Abstract:
This paper aims to examine the impact of non-financial rewards on employee innovation, with an emphasis on the moderating effects of individualistic and collectivist cultures as well as the mediating function of employee engagement. Quantitative data analysis was performed using the Analysis of Moment Structures (AMOS) to demonstrate the conceptual framework through Structural Equation Model (SEM) analysis, which utilized the study's relevant descriptive and inferential tests. Non-financial benefits substantially enhance employee engagement, which in turn mediates the relationship between non-financial rewards and employee innovation. Individualistic versus collectivist cultural contexts have an impact on how well reward systems work; collectivist cultures exhibit higher levels of engagement, but for the best innovative results, rewards must be in line with cultural ideals. By combining the Job Demands-Resources (JD-R) model with Self-Determination Theory (SDT), this study makes a theoretical contribution by elucidating how psychological involvement converts rewards into innovative behaviours. Practically, this study emphasises the necessity of non-financial rewards, culturally appropriate reward systems that prioritize equity, acknowledgment, and opportunities for growth. It also emphasises how crucial it is to match employee values with organisational culture to maximize engagement and innovation.
