Determining the effect of Financial and Non-Financial Compensation on Employee Motivation and Commitment in Higher Education Institutes, Jamshoro.

Abstract

The main objective of this research is to measure the effect of financial and non-financial
incentives on employee motivation and commitment in higher education institutes. Primary data
was collected from employees of three large public sector universities located at Jamshoro city.
Using survey research method, survey questionnaire is used to collect primary data. After data
analysis it is interpreted that observed data is statistically valid and reliable. Discriminant validity
analysis confirm no any specific item or construct is highly correlated with the measure of other,
means all items are statistically different from one another. Standardized Root Mean Square
Residual and Normed Fit Index analysis confirm significance of financial and non-financial
incentives with motivation and commitment and Variance Inflation Factor analysis reveal no
multicollinearity issues with predictors. Positive Beta and P values indicate all four alternate
hypotheses are accepted. It is concluded that employees in higher education institutes are given
fair and equitable compensatory benefits which not only motivate them but enhance commitment
to work with employer. The findings of this research are valuable insight for top management of
higher education institutes to devise compensation policy for employees. Future researchers may
conduct this research in private educational institutes of country as well as comparative analysis
between financial and non-financial incentives is also needed to achieve more diversified
findings in compensation management.