ABSTRACT
This research is on Compensation on Employees Performance in an
Organization. The purpose of this study is to examine the important roles
compensation plays in motivating employees to performance as well as ways of
administering the reward system in an organization. The techniques use in
collecting data in this study is both primary and secondary techniques the
primary techniques involves collection
of data through the consultation of textbooks, magazines and newspaper on the
subject matter. The simple percentage method was used for the analysis of
respondent while chi-square was used to test the hypothesis formulated. In the
case of research, it was discovered that compensation contributes to
effectiveness and efficiency of organization by motivating the workers to put
in their maximum effort when discharging their assigned duties. It was also
discovered that compensation encourages them to be more interested in their
jobs. Recommendations were made to lay more emphasis on the importance or
effects of compensation in an organization.
TABLE
OF CONTENTS
Title Page
Certification --- --- --- --- --- --- --- --- --- i
Dedication --- --- --- --- --- --- --- --- --- ii
Acknowledgements --- --- --- --- --- --- --- --- iii
Table of Contents --- --- --- --- --- --- --- --- iv
Abstract --- --- --- --- --- --- --- --- --- --- vii
CHAPTER ONE: INTROUDCTION
1.1
Background to the Study --- --- --- --- --- --- 1
1.2
Statement of the Problem --- --- --- --- --- --- 3
1.3
Research Questions --- --- --- --- --- --- --- 3
1.4
Objective of the Study --- --- --- --- --- --- --- 4
1.5
Statement of Hypotheses
--- --- --- --- --- --- 4
1.6
Scope of the Study --- --- --- --- --- --- --- 5
1.7
Significance of the Study --- --- --- --- --- --- 5
1.8
Limitation of the Study --- --- --- --- --- --- 6
1.9
Operational Definition of Terms --- --- --- --- --- 6
CHAPTER
TWO: LITERATURE REVIEW
2.1 The Nature of Compensation ---- --- --- --- --- 8
2.2 Purpose of Compensation --- --- --- ---
--- --- 8
2.3 Relationship Between Compensation and
Employee Performance 13
2.4 Compensation and Performance Model --- --- --- --- 13
2.5 Types of Compensation --- --- --- --- --- --- 14
2.6 Compensation Administration --- --- --- --- --- 18
CHAPTER THREE: RESEARCH
METHOD
3.1 Research Design --- --- --- --- --- --- --- 23
3.2 Population of the Study--- --- --- --- --- --- 23
3.3 Sample and Sampling Techniques --- --- --- --- --- 24
3.4 Instrumentation --- --- --- --- --- --- --- --- 24
3.5 Method of Data Collection --- --- --- --- --- --- 24
3.6 Method of Data Analysis --- --- --- --- --- --- 25
CHAPTER FOUR: DATA
PRESENTATION ANALYSIS AND INTERPRETATION
4.1 Data Presentation --- --- --- --- --- --- --- 27
4.2 Data Analysis --- --- --- --- --- --- --- --- 37
4.3 Test of Hypotheses --- --- --- --- --- --- --- 40
4.4 Discussion of Findings --- ---- --- --- --- --- 44
CHPATER FIVE: SUMMARY
CONCLUSION AND RECOMMENDATIONS
5.1 Summary --- --- --- --- --- --- --- --- --- 46
5.2 Conclusion --- --- --- --- --- --- --- --- 46
5.3 Recommendations --- --- --- --- --- --- --- 47
5.4 Suggested Area for Further Studies --- --- --- --- 48
References
Appendices
CHAPTER ONE
INTRODUCTION
1.1 Background
to the Study
The
business world has gradually metamorphosed into a complex sector of the
society; one of the primary objectives of any business organization is the
survival and growth in its operations. For this to be achieved, every employee
in the organization has to be compensated to motivate them to contribute their
maximum effort to the achievement of organization objectives.
The basic tool for attracting and
retaining key people of superior caliber, is to encourage workers to strive for
advancement and motivating employee to perform effectively is by adequately
compensating them for the job they do in the organization workers are very
sensitive to unfair treatment by management because they have private needs and
goals which are unique to them individually (Herbert 1980).
Therefore there is need for the
organization to employ a good policy for compensating employees in order to
meet their needs which will enable them to contribute maximally to the goals
and objectives of the organization. As a result, one of the traditional personnel
function is to determine employee compensation having known that employees
satisfaction affect the organization productivity and their tendency to stay
with the organization. Compensation of employees is planned and administered by
top management in the personnel department. Compensation means all forms of
reward in payment or otherwise which goes to employees at all organizational
levels. (Colon
1996).
Some of the types of compensation
given to employees in an organization are monetary rewards such as bonuses, salaries,
commission, paid vacation and holiday retirement, pay incentives etc. non
monetary reward are good working condition, interesting job recognition etc
each organization has a policy or pattern of reward system in compensating is
employees.
There are many reasons for compensating
or rewarding employees but the most important of the which the researchers want
to deliberate on motivating them to perform. Before employees can perform
effectively, he ahs to be given incentives, adequate reward to satisfy their
private needs that they can easily accept the burden posed on them by their
employers or those superior and also willing to contribute their quota to the
achievement of the organizations objectives.
There is a direct relationship between
compensation and employees performance in view of this, the researcher has
chosen First Bank Plc , Ring Road (King’s Square) Benin City as a case study to
examine the effect of compensation on employee’s performance in organizations.
1.2 Statement
of the Problems
Compensation plays an important role in the success of any
organization. In view of this, the researcher took interest in identifying how
compensation will motivate employees to higher performance in order to achieve
the organization’s objectives. The major
problem is emanating from the fact that some of the employee that are highly
rewarded do perform low in organizations.
In other words high compensation does not commensurate with
performance in organization. Again most workers compensations do not base on
monetary terms. These had over the time generate conflict of interest in some
organization between management and non-management staffs of organization.
Based on the above mention problems, the researcher attempt to fill the gap of
knowledge.
1.3 Research
Questions
The following research questions shall be
provided answers to:
(1) Do
workers satisfactions with their organizational reward system motivate them to
higher performed?
(2) Does
the increase in motivation of employee leads to higher output?
(3) Can
compensating employees enhance their standard of living?
1.4 Objectives of the Study
The
specific objectives of the study are;
(1)
To determine if worker satisfaction with their
organizational reward system motivate them to higher performance.
(2)
To investigate if the increase in motivation of the
employee will lead to higher output.
(3)
To examine if compensating employees will enhance
their living standard.
1.5 Statement
of Hypotheses
In order to achieve the purpose of this research, the
following hypothesis which are in their null (Ho) forms shall be tested.
(1)
Workers satisfaction with his organization reward
system will not motivate him to higher performance.
(2)
Increase in motivating of the employees will not lead
to a higher output.
(3)
Compensating employees will not enhance their standard
of living.
1.6 Scope of
the Study
The research work on the effect of compensation on employee’s
performance in an organization using the First Bank of Nigeria Plc, Benin City as a case
study.
Also this research will cover the nature, purpose of
compensation as well as the relationship between compensating factors affecting
compensation rate and its importance to the employees. Moreover, the research
will also talk about government regulation of compensation and the problems of
compensation in an organization.
1.7 Significance
of the Study
This research will be of great help to First Bank of Nigeria
Plc in its administration of compensation policy or reward system so as to
achieve its objectives.
It is also hoped that the study will be of great assistance
to personnel managers in determining a better and more use of effective ways of
motivation to enhance adequate performance.
This research will also broaden the knowledge of Business
Administration Students that will be interested in making use of its and the
findings and conclusion in this research and also will be useful to any person who wishes to carry out a research
on similar topic.
This work will also enrich and fertilize already existing
literature on the effect of compensation on employee’s performance in an
organization.
1.8 Limitation
of the Study
There were many problems to this study in the course of
carrying out this research. One of the greatest obstacles the researcher
encountered was the reluctance of officials to give relevant information that
would have been of important to this study.
Furthermore, many of the questionnaires administered only
fifty were filled and returned. In addition, the researcher had problem of time
due to the shortness of the semester and a lot of academic assignment.
Finally, the researcher also encountered the problem of
financial constraint in the course of carrying out this research.
1.9 Operational
Definition of Terms
The
following terms are used in this research for a clear understanding the
following definitions have been given.
Compensation: All forms
of reward in payment or otherwise which goes to employees at all level of the
organization and arising from the employment in a work place.
Motivation: These are
complex forces which start and keep the individual at work and also stir them
up for higher performance.
Incentive: A general
term of compensation payment.
Satisfaction: Workers or
employees contention with their job.
Salaries: These are
payment made to employee other than those who are hourly rated.
Workers: The total
workforce of employee in an organization who carryout specific function for
which they are rewarded.
Objectives: Goals which
the organizations want to achieve within a given time dimension by optimal
allocation of its human and material resources.
Management: All those
involve in social and economical process of utilizing resources and influencing
human action to get the job done.
Reward system: The pattern
or method of administration of the various techniques of workers compensation,
which is adopted in an organization.
Monetary reward: These are
reward made in cash to employees in an organization such as salaries and wages,
bonuses, commission etc.
Non-Monetary Reward: These are
rewards that are not directly made in cash to employees in an organization.
Examples of such are good working condition, interesting job, recognition,
promotion opportunity etc.
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