1. Introduction

Employee motivation and reward and recognition (RR) system enhances positive environment at the work places. These systems elicit better performance and keeps workers focused on their job duties [1]. Lack of reward and recognition is cited as one of the main reasons behind employee turnover. Reference [2] mentioned that “If you want to avoid losing your best employees, and encourage others to do better, recognizing them publicly may save yourself time and money and having to find and retrain a new staff. …It may be hard to believe, but recognition is the most powerful motivator of all”.

Reference [3] stated that employee motivation and RR programs are important in order to retain well qualified employees and actively engage them in satisfying customers, managing scarce resources, and improving performance. New York based Business Research Lab found positive correlation between reward/recognition programs and whether people intend to stay at their work places. Clive Mettrick, an executive of the company says “Rewarding-and recognizing positive results is an important factor in retaining employees. People enjoy working and tend to thrive in organizations that create positive work environments – environments where they can make a difference”.

Another survey sponsored by Robert Half International, Inc finds ‘limited recognition and praise’ as the top reason why people leave their jobs. According to [4], RR and employee motivation programme provide a visible means of promoting quality efforts and telling employees that the organization values their efforts. Reference [5] mentioned, in a world of downsizing, doing more with less, reward/recognition are vitally important to boost morale and creating goodwill between employees and managers.

However, it has been noted that a poorly designed RR system may work as a de-motivator to the employees instead of motivating them. This necessitates designing a sound RR system that addresses employees’ needs. This is not an easy task: [6] mention that human resource and non-human resource executives alike scratch their heads about how to send the right massages with their compensation and recognition programs. Reference [1] says “It is important to remember that developing and implementing a meaningful cost-effective reward system is one of the crucial challenges facing organizations today. Reward programs are pivotal in developing a unified, strategic approach to organizational motivation. When handled poorly, reward programs frustrate employees and drain organizational resources. When employees feel they are not being rewarded as they deserve, motivation may suffer, leading to resentment and low morale”. Reference [7] corroborates exactly the same. He writes (page 45):

In too many companies, the reward system has become a bottomless pit into which millions, even billions, of dollars are thrown away annually, while employees complain that the rewards they receive aren’t particularly rewarding, and frequently find the reward system itself is one of the most de-motivating aspects of their company. Creating a meaningful, cost-effective reward system is one of the most important challenges facing any organization today.

Reference [1] again mentioned that employers waste thousands of dollars on incentive programs that employees do not want. An effective, structured incentive program is planned in advance and operates according to established guidelines. Reference [7] mentioned that different people respond to different incentives. They advise that before investing in reward and recognition system, organizations should survey their employees. Organizations should list as many different potential rewards as possible and let employees rate them and from the list employees should be able to select the specific reward that appeals most to them. The aim of this study is to identify the most important reward and recognition ways and motivating factors which are preferred by the employees working in various organizations in Malaysia and UAE. This study also find out the difference and conformance between Malaysia and UAE employees on reward and recognition ways and motivating factors.

2. Literature Review

The basic purpose of employee reward and recognition system is to motivate them so that they work harder in course of realizing organizational objectives. In a highly publicized survey conducted in US, when workers and managers were asked to rank a list of ten motivators from 1 to 10 in order of their importance, workers rated “appreciation for a job well-done” as their No.1 motivator, whereas managers rated it No. 8 [7]. Same thing applies for reward and recognition (RR) system. Managers may think a particular item as reward, but the workers might think otherwise. Reference [1] mention: “Employers waste thousands of dollars on incentive programs that workers don’t plan or want”. The secret of making a reward effective is tailoring it to the individual’s need. A reward to one person may be a form of punishment to another. This necessitates involvement of employees in designing the system. Reference [9] mentioned:

If you are not sure what recognition to give, just ask! If you don’t tailor the reward to the employee, the reward will not have the motivating effect you desire. Give them several ideas to choose from and a chance to write in their own ideas and submit their preferences.

According to [7], rewards are as different as the people who receive them and it does not make sense to give the rewards that recipients don’t find rewarding. For example, some people may prefer cash, while a new job design may be more rewarding to another. It is a well-known fact that some people are fond of sports where as others inclined to movies. Some people may like to be employee of the month; others may like a medal or a plaque. In the following section discusses two issues: one is reward and recognition for employee motivation and another is employee motivation from an organizational perspective.

2.1. Reward and Recognition for Employee Motivation

Though there are numerous types of rewards, all do not equally fit across organizations. Many people contend that the reward and recognition system should fit with the organizational mission, vision, values and competitive atmosphere. According to [10], if an organization has a very formal, quantitative, competitive and materialistic culture (e.g. a large steel mill or chemical manufacturing company), then the reward system may need to be calculated based on production and conducted in a competitive and formal way and is likely to provide more monetary rewards. On the other hand, a small health unit which focuses on personal relationship and works towards cooperative goals may have a more team-based, informal and spontaneous reward system that provides letters of recognition or personal thank-you. Reference [11] term “begin with the end in mind” is relevant in designing RR system. Before developing the reward system, it is important for the manager to consider the key results that the organization aspires to achieve. The reward strategy is expected to be aligned with the key results. Reference [7] concurs with [11]:

The most important question to ask in evaluating the reward system in your organization is, do the rewards you are giving elicit the performance you want? Start with the results you want to achieve and then pin-point the types of behaviors needs to achieve them. For example: if you believe teamwork is going to get you the results you want, make sure you reward teamwork, and not internal competition between departments. If you want quality, make sure that productivity isn’t over emphasized. And, if you want long-term solutions, don’t reward quick fixes.

Reference [12] suggests to align the rewards with the business objectives which, according to him, are: profit, revenue growth, cycle time, financial return, customers satisfaction, quality, new product development, and reducing operating expenses.

2.2. Employee Motivation from an Organizational Perspective

The term motivation is hard to define due to its relation with human psychology which itself is very complicated. Reference [13] argues the term defies definition. Reference [14] identified about 140 attempts to define motivation. Reference [15] provides a definition that accommodates several of these attempts: work motivation is a set of energetic forces that originates both within as well as beyond an individual’s being, to initiate work-related behavior, and to determine its form, direction, intensity, and duration. According to its Latin source ‘movere’ (which means to move), motivation is what moves us from boredom to interest. It is like steering wheel of a vehicle that directs our activities. Motivation represents those psychological processes that cause the arousal, direction, and persistence of voluntary activities that are goal oriented [16].

Reference [17] have reviewed the literature on employee motivation developed in the last 30 years giving special emphasis on the last decade. Their focus on review pertains to needs, traits, values, cognition, and effect as well as the literature that deals with content of motivation: national culture, job design, and models of person-environment fit. The authors conclude that three theories dominate the motivation literature: goal-setting, social-cognitive, and organizational justice. Further, behaviorism and expectancy theory have been overwhelmed by goal-setting and social-cognitive while equity theory has given way to conceptualization of organizational justice.

Apart from the motivational theories, nowadays, many organizations are facing retention challenges regardless of size, technological advances and market focus [18]. Reference [19] stated that the average company loses approximately $1 million with every 10 managerial and professional employees who leave the organization combined with the direct and indirect costs; the total cost of an exempt employee’s turnover is a minimum of one year’s pay and benefits. Reference [20] mention that voluntary turnover is a major problem for companies in some Asian countries such as Malaysia, Thailand, Taiwan, etc. Job-hopping has become so rampant in these Asian countries that it has, in part, become culture. [18] writes:

Given the large investments in employee retention efforts within organizations, it is rational to identify, analyze and critique the motivation theories underlying employee retention in organizations.

Motivation constitutes a central element when going through the process of human learning. If the organization does not possess the ability to motivate its employees, the knowledge within the organization is not practically used to a maximum. Therefore, it becomes the aim of every learning organization to find the factors that enable it to motivate its employees to continuous learning and to take advantage of this knowledge to ensure its living [21], [22]. In today’s business environment, the future belongs to those managers who can best manage change. To manage change, organizations must have employees committed to the demand of rapid change and as such committed employees are the source of competitive advantage [23], [24].

Since the nature of human beings is widely different, so are their motivating factors. Reference [25] mentions that “people differ not only in their ability to do but also in their will to do.” The motivation of a person depends on the strengths of his/her motives. Motives are sometimes defined as needs, wants, drives, or impulses within the individual. Individuals at different organization levels, with different earning power, may have different motivational values. Hence what motivates individuals at one level of the organization may not motivate those at another level.

A unique longitudinal study has been conducted in USA in 1946 [25]; 1980 [26]; 1986 [27]; and 1992 [28] to know the preferences on various motivators. Though the ranking of the factors varies from person to person, the conclusions are drawn on the average ranking obtained considering all the respondents. The final outcome of all these studies is the ordered set (in terms of preference) of 10 motivators. One of the objectives of the present work is to replicate the above study in Malaysian and UAE settings.

3. Methodology

Data collection for the study was carried out by means of self-administered questionnaire. The instrument of this research was developed based on three parts namely A, B, and C. Part A pertains to the respondents’ demographic information such as gender, age group, educational background, marital status, and type of employment. Part B was developed based on 17 factors of reward and recognition for employees. In this part the respondents were asked to rank 17 ways of rewarding and recognizing for employees according to their own preference: most preferred, rank = 1, second most preferred, rank = 2, etc., and out of these 17 factors of rewarding and recognizing the least important factor was assigned 17th rank. Similarly, part C was developed based on 10 motivating factors for employees. In this part, the respondents were asked to rank a set of 10 pre-determined factors according to their perceived effectiveness to motivate them in the workplace, the most effective motivating factor was assigned rank = 1, then second most effective motivator factor, rank = 2, and out of the ten motivating factors the least effective factor was assigned 10th rank.

In this study, 1500 questionnaires were distributed in two different countries namely Malaysia and UAE. Out of 1500 responses, we received 504 responses from Malaysia and remaining 434 responses from UAE. This gave a response rate of 62.53 percent. The research questionnaires were distributed to the respondents through online and face to face. A small gift as incentive was offered with each questionnaire in order to increase the response rate, but participation was entirely voluntary. After conducted the survey of this research, the data were analyzed according to mean, standard deviation, and independent samples t-tests via SPSS -19 version.

4. Results and Discussion

There are two parts in the data analysis. First part is descriptive analysis which is based on demography information of the respondents; second part is ranking of reward and recognition and motivation factors between Malaysia and UAE.

4.1. Demography Profile of the Respondents

In this study two similar surveys were conducted in two different countries, namely Malaysia and UAE. The total sample size was 938. Out of these 938 respondents, 505 respondents were participated from Malaysia and remaining 434 respondents were from UAE. The study obtained the respondents’ personal information including gender, age group, educational qualification, marital status, and type of employment. These data have been shown in Table 1.

In the Malaysia’ survey, males were more than females. Out of 505 respondents, male respondents constituted 55.2 percent, whereas 44.8 percent were female respondents. Similarly, out of 434 respondents for UAE’s survey, male respondents were 233, which was 53.7 percent, whereas 201 (46.3 percent) female respondents were participated in this survey. In the age group of the respondents, majority (28.6 percent) of the Malaysian respondents’ age lies between 31 – 35 years. The second highest Malaysian respondents’ age group was 26 – 30 years (26.6 percent). Moreover, three age groups of respondents have similar percentage: 21 – 25 years (13.5 percent), 36 to 40 years (13.5 percent) and 41 – 50 years (15.4 percent). On the other hand, the highest number of UAE respondents’ age group was between 26 – 30 years, which is 30.5 percent. The second highest Thai respondents’ age group was 21 – 25 years (27 percent) and the lowest number of respondents’ age group was above 50 years, which is only 3.2 percent.

In the Malaysian survey, most of the respondents’ educational level was bachelor degree (45.1 percent). The second most education level of the respondents was diploma/certificate (28.1 percent). Further, only 39 (7.7 percent) professionals, 56 (11.1 percent) masters and 30 (5.9 percent) PhD holders and were participated in this study. Similarly, the highest number of UAE respondents’ educational background was bachelor degree (44.5 percent) and second highest education level of the respondents was certificate/diploma (32.9 percent). However, only 25 UAE respondents (5.8 percent) were participated in this study those had master degree qualification and one respondent was PhD.

Table 1 also illustrated that 342 Malaysian respondents were married (67.8 percent) and 162 (32.2 percent) respondents were single. Similarly, most of the UEA respondents were married which was 59.2 percent and 40.8 percent respondents were single. In the survey questionnaire, the respondents were asked about their employment type. Based on the responses, 60 percent of the Malaysian respondents were private employee, whereas 36 percent were public. On the other hand, 72.1 percent of UAE respondents were public employee, whereas, 25.8 percent were private employee.

Table 1. Demographic profile of the respondents

4.2. Comparison Analysis between Malaysia and UAE on Reward and Recognition Perceptions

The main component of the questionnaire was to know employees’ preferences on various reward and recognition ways. Table 2 shows the overall ranking on the 17 ways between Malaysia and UAE respondents. Ranking has been determined based upon the mean value of the rewards. The lower the mean, the higher is the rank. For Malaysia’s survey, the smallest and the largest mean values are observed to be 3.5723 and 12.2812, so their respective ranks are 1 and 17. On the other hand, for UAE survey, the smallest mean value is 6.0253 and largest mean value is 10.8664.

Table 2. Ranking of the Reward and Recognition between Malaysia and UAE

From the Table 2, we observe that the five most preferred reward and recognition for Malaysian employee are the following:

1. Cash

2. Traveling allowance to visit overseas country

3. Further training and educational opportunities

4. Paid vacation (Time-off)

5. Company share

On the other hand, UAE employees are preferred the five most reward and recognition for themselves is following:

1. More power in the job

2. Cash

3. Merchandise

4. Further training and educational opportunities

5. Certificate/Plaque

According to the independent samples test, we observed that there is significant differences between Malaysian and UAE employees on 17 factors of reward and recognition except Employee of the Month/Year (p = 0.114). The results indicated that Malaysian employees are seeking for cash, traveling allowance to visit overseas country, paid vacation, further training and educational opportunities and company share more than UAE employees, whereas, UAE employees are expecting more for power in the job, certificate/plaque, merchandise, medal, reserve parking space, write-up in the newsletter, praise in the meetings, company XYZ award, job redesign, maple gold coin, and premium certificate compare to Malaysian employees (see Table 3).

Table 3. Independent Samples t-test on Reward and Recognition between Malaysia and UAE

4.3. Comparison Analysis between Malaysia and UAE on Motivational Perceptions

As mentioned previously, in this study, employees were asked to rank the ten motivating factors which they feel very important in their workplace. The most important item was to be ranked 1 and the least important factor was to be assigned the rank 10. All items had to be ranked and no rank could be used more than once. Having collected the data from various organizations in Malaysia and UAE, we ranked all the ten motivating factors based on mean values. The lowest mean value was assigned the rank 1 which indicates the most important motivating factor to the employees. On the other hand, the highest mean was assigned the rank 10 which indicates the least important among the ten motivating factors to the employees. Table 4 presents the ranking of motivating factors between Malaysia and UAE based on the employees’ perspectives.

Table 4. Motivating factors ranking between Malaysian and U.E.A.

Based on the employees’ responses, we find that “good wages” has been placed at the first and “good working condition” placed second position among the ten motivating factors for both countries. However, Malaysian employees are placed promotion as third important motivating factor, whereas UAE employees placed it as sixth position among the ten motivating factors. The results also indicated that Malaysian employees placed the “management's help to solve personal problems” as the least important motivating factor (rank 10), whereas UAE employees placed it in the fourth position (see Table 4).

Table 5. Independent Samples t-test on Motivating Factors between Malaysia and UAE

According to the independent samples test, there are three significant differences between Malaysian and UAE on motivating factors. First difference is on job security (p < 0.001). Therefore, Malaysian employees are perceived importance on job security is significantly more than UAE employees’ perception. Second difference is on promotion (p < 0.001) which indicates Malaysian employees’ assigned importance on promotion is significantly more than the UAE employees. The last but not least difference is on management's help to solve personal problems (p < 0.001) which indicates UAE employees are seeking more help from management’s to solve their personal problems compare to Malaysian employees.

5. Discussion and Conclusions

The world scenario has been changing rapidly. Any management development program should be incorporating the factors that affect the working life of the workers. And, furthermore, this kind of programs may fail if the inputs from the employees are not adequately taken into consideration. Reference [29] suggested that managers must care about how employees perceive the organization, paying attention to a number of aspects: (a) a respectful and trustful way of treatment; (b) creating opportunities for employee learning and personal development; (c) the degree to which they treat employees as people in search of meaningful work; (d) the honesty and frankness they place in relating to subordinates; (e) strategies they develop to facilitate work–family balance; (f) ways they promote spirit of camaraderie and teamwork and (g) the fairness in their decisions involving promotions and rewards. In this study, authors would like to emphasize that employee involvement is crucial for a successful design of a reward/recognition and motivation program. The present work has provided some guidelines that can be considered at the time of developing employee reward/recognition and motivation program.

The main purpose of the present study is to identify the most important reward/recognition and motivating factors of the employees who are working in Malaysia and UAE. Based on the research findings, it was observed that there are similarities and also differences exist in the both ranks of the reward/recognition and motivating factors for Malaysia and UAE. The employees in these two countries concur on the two most effective reward and recognition, namely ‘cash’ and ‘more power in the job’. Nowadays, cash reward has been predominantly preferred reward among Malaysian and UAE employees working at different organizations. However, the result is contrary to many people’s belief that cash is not a very strong motivator such as reference [30] stated that “at one time, money was considered the best employee motivation technique. But today, the use of money as motivation has several strikes against it. The impact of a monetary reward is often short-lived. Non-cash rewards of high intrinsic recognition value – such as merchandise credits or time off – often work better. When given a cash incentive, an employee may spend the money on groceries or the electric bill. If merchandise is offered, however, employees will constantly be reminded of the incentive each time they took at the gift”. Similarly, one of the human resource consultants reference [31] mentioned that “I have never been a big fan of awarding small cash reward as a prize, because it has no ‘trophy’ value. If you hand a team member a $29 bill as a gesture of gratitude, the emotional buzz lasts anywhere from 12-15 seconds. The cash goes into the wallet and disappears”. Apart from these statements, money is still considered as an effective motivator. In a nationwide survey conducted in 1992, Wiley (1997) has found that high wages is the strongest motivator among US employees.

The research results also indicated that there are significant differences between Malaysian and UAE employees on all reward and recognition ways to motivate employees in the workplace except ‘employee of the month/year’. On the other hand, both countries employees identified the most important motivating factors, namely ‘high wages’ and ‘good working conditions’. Further, though management’s help is not considered as favorable in Malaysia, it is widely sought in the case of UAE. The reason is that Malaysian employees are not much concerned about management help whereas UAE employees are seeking for it [32]. The research findings also indicated that there are significant differences between two countries on three motivating factors, namely job security, promotion and management's help to solve personal problems.

Although most of the motivating factors are not significantly different but there are some factors that have shown significant differences between Malaysian and UAE employees. Therefore, research should be carried out to gain a continuous view of what motivates employees to do their work better. The ability to motivate subordinates is critical to every manager’s job. Demographic changes in the workplace, as well as technological advances and globalization, only accentuate the need to continue to determine what motivates employees to perform well. A motivated workforce can make substantial contribution to the profits of a firm. Reference [27] suggested that management must understand what motivates employees within the context of the roles they perform. Such an understanding is absolutely crucial to improve productivity and ultimately to the health of our industry and our nation as a whole. He also mentioned that research surveys are not curing all the motivational problems in the organization. However, if the companies periodically administer them and take to heart their results, incorporating them whenever possible in orchestrating the reward system, employees, supervisors, the company, and the country will stand to gain a great deal [33]. The exploration of the present study can be compared with other different countries whether or not the results differ from the findings in the present paper.