The Impact of Reward System on Employee Performance, Motivation and Retention in Non-Profit Organizations

Abstract

The study aimed for an in-depth qualitative understanding of the reward system within Pakistan's non-profit sector, adopting a qualitative case study methodology with interviews, observations, and document review across two organizations. The literature indicates a lack of study on reward systems in Pakistan's non-profit sector, despite being the critical component to organizational design. The objective of the study was to investigate and understand the impact of reward system in optimizing employee performance, motivation, and retention in non-profit organizations. This relationship is examined through the lens of expectancy theory. Twenty respondents from two non-governmental organizations were interviewed using a semi-structured approach. The findings suggest that a well-designed reward system leads to effective performance and motivates employees at the workplace. Additionally, employee satisfaction with rewards encourages them to stay with the organization, implying that organizations should prioritize attractive and equitable reward systems.