The Role of Competitive Compensation towards Employee Productivity and Satisfaction

Abstract

This research aims to analyze the human resources policies and practices on providing a competitive compensation package to its employees. The issue of compensation package becomes relevant due to its effect on employee productivity and job satisfaction as a factor that causes the attitude and behavior of the employees towards work productivity. This research determine the following specific objectives: (i) identify which dimensions are with greater and lesser relevance between competitive compensation schemes and practices; (ii) identify which dimension will affect greater or lesser relevance in employee productivity and job satisfaction; and (iii) analyze the relationship between employee productivity and satisfaction and the perception of competitive compensation schemes and practices. In relation to the methodological procedures, the researcher makes use of descriptive method; the researcher gathered the necessary data using survey questionnaires. The results show that the employees are indifferent about their satisfaction with their work, but they also feel indifferent about compensation schemes and practices provided by their respective companies. The correlation of the data indicates that there is a moderate correlation between the remuneration and rewards factor and the satisfaction dimension with the salary. The practical implications of this study proves that compensation schemes are often introduced to improve incentives and productivity of employees, profit sharing based on firm profitability may allow enhancing retention of employees and reducing the incidence of unemployment, hence increasing productivity that leads to job satisfaction.