Impact of financial and non-financial incentives on workforce sustainability

Abstract

Financial and non-financial incentives in the academic institutions are indispensable to the continuance of job satisfaction, motivation, and retention. This research also intends to accord this motive and examines employee perceptions with a view to focusing on cultivating a sustainable workforce. Although there are several measurements of workforce sustainability but we have considered satisfaction, motivation and retention to measure the sustainability. The study is administered on the survey response of 100 respondents collected from 10 private universities of Bangladesh. The survey questionnaires were encompassing several types of incentives (both financial and non-financial) such as performance-based bonuses, research grants, retirement benefits, recognition and awards, flexible working hours, and professional development programs etc. Questions were structured in Likert scale along with mentioning some demographic characteristics. From analyzing these data, this study constructed valuable insights about the effectiveness and recommend actionable suggestion to enhance employee satisfaction and institutional performance. Afterwards, statistical analysis has been assessed in SPSS 27.0 to find the significance of the relationship between incentives and workforce sustainability. The result drawn from this study is versatile. In regards to the financial incentives, these are perceived as important yet moderate motivators. Most common type of incentive program in the financial perspective is Retirement benefits. Performance-based bonuses, retirement benefits, grants and perks enhance satisfaction level but the variability among the responses are slightly high, which suggests that not all employees find these incentives equally effective. Overall, financial incentives show a strong correlation with employee satisfaction that indicates their critical role in workforce sustainability. As for the non-financial benefits, these are highly valued motivation factor by academics. Recognition and awards, flexible working hours, and professional development programs are contributing substantially to satisfaction, productivity, and mental well-being in the employment setting. Among others particularly flexible working hours show high mean scores and lower variance which indicates the widespread appreciation for this incentive program. Nevertheless, when it comes to the overall satisfaction on the incentive structure provided by the university, most of the respondents expressed moderate satisfaction with some exception. The high variance in responses indicates the differing levels of satisfaction across the faculty of same v | P a g e university suggesting that not every type of incentives is not equally desirable to everyone. Non financial incentives, while impactful, have a weaker correlation with overall satisfaction compared to financial incentives, suggesting that financial rewards remain a primary driver of employee satisfaction. Moreover, the demographic characteristics the workforce is diverse with a slight male majority and a significant proportion of younger employees and early-career professionals with 1- 5 years of experience. Most of the institutions provide both type of incentives but all are not equally incentivizing efficiently to its faculty members. Most common type of financial incentive is retirement benefits whereas recognition and awards are mostly provided in terms of non-monetary benefits. Finally, the objective of this research is to recommend better initiatives that need to be taken by the private universities of Bangladesh to develop a sustainable workforce. In this regard, adjusting incentive structures incorporating both financial and non-financial benefits and reviewing regularly to ensure alignment with employee expectations, addressing gaps in the incentive programs by gathering feedbacks from employees and implementing targeted improvement and tailoring packages to meet the unique needs of different employee groups can build a sustainable workforce with enhanced satisfaction, motivation and long-term retention. This research underscores significance of the holistic approach to employee incentive program that are aligned with the need of the workforce. By addressing the necessity of the workforce and improving incentive that caters to the employee needs can foster a satisfies, motivated and loyal workforce who will eventually contribute to the institutions success.