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

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Human Resource
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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