The Effect of Compensation on Employees Productivity
Abstract of The Effect of Compensation on Employees Productivity
Compensation is recompense, reward, wage or salary given by an organization to persons or a group of persons in return to a work done, services rendered, or a contribution made towards the accomplishment of organizational goals, and any organizations who fail to compensate its employee adequately may not be able to achieve.
Based on above premises, this research study was set out majorly evaluate various mechanism of compensating workers, ensuring good productivity and in a view of archiving organizational goals.
The study was carried out with the use of questionnaire research instruments, whereby hundred respondents were elicited information from with the aid of questionnaires.
The study reveal that if all forms of incentive (Fringe benefits, adequate compensation, training and better remuneration etc.) were granted to the employees from time to time, it could enhance their performance thereby engendering organizational goals and better productivity.
Key word: Compensation, productivity and employee.
Chapter One of The Effect of Compensation on Employees Productivity
INTRODUCTION
BACKGROUND OF THE STUDY
Remuneration in form of money seems most acceptable to people in an industrial society where paid jobs are common. Money can buy basic needs; it can also buy power and social status, it is a reward to work. For jobs that are generally challenging, nor very interesting, or for those that do not require much training and skill, and are not offering lifelong career, money is the only motivator. A person in a paid employment in a managerial capacity normally has some motivation that makes him spend his day at work this may be in form of offer of additional reward, prospect of promotion, or other specific incentives, that add value to his basic needs of reward and security.
Human resources management strives to achieve organizational goals and the goals of the employees through effective personnel programs policies andprocedures. Successful performances of the personnel function can greatly enhance the bottom line of any organization. the personnel practitioners however are challenged more today than at any time in the history by a changing and more demanding labour force that has high expectation about the work place. At the same time, rapidly advancing technologies and outside influences are changing the nature of our jobs. It is thus more critical and more difficult to maintain a work environment that motivates and satisfies human resources.
Edward (1976) states that personnel management is the planning, organizing, directing and controlling of the procurement, development compensation, integration, maintenance and separation of human resources to the end that individual organizational and social objectives are accomplished.
According to Wayne (1980) “compensation which includes direct cash payment, indirect payments in form of employee’s benefits and incentives to motivate employees to strive to higher levels of productivity is a critical component of the employment relationship. Compensation affected by forces as diverse as labour market factors. Collective bargaining, government legislation and top management philosophy regarding pay benefits.
Compensation is recompense, reward, wage or salary given by an organization to persons or a group of persons in return to a work done, services rendered, or a contribution made towards the accomplishment of organizational goals, and any organizations who fail to compensate its employee adequately may not be able to achieve.
Its set objective because a good compensation package is a good motivator. Hence, the primary responsibility of the Human Resources manager is to ensure that the company’s employees are well paid.
OBJECTIVES OF REWARD
i. To attract capable applicants
ii. To retain employees so that they don’t quit
iii. The employees is motivated for better performance
iv. Reward desire behaviour
v. To ensure equity
vi. To control cost
vii. Facilitate easy understanding by all i.e. employee operating manages and human resources personnel
STATEMENT OF PROBLEM
Organization is defined as a group of people working together to achieve a common goal and for the organization to be able to achieve the common or set goal, its personnel which is the most important factors of production, should be compensated or reward adequately for them to be able to do their work effectively, because it is the personnel that will plan, organize, control and coordinate all the other factors of production, and it is very important for any management that want to survive or achieve its goal to be concerned about the welfare of its employees.
Research has also shown that a well-paid / motivated employee has the tendency to bring out his or her best in the work place than an employee that is not well motivated .Abraham, (2000)
From one research noted by Cole, (2005) .It is assumed that causes of employee been motivated is different in Radisson blue hotel ltd Victoria Island Lagos
This study therefore intends to evaluate the effect of compensation on employees’ productivity.
RESEACH QUESTIONS
i. Does compensation has any impact on workers performance?
ii. Can compensation package be used to reduce the rate of labour turnover?
iii. Does reward system has any impact on shareholders dividend?
iv. Can reward policy be used to ensure desired behaviour?
v. This research work will also bridge the gaps in knowledge/curiosity for future research
AIM AND OBJECTIVES OF THE STUDY
The purpose of this study is as follows:
i. To evaluate the effect of compensation of employees productivity.
ii. To shed more light on the various ways of compensating workers
iii. To estimate the extent at which a very good compensation policy can be used to achieve organizational goal
iv. To fulfill the requirement for the award of bachelor degree in industrial and personnel management department of Lagos state university Ojo Lagos.
SIGNIFICANCE OF THE STUDY
This study will be of a great importance to the following:
i. It will serve as a guide to management in the area of how to prepare compensation package that will be fair to both the management and its employees.
ii. This research work will also be useful to policy makers, in terms of making policies that will be favourable to both employees and the employees
iii. This study will also contribute to knowledge by adding to the literature review of the research topic /
iv. This study will also explore the area of recruitment and selection that has not been reached.