A Study On Rewards and Compensation of Employee With Special Reference
A Study On Rewards and Compensation of Employee With Special Reference
A Study On Rewards and Compensation of Employee With Special Reference
SPECIAL REFERENCE
Fat pay package, quicker promotions and incentives are not enough anymore.
Employers need to listen what employees want. A reward or incentive can be
anything that attracts a worker‘s attention and stimulates him to work. In the words
of Bureckm and Smith reward systems is a plan or programme to motivate individual
or group performance. An incentive programme is most frequently built on monetary
rewards, but also includes a variety of non-monetary rewards or prizes. On the other
hand French says the incentive system has a limited meaning that excludes many
kinds of inducements offered to people to perform work, or to work up to or beyond
acceptable stands. It is related with wage payment plans which tie wages directly or
indirectly to standard productivity or to the profitability of the organization or both
criteria. The use of incentives assumes that people‘s actions are related to their skills
and abilities to achieve important longer run goals. Even though many organization
by choice or by tradition or contract. In fact rewards on non performance criteria,
rewards should be regarded as a pay off the performance. Jack Zigon defines rewards
as something that increase frequency of an employee action‖. This definition points
to an obvious desired outcome of rewards and promotion: to improve performance.
2. The timing, accuracy and frequency of incentives are the very basis of a successful
incentive plan.
Determinants of Rewards
These features are contingencies, which affect the suitability and design of rewards
to varying degrees. The effective use of rewards depends on 3 variables.
Information technology (IT) industry in India has played a key role in putting India
on the global map. IT industry in India has been one of the most significant growth
contributors for the Indian economy. The industry has played a significant role in
transforming India’s image from a slow moving bureaucratic economy to a land of
innovative entrepreneurs and a global player in providing world class technology
solutions and business services. The industry has helped India transform from a rural
and agriculture-based economy to a knowledge based economy. Information
Technology has made possible information access at gigabit speeds. It has made
tremendous impact on the lives of millions of people who are poor, marginalized
and living in rural and far flung topographies. Internet has made revolutionary
changes with possibilities of e-government measures like e-health, e-education, e-
agriculture, etc. Today, whether its filing Income Tax returns or applying for
passports online or railway e-ticketing, it just need few clicks of the mouse. India’s
IT potential is on a steady march towards global competitiveness, improving defense
capabilities and meeting up energy and environmental challenges amongst others.
IT-ITeS sector in India, with the main focus on increasing technology adoption, and
developing new delivery platforms, has aggregated revenues of USD 88.1 billion in
FY2011, while generating direct employment for over 2.5 million people. Out of
88.1 billion, export revenues (including Hardware) has reached USD 59.4 billion in
FY2011 while domestic revenues (including Hardware) of about USD 28.8 billion.
LITERATURE REVIEW
The general objective of the study was to determine the effect of compensation on employee’s
motivation at organization
Primary:
To study various factors relating to Rewards and promotion in State bank of India.
Secondary:
This research project examined the impact of compensation schemes by examining previous studies
and literature on the issue and by conducting a study on employees. The research data was collected from
37 respondents out of 41 requests. Some of the limitations experienced included distance related in reaching
some of the intended respondents and availability of personal time to fill the questionnaire. To mitigate the
effects of these limitations, the researcher used emails to reach far respondents and individually telephoned
the respondents to explain the purpose of the study and give assurance that confidentiality would be upheld.
Through this the researcher got a response of 90%.
Limitations of study:-
Sample size: the present study is carried out for academic purpose, so sample size is
restricted.
2. Rewards and promotion are complex problem and researcher has attempted to
study most appropriate factors but chances cannot be ruled out that some areas may
have been untouched or not adequately touched.
METHODOLOGY
4.2 Sample:
QUESTIONNAIRE
The study used primary data and the main data collection technique used was structured
questionnaires. The questionnaire consisted of five questions seeking general information about
the respondent, these included the age, the gender, the level of education, category of employment,
the number of years they have worked at Chloride Exide and finally the general feeling of staff
motivation in the organization. The questionnaires were collected and sorted to eliminate those
with errors and the incomplete ones. Data was then analyzed using descriptive statistics like
percentages and frequencies. Descriptive statistics are methods used for describing the basic
features of the data in a study. The tools used for the analysis were first by use of Microsoft excel
and further by use of computer assisted programmer called Statistical Package for Social Sciences
(SPSS).
INTERPRETATION
The population of this study consisted of all employees of organization who are on permanent or
contract basis. For the study we refer to permanent employees as those whose letter of appointment
does not specify the duration of employment while contract employees as those whose letters
specifies the beginning and the expected last day of employment.
Population size
FINDINGS
This chapter presents the results and findings of the study based on the three research questions.
Part one gives the general information of the respondents. Part two covers findings on research
objective one which was to establish the methods used to determine compensations at organization.
Part three focuses on the second research objective which was to establish the extent to which direct
financial rewards affect employee’s motivations. Part four addresses the findings of the third
research objective which was to establish the extent to which benefits affect the employee’s
motivation at organization. A summary of the chapter is also given. Out of the targeted forty one
respondents, thirty seven responded to the questionnaire, this represented a 90% response rate.
This part had five questions touching on Gender, Age, Education level, Employment duration and
the general feeling on motivation in the organization.
Gender of Respondents
The findings showed that 8 of the respondents were female and 29 were male. This shows a 22%
and 78% representation of female and male respectively.
Gender Distribution
Gender Distribution
Frequency Percentage
Female 8 22%
Male 29 78%
Total 37 100%
The employees were asked if employee’s compensation constituted a significant portion of the
organization cost. The findings showed that 11% of the respondents strongly agreed that employee
compensation is of significant importance, 62% agreed, 24% were not sure, 3% disagreed and
none strongly disagreed as illustrated in Table.
Level Distribution
Frequency Percentage
Total 37 100%
Motivation of the questionnaire had five items which sought to establish the extent to which
benefits affect employee motivation at industries. Question one required the respondents to give
their opinions on whether they receive the listed benefits. On questions two to five the respondents
were required to give their opinions on a 1 to 5 scale, 1 being strongly Agree and 5 being strongly
disagree.
When asked if they were entitled to a list of sampled benefits namely, medical, pension, paid leave,
insurance, car loans, free meals, child care and severance. The findings showed that on medical
benefits all the 37 respondents agreed so, on pension only 31 affirmed, Paid leave 33, insurance
32, car loan 16, Meals 35, Child care 14, and severance pay had 23 affirmations.
Importance of Benefits to Employees
The respondents were asked if benefits were of importance to them. Table 4.27 shows the findings.
A 16% of the respondents strongly agreed so and 46% agreed. Eight percent were not sure, 30%
disagreed and 0% strongly disagreed.
Contribution of Benefits to Staff Motivation
The respondents were asked whether they felt motivated by the benefits they received, 19% of the
respondents strongly agreed that they were motivated by the benefits they received, 62% agreed,
5% were not sure, 14% disagreed and none strongly disagreed as illustrated in Table
The respondents were asked if they were motivated by the system of recognition when they have
exceptionally performed. The findings are as presented in Table 4.31. A 22% of the respondents
strongly agreed that they were motivated, 49% agreed, 8% were not sure, 16% disagreed and 5%
strongly disagreed.
Correlations between Employees Benefits and Employees Motivation
A Pearson’s correlation test between employee’s benefits and employee’s motivation showed
different levels correlations on the areas tested. The results show that there were no significant
correlations between employee benefits and their motivation.
RECOMMENDATIONS
The Methods of Determining Employee’s Compensation From the findings and the conclusions
made, there seems that proper methods of determining employee’s compensation in the
organization are lacking, and especially in evaluation against what the different authors advocate
for. It is with this knowledge that the researcher recommend that the Human Resources Manager
should develop systems that will ensure that there is a proper compensation plan entailing
proper job evaluation processes and pay structures in the organization. Any changes in the plan,
like salaries or process should be supported by right fundamentals like salary survey and facts on
the ground. Employees should be encouraged to take up-skills enhancement programmes and
lastly proper communication and clarification channels to be set where information is
disseminated regularly to all or is easily and readily available to all employees.
Direct Financial Payments and Employee’s Motivation In the light of the findings, of high
awareness of existence of basic and other additional payment, only a small population was
motivated with their basic pay and the overwhelming positive response on motivation improving
as a result of change in basic pay. The researcher recommended that a proper salary survey and
job evaluation vis-a-vis total rewards received to be commissioned in a bid to ensure there is
internal and external equity in the organization and that motivation is driven by the right
fundamentals. On the contingent pay, although the study did not go deep into finding out the
various forms of contingent pay in the organization, the general feeling of motivation was high.
The researcher also recommends that a further study be done even by department to determine
the specifics and take necessary actions. In the area of team work, team rewards and whole
organization reward it is recommended that further study be done to enhance it.
Conclusion
The purpose of the study was to determine the effect of employee compensation on employee
motivation at organization. Based on the findings of the study, the following conclusions were
drawn on the three key and specific objectives of the study.
The fact that a good number of the respondents were not sure of the compensation plan in place
and minimum government requirements and that they disagreed that the plan achieved internal and
external equity could only mean that, the plan was either not communicated to them adequately or
it was not strongly upheld. On job well definition there was a good response of agreeing which
implies that this was well communicated to employees and employees understood what was
expected of them. Compensation for use of skills received nearly two thirds agreeing response
while a third disagreed, this could mean that the organization uses a mixture of skills and job based
pay or it could mean that some individuals are not placed in the jobs that match their skills. A two
thirds majority confirmation that compensation decision were made centrally indicates majority of
decisions were made centrally. The fact that many respondents were not sure or disagreed about
salary survey being conducted to determine salaries could mean that the system was not used and
so they were not familiar with it.
The strong response on the entitlement of benefits shows that employees were quite aware of the
benefits. It also meant communication about the benefits was better. Although there was a high
response on the value that the respondents put on the benefits, a good percentage of them felt
otherwise, this could mean that the benefits were not sold well to them or the combination of the
various benefits did not work for them. On there being a system of recognition and such a system
recognizing the respondents the high response again points out that to a high awareness on the
employee’s side and a better communication in the organization.