Compensation & Benefits and Employee Satisfaction

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Compensation & Benefits (C&B)

“Compensation includes direct cash payments and indirect payments in form of employees benefits and incentives to motivate employees to strive for higher levels of productivity” (Cascio, 1995).

It is also the human resource management function that deals with all types of rewards and benefits  employees receive in return of  working towards achieving the Organizational Goals (Ivancevich, 1998). 

Figure 1. Compensation & Benefits

Employee Satisfaction

Employee satisfaction or job satisfaction is, quite simply, to what extend employee is content or satisfied with their nature of job. Typically, employee satisfaction survey is measured using a survey. Following factors may include in the survey but not limited to compensation, workload, perceptions of management, flexibility, teamwork, resources, etc.


Factors affecting Compensation

The factors affecting C&B can be categorized into

1          Internal Factors

2.         External Factors

Internal Factors

Ø          Corporate Strategy

Ø          Management Philosophy

Ø          Type of Job

Ø          Productivity

Ø          Internal Equity

Ø          Job Evaluation

Ø          Performance Management

External Factors

Ø          Nature of the Competition

Ø          Nature of Labour Market

Ø          Government Regulations

Ø          Unions

Ø          Market Salary Survey

Figure 2. Factors Affecting Compensation & Benefits


Conclusion:

It is imperative to have a well designed C&B Structure to attract and retain employees. With the rapidly changing environment, Organizations should understand the complex nature of Compensation and job satisfaction relationship and how to improve the compensation strategy in order to meet the needs of employees. To sustain the Competitive advantage in the Market, Companies should always be vigilant about the Market movements related C&B considering the rapid change in the Technology and other external and internal factors.

Any negative impact could affect the employee moral, motivation and eventually lead to trained and capable employees in the Organization to exit the Company.

Thus to motivate and sustain the High Performing employees it is imperative to have a flexible C&B model that could help to retain employees especially considering rapid changes in this era.


https://www.academia.edu/8064102/Compensation_Systems_and_Their_Effects_on_Employees_Satisfaction_at_Tour_Operators_in_Egypt

[Accessed 09 April 2022]

Ivancevich, J. M., (1998). Human resource management. Boston: McGraw-Hill

https://www.custominsight.com/employee-engagement-survey/what-is-employee-satisfaction.asp

[Accessed 09 April 2022]

Comments

  1. Jude Gnanapragasam 6 May 2022 at 08:14

    This comment has been removed by the author.

    ReplyDelete
  2. Jude Gnanapragasam 6 May 2022 at 08:27

    Compensation policies are to be driven by the nature of the business and its philosophy on how to compensate employees for their past services and how to provide insensitive for the future. Management must be more attentive in it to satisfy the employees. Well explained 👍

    ReplyDelete
  3. MANOJ6 May 2022 at 08:31

    you have well explain about Compensation & Benefits and Employee Satisfaction. this is very importin topic to the organization. well written ..

    ReplyDelete
  4. Pasan Nanayakkara6 May 2022 at 08:56

    As mentioned in the article, management should always be vigilant regarding the compensation and benefits done in the market and the competition. Talented individuals are hard to recruit and proper compensation and benefits should be provided to employees in order to keep them satisfied and motivated. Great article.

    ReplyDelete
  5. Mafaz6 May 2022 at 19:46

    If the employees are not satisfied high levels of absenteeism and staff turnover can affect an organization's growth and productivity. According to Herzberg's theory employee satisfaction depends on two sets of issues: “hygiene” issues and motivators. Once the hygiene issues have been addressed, he said, the motivators create satisfaction among employees.

    ReplyDelete
  6. Amjad Aboobakar6 May 2022 at 23:04

    Satisfied employees means happy customers, vice versa can be harmful to the business. Good work.

    ReplyDelete

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