2024, Vol. 6, Issue 2, Part E

In the evolving global workforce, retaining talent and aligning employee performance with organizational goals is a critical challenge, especially in high-pressure industries like insurance. This study examines the impact of reward systems on employee productivity within Bihar’s insurance sector, using a mixed-methods approach to analyze the influence of extrinsic (monetary) and intrinsic (non-monetary) rewards on motivation, engagement, and retention.

Data was collected through structured surveys administered to 500 employees across insurance firms in Bihar, with an 87% response rate (435 participants). The survey assessed demographic profiles, performance perceptions, motivational drivers, and productivity metrics. Quantitative data was analyzed using descriptive statistics and correlation tests, while qualitative responses were thematically coded.

Findings reinforce the dual role of rewards as motivators and retention tools. Extrinsic rewards (e.g., salary raises) address economic needs, while intrinsic rewards (e.g., recognition) fulfill psychological and professional aspirations. However, systemic inefficiencies exist due to a disconnect between employee expectations and organizational practices. A significant majority perceive reward distribution as unfair (94.7%) and feel career progression is inadequately linked to performance (94.3%), highlighting the need for urgent reforms.

In Bihar’s client-centric, high-pressure insurance sector, monetary incentives remain relevant but are secondary to career development and acknowledgment. Employees value transparent, equitable systems that recognize contributions and offer clear growth pathways. This study validates social exchange and expectancy theories, illustrating that employees weigh efforts against anticipated rewards and link performance to perceived equitable outcomes.