The Impact of Non Monetary Rewards on Employee Productivity at Spotless in Rotorua Hospital

Catering is a key service provided by the company. In fact, the company claims to feed 186,000 people every day in Australia and New Zealand which accounts for more than 68 million meals every year (Spotless, 2018a). Moreover, Spotless is arguably the leading provider of patients’ meal which currently stands at approximately 55,000 meals a week (Spotless, 2018a). Thus one of the many Spotless’ clients in the healthcare sector is Rotorua Hospital, New Zealand. Spotless has always been faced with a challenge of keeping up with the ever-changing nutritional demands. Literature Review In a world characterised by increased global competition, many businesses are evaluating ways in which to increase productivity and remain competitive. One of the solutions has been to keep employees motivated so as to reduce turnover and encourage them to increase their performance given that many organisations agree that human capital is their most valued resource.

But one challenge has always been on the on how best can an organisation motivate its employees. In his study Maslow (1943) wanted to understand what really motivates individuals to act in the way that they do. He identified all the human needs and classified them into five parts arranged into a pyramid, which has commonly come to be known sat the hierarchy of needs (Sadri & Bowen, 2011). The same sentiments are echoed by Bandiera, Barankay, and Rasul (2011) who reported that non-monetary rewards were significant to the organisational success. According to a study by Abdullah and Wan (2013), employees can be intrinsically motivated through two distinct ways. First employees can motivate themselves through the performance of tasks that they feel will motivate them once their goals have been achieved.

On the other hand, management can step in to provide a motivating work environment through offering both monetary and nonmonetary rewards. Some of these nonmonetary rewards include being given responsibility, freedom to make one’s own decisions, opportunities to develop one's skills, and recognition for a job well done. Kube, Maréchal and, Puppe (2012) revealed managers who use non-monetary rewards to motivate their employees are more likely to achieve their goals than those who solely rely on monetary rewards. This is because nonmonetary rewards such as recognition foster the working relationship between the employees and the managers. Employees become more likely to work towards the managerial goals as they feel that they are part of the achievement. In other words, Waqas and Saleem (2014) content that nonmonetary rewards give the employees a sense of ownership in the organisational achievements and makes them more committed.

Yousaf et al. Worse still employees are likely to overestimate what their co-workers are actually earning (Morrell, 2011). About 50% of the employees tend to overestimate the salaries given to their co-workers (Suls & Wheeler, 2013). As such, employees may end up feeling that their colleagues make more money than they do which may result in demotivation. In such cases, non-monetary rewards may not make any difference. Thus if an employee cannot place the same value on the nonmonetary incentives they receive to the overall compensation of the other employees, then these nonmonetary rewards will create more problems than they solve. Thus it is critical for the employers to tailor the nonmonetary reward to suit the specific interest of the individual employees. However, tailoring nonmonetary rewards is a complex task given the complexities of human beings, therefore, employers are likely to make mistakes resulting in demotivation and reduced productivity.

Due to the apparent benefits of nonmonetary rewards, Spotless Catering at Rotorua Hospital has resorted to using nonmonetary incentives to motivate their employees. The company recognises that the job performed by its employees is extremely challenging. The workers are expected to produce tasty and healthy foods within short periods of time. As such employees are more likely to be less committed and less productive and would happily leave the organisation if offered a better paying job elsewhere. Thus Waqas and Saleem (2014) feel that there is no guaranteed that nonmonetary incentives would result in increased productivity but it is just a gamble that many organisations take. It is thus essential to address the following question: RQ1: Do nonmonetary compensation which includes gifts and the recognition of the employees of the month at Spotless Catering, in Rotorua Hospital result to have a positive impact on the employees’ productivity? Yousaf et al.

(2014) and Kube, et al. (2012) suggest that nonmonetary rewards lead to employee motivation. This is because such rewards increase the intrinsic motivation of employees towards job performance which translates into higher productivity. Nevertheless, these programs are received differently by employees based on the perceived value and equitability of these programs. If they are perceived value is high and they are seen to be administered equitably, then they will motivate employees towards their jobs, otherwise, they will demote them resulting in decreased production and labour turnover. One thing that is clear though is that if they are applied appropriately, non-monetary rewards will surely increase employee productivity. The users for this study will be majorly Spotless Group since the study specifically focuses on their nonmonetary compensation programs and the company’s productivity.

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