Influence of Financial and Nonfinancial Compensation on Academic Employees as Motivators – A Study on Higher Educational Institutions

Abstract

Financial and nonfinancial compensation in the employment of academic employees in higher educational institutions have had a significant influence on their motivation. The kind of compensation determines whether employees will be satisfied with their jobs, whether they remain in service in an organization, and the level of performance executed at the place of work. With both surveys and interviews, data collection has been carried out with academic employees from various organizations that offer higher education. It suggests that although financial rewards, like salary and extrinsic rewards through bonuses, work to show greater job security and basic needs satisfaction, nonmonetary rewards, like recognition, career progression, and integration of work and life, are far more crucial for long-term employees' motivation and job enrichment. From the present study, it is said to be concluded that a proper ratio of financial and non-financial rewards and incentives may prove to be highly instrumental in ensuring the continued interest and motivation among employees. Those institutions that align the nonfinancial motivators with competitive financial packages are more prone to having higher levels of employee satisfaction and performance.