The Relationship Between Compensation and Productivity of Employees

Running head: RESEARCH PAPER
Topic: The Relationship Between Compensation and Productivity of Employees
Name of the Student
Name of the University
Author Note

1RESEARCH PAPER
Abstract
The current state of business world has found to be in a state in which for any issues
employees are seen to be turning over their positions at their current employers and most of
them had been characterizing a variety of issues for it. In some places it is also been found
that there is inconsistency in in the compensation of a particular employee and their
productivity levels. Very few of the employees were found to be e abiding by the rules and
regulations and providing adequate productivity, some of them even found to be falling
behind that expected productivity levels. This has been increasing issue for every
organization all around the world and this is created a huge problem for business
organizations as well. Employees are regarded as the assets and resources of an organization
and they are treated in the same way. The termination or or turnover of any employee for an
organization is a massive blow that affects an organization negatively. This is the reason that
this particular thesis on research work is conducted to find out, why the employees are not
motivated enough to who provide there expected productivity to the organizations as a part of
their services even if they are paid a handsome compensation for this. This thesis paper is
therefore presented to analyze what is the exact relationship between employee productivity
and their compensation to find out what more could be done to make sure that every
employee within the organization is highly productive and motivated enough.

2RESEARCH PAPER
Acknowledgement
Conducting this research has been one of the most enriching experiences of my life. The
contribution of this research to enhance my knowledge base and analytical skill has been
paramount. It gave me the opportunity to face challenges in the process and overcome them.
This would not have been possible without the valuable guidance of my professors, peers and
all the people who have contributed to this enriching experience. I would like to take this
opportunity to thank my supervisor _________________________ for the constant guidance
and support provided to me during the process of this research. It would not be justified if I
did not thank my academic guides for their important and valuable assistance and
encouragement throughout the research process. I would also like to thank my friends who
had provided me with help and encouragement for collecting primary data and valuable
resources. The support of all these people has been inspiring and enlightening throughout the
process of research in the subject.
Heartfelt thanks and warmest wishes,
Yours Sincerely,

3RESEARCH PAPER
Table of Contents
Chapter 1: Introduction..............................................................................................................6
1.1 Introduction......................................................................................................................6
1.2 Background of the study..................................................................................................6
1.3 Purpose of the Study........................................................................................................7
1.4 Research Aims and Objectives.........................................................................................7
1.5 Research Questions..........................................................................................................8
1.6 Problem Statement...........................................................................................................8
1.7 Rationale of the study.......................................................................................................9
1.8 Research Hypothesis........................................................................................................9
1.9 Definition of Key Terms................................................................................................10
1.9 Structure of the study.....................................................................................................10
Chapter 2: Literature Review...................................................................................................12
2.1 Introduction....................................................................................................................12
2.2 Findings of the Study.....................................................................................................12
2.3 Gap in the Literature......................................................................................................14
Chapter 3: Research Methodology...........................................................................................15
3.1 Introduction....................................................................................................................15
3.2 Method Outline..............................................................................................................16
3.3. Research Philosophy.....................................................................................................16
3.4 Research Approach........................................................................................................17
3.5 Research Design.............................................................................................................18
3.6 Data Collection Process.................................................................................................18
3.7 Ethical Consideration.....................................................................................................19
3.8 Limitations of the study.................................................................................................19
3.9 Chapter Summary...........................................................................................................20

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Chapter 4: Data Analysis and Results......................................................................................20
4.1 Introduction....................................................................................................................20
4.2 Data Analysis and Empirical Results.............................................................................21
4.2.1 Frequency Distribution............................................................................................21
4.2.3 Descriptive Statistics...............................................................................................23
4.3 Regression Statistics.......................................................................................................26
4.3.1 Summary Output.....................................................................................................26
4.4 ANOVA Statistics and Co-efficient...............................................................................27
4.4.1 ANOVA Statistics...................................................................................................27
4.4.2 Coefficient...............................................................................................................28
Chapter 5: Conclusions and Recommendations.......................................................................29
5.1 Conclusion......................................................................................................................29
5.2 Linking with Objectives.................................................................................................30
5.3 Recommendations..........................................................................................................31
5.4 Limitations of research...................................................................................................32
5.5 Future scope of the study...............................................................................................32
References................................................................................................................................34
Table 1:Distribution of Gender................................................................................................21
Table 2: Distribution of Age Group.........................................................................................22
Table 3: Distribution of Education...........................................................................................23
Table 4: Distribution of Salary.................................................................................................23
Table 5: I am satisfied with my place of employment.............................................................24
Table 6: I am dissatisfied with my place of employment........................................................24
Table 7: I am compensated well for my employment services................................................25
Table 8: I am not paid well for my services.............................................................................26
Table 9: Regression Statistics (1st Variable)............................................................................26

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Table 10: Regression Statistics (2nd Variable)..........................................................................27
Table 11: ANOVA (1st Variable).............................................................................................27
Table 12: ANOVA (2nd Variable)............................................................................................28
Table 13: 1st Variable...............................................................................................................28
Table 14: 2nd Variable..............................................................................................................28
Figure 1: Distribution of Gender..............................................................................................21
Figure 2: Distribution of Age Group........................................................................................22
Figure 3: Distribution of Education.........................................................................................23
Figure 4: Distribution of Salary...............................................................................................23
Figure 5: I am satisfied with my place of employment............................................................24
Figure 6: I am dissatisfied with my place of employment.......................................................25
Figure 7: I am compensated well for my employment services...............................................25
Figure 8: I am not paid well for my services...........................................................................26

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Chapter 1: Introduction
1.1 Introduction
In the Global world, the recent times have seen that people have the effect of
important aspects within the performance of an organization in various ways. People, who
have been working within the organizational system, make up one of the biggest assets of an
organization. Why this people mostly conceive and implement the strategy for an
organization, the mix of all these people and system working within the organization decides
the capability of the organization itself. Competencies of an organization are required to
execute the strategy (Saridakis, Lai & Cooper, 2017). This is why it is necessary that a
research needs to be commenced on the importance of compensation on the productivity of
an employee and what is the effect on the employee if they are not being sufficiently paid as
per their zone and skillset of work. This decides a lot about the organization as well, since the
compensation that is paid to the employees is related to the economic resource of the
organization and the employees can be regarded as the human resources of the organization.
Therefore, this research process would also help the organizations to analyze their standings
based on the topic of the research.
1.2 Background of the study
The human capital of an organization is regarded as the competency of an
organization which forms as a primary function conceived due to the skills and knowledge of
the human capitals. Therefore, the organization in which an employee is working in needs to
take care of every working individual within the organization and has to analyze all the basic
aspects within the organization that motivates a person to achieve their full potential of
working within the organization so that they provide the best possible services within the skill
levels. However, it is not always easy to figure out all the aspects within an organization that

7RESEARCH PAPER
has the potential of motivating the people within the organization to reach their full potential
and provide services to the organization, but it has to make sure that an effort is made to
understand or identify the factors.
Compensation can be considered as one of the biggest strategies that human resource
management has implemented within an organizational setup that can be a factor that
employees are attracted to an organization or they try to improve the performance is true for
the motivation of compensation. Employees and mostly found to seek for employment for
earning a certain salary for satisfying their own needs and on the other hand the employers
are providing compensation to the employees for sprouting the performances (Howard,
Turban & Hurley, 2016). This is why it is important that the particular effect of compensation
on an employee is found out so that it can be identified about the strategies that can be
implemented within an organization to keep an employee interested throughout their tenure
and increase the productivity. The research is also necessary to find out the relationship
between compensation with the productivity of employees.
1.3 Purpose of the Study
The purpose of this study is to find out the reasons behind the insufficient
compensations agitating the employees found in several companies. This would help in
finding out the exact issues and through further research conducted by the data collection
processes would help in finding out the probable solution to the problems.
1.4 Research Aims and Objectives
The research aims for the following study is to find out the exact relationship between
compensation and their role in increasing the productivity of an employee within an
organizational setup. For this the particular aim of the research would be to frame a proper