Article Sidebar

Download
View Full Article XML S.I.S
Statistic
Read Counter : 323 Download : 172

Downloads

Download data is not yet available.

Metrics

Metrics Loading ...

Main Article Content

Abstract

 


Compensation management plays a pivotal role in shaping employee performance and driving organizational success. This study examined the impact of strategic compensation practices on employee motivation, retention, and productivity, offering insights into how compensation systems align with organizational objectives. Drawing on prominent theoretical frameworks, including Expectancy Theory, Equity Theory, and Goal-Setting Theory, the analysis delved into the mechanisms through which compensation influences employee behavior and performance outcomes. The study emphasizes the multidimensional nature of compensation, encompassing direct components such as base salary and performance-based rewards, alongside indirect elements such as benefits, workplace perks, and professional development initiatives. A robust compensation framework is shown to enhance job satisfaction, minimize turnover, and promote high performance by addressing the financial and non-financial needs of employees. Moreover, the alignment of compensation strategies with organizational goals is highlighted as a key driver of strategic flexibility, cultural reinforcement, and long-term organizational sustainability. The findings underscore the critical importance of transparency and equity in compensation practices for cultivating a motivated and engaged workforce.

Keywords

Performance compensation motivation organizational goals employee engagement

Article Details

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

How to Cite
Nana Akuffo-Aduamah, C. C. (2025). The Impact of Compensation on Employees performance in Organizations. International Journal of Multidisciplinary Studies and Innovative Research, 13(1), 57–69. https://doi.org/10.53075/Ijmsirq/098736342
Download Citation
Endnote/Zotero/Mendeley (RIS)
BibTeX
Crossref
Scopus
Google Scholar
Europe PMC

References

  1. Andrew, A. (2017). Employees’ commitment and its impact on organizational performance. Asian Journal of Economics, Business and Accounting, 5 (2), 1-13.
  2. Basit, A., & Hassan, Z. (2017). Impact of job stress on employee performance. International Journal of Accounting and Business Management, 5 (2), 13-33.
  3. Baumgartner, R. J., & Rauter, R. (2017). Strategic perspectives of corporate sustainability management to develop a sustainable organization. Journal of Cleaner Production, 140, 81-92.
  4. Brown, M., Nyberg, A. J., Weller, I., & Strizver, S. D. (2022). Pay information disclosure: Review and recommendations for research spanning the pay secrecy–pay transparency continuum. Journal of Management, 48 (6), 1661-1694.
  5. Buil, I., Martínez, E., & Matute, J. (2019). Transformational leadership and employee performance: The role of identification, engagement and proactive personality. International Journal of Hospitality Management, 77, 64-75.
  6. Carr, S. C. (2018). Goal Setting Theory in Action (Doctoral dissertation, Mercer University).
  7. Chai, D. S., Hwang, S. J., & Joo, B. K. (2017). Transformational Leadership and Organizational Commitment in Teams: The Mediating Roles of Shared Vision and Team-Goal Commitment. Performance Improvement Quarterly, 30 (2), 134-149.
  8. Chandani, A., Mehta, M., Mall, A., & Khokhar, V. (2016). Employee engagement: A review paper on factors affecting employee engagement. Indian Journal of Science and Technology, 9 (15), 1-7.
  9. Cook, D. A., & Artino Jr, A. R. (2016). Motivation to learn: an overview of contemporary theories. Medical Education, 50 (10), 997-1014.
  10. Cvenkel, N., & Cvenkel, N. (2020). Evaluation of workplace well-being research: Developing healthy, resilient and sustainable organisation—A public sector case study. Well-Being in the Workplace: Governance and Sustainability Insights to Promote Workplace Health, 345-368.
  11. Dineen, B. R., & Allen, D. G. (2016). Third party employment branding: Human capital inflows and outflows following “best places to work” certifications. Academy of Management Journal, 59 (1), 90-112.
  12. El-Ghalayini, Y. (2017). Human resource management practices and organizational performance in public sector organization. Journal of Business Studies Quarterly, 8(3), 65.
  13. Fehr, R., Fulmer, A., Awtrey, E., & Miller, J. A. (2017). The grateful workplace: A multilevel model of gratitude in organizations. Academy of Management Review, 42 (2), 361-381.
  14. Grant, A. M. (2020). An integrated model of goal‐focused coaching: an evidence‐based framework for teaching and practice. Coaching researched: A coaching psychology reader, 115-139.
  15. Gagné, M. (2018). From strategy to action: Transforming organizational goals into organizational behavior. International Journal of Management Reviews, 20, S83-S104.
  16. Greene, R. J. (2018). Rewarding performance: Guiding principles; custom strategies. Routledge.
  17. Grigsby, J., Hurst, E., & Yildirmaz, A. (2021). Aggregate nominal wage adjustments: New evidence from administrative payroll data. American Economic Review, 111 (2), 428-471.
  18. Gustafsson, K. M., & Lidskog, R. (2018). Boundary organizations and environmental governance: Performance, institutional design, and conceptual development. Climate Risk Management, 19, 1-11.
  19. Hanaysha, J. (2016). Examining the effects of employee empowerment, teamwork, and employee training on organizational commitment. Procedia-Social and Behavioral Sciences, 229, 298-306.
  20. Han, J. H., Kang, S., Oh, I. S., Kehoe, R. R., & Lepak, D. P. (2019). The goldilocks effect of strategic human resource management? Optimizing the benefits of a high-performance work system through the dual alignment of vertical and horizontal fit. Academy of Management Journal, 62 (5), 1388-1412.
  21. Ho, H., & Kuvaas, B. (2020). Human resource management systems, employee well‐being, and firm performance from the mutual gains and critical perspectives: The well‐being paradox. Human Resource Management, 59 (3), 235-253.
  22. Hoffman, M., & Stanton, C. T. (2024). People, practices, and productivity: A review of new advances in personnel economics.
  23. Hoole, C., & Hotz, G. (2016). The impact of a total reward system of work engagement. SA Journal of Industrial Psychology, 42 (1), 1-14.
  24. Hamad, A., Alshurideh, M., Alomari, K., Kurdi, B., Alzoubi, H., Hamouche, S., & Al-Hawary, S. (2022). The effect of electronic human resources management on organizational health of telecommuni-cations companies in Jordan. International Journal of Data and Network Science, 6 (2), 429-438.
  25. Ikramullah, M., Van Prooijen, J. W., Iqbal, M. Z., & Ul-Hassan, F. S. (2016). Effectiveness of performance appraisal: Developing a conceptual framework using competing values approach. Personnel Review, 45 (2), 334-352.
  26. Iqbal, S., Guohao, L., & Akhtar, S. (2017). Effects of job organizational culture, benefits, salary on job satisfaction ultimately affecting employee retention. Review of Public Administration and Management, 5 (3), 1-7.
  27. Jaiswal, A., Arun, C. J., & Varma, A. (2023). Rebooting employees: Upskilling for artificial intelligence in multinational corporations. In Artificial Intelligence and International HRM (pp. 114-143). Routledge.
  28. Jena, L. K., & Goyal, S. (2022). Emotional intelligence and employee innovation: Sequential mediating effect of person-group fit and adaptive performance. European Review of Applied Psychology, 72 (1), 100729.
  29. Kang, E. (2020). The relationship between reinforcement of employee’s customer-centric behavior and employee motivation factors. Advances in Social Sciences Research Journal, 7 (7), 338-347.
  30. Kossek, E. E., & Thompson, R. J. (2016). Workplace flexibility: Integrating employer and employee perspectives to close the research–practice implementation gap. The Oxford Handbook of Work and Family, 255, 215-239.
  31. Kumar, H. (2021). A Critical Review of Motivational Theories in Management and their Role in Modern Era. Tobacco Regulatory Science (TRS), 4569-4575.
  32. Lasrado, F., & Kassem, R. (2021). Let's get everyone involved! The effects of transformational leadership and organizational culture on organizational excellence. International Journal of Quality & Reliability Management, 1, 169-194.
  33. Lazear, E. P. (2018). Compensation and incentives in the workplace. Journal of Economic Perspectives, 32 (3), 195-214.
  34. Luukkanen, J. (2024). Designing a Compensation Scheme in Low-hierarchy Scaling Talent-driven Organizations.
  35. Mabaso, C. M., & Dlamini, B. I. (2018). Total rewards and its effects on organisational commitment in higher education institutions. SA Journal of Human Resource Management, 16 (1), 1-8.
  36. Mahapatro, B. (2021). Human resource management. New Age International (P) Ltd.
  37. Marescaux, E., De Winne, S., & Sels, L. (2019). Idiosyncratic deals from a distributive justice perspective: Examining co-workers’ voice behavior. Journal of Business Ethics, 154, 263- 281.
  38. Michael, B., PRINCE, A. F., & Chacko, A. (2016). Impact of compensation package on employee retention. Clear international Journal of Research in Commerce & Management, 7 (10), 151-169.
  39. Moşteanu, N. R. (2024). Adapting to the Unpredictable: Building Resilience for Business Continuity in an Ever-Changing Landscape. European Journal of Theoretical and Applied Sciences, 2 (1), 444-457.
  40. Murphy, K. R. (2020). Performance evaluation will not die, but it should. Human Resource Management Journal, 30 (1), 13-31.
  41. Nadim, A., & Singh, P. (2019). Leading change for success: embracing resistance. European Business Review, 31 (4), 512-523.
  42. Ngozi, D., & Edwinah, A. (2022). Employee engagement and talent retention: a review. South Asian Research Journal of Biology and Applied Biosciences, 4 (5), 188-197.
  43. Nuraini, B. (2023). Employee performance optimization: The synergy of leadership and compensation. Asadel Publisher.
  44. Oyer, P. (2020). The gig economy. IZA World of Labor.
  45. Pandita, D., & Ray, S. (2018). Talent management and employee engagement–a meta-analysis of their impact on talent retention. Industrial and Commercial Training, 50 (4), 185-199.
  46. Pattanayak, B. (2020). Human resource management. PHI Learning Pvt. Ltd..
  47. Prajogo, D. I., & Oke, A. (2016). Human capital, service innovation advantage, and business performance: The moderating roles of dynamic and competitive environments. International Journal of Operations & Production Management, 36 (9), 974- 994.
  48. Purnomo, B. R., Eliyana, A., & Pramesti, E. D. (2020). The effect of leadership style, organizational culture and job satisfaction on employee performance with organizational commitment as the intervening variable. Systematic Reviews in Pharmacy, 11 (10), 131-147.
  49. Putra, E. D., Cho, S., & Liu, J. (2017). Extrinsic and intrinsic motivation on work engagement in the hospitality industry: Test of motivation crowding theory. Tourism and Hospitality Research, 17 (2), 228-241.
  50. Quirke, B. (2017). Making the connections: Using internal communication to turn strategy into action. Routledge.
  51. Reddy, V. S. (2020). Impact of compensation on employee performance. IOSR Journal of Humanities and Social Science, 25 (9), 17-22.
  52. Saif, U., & Siddiqui, D. A. (2019). Tangible rewards or intangible rewards–which play most significant role in increasing job-hopping behavior in generation Y employees in Pakistan? Available at SSRN 3510943.
  53. Schunk, D. H. (2023). Self-regulation of self-efficacy and attributions in academic settings. In Self-regulation of learning and performance (pp. 75-99). Routledge.
  54. Shin, T. (2016). Fair pay or power play? Pay equity, managerial power, and compensation adjustments for CEOs. Journal of Management, 42 (2), 419-448.
  55. Taba, M. I. (2018). Mediating effect of work performance and organizational commitment in the relationship between reward system and employees’ work satisfaction. Journal of Management Development, 37 (1), 65-75.
  56. Varma, C. (2017). Importance of employee motivation & job satisfaction for organizational performance. International journal of social science & interdisciplinary research, 6(2).
  57. Wahab, A., Begum, I. U., Nandini, P., Sowjanya, P., Harshavardhini, P., & Nithya, P. (2024). A Study of employee satisfaction with a focus on employee incentives. International Research Journal on Advanced Engineering and Management (IRJAEM), 2 (04), 866-875.
  58. Will, J. H. (2022). Following in the footsteps of fair pay: The case for exempt" time transparency" and the mandatory Disclosure of White-Collar Work Hours. Georgetown Journal of Law & Public Policy, 20, 671.
  59. Ye, Q., Wang, D., & Guo, W. (2019). Inclusive leadership and team innovation: The role of team voice and performan