Effect Of Remuneration On Employees Job Satisfaction
In today’s highly competitive environment, the goal of organizations is to recruit, retain and sufficiently stimulate employees to give high quality performance, which may actually be achieved by a well developed system of remuneration and a wide range of suitably selected employee benefits. This study aims to identify and evaluate important factors influencing the area of employee remuneration and benefits offered in organizations in the Corporate Environment. The research was carried out through a questionnaire survey that involved selected organizations in Ikorodu Local Government. The obtained primary data were processed using descriptive and chi-square statistics. The factors examined in relation to the employee remuneration and benefits include: salaries, bonuses, incentives and so on. The results confirm that the organizations that want to maintain a good position in the labour market pay attention to their personnel marketing, which is also helped by the right (suitable) system of employee remuneration and fringe benefits thanks to which they retain their employees and can increase employee satisfaction and loyalty. Employee benefits are exactly what may distinguish the organizations from their competitors in the labour market.
1.1 Background to the Study
The role of remuneration in shaping the live of an organization cannot be overemphasized. Now, remuneration management has been described as the development, implementation, maintenance, communication and evaluation of reward processes (Galanou et al cited in Aninkan, 2014).Ordinarily, the management of people at work is an integral part of the management process, put differently, managers need to understand the critical importance of people in their organizations so as to recognize that the human element and the organization are synonymous (Popoola et al cited inOdunlade, 2012)
Therefore, it is imperative to compensate an employee with benefits if he merits it. It is put that because of the importance that compensation holds for people’s lifestyle and self esteem, individuals are very concerned about what they are paid – a fair and competitive wage, while organizations are also concerned about what they pay because it motivates important decisions of employees about taking a job, leaving a job and on the job performance (Cascio cited in Odunlade, 2012).
The concept of compensation according to Bernadin ( in Odunlade, 2012) refers to all forms of financial returns and tangible benefits that employee receives as part of employment relationship. Given the whole ambits of human resource management, hardly is any issue more important, relevant, and crucial to an employee than what he receives in exchange for his labour and services to the organisation. In present days, among manager’s tasks is to create an environment which motivates people to perform satisfactorily and to be a profitable asset, so that they can foster the organisation’s growth. Job satisfaction and motivation are two inseparable brothers.
Motivation has been described as an accumulation of different processes which influence and direct ones behaviour to achieve some specific goals (Danich and Usman, 2010). It is such a dynamic in today’s environment that explicitly creates and encompasses a positive impact on job. Motivation contains those psychological processes that cause the arousal direction and persistence of voluntary actions that are goal directed (Kreiter and Kinicki cited in Aninkan, 2014). Motivation is premised on certain intrinsic, as well as extrinsic factors which in collaboration results in fully committed employees (Galanou et al cited in Aninkan, 2014).
The issue of job satisfaction has being the cause of incessant disputes with the NLC and the Federal Government. Ditto is the case with the Academic Staff Union of Universities. The issues range from autonomy, bad working conditions, failure to fulfil agreements, to inadequate remuneration. In Lagos State tertiary educational institutions, the complaints have being the unpaid salary arrears, high handedness of governing councils, late payment of monthly salaries and allowances. For employees to be effective and efficient on their job, it is imperative to be satisfied with their job. Hence, the undertaking of this study will examine the Effect of Remuneration on Employees Job Performance with a special reference to Ikorodu Local Government Area (LGA).
1.2 Statement of the Problem
Employee performance no doubt is a prerequisite for the growth of any organisation or even a nation. The absence of employee performance is a national disaster in Nigeria. No wonder the nation is not moving forward. The current agitations, gingles and adverts by NULGE as advocacy for the autonomy of local government councils is an indicator of dissatisfaction with their job. Salaries of local council employees are delayed, and that is even when it is paid at all.
The academic thrust is not spared of this crises, the ever lingering strikes by the academic and non-academic staff unions of universities and polytechnics have always been on the premises of dissatisfied working terms and poor remuneration package.
Productivity suffers a lag if compensation is poor or inappropriately used. Some of the problems associated with reward management system include the following; the negotiation and bargaining period of total reward system is difficult. This is so because, some portions of total reward were not backed up by laws/legislations but by negotiation and bargaining processes. Sometimes, the employer proves very difficult to negotiate with. While the employee wants the highest and the best package, the employer would like to minimize cost as much as possible for profit maximization. Bad and depressed economic condition in Nigeria makes it difficult to fully implement a good compensation management system.
In organised societies, firms see an average worker as the root source of quality and productivity gains. Those organisations or nations do not look at capital investments but to employees, as the fundamental source of improvement. Over there, is an increased emphasis on people as a key source of competitive advantage, often being regarded as the key differentiator between organisations, and many managers try to comprehend the complexities of motivating people at work and provide them with job satisfaction so that they can gain employee commitment.
Most employers of labour in Nigeria disregard labour laws and edicts. Sometimes, this situation leaves the dejected employee with no other condition than to accept what is offered to him, otherwise, he will face unemployment consequences. Therefore, this study seeks to determine the Effect of Remuneration on Employees Job Performance with reference to Ikorodu Local Government Area (LGA).
1.3 Objectives of the Study
The major objective of this study is to assess Effect of Remuneration on Employees Job Performance with reference to Ikorodu Local Government Area (LGA).
While other specific objectives include the following:
- To examine the effect of compensation on employee’s job performance
- To establish the relationship between compensation management and employee commitment.
- To determine the effect of reward system on industrial action in Ikorodu LGA.
- To assess employees’ job performance and the implementation of compensation management inIkorodu Local Government Area.
1.4 Research Questions:
The undertaking of this research project will beam a searchlight on the following research questions;
- Is there an impact of compensation on employee job performance?
- What is the relationship between compensation management and employee commitment?
- Is there any relationship between reward system and industrial action in Ikorodu LGA?
- Does employees’ compensation management has effect on job performance?
1.5 Research Hypotheses:
The researcher intends to test the following hypotheses at 0.05 level 0f significance:
- Ho: There is no significant relationship between incentive programme and employee job performance.
- HI: There is a significant relationship between incentive programme and employee job performance.
- Ho: There is no significant relationship between compensation management and employee commitment
- HI: There is a significant relationship between compensation management and employee commitment
- Ho: There is no significant relationship between reward system and industrial action in Ikorodu LGA.
- HI: There is a significant relationship between reward system and industrial action in Ikorodu LGA.
1.6 Significance of the Study
The main basic assumption of this study is to know the importance of employee reward and compensation to the job commitment and satisfaction of the workforce and theoretically it is to identify the various motivational incentives and summarizes the various views of managers on the impact of these incentives on employee.
Practically it will assist practicing manager in understanding the effect and impact of incentives on employee remuneration, hence enabling these elements to be incorporated into policy and objectives of the organization.
1.6 Scope of Study
The study “Effect of Reward and Compensation on Employees job commitment”, is very stressful to be dealt with, because of some militating factors. Sufficient effort will be made to cover some relevant areas.
1.7 Definition of Terms
For the purpose of this study, the following terms are defined:
Reward and Compensation:
This refers to a very vital factor that has big contribution towards enhancing job satisfaction and commitment of employees. It can be in monetary or non-monetary value.
Commitment as a partisan, to emotional attachment, to individual’s role to accomplishment of objectives and values of himself and an organization. It is the relationship between the organization (the employer) and an individual (the employee) being a bond
These are individuals paid to carry out specific duty or perform specific obligations
This is an entity comprising multiple people, such as an association
1.8 Organization of the Study
The study is divided into five chapters. Chapter one deals with the study’s introduction and gives a background to the study. Chapter two reviews related and relevant literature. The chapter three gives the research methodology while the chapter four gives the study’s analysis and interpretation of data. The study concludes with chapter five which deals on the summary, conclusion and recommendation.
Summary, Conclusion and Recommendation
It is important to reiterate that the objective of this study was to examine the effects of remuneration on employee job satisfaction.
In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in examining the effects of remuneration on employee job satisfaction.
This study was undertaken to examine the effects of remuneration on employee job satisfaction. The study opened with chapter one where the statement of the problem was clearly defined. The study objectives and research hypotheses were defined and formulated respectively. The study reviewed related and relevant literatures. The chapter two gave the conceptual framework, empirical and theoretical studies. The third chapter described the methodology employed by the researcher in collecting both the primary and the secondary data. The research method employed here is the descriptive survey method. The study analyzed and presented the data collected in tables and tested the hypotheses using the chi-square statistical tool. While the fifth chapter gives the study summary and conclusion.
5.3 Conclusions and Recommendation
The results have shown that remuneration and employee benefits play an important role in attracting and retaining employees in the organization. A fair adjustment of the entire scheme of remuneration and employee benefits plays an important role, which leads to the increased attractiveness of the organization as an employer. The theoretical contribution of the paper is the current elaboration of the remuneration issues with a particular emphasis on fringe benefits. In accordance with the aforementioned necessity of the fair and transparent offer of both financial and non financial rewards, it is important to highlight the need to link the remuneration scheme closely to the job performance evaluation of individual employees.
In conclusion a very high agreeing response on regular pay was review and variation within the organization implies that employees were well aware this and that it was actually happening. The mixed response of respondent feeling either motivated or otherwise by increase in basic could only mean that basic pay does not fully motivate. The almost equal response of those agreeing and those disagreeing to basic pay being well balanced with the work done means that there was no good relationship between work done and compensation received or not enough communication was done to help employee understand how their work contributed to pay received.
However, organizations that want to maintain a good position in the labour market should pay attention to their personnel marketing, which is also helped by the right (suitable) system of employee remuneration and fringe benefits thanks to which they retain their employees and can increase employee satisfaction and loyalty. Employee benefits are exactly what may distinguish the organizations from their competitors in the labour market.
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