Employee Compensation, Motivation, Reward, Recognition, and Satisfaction: A Literature Review

This text is a literature review that focuses on employee compensation, motivation, reward, recognition, and satisfaction based on three journal articles. The articles explore the impact of compensation and job motivation on employee performance, the effects of rewards and recognition on employee performance in public educational institutions, and the determinants of career growth in the spa industry in Thailand.

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Human Resource
By (Name)
Course
Professor
University
Date

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1.0 Introduction
Compensation refers to the reward which is given to the employees for the services that
they render. The quality and the performance of a firm’s talent tool is considered to be directly
dependent on the employees’ level of satisfaction and motivation, recognition, and the manner in
which compensation planning strategies are executed. Employee compensation is often viewed
to be a recompense, salary, reward, or wage. A compensation package that is good acts as a good
motivator, making compensation to be a primary responsibility for the Human Resource
department. This research focuses on employee compensation, motivation, reward, recognition,
and satisfaction based on three journal articles that are based on the reward, recognition, and
employee performance. The research will conduct a literature review on the three articles,
providing evidence on how the research was conducted, the data findings both qualitative and
quantitative, and the critical findings that comprise of the pros and cons of the research.
2.0 2.0 Content / Criticism of research approach
2.1 The Impact of Compensation and Job Motivation on Employee Performance with Job
Satisfaction as Mediating Variable: A Study at Bali Regional Offices of Directorate General of
Taxes, 2018.
The primary objective of the research was to analyze and acquire empirical evidence that
is related to compensation as well as job motivation towards employees’ performance of the
Directorate General of Taxes, using job satisfaction as the mediating factor. The research’s
subject comprises of the employees of the Bali Regional of Directorate General of Taxes. The
Indonesian Directorate General Taxes is mandated the duty of collecting the state’s revenues
from the taxation sector (Verozika, 2018, pp.93). In the year 2007, of the total national income,

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the tax revenue amounted to 61.6%, and it increased in 2007 to 80%, reaching 1.498 trillion
rupiahs. Aimed at improving the DGT employees’ performance, the government has provided a
compensation program through a Presidential Regulation no. 37 of 2015. The primary objective
is to motivate the tax officials to achieve the organizational objectives.
The research is an explanatory one and the research strategy used is a survey which is
associated with the deductive strategy, with the number of respondents totaling to 190
individuals. The target population for the study was the employees of the Bali Regional Office of
Directorate General of Taxes. Surveys were conducted using questionnaires as the primary data
collection method. Qualitative research methods were used, with the variables being
performance, job motivation, job satisfaction, as well as employee performance (Adeoye and
Fields, 2014, pp.346). The sampling technique used for the research is the Simple Random
Sample. The questionnaires were distributed to all the 190 respondents of the Bali Regional
Office of Directorate General of Taxes. In examining the relationship that exists between the
three mentioned variables, the inferential analysis in the form of Path Analysis and Regression
analysis were used for analysis.
The purpose of a qualitative research is to develop an understanding of the underlying
motivations, reasons, as well as opinions. A simple random sampling technique was used to
select a sample from a larger population. In this case, the selection of individuals is entirely by
chance, and all the members have got an equal chance of being included in the sample. A
qualitative research as used in this research makes it possible to come up with a hypothesis that
can be used for quantitative research. The deductive strategy used in this research involves
constructing a hypothesis that is based on an existing theory. Questionnaires are used to collect
data in this case because they are cheap and they contain standardized answers that make the

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compilation of data to be simple. The research strategy developed is then used to test the theory.
The approach is advantageous because it makes it possible to explain the causal relationships that
exist between variables, makes it possible to quantitatively measure concepts, and it is possible
to generalize the findings of a research to a certain extent.
The findings of the research identified that compensation had a positive significant effect
on job satisfaction. The author notes that the findings are supported by the research conducted by
Adeoye and Fields (2014) which revealed that there existed a positive relation between
compensation and job satisfaction. Further, the research revealed that a positive relationship
exists between compensation and employee performance which proves to be in line with
research conducted by Qureshi and Sajjad (2015) which expresses that employee performance
and compensation are positively correlated. Testing the relationship between job satisfaction and
job motivation, the research identifies that motivation positively affects job satisfaction.
Conclusively, the higher or lower the compensation levels will have an effect on job satisfaction
(Afshar and Doosti, 2016, pp.100). The research concluded that a significant effect on
performance existed as a result of the compensation for the Bali regional office. This indicates
that if better compensation is given to the employees, it will be directly proportional to the
increased performance among the staff. Generally, improved job satisfaction and compensation
of the Bali regional office of DGT employees would enhance their performance.
The study is of benefit since it quantitatively provides evidence that compensation is
directly linked to job satisfaction, performance, and motivation. Understanding this relationship
is very helpful to the management in ensuring that compensation is among the key priorities of
the Human Resource department if the organization is to achieve its intended goals (Andries and
Czarnitzki, 2014, pp.26). However, the study does not adequately provide quantitative evidence

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to indicate what the likely situation is if the employees are not compensated adequately which
would translate to reduced performance. Offering quantitative evidence would have been more
appealing to the management of various companies to understand what would transpire if they
did not put in place proper compensation (Uzonna, 2013, pp.207). This is because the
management would be in a position to weigh both sides of the situation and come to the
conclusion that compensation would be among the primary means of improving performance.
2.2 The Effects of Rewards and Recognition on Employee Performance in Public
Educational Institutions: A Case of Kenyatta University, Kenya, 2017.
The primary objective of this research was to establish the impacts of recognition and
reward on the job performance of the employees in Kenyatta University. Also, the relationship
that exists between other factors that have a significant effect on performance such as the
leadership styles and the working environment were also explored in the study (Bedarkar and
Pandita, 2014, pp.107). These factors alongside performance were investigated with the
assistance of responses obtained from the staffs working at the Kenyatta University. In the past
few decades, employee reward, as well as the recognition schemes within the public sector, has
received a lot of attention and their utilization remains questionable since most of them have not
successfully implemented (Ndungu, 2017). The study notes that paying for performance system
is advantageous in attracting high-quality staffs and motivating the staffs to exert extra efforts on
their job.
During the data collection stage, the stage made use of the descriptive research design
from Kenyatta University’s both teaching and the non-teaching staff. The research strategy for
the study was a cross-sectional survey design through the use of quantitative methods. The target

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population constituted of all the population in Kenyatta University and questionnaires were
distributed to 360 employees. Of the total 360 questionnaires, 332 of them were used for
analyzes (Bari, Arif and Shoaib, 2013, pp.2556). The categories of the employees from which
the sample was selected comprised the administrators, chairpersons of departments, lecturers,
messengers, drivers, cashiers, clerks, and others (Hau, et al., 2013, pp.361). The research
employed a stratified sampling technique since it enhances the statistical efficiency of a sample,
avails adequate data for analysis, and it facilitates the use of different research procedures and
methods for different data. SPSS 20.0 was used for analyzes, while inferential statistics and
multiple regressions were used to represent the data.
In a descriptive research design, the behavior of the subject is observed and described
without interfering with it in any way. This design is advantageous because the subjects are
observed in an unchanged and natural environment, the methods of data collection allow for the
qualitative and quantitative data collection, and it can be used in studying the attitudes, habits,
beliefs, or the behaviors of the target audience. A cross-sectional survey design was used in the
research and it involves looking at individuals who are dissimilar in particular key characteristics
such as the difference in income levels or age. Data collection was done using questionnaires
since they have standardized answers that make it easy for data analysis. Additionally, the study
carried out at Kenyatta University used a stratified sampling technique. In this technique, the
target population is divided into groups called strata and a probability sample is drawn from each
stratum. The technique is advantageous because it facilitates the reduction of the sample size to
attain a particular precision. Representing data using multiple regression entails predicting a
variable’s value based on two or more other variables. The model facilitates the researcher to

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determine the model’s variance explained and each predictor’s contribution to the overall
variance explained.
The results from the study show that Kenyatta University staff are less motivated in terms
of financial as well as the recognition rewards. These variables translate to a reduced extent of
improving employee job performance. This indicates that if Kenyatta University management
would concentrate more on reward and recognition, the resultant would have been an enhanced
positive effect on the employees, and there would have been a resultant enhanced level of job
performance (Bradler, et al., 2016, pp.3087). The research findings indicate that the lowest mean
values were those of financial and recognition awards, indicating that there is less motivation
among the staff with respect to financial rewards. Also, in the case where the working
environment is conducive, the employees are paid for the services rendered, and their jobs are
not threatened, the employees’ motivation tends to remain high. Nonetheless, it is observed that
only a few staff had worked for the institution for a long period. This conveys the information
that there is a high level of employee attrition at Kenyatta University.
This research is beneficial not only to the educational institutions but also to the business
world if the management is to ensure the attainment of goals through improved employee
performance. The outcomes from this study can be used by the management to check their
current reward and the recognition programs (Dar, et al., 2014, pp.231). This would effective
particularly if the management’s focus would address all the employees’ needs who have
different job statuses. By ensuring that the motivation and reward system was effective, it would
translate to improved employee performance thus the attainment of organizational goals and
objectives. However, some of the findings of this research may only be specific to Kenyatta
University and thus cannot be generalized to other educational institutions or organizations.

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2.3 The Determinants of Career Growth: The Case Study of Spa Businesses.
The spa industry is among the most essential hospitality industries in Thailand. The Thai
spa treatment is considered to be the main activity for the tourists who intend to experience
Thailand’s uniqueness. The success of this spa business is dependent on the employees’ quality
and performance. In the current competitive business environment in the hospitality industry, the
employees are the foundation of the spa business (Ellinger, et al., 2013, pp.1126). Among the
employees, their goals are to grow their career path, aimed at improving their financial
remuneration as well as the job challenges. If the employees are made to feel that the career
development policy is capable of fulfilling their expectations, they get more dedicated to perform
tasks and deliver high-quality work. Within the hotel industry, the performance of the frontline
officers including the quality of the services offered depends on the level of satisfaction of the
employees (Yoopetch, n.d.). The employee performance is used to express the success of an
organization. In the service industry, the perception of service quality is impacted directly by
employee performance. This indicates that enhancing the performance level of the employees
can translate to improved levels of service quality which is perceived by the clients. As such, the
employees’ attitudes and behaviors are crucial determinants of the quality of service offered.
The target population that was used for this study were the staff from the senior
management levels from the spa service providers located in Thailand. Since Thailand is viewed
as being among the most competitive in the types of spa services it offers, it makes it suitable for
the study. The research strategy used in the study was a survey with the use of self-administered
questionnaires which were distributed to the spa firms in Bankok (Funmilola, Sola and Olusola,
2013, pp.516). Due to the fact that the survey was used as the research strategy, it is worth noting
that the study was descriptive in nature. The distribution of the questionnaires mainly targeted

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the spa service providers. A sample population of 350 respondents was used for the study.
Aimed at finding the relationship with all the constraints, the researchers used the structural
equation modeling as the most appropriate method in testing the hypothesis. The results obtained
comprised of validity tests, demographic characteristics, as well as model testing.
In studying the determinants of career growth, the researcher made use of surveys as the
research strategy. A survey research strategy is used to study the sampling of individual units
from a particular target population and it makes use of survey associated data collection methods
such as constructing questionnaires. These methods aim at reducing the accuracy as well as the
number of responses. Self-administered questionnaires were used for the study and they are
designed specifically to be completed without any kind of direct intervention by the researcher.
Such data collection method reduces the cost of administering surveys and the respondents have
got plenty of time to complete the survey. The hypothesis was tested using structural equation
modeling which is a multivariate statistical analysis method that is applied when analyzing the
structural relationships of the measured and the latent variables.
According to the findings, career growth was directly affected by employee performance
and job satisfaction. When the employees believe that they have a chance of growing their career
in an organization, they get motivated and this translates to performance and productivity (Kehoe
and Wright, 2013, pp.371). On the same note, the higher the quality of performance delivered by
the employee would result in promotion and reward. The level of job satisfaction among the
employees affects how they react and feel about their job. When the level of job satisfaction is
high, the employees look for means to develop themselves.

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This study is very useful not only to the spa providing services but also to all other
companies because it quantitatively provides a detailed investigation of the factors that have a
direct effect of career growth among employees (Malik, Butt and Choi, 2015, pp.63). The study
can be applicable if only companies use the study’s result to provide a clear policy for their staff
to create an understanding of career growth opportunities. This would make them feel that they
have a potential long-term employment with the company and their jobs are secure.
Conclusion
Reviewing the three articles, it is evident that the level of compensation and job
motivation on employee performance is dependent on the level of employee satisfaction. For
instance, research carried out at the Bali regional office concluded that a significant effect on
performance existed as a result of the compensation of the employees. Additionally, the study of
the spa business indicates that career growth was directly affected by employee performance and
job satisfaction. Nonetheless, the study conducted at Kenyatta University reveals that the
Kenyatta University staff are less motivated in terms of financial as well as the recognition
rewards. These indicate that if a better compensation, recognition, and rewards system are put in
place and the employee satisfaction levels are improved, it will translate to increased
performance among the staff.

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