.

Some ways organizations can offer their employees recognition include recognition of the
performance of employees publicly, the provision of a day - off, and good office space for
employees (Njambi, 2014). Through his study of employee motivation and performance,
Tremblay et al (2010) found that recognition by managers and employees was an
important driver of hospitality industry performance in South Africa. Accognition is
therefore a key driver of performance, as it not only improves employee performance
impetus but improves employee management relationships (Hafiza et al. 2011). Tumwet
(2011) found that the utilization of social recognition such as compliments leads to
improved performance in private universities in Kenya focusing on University Kabarak. If
done consistently and fairly, this is even more effective.

ACHIEVEMENT:
Managers who seek to improve employee performance should set up internal
organizational mechanisms that enable employees to plan and implement their
performance objectives effectively (Zare 2012). Employees who set performance goals
and work to ensure that these goals are met are more motivated than those who do not.
One of the reasons Rukhman (2010) explains why achievement is an inert desire for an
individual that can not be forced upon an employee; it can rather be reinforced, especially
for self-motivated people. The need for success is one of the main motivators for
employee performance. Ziegler, Atzert, Bühner and KRUMM (2009). Ziegler and others
(2009) argue that persistence is one of the key contributors to staff performance. An
employee's ability to stand firm, and continue to work hard to enhance his ability to
perform, both personal and organizational.

Tremblay et al., 2010) The achievements of employees fall under various categories:
trust, persistence, goals and commitment are viewed as promoting their need for
achievement by employees ' trust in success. If success seems to be achievable, then
employees have an abundance of performance requirements, while success does not
appear to be achievable to average and even less than average employees. Zhou (2011)
describes accomplishment as the ability to achieve outcomes on the grounds of
objectives or goals.

EXTRINSIC REWARDS:

For the purpose of achieving or being part of an organization, Farooqui and Nagendra
(2015) define foreign rewards as compensation or recompense for employees in terms of
fringe benefits, payments and other significant benefits from an agency. Extrinsic rewards
take the form of wages and salaries, annual leave pay, vacation payment and annual
bonuses in most hospitality organisations (Siti-Nabiha et al. 2012). The hospitality sector
is extremely competitive and requires employers to produce rewards attractive to existing
and potential employees.

Burton (2012) argues that foreign awards are important because their role as a driver of
performance is crucial. Extrinsic compensation systems are designed to determine the
level of compensation for employees based on organizational procedures of performance
structures. Therefore, the award systems must be seen in the processes, norms,
regulations and award mechanisms as fair to all staff (Pratheepkanth (2011); Lotta
(2012)). Burton (2012) argues that management decisions should be rational and
overriding for the pay of employees. If employees feel that their organization gives foreign
rewards fairly, they are committed to organizational performance and sustainable
development.

Researchers have suggested that external incentives affect employee satisfaction directly
and positively. Earlier researcher is certainly working well on the effect of extrinsic
rewards but researchers have to add certain points which are irrelevant to the importance
of extrinsic rewards. Research results show that both external and intrinsic rewards have
a significant impact on the satisfaction of employees. Both awards have a beneficial effect
(Reily et al., 1991). Recent scientists suggested that mere foreign rewards should not be
focused on significant intrinsic rewards.

However, researchers who need to add up must ignore some logical issues. There are
certainly both kinds of rewards, but our focus on foreign rewards should be high as money
is a major satisfying factor. Some important items in previous research, which last
researchers have been continuously ignoring, are that only extrinsic rewards related to
employee satisfaction and that they ignore the intrinsic rewards. Intrinsic rewards must
also be concentrated, but foreign rewards must also be given high priority (Ali and Akram;
2013, 2012).

One other researcher shows the positive outcome of extras with the satisfaction of
employees by focusing on promoting employees, but in previous research there are
certain constraints that only medical allowances are appreciated and promotional
packages are appreciated, because extras should be attractive as salary packages.
Wages should be adequate and reasonable (Nayadema et al. 2014)

In fact, an Extrinsic reward fulfills extrinsic factors or hygiene factors for the employees
and therefore does not allow it to think about leaving. Examples are: pay rise, bonuses,
leaves paid, annual leisure plans etc. Ahmed( 2009) confirms that the relationship
between awards and recognition, also motivation and satisfaction is statistically
significant. Carraher et al (2006) argue that the high performers in the organization must
be kept by an effective external reward system and the rewards should be connected to
their productivity.

The fact that the above-mentioned discussion and examples show that intrinsic rewards
are mainly of a qualitative nature and can not be measured for instance by greater
respect, recognition etc. Whereas external recompenses are more of a quantity. Extrinsic
compensation systems are designed to determine the level of pay for employees on the
basis of the organizational procedure for the performance structures.

SALARIES AND WAGES:

Wages and salaries are defined as monthly payments for employers for services they
perform under contracts (Boselie, Dietz & Boon 2015). Such payments are based on
contractual agreements. The terms salaries and wages are often used interchangeably
with regard to employers ' financial rewards. But wages and salaries are not the same.
Salaries are permanent or long - term salaries to permanent employees, and wages to
casual and short - term contractual employees are salaries (Pratheepkanth, 2011).

Wages and salaries are often used in the hospitality sector to increase organisation's
competitiveness, equity and employees ' incentives. Corby, White and Stanworth (2015)
argue that although salaries and wages are used by companies in the hospitality sector
to enhance their workers ' equity and equity, they are not strong enough to motivate
employees to achieve higher performancing.

Pratheepkanth (2011) argues also that pay and wages can only increase the performance
of employees to a specific threshold. Once the individual employee threshold is reached,
wages are no longer considered motivational or performance - enhancing. Dobre (2013)
reflects similar thoughts on wage and wage deficiency and notes that wages only increase
employee performance if safety and financial stability are still needed. However, when an
employee feels financially stable and secure, wages are no longer a driver of commitment
or performance or an improvement.
Rukhman, (2010) and Zare (2012) argue that salary pay in the hospitality sector is
significant for staffing performances, contrary to Corby et al., (2015) claims that wages
and salaries do not enhance employee performance. They say that if hotels do not pay
their workers well in the hospitality sector; they become motivated, which not only leads
to poor performance but also high revenues. Although wages and wages significantly
improve employee performance, Burton (2012) maintains the effect is typically measured
on low-level managers as well as seldom on mid-level managers for whom salaries are
no longer a performance driver. Other benefits such as holiday, insurance and mortgage
motivate them more.

PAID VACATION:

One of employers ' external benefits is a paid holiday, which companies in the hospitality
sector extend to their workers in order to motivate them to perform (Tippet & Kluvers,
2010). Burton (2012) defines paid vacations as incentives employers give employees to
rest on their work in the form of a fully paid holiday. In the United States of America Lotta
(2012) conducted a study on the impact of paid vacation on senior managers in the hotel
industry. Four five star hotels (Marriott, Hyatt Regency, Sheraton, Holiday Inn and Hilton)
were included in the study. It found a positive relation between a paid vacation and the
performance of top managers. Boselie et al (2015), who argued that experiences and
views of senior management are not necessarily reflective of the feelings of the majority
of employees in the hospitality industry, who often work for supervision to lower levels.

The study does not cover the entire workforce and was criticized for this. The importance
of paid vacations for employees has recently been realized by firms in the hospitable
sector. In the hospitality sector, most hotels offer employees full - service holidays in any
of their affiliated hotels across their operational regions (Njambi 2014). For example, in
every East African Serena unit employees and spouse receive a fully paying vacation
once a year (Asiamah, 2011) Tourism Promotion Services. All employees from the lower
office to the senior management can use these services.Nevertheless, no hotel
determination was made as to the extent to which these vacations improve employee
performance.

Likewise, there was no study to assess the employees' use of these paid vacations and
whether there are any significant relationships between paid tourism vacations promotion
services and employees’ performance (Njambi 2014). The majority of organizations of the
hospitality sector have established the Key Performance Indicators (KPIs) linked to key
external benefits (Burton 2012). For example, various levels of salary, including paid
holidays, are dependent on how well an employee performs in different KPIs. Certain
organizations have established certain thresholds for various benefits. The system of
reward - finding by KPIs is unfair, according to Rukhman (2010), and Zare (2012). The
relationship between the evaluator and the employee being evaluated can influence the
results positively or negatively. Thus KPIs can demoralize employees and their
performance, if they are positive (Burton, 2012).

PAID LEAVE:

For employee performance and organizational performance the annual employee leave
is essential. Naithani (2010) states the individual organization shall determine the paid
leave within the hospitality sector. In the majority of cases, organizations define a set of
rules and regulations on who qualifies for paid leave and how to implement the paid leave
procedure. Legally, organizations must grant their employees for a full year of work a
minimum of 21 working days of paid annual leave. However, each organization has the
discretion to determine its number of days, in addition to legal requirements, as a way to
appreciate their work performance and motivate their employees (Harrington & Ladge,
2011).

Different studies have shown that motivated employees are more efficient than non-
motivated employees (Akanbi, 2010; Zaini et al., 2009; Richard et al. 2010; Farooqui &
Nagendra, 2014; Siti-Nabiha et al., 2012). Hafiza et al. (2011) argue that further studies
should be conducted to clarify the impact of pay leave on the performance of employees
in Africa. As it is, the majority of the studies mentioned above are carried out in the
developed world and thus widespread use may not provide the realistic situation in the
hospitality sector for most African employees. A study in Nigeria conducted by Akanbi
(2010) found that most organizations in the sector only paid vacation for senior managers.
For the days they were on leave, general staff did not receive any compensation beyond
their annual wages. The study shows that, as the majority (72%) of respondents in their
study did not get their paid leave beyond their salary, it is also difficult to determine
whether their paid holidays enhanced staff performance.

Management across the hospitality industry is therefore crucial to develop and strengthen
mechanisms to ensure fair treatment for all staff in their organizations (Tippet & Kluvers,
2010). Fairness increases motivation and confidence and the commitment of employees
to an organization. The relationship between the salary leave and employee performance
in the hospitality industry is suggested by Harrington and Ladge (2011). Workers are
generally honored and appreciated by the organization when a generous salary is
provided during their annual vacation.

EMPLOYEE PERFORMANCE:

Performance of employees is defined as the outcome or contribution of employees in

order to achieve the objectives set (Herbert, John & Lee 2000). Processes, relevance,
results and achievement can be used to describe what an organization has achieved
(Uganda national development program 1995). The performance of employees also
means achievement over a specified period of time of set standards in terms of accuracy
and completeness (Afshan et al., 2012). In addition to the actual skills of employees, the
level of performance is based on the level of motivation of the individuals. Motivation is
an internal drive or external drive for behaviour. This is a route to rewards in typical
situations (Barney, 1991). Top - level employees and talented people are the motor of all
organisations, so it is vital that organizations motivate and rely on the best. The quality of
the management of personnel is a key factor in the institution's performance (Dessler,
2003).

Efficient employees are using their skills and knowledge to work in the right way. All
activities carried out by employees in an organization irrespective of their departments
interrelate and impact the organization's overall performance. It is therefore important for
all divisional officials, to understand that the inefficiency of employees under their
supervision has a negative effect on the performance of the organization as a whole. This
weak performance lessens the competitive edge of the corporation on the market place
(Chei et al, 2014).

Performance is a multipart concept, and at the fundamental level the process aspec) t of
performance can be differentiated from the expected outcome of behavioral
commitments. (Borman, & Motowidlo, 1993; Campbell et al., 1993; Roe, 1999The
behavior here refers to the activities people show for a job, while the outcome side
indicates the effect of the work behavior of individuals (Campbell, 1990).

The behavioral commitment and expected outcome seem to be interrelated in a working

setting, but a thorough overlap between the two constructs is not yet clear, as the intended
outcome is influenced by factors like motivation and cognitive capacities as well as the
behavioral aspect (Borman, & Motowidlo, 1993). The performance of the task comprises
explicit behavior in the work, including basic tasks assigned as part of the job description.
Task performance requires more cognisant capacity, which is primarily facilitated by the
know-how of the tasks (technical knowledge required or guidelines to ensure job
performance and to handle several tasks), task (application of technical know-how to
successfully perform work without great oversight) and task habits (Conway, 1999).

The main precedents of task performance are therefore the ability to do the job and
previous experience. Task performance is a contractual agreement between the
executive and the subordinate in an organizational context to perform the task assigned.
The task performance entrusted to the task shall be divided into two segments: technical-
administrative and leadership. As technical and administrative task performance are
called expected job performance including the schedules, the organization, and the
management of daily work through our technical capabilities and business judgement.
Leadership task results are identifiable through the establishment of strategic goals, the
implementation of required performance standards, motivation and leadership to
encourage, recognize and criticize subordinates to perform the job (Borman, & Brush,
1993; Tripathy, 2014).
In the context of task performance, Borman and Motowidlo (1997) defined the "efficiency
with which occupants carry out their assigned tasks, which fulfills the organizational vision
and provides an appropriate reward for organizations and people." Werner (1994)
synthesised earlier proposal work performance in terms of "proven abilities and behaviors
that influence the direct production of goods or services or any type of activity that
provides indirect support for core technical processes of the organization."

The ability of a person to accustom and support the profile of the job in dynamic working
conditions is called adaptive performance (Hesketh, & Neal, 1999). Previous studies have
shown that once the employees are perfect in their tasks, they attempt to adapt their
behavior and attitude to the diverse requirements of their jobs (Huang et al., 2014;
Pulakos et al., 2000). An effective adaptive performance requires the capacity of workers
to handle volatile work situations efficiently, (Baard, Rench, & Kozlowski, 2014), for
example, technological changes, changes in their core tasks, organizational restructuring
etc.

Changes in different new professions as a result of technological innovation need new

learning by workers and to adapt effectively to changes (Griffin, Parker, & Mason, 2010;
Hollenbeck, LePine, & Ilgen, 1996). Employees are also expected to adapt their
interpersonal behavor to work with a wide range of employees and subordinates
successfully. Griffin, Neal and Parker (2007) cited that skills in the job may assist in the
performance of a task, but it is important that we adapt and be proactive to our role in
addressing uncertain business environments.

In addition to the task and adaptability, efforts have been made to assess the importance
of non - job performance components to create a better working environment (Austin, &
Villanova, 1992; Viswesvaran, & Ones, 2000). Industrial psychologists have referred to
non - job components as OCBs or contextual performance referring to voluntary actions
of employees (Bateman, & Organ, 1983) who benefit employers intangibly. Contextual
performance is a type of prosocial behavior shown by people in a set - up work. The
employee is anticipated to have such behaviour, but is not clearly stated in the job
description. Such unstated expectations are known as pro - social or additional roles.
In support of the foregoing ideology, numerous prominent researchers in this field have
argued that expected performance of the job has two crucial dimensions: one as an
organisation's task and the other as a discretionary behavior (LePine, Erez, & Johnson,
2002; Van Dyne, & Lepine, 1998). Subsequently psychologists took this to be a contextual
performance that helps others adjust to the varied job roles impressing upon the
importance of volunteer behaviour. (Borman, & Motowidlo, 1993, 1997; Motowidlo, & Van
Scotter, 1994; Motowidlo, Borman, & Schmit, 1997). Bergeron (2007) recommends
multiple subdimensions such as teamwork, loyalty and definition to the contextual
performance.

RELATIONSHIP OF INTRINSIC AND EXTRINSIC REWARDS ON

PERFORMANCE:

Intrinsic rewarding is essential to achieve the organizational performance as an incentive

and an unbreakable motivator. Furthermore, various organizations both in public and
private sectors have adopted it today. When reducing intrinsic reward for example, it is
very important for managers and their staff to increase self-esteem and to establish
kindness (Bowen, 2000). In general, insight into the clarity of the intrinsic reward practice
depends on two factors: complexity and communication. That is, the requirement of a
clear compensation system consists of a clear communication of the offer and focus on
the rewards and concerns about grasping the methods, objectives and measures used
during the introduction of intrinsic rewards. The employees need to know the connection
between the company's objectives, their supply and how they are awarded ; and the
motivation - rewarding value will decline in ambiguity in this connection (Gibbons, 1998).

Ivana, Lovorka and Nevenka (2009) discussed that the reward should be open and
obvious in terms of prizes. On the other hand, accessibility to the award recipients should
be notified, the criteria for being met and rewards should be granted (Ivana et al. 2009).
Since Deci et al. (1971) issued the finding that foreign rewards have a negative impact
on intrinsic motivation, numerous discrepancies have been passed on to various OB
generations. Although this issue was finally put back in the area, the discussion has
continued to this day. Furthermore, the conclusions drawn have shown a profound and
hypothesizing influence on practice. In general, the interactive and direct effects of
extrinsic and intrinsic rewards can be at the core of the motivational study while motivation
is at the center of organisation.

The actions derived from extrinsic rewards include, for example, payments, esteem,
material properties and positive assessments. Moreover, by changing and identifying
environmental contingencies, with the involvement of extrinsic power, increased
motivation is realized in working behaviors such as attendance, sales, speed, cost
reduction, productivity, quality of work and customer service (Komaki, 1982). On the other
hand, the intrinsic is referred to when the conduct is done exclusively for the purpose
instead of accessing social or material empowerment. The concept of the intrinsic
motivation was a major challenge to behavioralism. It originated in White — Intrinsic and
Extrinsic Motivation 5 Subsequently, Motivation for reflection or competence. The same
needs and statements were addressed by Maslow (1943) and Alderfer (1969). Hypothesis
2: The rewarding effect on employee performance is substantial and positive.

CHAPTER SUMMARY:
Literature review based on each research question is presented in this chapter.
Literature on effects of intrinsic rewards on employee performance is presented first,
followed by literature review on extrinsic rewards that influence employee performance,
and finally literature on the extent to which other factors influence employee
performance. The next chapter focuses on the study methodology.

CHAPTER 3
METHODOLOGY
INTRODUCTION
The focus of this chapter is the research methodology adopted in this study. The
methodology consists of the research design, the study population, sampling design
and the data collection methods. This chapter also presents research procedures
adopted for the study, as well as the data analysis methods.

RESEARCH DESIGN:

Asika (1991) describes research design to mean the structuring of investigation aimed at
identifying variables and their relationships to one another. In this study, a survey design
is used since it provided the researcher with the opportunity to have easy access to
information and minimize cost. Survey method was used with questionnaire to generate
data. As a quantitative study, researchers need to distribute the questionnaire to
respondents to make conclusion. The research design is defined by Cooper et Schindler
(2014) as a blueprint for the collection, measurement and analysis of research data. A
research project is important for a study because it allows scientists to allocate limited
resources efficiently where they are most needed. This study was designed in description.

RESEARCH TOOLS:

We chose questionnaire as a tool for this research as paper questionnaire is the prior
choice in the research since questionnaire distribution by hand delivery shows more
genuineness to respondents. Besides, in face-to-face distribution of questionnaire,
researchers can guide and clarify any issue with which the respondents need to be
clarified with. A total of 200 questionnaires were distributed among four universities, 50
questionnaires each.

SAMPLE AND DATA COLLECTION:

We used the sampling method to collect more related data to create and enhance the
decision making for the research. Data collection is the systematic collection of the data
by the scientific process in question (Cooper, 2014). In this study the primary data was
collected using a structured questionnaire. Saunders, Lewis and Thornhill (2009) note
that a query is a research tool that contains structured questions about the collection of
data or information. Data was gathered from four different universities of Peshawar, like
Institute of management sciences, Cecos university, Qurtaba university, Virtual
university, and Iqra national university. Data was collected from a sample size of 200
employees from afore mentioned universities.

RELIABILITY AND VALIDITY ISSUES:

For reliability, we used Cronbach alpha test.

ETHICAL CONSIDERATIONS:

No respondents were harmed during this research data collection, and their privacy was
not leaked. All use of information was only for the study purpose. All respondents
participated in the study voluntarily.

CHAPTER SUMMARY

The study has been presented in this chapter. This study has adopted a descriptive
survey research design. This study has a sample size of 200 respondents. This chapter
has also presented the study research tools, design, sample and data collection,
reliability test, and ethical considerations. This chapter has also highlighted how data
was collected and presented. Chapter four presents result and findings.