It is clear from the above overview that high levels of PsyCap are advantageous for nurses, and that nurses have differing reward preferences and experience differing levels of satisfaction with their current rewards. This justifies the need for the present research study, which investigates these three constructs within the Nelson Mandela Metropole medical industry in South Africa. Ardichvili (2011) believes that whilst there is much relevance in the construct of PsyCap in that it holds many benefits for employees, there is still much room for research in countries outside the United States. To date, few PsyCap studies (see Görgens-Ekermans & Herbert, 2013; Harris, 2012; Schoeman, 2012) and reward preference studies (see Nienaber, Bussin & Henn, 2011; Snelgar, Renard & Venter, 2013) have been conducted in South Africa. Furthermore, there have been no studies conducted to date that link either the reward preferences of employees or their levels of reward satisfaction with their levels of PsyCap.

Based on the above, the primary purpose of this study is to address the gap in empirical research by investigating the relationship between PsyCap and both reward preferences and satisfaction in the Nelson Mandela Metropole medical industry in South Africa. Additionally, differences across demographics such as age, educational level and tenure for these three constructs will be investigated.

In order to achieve these objectives, this article will provide a brief literature review outlining PsyCap and reward preferences and satisfaction, followed by the research design for this study. Thereafter, a discussion of the results will be provided, which will address the study’s purpose and objectives.

Luthans et al. (2008) state that PsyCap is typically ‘state-like’ in the sense that it is believed that PsyCap is moderately stable, but not fixed in the way that personality or a core self-evaluation may be. Luthans, Avey, Avolio and Peterson (2010) mention, however, that the PsyCap constructs are more stable than moods or emotions. PsyCap is therefore not the same as positive emotions or feelings, but is rather a positive state.

Avey (2014) mentions that there is a strong correlation between employees’ levels of PsyCap, their resulting levels of performances and their patterns of behaviour, thus suggesting that PsyCap has the ability to positively influence employees. Individuals who have higher levels of PsyCap are more likely to be energised and thus put forth effort, which results in improved performance over an extended period of time (Avey, 2014). Avey, Reichard, Luthans and Mhatre (2011) identified strong correlations between job satisfaction and PsyCap. These authors note that when employees experience reward satisfaction they are more likely to have an expectancy of success, which stems from having optimism, and a belief in their personal abilities, which is derived from self-efficacy and hope. Furthermore, individuals who recover well from setbacks (resilience) have been proven to be more satisfied with their rewards (Avey, 2014). The four dimensions of PsyCap will now be discussed in more detail as they specifically relate to an individual’s behaviour.

Allen and Helms (2001) highlight the importance of effective reward practices by stating that these have the potential to improve motivation, which leads to an increase in employee performance and ultimately an increase in the organisation’s performance. It is for this reason that an organisation’s reward practices should be of a high standard. In order to motivate employees, it is crucial that organisations address the needs of their employees through a holistic, integrated and business-aligned approach to the management of rewards for employees (Nienaber et al., 2011). In order to do this, an organisation needs to respond to the demands of their employees by gaining an understanding of their reward preferences (Linkow, 2006). It is this discovery that has led to organisations adopting a total rewards strategy.

The Achievement Awards Group (2008) defines total rewards as an integrated approach to managing an organisation’s human resources, which considers the strategic interdependence of both tangible and non-tangible factors that impact on employees’ levels of motivation. Kwon and Hein (2013) highlight the importance of total rewards by stating that employees do find financial rewards to be important, but it is a combination of appealing factors that will make an employment deal attractive to an employee. This, therefore, creates a need for total rewards.

Nienaber et al.’ s (2011) Total Rewards framework forms the basis of this study. This framework includes both financial and non-financial rewards. According to Nienaber et al., financial rewards incorporate compensation (fixed pay or salary), benefits (such as medical aid and pension funds) and contingency pay (such as variable pay and performance-based pay). Chiu, Luk and Tang (2002) note that employees will view the financial rewards that they receive from their organisation as an indication of their value to the organisation, and for this reason financial rewards play a large role in reward management. However, Zobal (1999) states that there are many problems associated with financial rewards. These include the fact that they cause employees to shift their focus only towards achieving financial gain. This may, therefore, move their focus away from developing themselves to being mainly focused on completing a task for financial gain (Zobal, 1999). Furthermore, Zobal states that financial rewards may lead to negative effects on employees when goals are not achieved, such as a lack of confidence or being demotivated.

On the other hand, Nienaber et al. (2011) state that non-financial rewards include work-life integration (such as flexitime, job sharing and wellness programmes), career and performance management (including performance appraisals and training and development opportunities) and a quality work environment (such as adequate physical resources and meaningful working relationships). Non-financial rewards are often referred to as internal rewards as they meet the internal needs of an employee more so than financial rewards (Thumbran, 2010). Nienaber et al. state that employees seek more meaningful rewards from their work and it is for this reason that they are likely to place a great value on non-financial rewards. Furthermore, Dewhurst, Guthridge and Mohr (2009) state that non-financial rewards lead to employees feeling more positive, as well as feeling that the organisation values their well-being.

Boyd and Salamin (2001) state that an organisation’s employees form the basis of any organisation’s competitive advantage due to the fact that human resources are more durable and less likely to be imitated than any other organisational assets. Thus, they note that an effective compensation plan that accounts for employees’ individual reward preferences is essential in order to effectively attract, motivate and retain the best employees. Attracting the right employees, and motivating and retaining these employees, is crucial to developing a competitive advantage for the organisation. Through focusing on the reward preferences of employees, they are more likely to become motivated and more committed to the organisation as a result (Kaliprasad, 2006).

As previously mentioned, within South Africa there are limited studies that relate to PsyCap. However, Harris (2012) reported no statistically significant differences between individuals on the basis of tenure or age with regard to PsyCap. Furthermore, Rauschenbach, Göritz and Hertel (2012) revealed that with regard to resilience (a subscale of PsyCap) generally older employees have higher levels of resilience than their younger counterparts owing to their wealth of work experience.

Nienaber et al. (2011) provide evidence of multiple correlations between reward preferences and demographic variables. Amongst these were that both performance and career management and a good working environment are preferred mainly by individuals with no formal postgraduate qualifications. Additionally, they state that work-life integration is preferred by younger, married employees with postgraduate qualifications. Snelgar et al. (2013) concur that younger employees indicate a distinct preference for work-life integration as a reward. Specifically within nursing, Von Bonsdorff (2011) revealed that younger nurses show a distinct preference for work-life integration as a reward. Finally, Nienaber et al. note that individuals with postgraduate qualifications will show a significantly higher preference for benefits and base pay based on their high expectations due to their higher qualifications. Specifically within nursing, Von Bonsdorff (2011) notes that older employees with longer tenure are typically less satisfied with their financial rewards than their younger counterparts.

The empirical research conducted for this study was non-experimental in nature and followed a cross-sectional quantitative approach. The authors adopted this approach in order to determine whether statistically significant patterns of preferences would emerge, which would not have been possible if a qualitative approach were adopted.

The composite questionnaire used for this study was a fixed-answer questionnaire, requiring respondents to select from a series of predetermined answers (Malhotra, 2010). It consisted of a biographical data section and two measuring instruments, namely the Psychological Capital Questionnaire (PCQ) and the RPQ.

The data was collected through the use of pencil and paper questionnaires, since not all respondents in the sample had access to the Internet to complete an online questionnaire. The questionnaires were left at all the medical institutions included in the sample and the authors were reliant on the managers of each institution to distribute the questionnaires. After a period of four weeks, the authors collected the questionnaires from the various sampled institutions.

The authors obtained formal permission from the relevant head offices to conduct research in the public and private hospitals that formed part of the sample. In addition, permission was granted from Mind Garden, the publishers of the PCQ, to make use of the instrument for academic purposes, provided that it remained unmodified. To ensure the ethicality of the study, participation was completely voluntary. None of the respondents was forced to participate and no incentives were provided to encourage participation. Additionally, all responses were anonymous. The data obtained from the respondents remained confidential and were only accessed by the authors and the study’s statistician.

Statistical analysis was completed through the use of both descriptive and inferential statistics. The data was analysed using a statistical software applications package that was developed by the authors’ statistician from the Unit for Statistical Consultation at NMMU. Cronbach’s alpha coefficients were calculated in order to prove that the instruments were reliable. Descriptive statistics were calculated in the form of frequency distribution tables, as well as through measures of central tendency and dispersion, in order to illustrate general trends within the data analysis.

In terms of inferential statistics, Pearson’s product moment correlations were utilised to attempt to establish a relationship between the subscales of the PCQ and the RPQ. This technique is used to establish the strength of the correlations between factors (Malhotra, 2010). t-Tests were used to assess whether statistically significant differences existed between sector and job level across the subscales of the PCQ and the RPQ. Analysis of variance (ANOVA) was utilised to establish whether there were any statistically significant differences between age, marital status, educational level and tenure across the subscales of the PCQ and the RPQ. Post-hoc Scheffé tests were used when a level of statistical significance was found. Thereafter, Cohen’s d was calculated in order to determine the level of practical significance.

Table 2 summarises the descriptive statistics for the PCQ and the RPQ by providing the minimum, maximum, mean, standard deviation and Cronbach’s alpha values for the constructs under study. It is evident that the nurses within the sample exhibited high levels of total PsyCap, with an overall mean of 4.66 out of a possible 6.00. The two greatest reward preferences were for a quality work environment and base pay, whereas their greatest satisfaction was with a quality work environment and performance and career management.

Both measuring instruments exhibited acceptable internal reliability as the Cronbach’s alpha values are above the 0.60 level (Malhotra, 2010): the reliability coefficient for the total reward preferences section is 0.89 and the total satisfaction section is 0.90. The reliability coefficient for the total PCQ is 0.81. The authors note that the Cronbach’s alpha values for the RPQ factors of preference for base pay, preference for contingency pay, preference for benefits, preference for performance and career management and preference for work-life integration are higher than those found by Snelgar et al. (2013). Additionally, satisfaction with benefits, satisfaction with performance and career management, satisfaction with quality work environment and satisfaction with work-life integration are all higher than the reliability coefficients obtained in Snelgar et al.’s study. However, for the factors of the PCQ, all the factors in the present study, with the exception of resilience, obtained lower reliability coefficients than in previous studies conducted by Harris (2012), Schoeman (2012) and Görgens-Ekermans and Herbert (2013).

From Table 3 it is evident that there is a statistically significant negative relationship between base pay as a reward preference and hope, and a statistically significant negative relationship between benefits as a reward preference and optimism. Therefore, this implies that if respondents exhibit a low preference for base pay, then they will demonstrate a high level of hope and vice versa, since the relationship is inversely related. In the same way, if respondents exhibit a low preference for benefits, they will also demonstrate a high level of optimism and vice versa. Whilst these correlations were statistically significant, they were not found to be practically significant as they were below the practically significant level of 0.30 (Gravetter & Wallnau, 2013).

What can be concluded from Table 4 is that there are statistically significant correlations between satisfaction with base pay and hope, as well as satisfaction with base pay and total PsyCap. Furthermore, there is a statistically significant correlation between satisfaction with performance and career management and self-efficacy, hope, optimism and total PsyCap. Finally, the table indicates that there is a statistically significant correlation between satisfaction with work-life integration, as well as total reward satisfaction, with levels of optimism. Whilst these correlations have been found to be statistically significant, practical significance was not proven. It is important to note that all of the above correlations are positive, implying that higher satisfaction with these rewards imply higher levels of the PsyCap dimensions mentioned.

Table 7 shows the ANOVA results for the preference and satisfaction factors of the RPQ according to various demographic variables. Statistically significant relationships are represented by p-values less than 0.05.

It is evident that there are statistically significant differences between satisfaction with work-life integration both according to age and marital status, between a preference for benefits, preference for performance and career management and preference for a quality working environment according to educational level, and between satisfaction with base pay and tenure. The following sub-sections will expand on these differences.

The key research objective of this study was to establish whether a relationship exists between PsyCap and both reward preferences and reward satisfaction, specifically within the medical industry. The impact of demographic variables on these constructs was also investigated. As this research was conducted within five medical institutions within the Nelson Mandela Metropole, generalisations from these results to the broader South African population are not necessarily appropriate.

As previously highlighted, high levels of PsyCap in nursing staff will prove beneficial to the patients they treat as well as the medical institutions at which they work; for this reason, the development of PsyCap within nurses is imperative. However, since the present findings suggest that the majority of the sample have high levels of PsyCap, increasing PsyCap need not be an immediate concern for the medical institutions under study.

As the level of reward satisfaction experienced by nurses is likely to impact on the level of healthcare provided to patients, it is essential that medical institutions take the reward preferences and satisfaction of their nurses into account in order to increase their levels of PsyCap. This can be done by considering the differing reward preferences of staff when designing reward packages. For example, the authors note that the sample shows a preference for components of fixed pay (i.e. benefits and base pay); therefore it is within the relevant organisation’s best interests not to incorporate variable pay (i.e. contingency pay) into reward packages as this may result in demotivating employees. Furthermore, the study revealed that younger employees were dissatisfied with their allowance for work-life integration; the institutions in the sample could make provisions to address this by providing more flexitime or personal days. Moreover, medical institutions should take into account the particular life stage that their employees are in when designing their relevant rewards packages, as the study also reveals that married individuals have a greater preference for work-life integration than their single counterparts. As the majority of the sample has some form of tertiary education, the organisations under study should reward their employees for this accordingly. The study reveals that the higher the qualification, the greater the preference for benefits, quality working environment and performance and career management, thus suggesting that these individuals have higher expectations of the organisation and want to be challenged and developed further. The organisations under study should make provisions for this by regularly providing opportunities for training and development, keeping the working environment up to a high standard and consistently assessing how satisfied employees are with their specific benefits.

Based on the findings, it is evident that individuals with a shorter tenure (4–10 years) are more satisfied with their pay than those with 10 or more years of service. Therefore, whilst medical institutions may initially be meeting the expectations of their employees, employees with longer service might not have their pay frequently reviewed and do not receive the level of pay they had hoped for. The authors suggest that the organisations under study introduce a long service bonus every 5 or 10 years to create a stronger link in the minds of their employees between their length of service and pay. Finally, whilst public sector nurses show the greatest preference for rewards, nurses in the private sector are more satisfied with their rewards. Therefore, the authors suggest that medical institutions in the public sector make every effort to improve the working conditions of their nurses by ensuring that they are medically safe and hygienic and that their nurses have all their necessary equipment. Moreover, this sector could provide a form of ‘pay bonus’ due to the high-risk environment that the employees in the public sector may be exposed to. Overall, management in the public sector should assess employees’ training and development opportunities and work-life integration as well and attempt to align these better with the needs of employees in order to improve their levels of satisfaction.

This study serves as a guideline concerning the reward preferences of nurses employed by medical institutions within the Nelson Mandela Metropole. Importantly, it suggests that medical institutions should turn their attention to the satisfaction that their employees experience with regard to their rewards and attempt to increase these levels of satisfaction. This is due to the fact that the majority of the correlations in this study existed between reward satisfaction subscales and PsyCap subscales, thus suggesting that PsyCap factors may be influenced through employees’ levels of reward satisfaction. Bussin (2011) recommends ensuring that both internal and external equity exists in relation to rewards, which is likely to lead to satisfaction in employees with regard to their level of base pay. In so doing, high levels of PsyCap may be maintained, resulting in more productive, satisfied, committed employees with lower levels of burnout. It is also important to note that by providing employees with their respective rewards preferences, it is likely that they will be more satisfied with their rewards as they will be tailored according to their individual preferences.

The sample size of this study was deemed adequate by the authors’ statistician; however, the response rate was only 42%, which the authors deem a limitation to the study. As the authors were reliant on managers to distribute the questionnaires within the respective medical institutions, they had little control over how and when the questionnaires were distributed, as well as how the questionnaires were completed. Although written instructions were provided to respondents, in many cases they completed the RPQ incorrectly by leaving out questions, thus indicating that a misunderstanding occurred.

Welman et al. (2005) refer to socially desirable responses. This occurs when respondents answer in a way that is overly positive in order to provide answers that they believe to be socially desirable. Since the majority of respondents indicated that they have high levels of PsyCap, it is possible that the responses they provided were socially desirable, thus creating a limitation to this study. In future, this could be overcome by encouraging respondents to be as honest in their answers as possible and placing a greater emphasis on the fact that responses are anonymous and will be treated as confidential.

As previously mentioned, the sample size for this study was adequate; however, the authors recommend that in future the study be expanded to include more respondents from other provinces in more than just the line of nursing (i.e. include doctors, specialists, radiographers), so that the findings can be generalised to the broader medical field within South Africa. Furthermore, the authors recommend investigating correlations between PsyCap and satisfaction with rewards in greater detail. As this study was exploratory in nature, it cannot prove beyond all doubt that the findings are absolute. The authors recommend that future studies investigate the rewards that specifically serve to attract, retain and motivate nurses. The authors believe that interesting correlations may emerge between nurses’ levels of PsyCap and the rewards that best attract, retain and motivate them.

This study focused on the relationship between PsyCap and both reward preferences and reward satisfaction within the medical industry in the Nelson Mandela Metropole. This focus was chosen as there were, to date, no studies linking these constructs. Furthermore, there has been limited research within the South African context relating both to PsyCap and reward preferences in general.

The findings of this study are therefore of importance as they contribute to the body of empirically tested PsyCap and reward preferences knowledge within the South African context. This study was the first of its kind to be conducted in South Africa, to date, specifically within the medical field. The results hold important implications for medical institutions. This investigation has provided interesting and valuable insight into whether PsyCap influences nurses’ reward preferences and their satisfaction therewith. As some of the findings were inconclusive, more research is required to fully explore this topic.