Impact of Compensation on Employee Motivation and Performance in Semi-Governmental Organizations in Abu Dhabi, UAE

This research paper analyses the impact of different components of compensation on employee motivation and level of performance in semi-governmental organizations in Abu Dhabi, UAE. It highlights the interrelationship between compensation and employee motivation that leads to better productivity. The research aims to analyse the features of compensation that mostly motivates the employees and discover the compensation needs of the employees that are not addressed properly by the organizations.

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Management
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Author’s Note

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Table of Contents
1. Project title:............................................................................................................................3
2. Overview and significance of the proposed study.................................................................3
3. Aim and Objectives................................................................................................................3
3.2 Research Objectives.........................................................................................................4
4. Relevant literature..................................................................................................................4
4.1 Retention...........................................................................................................................4
4.2 Job Satisfaction.................................................................................................................5
4.3 Productivity......................................................................................................................6
4.4 Motivation........................................................................................................................6
4.5 Grants and Incentives for employees in UAE..................................................................7
4.6 Transparency in providing compensation........................................................................7
5. Research Design.....................................................................................................................8
6. Methodology..........................................................................................................................9
6.1 Research Philosophy........................................................................................................9
6.2 Research Approach...........................................................................................................9
6.3 Data Collection Methods..................................................................................................9
6.4 Data Sampling................................................................................................................10
6.5 Data Analysis..................................................................................................................10
6.6 Research Limitations......................................................................................................11
7. Ethical issues........................................................................................................................11

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8. Assumed Outcomes..............................................................................................................11
9. Implications..........................................................................................................................11
10. Expected Timescale...........................................................................................................12
Reference List..........................................................................................................................14

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1. Project title:
An analytical study on the impact of different components of compensation on employee
motivation and level of performance: A case study on the semi-government
organizations in Abudhabi, UAE
2. Overview and significance of the proposed study
This research paper makes a trace of various historical conceptualisations regarding
compensation and employee motivation at the workplaces. The findings highlighted in the
research paper will highlight the strong interrelationship between compensation as well as
string employee motivation that leads to better and advanced .productivity of the companies.
The research is made in the light of the modern semi-governmental organisations in Abu
Dhabi. About 70% of the semi-governmental organisations in Abu Dhabi make use of the
compensation packages for enhancing job satisfaction as well job motivation of the
employees. In fact, it has been assessed that in many of the semi-governmental organisations,
the non-monetary awards are more motivating compared to the salaries that they receive. As
analysed in this research paper, the main components of compensation that affects the
motivation level of the employees are salaries, wages, health care facilities, retirement plans,
insurance facilities, working conditions and so on. However, the implementation of these
perks are not even in many of the organisations and that is why employee motivation level is
not static in all the organisations. This research analyses what reforms are needed to be set
forth for getting the fruitful results by means of the compensation packages.
3. Aim and Objectives
The aims and objectives of the research are as follows:
3.1 Research Aims

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The aim of the research is to analyse the impacts of the various factors of
compensation in employee motivation and how that affect the organisational performance
in turn.
3.2 Research Objectives
 To analyse the features of compensation that mostly motivates the employee of
the companies of Abu Dhabi.
 To discover the compensation needs of the employees that are not addressed
properly by the organisations
 To analyse the organisational factors that are responsible for the allocation of
the various aspects of compensation
4. Relevant literature
4.1 Retention
Since the job market of UAE is tight, the employers need to be proactive in
implementation of their efforts to retain the talented and most resourceful employees. As
Aslam et al. (2015), states, compensation has a direct impact on retention, and this is mostly
emphasised because all the major employers are bent at engaging the best performers. As
informed by Hassan (2016)), nearly most of the semi-governmental organisations in UAE has
experienced an increment in the rate of attrition in the latest time. However, as Yan and Sloan
(2016), supposes, this situation has been aggravated owing to the fact that about 70% of the
employees who are rated with a high retention risk score perceive that they should leave their
current organisational position in order to hunt for better scope for advancement in their
careers.
As analysed by Larkin and Pierce (2016), the recent annual raises in the pay scale has not
been able to keep pace with the rate of inflation and this in turn has accounted for a pay

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decrease for many of the potential employees. However, the junior employees who have
entered the organisational circuit are under an impression that the rate of hike in pay scale
and other similar facilities are much higher in the governmental and semi-governmental
organisations. However, Ambrosius (2018), locates that the rate of increment in the semi-
governmental organisations, nowadays are not able to keep at par with the corporate private
organisations. Therefore switching of the jobs is the only option left for the employees in
order to get a better hike in their salary. As such, Faisal Ahammad et al. (2015), defines that
the employers need to increase the rate of their basic pay as an elementary strategy for
retaining the potential employees.
4.2 Job Satisfaction
Compensating factors also contributes greatly to moderating the rate of job
satisfaction. The report published by the society for the Human Resource Management
reverts that among the surveyed employees in the year 2016 in Abu Dhabi, 96% confirmed
that good level of compensation is urgent for the overall happiness in their job.
The rate of engagement of employees in the governmental and semi-governmental
organisations is questionably low, according to Haider et al. (2015). Whereas, it is observed
by Salisu, Chinyio and Suresh (2015), that the corporate level organisations are handled with
better organisational involvement and engagement strategies like surveying as well as
feedback gathering, for the purpose of assessment of their workplace motivation and overall
job satisfaction. In this context, Clor-Proell Kaplan and Proell (2015) has observed that a
decrement in rate of employee happiness while working in a company can lead to other
detrimental factors like decreased productivity, attrition as well as absenteeism. In case, if the
organisations feel that the increment of the salary under the current scope is not possible, they
should look up for alternative ways of compensating the employees for their work. In the

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same context, Shaukat, Ashraf and Ghafoor (2015), refers to some of the most famous non-
monetary compensations like group outing or allowance of flexible working hours.
4.3 Productivity
There is a considerable differentiation between the wage growth and the worker’s
productivity in many semi-governmental associations in UAE. This not only complimentarily
true for Abu Dhabi, but the same for many parts of the country. Comparing the wage growth
rate over time, it has been observed that there has been a growth in the productivity of the
workers in the governmental organisations of the country by 246.3% since 1950s (Pierce,
Snow & McAfee, 2015). However, the wage growth rate of the companies has been only
114.3%. Up till 1960s, the growth rate of both, were in tandem. However, since 1970s, socio-
political factors came in to play and the wage growth rate started to diverge in comparison to
the growth of productivity (Lazaroiu, 2015). The gradually shifting economic policies that the
country needed to implement, owing to political pressure through many of the national and
international sources, has resulted in the occurrence of the current scenario.
Essentially, it has been noticed by researchers like Salisu, Chinyio and Suresh (2015),
which in spite of the fact that many of the bigger corporations have the options to raise the
wage limit easily by at least 10 to 12%, they are reluctant to do the same. However, in
contrast, Lazaroiu (2015), opines that as the job market is starting to become more stringent
with the potential employees striding towards the corporate organisations in order to foster
higher growth, the employers of the governmental and the semi-governmental organisations
might need to implement the wage increment policy now.
4.4 Motivation
All the employees who feel that they are being less compensated than the other at
work, might not be equally motivated to do harder work for the upliftment of their

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organisational performance. As, Larkin and Pierce (2016), states in high contrast, they might
be rather demotivated to perform as they might feel that they have been the victim of partial
appreciation in the company and this can highly affect their employee morale. The employees
feel that they have properly completed their work in proportion to the salary received. In such
instances, as Aslam et al. (2015), informs, there is lack of proper communication channel
between the management and the employees that leads to the occurrence of issues as such. In
most similar cases, it have been observed that organisation has not properly implemented the
metrics like performance based reviews or provided the sales incentives in proper duration.
As an outcome of that the employees might have started to feel that they are not in the good
book of the management for some eccentric reasons. As analysed by Yan and Sloan (2016),
analytics like excel sheet reporting and others can also be used by the management for the
purpose of tracking the compensation as well as the productivity rates in tandem. This will
help in the determination of the motivation levels of the workers.
4.5 Grants and Incentives for employees in UAE
The Labour laws in UAE have been recently alternated to change the working
conditions of the employees in UAE. The first instance that is to be focused here is that the
process of hiring is needed to be made more transparent in the governmental and the semi-
governmental organisations. In case if the employees are willing to leave the company within
their probationary period, then full dues before the termination of the contract have to be
cleared by the companies.
4.6 Transparency in providing compensation
The compensation framework for the semi-governmental companies in Abu Dhabi, is
commendable. However, there is lack of transparency in the implementation procedure of the
compensatory mechanisms. As per the UAE laws, Ambrosius (2018), reports the

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compensation that employees get as Diya or blood money for human life loss is amount to
and the value is equal for the men and women. However, the payments, as Clor-Proell,
Kaplan and Proell (2015), reports in stark contrast, is based on the predetermination of the
sectorial heads. Again, the analysis of the medical investigating team that determines the
level of disability based on which the compensation is to be received is also flawed to a great
extent, as explained by Salisu, Chinyio and Suresh (2015). These are typically the cases with
the governmental organisations. The corporate agencies do not have so many allowances, but
their base pay or other allowances compensates for these benefits.
5. Research Design
An exploratory research design have been undertaken for this research study. Since
this research is conducted over a topic that requires further study with more clarity as well as
development of operational definitions, the selection of the exploratory research study is
justified. The researcher needs to use instincts for finding research clues as well as venturing
in to the new territories for seeking information. Any case study based research provides
scope for revelation of new ideas as well as insights which are the typical characteristics of
the exploratory research also. This is why the selection of the exploratory research design is
justified. The research conducted here, in the light of the exploratory design will help in
 Definition of the ambiguous problem related to implementation of the compensatory
activities
 To gain better understanding of issues related to impact of the compensation on the
betterment of organisational performance of the employees of the semi-governmental
companies
 Generation of new ideas regarding the improvement of employee motivation

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 Development of hypotheses with the potential to explain the occurrence of specific
phenomenon.
6. Methodology
6.1 Research Philosophy
Since this research is based on the factual knowledge that will be gained by means of
observation, the philosophy of positivism is best suited for this research study. Quantifiable
observations based on statistical analyses is the basic foundation of a research philosophy
based on positivist approach. As a philosophy, positivism is based in accordance with the
perception that empirical aspects of knowledge evokes out of human experience only. Hence,
it is understandable that in a research work that is built up on data survey conducted with
actual respondents the positivist philosophy is the best suited (Silverman, 2016).
6.2 Research Approach
This research will make use of the inductive research approach that is based on the
assimilation of data from primary sources. Based on the data collected from the sources, a
detailed analysis would be conducted that would lead the way to a logically certain
conclusion and derivation. The research have been developed on the foundation of 3 suitable
research questions that is the typical feature of inductive research. Highest emphasis is laid
on previously researched phenomenon from a singular outlook. Again, as emphasised by
inductive approach, qualitative research is also equally reliant up on qualitative research
work.
6.3 Data Collection Methods
The methods of qualitative data collection are mainly emphasised upon, in this
research study. The data collection approaches that has been undertaken for this research

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revolves mainly around two important factors. DJ firstly, making direct interaction with the
individuals in a group setting. For this purpose, formation of observation groups and
subgroups having the two selected medium of research have been done. This method that
have been undertaken for the qualitative research Data Collection are generally time
consuming, however the data collected is first hand and authentic. In this research a
comparatively smaller sample of 50 respondents have been taken. The primary benefits of
this research study are that the information gathered by the means of this research is richer
and involves a deeper insight into the happenings, directly.
6.4 Data Sampling
A random non-probability data sampling technique have been selected for this
research study. This method of data sampling does not gives chance of equal participation to
all the members of the specific category of research sample. A small selected category of
people gets to participate in the research work, either on a one to one basis or on in a group
structure. Among the four categories of data sampling, convenience sampling have been
selected for the collection of research data. The convenience sampling method would allow
the respondents to provide their feedback based on their own time priorities (Taylor, Bogdan
& DeVault, 2015).
6.5 Data Analysis
In order to conduct the data analysis for this qualitative primary research study, at first
50 respondents who are the employees of various semi government organisations of Abu
Dhabi, have been selected through random non probability sampling. After the selection of
the employees, they would be subjected to a common set of open ended questionnaires based
on which they would cast their opinions. The opinion of the respondents will be initially
collected as raw data by the researcher. After that a narrative analysis of the research work

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would be conducted for which data sheets in excel would be created by the researcher and the
tabulation of the responses would be done. The assembled data would be then analysed
through statistical analysis by means of statistical software implied regression analysis. Based
on the statistical reports, the researcher would make a discussion of the data in order to arrive
to a conclusion.
6.6 Research Limitations
The aims and objectives of the research could have been developed in a better way to
narrow the aim of the study. This would have made the research more precise and authentic.
Implementation of the data collection method could have been better. Other than that a
greater sample size could have helped the researcher in arriving at better conclusions.
7. Ethical issues
In the course of this research, the researcher have not pertained to any kind of forcing
in order to manipulate the respondents. The respondents have answered the questions at will
and their identity as well their responses have been kept confidential by the researcher.
Lastly, the researcher have also pertained to the Data Protection Act 1998 and that is why, the
actual source names of the respondents or their exact designations have not been disclosed by
the researcher.
8. Assumed Outcomes
The assumed outcomes for this research study should highlight that there is a
noticeable percentage of disappointment among the employees regarding their compensation
that they receive at their workplace. The lack of motivation and disappointment is more so
since they perceive that they should be unanimously awarded by the authorities in a better
way for their performance. Their responses should conform that there is a certain disparity

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between the authorised compensation level for the organisations by the government and the
compensations, they actually receive at their workplaces.
9. Implications
The research implications prove that there is lack of professional approach in
compensating the employees in the governmental and the semi-governmental organisations of
Abu Dhabi. The reflections of the literature review and the data findings in the qualitative
research is similar. As evident, there is higher and more satisfactory rate of compensation
among the employees of corporate organisations. However, in the semi government
organisations, the compensatory allowances are actually higher than in corporate companies.
However, owing to certain subtle factors, the rate of compensation is quite low and
inadequate and that is why employees in the semi-governmental organisations are generally
lacking in motivation.
10. Expected Timescale
Area of
Research
Month 1
to 3
Month 3
to 6
Month 6
to 9
Month 9
to 12
Month 12
to 15
Month 15
to 18
Selection of
the topic
Development
of the research
roadmap
Development
of the
Literature
Review

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Framing of the
Research
Methodology
Selection of
the target
respondents,
contacting and
gathering their
permission
Collection of
research data
Data Analysis
and
interpretation

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