IMPACTS OF REMUNERATION ON EMPLOYEES’ JOB PERFORMANCE

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CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

Remuneration has been found over the years to be one of the policies organization use to increase workers’ performance and thereby increase the organizations productivity.  Remuneration is a catalyst that accelerates productivity. It is connected to performance where the inclination to carry out job task is determined by motivation. A clearly defined pay system is essential in improving the performance of a business by giving an incentive for the effective performance of individual employees (Eze, 2007)

Corporate world has become competitive, and so, top executive and managers use management practices and motivational philosophies to enhance the skills and productivity of the employees in order to earn more money. Thus, fair remuneration practice when used by an organization creates a feeling of satisfaction among employees to fulfill needs (Chi and Han 2008).

It is believed that remuneration strategy accounts for one of the greatest investments an organization makes. Although a fair wage is the cornerstone of the contractual and implied agreements between employees and employers, the underlying assumption is that money can directly influence behaviour. Many employees and managers believe that simply increasing what people are paid makes them more motivated, productive and loyal. The influence of remuneration strategy is an important ingredient in every organization and that employee performance is a critical issue for many businesses, because of the need to attract, motivate and retain the right talent pool for a business to succeed.

Furthermore, pay level across time communicates more to employees about their value to the firm than the information conveyed by a single change in pay which may be influenced by the above external factors It is also a reality that remuneration issues are core aspects of any organization’s personnel management function. It is an area of continual change and a minefield of complexities.

The remuneration strategy provides a welcome insight into reward systems. It presents the techniques of job evaluation and remuneration thoroughly and describes the tools for evaluating jobs, constructing a salary structure and comparing salaries giving guidance on developing a job salary structure like for instance, setting up computerized systems; ranking jobs; integration performance-related pay; creating a flexible salary structure as well as implementing a pay policy (Baron, and Armstrong, 2007).

Henceforth, Reilly and Williams, (2006) also states that the expansion of the business is mainly determined by the willingness of the owner to delegate supervision and the organization of an increasing labour force. As employees increase in number and the organization becomes more formalized, the company will have increasingly sophisticated methods of motivating employees.

Williams (1998) found that workers on incentive schemes earned more than eleven percent more than other employees, that profit sharing was not a substitute for other forms of pay, and that the use of profit sharing was associated with both higher productivity and improved performance and that goals must be accepted by the individual and participation and consultation in setting the target to be more effective in carrying out the strategy.

1.2 Statement of the Problems

Human being as an individual has unique characteristic which distinct from others. Therefore in an organization that has over one thousand workers, it means there would be different kind of characteristics. Employee remuneration as a psychology concept calls for a thorough understanding of employee’s need which enables the management to blend with the corporate need in order to have an equitable mix that enhances the realization of the overall objectives of the organization and employees.

On a closer look at most organization, the essential intrinsic factors have not been properly addressed by contemporary organization, no wonder there are high rate of incessant strike witnessed by the organizations over the year. The problem therefore is how to maintain an equitable compensation package of fulfilling the aspiration of both the employee and employers in such a way that an equilibrium social interaction is maintained.

1.3 Aim and Objectives of the Study

The aims and objectives of the study are stated as follows:

1. Examine the effect of remuneration on employees’ job performance,
2. Examine the relationship between motivational techniques and employee performance.

3. Examine the relationship between levels of job satisfaction of employee performance.
4. ssess the effect of reward system on employees’ job performance

1.4 Relevant Research Questions

1. How effective is remuneration on employees’ job performance?
2. What is the relationship between motivational techniques and employee performance?

3. What is relationship between levels of job satisfaction of employee performance?
4. What are the effects of reward system on employees’ job performance?

1.5 Relevant Research Hypotheses

1. H_o: There is no relationship between employees’ remuneration and job performance.

H₁: There is relationship between employees’ remuneration and job   performance.

1. H_o: Reward system does not have positive effect on employees’ job performance

H₁:  Reward system does have positive effect on employees’ job performance.

1.6 Significance of the Study

The significance of the study are stated below:

The study helps students to understand the relevance of remuneration on job satisfaction through various theories of motivational incentives on employees’ performance.

Practically it assists practicing manager in understanding the impact of incentives on employee remuneration, hence enabling these elements to be incorporated into policy and objectives of the organization.

The study gives an organization an in-depth insight into benefit of remuneration and it exponential effect on effective productivity.

1.7  Scope of the Study

The research work seeks to examine the Impacts of Remuneration on Employees’ Job Performance with a view to Flowline Energy Services, Lagos-Island, Lagos.

The study as perceived might face some logistic challenges in term of the time and the costs involved in carrying out the research, but nevertheless, it would strive to accomplish its aims and purpose.

1.8      Definition of Terms

Remuneration: This is the total compensation that an employee receives in exchange for the services rendered to the employer.

Employee: A person who is hired to provide services to a company on a regular basis inexchange for compensation and who does not provide these services as part of an independent business.

Performance: The accomplishment of a given task measured against preset known standards of accuracy, completeness, cost, and speed.

Impact: this is the action or process of producing effects on the actions, behavior, opinions, of another or others.

Attitude: An attitude is an expression of favor or disfavor toward a person, place, thing, or event (the attitude object).

Motivation: this is influences a person to act towards certain goals and behaviors in order to achieve what they desire.

REFERENCES

Chi, B. and Han, E. (2008),   ˜Where intrinsic job satisfaction fails to work: national moderators of intrinsic motivation’, Journal of Organizational Behaviour, 24, p.159-179.

Baron, A. & Armstrong, M. (2007).Human capital management, Achieving Added value through people. Kogan page limited.

Reilly, P. & Williams, T. (2006). Strategic HR, Building the capital to deliver. Gower publishing limited. England.

Noe, H. and Gerhart, W. (2003).     Human Resource Management, Gaining a competitive advantage. 4th edition. McGraw- Hill Higher Education

Eze, N. (2007). Sources of Motivation among Nigeria Managers Journal of Socal Psychology, 125: 341-345.

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