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The current study is based on investigation of current reward practices of the software development firms in Pakistan, employee’s preference for different type of reward offered, and influence of reward practices on employee’s work engagement. The design of the study is cross-sectional and explanatory, and it is based on quantitative approach and survey method. Primary data is collected from staff of 10 selected software development firms located in the city of Islamabad (n=160). Our results indicate that in monetary reward category, employees prefer reward such as enough payments, overtime payments, and transportation allowances which are not adequately provided by the employers. Similarly, in non-monetary reward category, employees prefer reward such as social security, and appreciation and recognition which are not adequately addressed by the employers. Furthermore, results indicate that both monetary reward as well as non-monetary reward has positive and significant effects on employee engagement. Both type of reward explains 66.9% change in the employee engagement level. Our results imply that software development firms in Pakistan should review their reward practices and give attention to both type of reward.

ANALYSIS OF REWARD PRACTICES AND THEIR INFLUENCE ON EMPLOYEE ENGAGEMENT AMONG SOFTWARE DEVELOPMENT FIRMS IN PAKISTAN