THE IMPACT OF FINANCIAL AND NON-FINANCIAL BENEFITS ON THE MOTIVATION OF PUBLIC SECTOR EMPLOYEES

Abstract

An effective motivational system increases the likelihood of attracting and retaining talent while reducing staff turnover. Financial and non-financial incentives such as salary and allowances, pay for performance, profit-sharing, bonus, recognition, flexibility, training, etc., significantly increase employee engagement and a sense of belonging to the organization. The research subjects are employees at various management levels in the Ministry of Economy and Sustainable Development of Georgia. The quantitative research method was applied throughout the research procedure. In particular, a questionnaire was created, which was completed by 720 respondents. The acquired results were analyzed using the SPSS statistical software package. The following hypotheses were formulated during the research process: Hypothesis 1. The motivation of subordinates determines the desire to change/not change the leader. In the case of positive motivation, there is no desire to change the leader; Hypothesis 2. Subordinate motivation increases when the supervisor is endowed with leadership skills. Hypothesis 3. The use of financial benefits by a supervisor in performance appraisal has a positive effect on the motivation of subordinates. Managers with leadership skills can identify the needs of employees, which affects their motivational level. As a result of the research analysis, it is important to note that financial motivation is a fundamentally important factor in developing countries. As a result, we formulated key findings and recommendations that will significantly increase employee motivation.