82 © 2021 Conscientia Beam. All Rights Reserved. EMPLOYEE MOTIVATION IN LIGHT ONCIAL, NON-FINANCIAL REWARDS AND EMPLOYEE COMMITMENT AMONG PHARMACEUTICAL SMES OF INDONESIA Sheema Matloob 1 Saeed Abbas Shah 2 Muzafar Hussain Shah 3+ 1 School of Management Universiti Sains Malaysia, Malaysia. 2 Assistant Professor Marketing, Business Administration, Sukkur IBA University, Pakistan. 3 School of Economics Finance and Banking, College of Business, Universiti Utara Malaysia. (+ Corresponding author) ABSTRACT Article History Received: 21 December 2020 Revised: 10 February 2021 Accepted: 8 March 2021 Published: 29 March 2021 Keywords Employees’ motivation Employees commitment Financial rewards Non-financial rewards. JEL Classification: F36, G40, L25. This paper aim to assess the effect of financial and non-financial rewards on employees’ motivation along with mediating effect of employee’s commitment on relati onship of financial and non-financial rewards with employees’ motivation in pharmaceutical industry of Indonesia. For achieving the purpose, structural equation modeling was performed on collected data from 235 employees through self-administered questionnaires from pharmaceutical industry in Indonesia. This research found significant and positive effect of non-financial payments with employee motivation in results of direct relationship, current study found positive but insignificant effect of financial rewards on motivation during direct relationship. This study also found significant results of effect of financial and non-financial rewards on employee commitment. Furthermore current study found positive significant results during mediation by employees’ commitment between financial rewards, non-financial rewards with motivation, and employee commitment proved as good mediator. Implication and recommendations were also discussed in current research. Contribution/Originality: This study has contributed in extension of literature on both financial and non financial rewards’ importance in employee motivation. Further to this, this is one of the few studies conducted in Indonesia, especially in pharmaceutical industry. 1. INTRODUCTION Human resource management (HRM) has a significant role in any organization to implement HR policies and make their employees satisfied in their workplace. Employees put their maximum efforts when they expect their work can be recognized by their employers. In the absence of, proper policies and procedures which can be entertain and arranged by HR department in any form including equitable pay policy, training and development opportunities and well reorganization of the work. The dissatisfaction from work may the cause of no proper existence of reward which leads towards high level of intention to leave and poor performance. Employee cannot be performed when no actual policy is existed to make their identification in the front of employer which makes them demotivated. Therefore, employees cannot be given their best due to dissatisfaction level and that dissatisfaction would be the cause of turnover intention in the future. Financial and non-monetary rewards are the factors which influence motivation in the employees to give their best and make reorganization in the front of employers. Armstrong (2016) stated that rewards are divided into two main categories: (i) Financial reward which can be identified by monetary reward while (ii) Non-financial rewards which are also documented by The Economics and Finance Letters 2021 Vol. 8, No. 1, pp. 82-91. ISSN(e): 2312-430X ISSN(p): 2312-6310 DOI: 10.18488/journal.29.2021.81.82.91 © 2021 Conscientia Beam. All Rights Reserved.