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The Impacts of compensation and Reward systems on Employees

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Mubarak Maishanu

on 6 February 2016

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Transcript of The Impacts of compensation and Reward systems on Employees

The Impacts of compensation and Reward systems on Employees Performance

The huge success of an organization and its ability to survive competitive pressure from its competitors in a globalized Economy depends on the compensation systems and the rewards they give to their employees. Compensation and reward systems have the ability to influence the performance of employees. The current study focuses on impacts of compensation and rewards systems on employee’s performance with evidence from Egypt. The study used questionnaire approach to gather information from the employees of various industries and firms. In all 50 questionnaires were designed but only 32 were distributed and shared among various employees and were analyzed using spss. This study found that the compensation and reward systems do impacts on employee’s performance because (53.1%) agreed that Compensation systems practices are positively and significantly associated with the performance of employees and this lead general performance of the firm
The outcome of the study also reveals that compensation systems have influence on employees performance and these impacts on the general performance and its do motivates employees to perform effectively
Employees performance
Reward Table
Compensation table
Demographic questions

Based on the above tables compensation and reward systems have a great impacts on employees because (41.9%) of employees are satisfied with the compensation benefits and plans being provided to them and these influenced and motivate their behavior because (40.6%) of the employees said compensation systems influenced and motivate satisfaction level of employees. Compensation objectives should be devised in such a format that it must have all the elements and aspects of the job itself and (43.8%) agree with these aspect. The employee’s reward (40.6%) of the respondents agrees that to improve performance of employees non-financial rewards should be given to employees. Expectations are not met out of your job because (61.3%) dis agree with it Compensation systems should not only focus on employees performance but rather to influence them and motivates them in a way that will be productive and profitable to all the parties involved, the use of non financial compensation should also be encouraged as such benefits impacts on employees and make them more secured and motivates them because part of these compensation include insurance health and medical which gives employees a sense of satisfaction being able to cover their medical bills, Reward and recognition are being mostly for the job performed and extra work while some consider team work and fairness. Linking reward with make an impact because (40.6%) of the employees says it motivates them and make them to work more and more.

The results show that majority of employees have a perception that cash bonuses motivate performance. Cash bonuses were perceived to have a great influence in motivating employees to achieve their targets as well as in motivating them to be more productive in their work; however it only has significant influence when it comes to Motivating employee performance

The impacts of compensation and reward systems on employees performance should be designed in many ways that will cover financial and non financial rewards because Results showed that employees claimed financial compensation; non financial compensation received has been good, quite good and very good encourage employees’ performances.
compensation systems should be designed to meet up employees’ expectation because if these are being met it plays a significant role towards employees because if their expectations are being met it will motivate and encourage them to work a lot and achieve more on different aspects.

The use of base pay should be encouraged because the cash compensation employer pays for the work performed and merit pay should also be encouraged because recognizing employees efforts gives them good sense of belonging and given them pay will make them to work in a better way to get more merit pay.

In general rewards do motivate employees so all reward systems should be in a way that will make employees to work more and get better rewards which helps in achieving organizational goals and objectives.

Rewards have been known to have great and positive effects on the performance of employees. However no reward system is very perfect as all have one or two issues this is because motivation is personal and what actually motivates one employee could be different from what will motivate the other or next set of employees. So therefore the firms or organization should get to know their employees well so that they design and implements the things that motivate their employees the most and use the right motivational strategies to achieve that.

The organization should hence change the intrinsic nature and content of jobs by enriching them So as to enhance employees’ sovereignty, opportunities for them to have additional responsibilities, gain recognition and develop their skills so that employees can achieve peak performance.

The table above table shows how employees feel about their compensation systems. (41.9%) of employees feel satisfied with compensation benefits and plans provided to them while (32.3%) are neutral about it they are not satisfied neither do they complain about it (12.9%) are not satisfied with it and (54.8%) of employees indicate that there is not internal alignment in firms or working place while (45.2%) of the employees indicated there’s internal alignment in their working place. Compensation system have the ability to influence and motivate satisfaction level of employees because based on the data gathered (40.6%) agreed that it influenced them while (28.1%) are neutral about it and (3.1%) dis agree. Organization do give cost of living adjustments to employee as being reported that (53.1%) of the employees indicated that there organizations give them the cost of living adjustments while (46.9%) dis agree that they don’t receive or get any cost of living adjustments.
The above table shows the question that are related to employee performance in compensation and most of the respondents of the questionnaire 21 employees representing (65.6%) said there is formal evaluation of performance practice in there various organization while (34.4%) representing 11 employees said there is no formal evaluation of performance. (53.1%) of the respondents prepare long incentives that are intended to focus employees efforts on multilayer results while (46.9) don’t prepare such long incentives. Based on the survey (40.6%) of the respondents agree that to improve the performance of employees were not only through financial compensation alone but also through non financial compensation also. (61.3%) of the employees expectation are not being met out of the job in the company while only (38.7%) said yes there expectations are being met out of the company. The efficiency objective help recognizes the level of performance performed by the employees are (43.8%) of the respondents are being neutral about only (34.4%) representing 11 respondents agree with it
The above table shows the elements and how the reward being given to employees plays a significant impact to the performance. The reward and recognition are being mostly for the job performed (66.7%) of respondents said so while (13.3%) of the employees said extra work and (6.7%) said team work and (13.3%) fairness. Employees agrees that linking reward motivate them as from the date being gathered (53.1%) strongly agree and (28.1%) also agree but 18.8% are being neural about it. (40.6%) of the employees responded that they perceive the amount of their salaries determines their status in the company while (12.5%0 dis agree with that. Extrinsic rewards are being considered to make great impacts on employees because (57.1%) said it impacts on them while (42.9%) said intrinsic rewards and the form of pay that most organization use is the base pay which represent (67.7%) and the merit pay percentage is (32.3%)
Demographic question are designed to know little about the respondent age and basic income and their basic gender. So out of 32 employees who filled the questionnaires (16.7%) of them are 32yrs while another (16.7%) are 29years and (13.3%) are 23years while the rest of various ages and 2 of the respondents did not write of their age. The managerial levels of the 32 employees are (43.3%) representing first level, (36.7%) are in second level while (20%) are third level workers. Their monthly income varies differently as (26.7%) earned less 1000LE, (66.7%) are earning between 1000LE-5000LE and the (6.7%) are earning 5000LE, (78.1%) of those who filled the questionnaires are Male while (21.9%) are Female. their occupations varies differently (34.4%) of them are sales representatives at different stores while (28.1%) are managers of clothing stores and café’s managers in various places (15.6%) are teaching assistants in a university while (6.3%) are technician
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