The Relationship Between Compensation and Productivity of Employees

This research paper analyzes the relationship between compensation and productivity of employees in an organizational setup. It aims to find out the reasons behind the insufficient compensations agitating the employees found in several companies. The study provides a framework to ascertain the relationship between total compensation and employee productivity. The research objectives include finding out the relationship between compensation and employee productivity, identifying the types of compensation strategies that organizations use, identifying the factors within an organization that determines the compensation packages for an employee, and finding out what the compensation provided to the employee at present has been affecting their performance.

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

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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.

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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,

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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

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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

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way or framework that would initiate an analytical study of the entire research topic. This is
to be done to find out the way by which the relationship between employee compensation and
increase in productivity of the employees can be feasibly found out.
The research objectives can be described as follows:
 To find out or determine the proper relationship between the total
compensation and its effect on the performance of an employee to see that if
their productivity is affected in a positively or negatively.
 To identify the types of compensation strategies that organizations use and
how each one of these types of compensation relates or affects the
performance of an employee.
 To identify what the factors within an organization are that determines the
compensation packages for an employee.
 To find out what the compensation provided to the employee at present has
been affecting their performance.
1.5 Research Questions
The research question and hypothesis that guides this research follows:
Research question: Is there a relationship between compensation and employee
productivity?
1.6 Problem Statement
The problem that the research is trying to address is the issues that employees often
face in their organizations that result in their turnovers due to insufficient payments. This
particular problem would be addressed in this particular research to focus on the reasons

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behind this and the ways by which these problems can be solved for making the employees
within an organization feel appreciated with the compensation they are being offered.
1.7 Rationale of the study
The rationale or the significance of the research topic by which the study can be
justified is that the entire study will help in contributing positively towards the academic
scholarly (Maestas, Mullen & Powell, 2016). This is because the entire study would be
available for future references when any analyst a researcher would like to research for that
through the compensation strategies and find out a relationship between the compensation of
an employee to the productivity of the employees working within the organization. The
empirical study between total compensation and employee performance in this entire study
would thus add a specific body of knowledge to this research.
The entire research would be verifying the relationship between the total
compensation and performance of employees with an organizational setup and this would
provide organizations in having a valuable inside to their management system with the help
of various components (Chrisman, Devaraj & Patel, 2017). The entire study would help the
organizations in having an inside over the relationship which would that provide them with
information when they would formulate organizational policies and make decisions regarding
this. Furthermore, the entire study and the findings of the study along with the
recommendation would be applicable to any organization respective of the industries they
belong to (Pohler & Schmidt, 2016).
1.8 Research Hypothesis
The research hypothesis according to the entire study to find out the proper
relationship between total compensation and employee performance can be framed as below:

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H01: There is no relationship between compensation and employee productivity.
Ha1: There is a relationship between compensation and employee productivity.
1.9 Definition of Key Terms
Compensation: Compensation can be defined as the mode of payment, through
monetary or voluntary sources, that an organization provides an employee in exchange of
their services that the employee provides to the organization according to the basic skill
levels and enhanced potentials.
Employees: Employees can be defined as the people working within an organization
chosen by the employees based on the basic skills required for the appropriate posts (Larkin
& Pierce, 2015).
Productivity: Productivity of an employee can be defined by the amount of effort an
employee puts in their work to further enhance the total amount of services that they provide
to a particular organization.
1.9 Structure of the study
The entire study would be based upon several chapters described in this thesis paper
that would provide a framework to make sure that the entire study has followed a step-by-
step procedure to ascertain the research topic. Following would be the structure of the entire
study that would provide the framework to ascertain the relationship between total
compensation of an employee and the improvement of their performances:
Introduction
This chapter would be the base of the entire thesis and it would be fine why the topic
has been chosen as an undertaking. The reasons for choosing the employee compensations
and its effect on productivity of employees would be described along with the identification

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of the research aims, research objectives, research questions and the hypothesis of conducting
the entire study.
Literature review
This would be the next chapter that would have the literature review that would
include the past theories and concept which have been previously identified to detect the
effect in detail. A critical analysis of the entire topic would be described in this chapter for
determining the relationship between employee compensation and improvement in the
productivity of the employees.
Research Methodology
This chapter would explain the procedures and techniques that would be utilized for
conducting the study. the entire identification of the process which would be absolutely
appropriate to carry on with the research methods and help in gathering the relevant
information for data collection and analysis would be described in this chapter.
Data Analysis and Results
In this chapter, the information gathered through the primary and secondary sources
would be analyzed with the help of statistical tools. The procedure of data analysis would be
done with in-depth knowledge about analytical tools to find out the hands on information
about relationship between employee compensation and productivity of the employees.
Conclusions and recommendations
In this chapter the link of the analysis with the objectives that have been defined
before would be made to come together. The analyst would try to conclude the entire study
through the data analysis that has been previously added from and the recommendation
would therefore base on the entire conclusion of the conducted study. Furthermore, all the
implications that have been witness during the data collection process would be describe in
details in this final chapter of the dissertation.

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Chapter 2: Literature Review
2.1 Introduction
This particular chapter is necessary in forming up the literature review, which can be
regarded as the secondary data collection method. This particular method would review and
analyze the previous research works performed on the same topic, which is the effect of the
compensation on the productivity of the employees. This step is necessary to find out what
the other researchers have analyzed about the said topic, which is the effect of compensation
or pay on the productivity of the employees within an organization. The data collected
through the findings of these papers reviewed are utilized as the secondary data which would
later help in forming the questionnaires for the primary data analysis (Kehrig & Vincent,
2017). The following chapter would thus be formed from the findings about the study that has
been acquired from the review of the literary papers based on the research conducted about
the topic previously.
2.2 Findings of the Study
According to John, Knyazeva and Knyazeva (2015), there is a dire necessity or need
for the effective compensations fulfilling the needs of the employees. The author states this
particular statement as through researches, it has been found out that some of the employees
in several organizations have reported for being under-remunerated or under-compensated.
Some of the organizations are even found to be lacking the proper administration program
about the compensation to provide the employees. The author suggests that there could be
several reasons behind this and they have formulated the findings about this which has
resulted in the employee promotions being late or the pay packages not being able to satisfy
the needs of the employees within the organization (Spencer et al., 2016).

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Author Hassan (2016), has found out that the dissatisfaction of the employees has
been formulated for both the ways of compensation, which is the direct cash payments and
the indirect compensations as well as the incentives that are meant for motivating the
employees that is expected to make sure that the employees are striving for higher levels of
their productivity. This forms a critical component of the employee relationship with the
organization. Therefore, it is identified that the most important aspect of making sure that the
employees are productive enough according to the needs of the organization that the
employees are sufficiently paid.
However, these were the findings of the researchers that presented this thinking that
the employees should be paid sufficiently may whatever be the form of compensation. It is
also to be explained how the compensation and employee productivity is related to each
other. The authors Larkin and Pierce (2015), explains that it is just not the compensations that
an employee seeks from an organization in exchange of their productivity or work but it is
also the extra compensation or the perpetual raise in the compensation that the employee
looks forward to. The extra payment is regarded to as the employee benefits which may or
may not be monetary forms of compensation. They can be complementary day offs,
incentives, vacation leaves, medical leaves and many others. The authors Chrisman, Devaraj
and Patel (2017), finds out that employee productivity is directly related to the self-
motivation and emotional quotient of an employee. This means that if an employee is not at
all satisfied with the balance between their compensation and their job, then it is likely that
the employee would reduce their individual productivity. For any organization, even the
slightest of the loss in employee productivity can mean a huge loss in the overall performance
of the organization (Kelechi & Akintaro, 2016).

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The authors Muguongo, Muguna and Muriithi (2015), enunciates that there are
various ways by which a proper employee compensation and benefits plan can be an
advantage for the organization. The ways by which the organizations can be at an advantage
can be listed as follows:
Job satisfaction: If there is a fair compensation offered to the employees in exchange
of their services, the employees would be much satisfied with their respective jobs.
Motivation: According to Wang (2017), Every person working within the industry
has their individual needs. Some are looking for monetary payment in exchange of their
services while others might be looking for the extra compensation, which might or might not
be monetary in nature. Some may even found to be looking for being valued or recognized
for their services within the organization (Mohamad et al., 2016). Therefore, if an
organization finds out the proper way of planning the employee compensation keeping all of
them in mind, then there is a high possibility that the employees within the organization
would be extremely motivated to offer their services to the organization.
Low absenteeism and Turnover: When the compensation of the employees is
managed appropriately and effectively, employees would be having the zeal and enthusiasm
to be regular at work instead of wasting time at home (Maestas, Mullen & Powell, 2016). The
employees will not be willing to work for any other organization as long as they are treated
well and get their compensations at the right time and measure. So there will be a low rate of
employee turnover.
2.3 Gap in the Literature
The gap in the literature refers to the process of literature review that puts forward the
issues on the topic of research that the researchers have missed out on while presenting the

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papers. This would be the information that was being looked for but there have been no
mentions of these throughout the paper.
In this particular research topic as well, there has been several aspects of the research
that has been missed out on while the findings of the topic were being carried out
(Schwellnus, Kappeler & Pionnier, 2017). The papers find out the various aspects of
employee compensation and how a proper administration of employee compensation benefits
the organization and motivates the employees. Even the relationship between the employee
motivation and their productivity is established in some papers as well. However, the actual
way by which a proper framework should be established about the compensation of the
employees and their effect on the productivity of the employees was found to be absent in
most papers. This was the only gap found in the literatures that have been reviewed
(Grossman et al., 2017). Thus, this particular research should be formulated around this
particular topic and the establishment of the solution to the problem is also likely to be
formulated.
Chapter 3: Research Methodology
3.1 Introduction
There have been various researches about the application of an appropriate method
that can be utilized for the research that is, for following a particular set of methodologies
that would be impactful in finding out the detailed information regarding the study thus
conducted. According to Flick (2015), it is essential that an appropriate method be applied to
a research methodology during the conduction of the study that would ultimately help in
gaining the information in details about the undertaken study including its underlying facts.
According to the author Nardi (2018), it is also necessary to make sure that the content and
the process of the entire research be able to define and describe the content of the entire

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methodology including the process and the content. This is to be done so that any person
going through the entire research process or the entire thesis would not find it difficult to
follow given the systematic approach that the data analysis process follows through the entire
research process. This is also found to be necessary since there is a possibility that any human
error that ought to cause problems in research processes would also be eliminated with the
implementation of this (Lampard & Pole, 2015). The entire chapter as described here
particularly aims at the provision of a brief description about the used processes with the
justification about why they are required to be followed for the process.
3.2 Method Outline
For analysing the impact or effect of compensation on the employee productivity, it is
essential that a detailed process for the technique applied for the research process is realized
(Alvesson & Sköldberg, 2017). The appropriate research philosophy applied for this process
is thought to be the theory of Positivism that would help the analysts to have an in-depth
information about the topic that has been undertaken for the research purpose. The research
approach towards the undertaken topic is chosen to be the Deductive Approach that allows
the analyst to gain the hidden information as well as the raw data with the help of the data
analysis process (McKim, 2017). This particular analysis makes use of both primary as well
as the secondary data to analyse the exact impact that compensation has on the employees
and how employees are motivated enough to provide the appropriate performances or even
go beyond their levels for the benefit of the company. The analysis makes use of the
qualitative, quantitative and regression analysis technique.

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3.3. Research Philosophy
Obtaining a proper research method is essentially required to have the detailed
information about the topic that has been undertaken for the research process (Robson &
McCartan, 2016). The author Berger (2019), have pointed out that the scientific philosophy
chosen for this purpose has the ability to bear a practical approach towards the entire topic
under research. Research philosophy can be classified into four basic divisions, such as
Interpretivism, Positivism, Realism and Pragmatism (Merriam & Grenier, 2019).
Chosen philosophy and justification: As per this particular thesis paper, the
appropriate research philosophy to be used would be the Positivism philosophy (Brannen,
2017). This chosen feature would be appropriate as it would make sure that the implemented
research methodology would be successful in etching out the hidden information that is
required for identifying the barriers that are found at every stage of the research process
(Hartas, 2015). The data collection process also goes through a proper implementation of the
scientific approach. Other philosophical approaches are eliminated because of the time
constraints of the research process.
3.4 Research Approach
The research approaches that are taken for the evaluation process of the study mostly
is utilized as the Deductive research approach. Amongst the other research approaches are the
abductive and inductive research approaches (Bell, Bryman & Harley, 2018). However, these
other forms of researches are not applicable in this particular thesis because the research
utilizes the logical thinking and broad assumptions. This is further elaborated for the
collection of data, analysis of data and its interpretation.

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Chosen approach and justification: Deductive approach is selected for the above
mentioned technique as this is the appropriate approach that would ensure that the hypothesis
developed for the analysis of the entire research is following the authentic path of examining
the situation through selection and rejection (Bryman, 2016). This is why the other research
approaches are rejected to be implemented for this particular study.
3.5 Research Design
There are various appropriate research designs that can we found during refining of
the framework for a research to begin with during the analysis of the data as the application
of a proper Research Design pictures of better detailed description of the undertaken topic.
The Research Design as characterized by the author Baran (2016) can be categorised into
Conclusive Research Design and Exploratory Research Design.
Chosen design and justification: For this particular study of the chosen topic in
understanding the relationship between compensation and the productivity of employees it is
effective if the Conclusive Research Design is used. This is because; this specification of the
process which is required for the analysis and collection of this research is generalized by the
assumptions that are required for acquiring quantitative information (Gibbs, 2016). This is the
only process by which all the above criteria are fulfilled.
3.6 Data Collection Process
The data collection process for this particular research process is done in two
processes. One is characterized as the quantitative data collection process which is the
collection of data through the primary data source and the secondary data source. The
collection of raw data is regarded as the primary data collection which would be absolutely
reliable and valid according to the research process given the source is primary (Wiek &

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Lang, 2016). It is not derived or acquired through review of researchers done by other people.
The evaluation of the impact of compensation on the productivity of employees would be
collected through the primary sources by conducting survey among the people working for
specific organizations to find out through several questionnaires about what they feel for the
undertaken topic. The questionnaire would be created through the introduction of the
secondary data collection method, which is the literature review conducted previously (Lee,
Dakin & McLure, 2016). The information gathered thus are formed into several
questionnaires that would be conducted through the survey comprising of 50 people taken as
total. The analysis would thus be completed with the answers that these people would
provide.
3.7 Ethical Consideration
The conduction of the study would be following few ethical considerations that are
required for completing the entire research in the proper and ethical way. For this it is to be
validated that both the data collection process has been following extensive ethicality and is
conducted entirely according to the laws and regulations regarding conduction of researches
(Bryman, 2017). The secondary data source for the literatures that are reviewed and the
original creators would be given proper credibility. In addition to that, during the collection
of data through the questionnaires and the survey, the participants would not be pressurized
for their answers and they would be absolutely according to their own free will. Again, the
participants would be made absolutely comfortable before conducting the service and it
should be mentioned to them with proper paperwork that all the information that they
providing to this questionnaire would be absolutely discrete in nature and none of them
would be revealed under any circumstances (Walliman, 2017).

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3.8 Limitations of the study
The only limitation of this entire study was that, the primary data collection process
was entirely dependent upon the participants and the answers that they provided. Not
everyone amongst the participants where absolutely flawless during the questionnaires and
there were often occurrences of incomplete answers are there where even participants found
who are not ready to answer all the questions and provide every information that was to be
provided through the set of questions (Flick, 2015). In addition to that, during the secondary
data research, few of the original content creators did not acknowledge the fact that their
work and ideas were being used for some other research process and they did not permit
reviewing their research work for further procedure of conducting this particular research.
Time constraints and reliability on the collected data was also considered to be some of the
limitations that made the conduction of study difficult as a process (Joyner, Rouse &
Glatthorn, 2018).
3.9 Chapter Summary
As a summary of this entire chapter, it can be said that this particular chapter provides
all the information about the research methodology that was utilized for conducting this
particular research to find out the relationship between the compensation of an employee and
their productivity. With this, all kinds of methods that way to be used for collection of data in
this particular research was established (Kehrig & Vincent, 2017). The chapter clearly
specifies what research philosophy needs to be used, what is the research approach that is
followed for this particular study, what Research Design is implemented for this thesis and
what would be the data collection processes. Along with that, the ethical consideration and
limitation of the study are also acknowledged in this chapter.

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Chapter 4: Data Analysis and Results
4.1 Introduction
This chapter would specify the process of data analysis with the results that have been
collected through the primary data collection procedure. As mentioned before, this particular
chapter focuses on collecting the data through primary research sources, which are to be
conducted through a survey. For this, a set of questionnaire would be presented to 50
participants who would be selected at random based on their work experience in any
organization (Grissom, Viano & Selin, 2016). The organization should not be selected as the
people would be selected at random irrespective of the organizations we have been currently
working in. The question is presented to them would specify what their personal experiences
and ideas tell us about the relationship of employee compensation and employee productivity.
Their views on their own compensation and productivity would be reflected through this data
collection process presented in this particular reflected through this data collection process
presented in this particular chapter (Raziq & Maulabakhsh, 2015). The analysis of the data
would be conducted through regression method to analyze the results as per the information
provided by the participants.
4.2 Data Analysis and Empirical Results
4.2.1 Frequency Distribution
1. Distribution of Gender
Gende
r Frequency Percentage
Female 28 56%
Male 22 44%
Total 50 1

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Table 1:Distribution of Gender
Figure 1: Distribution of Gender
2. Distribution of age group
Age Group Frequency Percentage
18 – 29 17 34%
30 – 39 24 48%
40 – 49 4 8%
50 – 59 3 6%
Over 59 2 4%
Total 50 1
Table 2: Distribution of Age Group
Figure 2: Distribution of Age Group
3. Distribution of Education
Education Frequency Percentage
High School Diploma 2 4%
Technical Certifications 22 44%
Associate Degree 1 2%
Bachelor’s Degree 13 26%
Master’s Degree 5 10%
Doctorate Degree 4 8%
Post Doctorate 3 6%
Total 50 1

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Table 3: Distribution of Education
Figure 3: Distribution of Education
4. Distribution of Salary
Salary Frequency Percentage
$0 - $30,000 14 28%
$30,001 -
$40,000 24 48%
$40001 - $50,000 4 8%
$50,001 -
$60,000 5 10%
Over $60,000 3 6%
Total 50 1
Table 4: Distribution of Salary

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Figure 4: Distribution of Salary
4.2.3 Descriptive Statistics
1. I am satisfied with my place of employment
Strongly Agree 3
Agree 22
Neutral 9
Disagree 9
Strongly Disagree 7
Table 5: I am satisfied with my place of employment
Figure 5: I am satisfied with my place of employment
The first question that was asked to the participants wear if they feel that they are
satisfied with their place of employment to which most of them had agreed to the fact that
they are pleased with their place of employment.
2. I am dissatisfied with my place of employment
Strongly Agree 1
Agree 23
Neutral 8
Disagree 11
Strongly Disagree 7

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Table 6: I am dissatisfied with my place of employment
Figure 6: I am dissatisfied with my place of employment
The next of question that was asked to the participants that if they feel that they are
dissatisfied with the place of the place of their employment and to this question most of the
participants and agreed that they were not satisfied with their place of employment.
3. I am compensated well for my employment services
Strongly Agree 2
Agree 23
Neutral 13
Disagree 6
Strongly Disagree 6
Table 7: I am compensated well for my employment services
Figure 7: I am compensated well for my employment services

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The third question that was asked to the participants was if they feel that they were
compensated will for their services and it was found that most of them had agreed that they
were paid according to their expectations from their employment services.
4. I am not paid well for my services
Strongly Agree 1
Agree 20
Neutral 13
Disagree 8
Strongly
Disagree
8
Table 8: I am not paid well for my services
Figure 8: I am not paid well for my services
In the last question the participants were asked if they were not to eat well for their
services to which most of them had agreed to the fact that they are not well paid for their
services.
4.3 Regression Statistics
4.3.1 Summary Output
Regression Statistics
Multiple R 0.774

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3
R Square
0.599
6
Adjusted R Square
0.591
2
Standard Error
0.766
9
Observations 50
Table 9: Regression Statistics (1st Variable)
Regression Statistics
Multiple R 0.8930
R Square 0.7974
Adjusted R Square 0.7932
Standard Error 0.5278
Observations 50
Table 10: Regression Statistics (2nd Variable)
Regression analysis is basically used for describing the relationship between set of
independent variables and dependent variables which has been described by the above tables
to find out the relationship between employee compensation and employee productivity. the
independent variable in this case is the employee compensation which is not dependent upon
the productivity of an individual employee.
Where on the other hand the employee productivity is a dependent variable since it is
depending upon how much compensation an employee is being paid individually. the
regression analysis finds out that under various circumstances there is the presence of a
relationship between employee compensation and employee productivity and it is found that
both of them are directly proportional to each other. if an employee is compensated highly
their productivity would be higher and if it is found that the compensation of an employee is
falling behind the expectation of that individual, their productivity would increasingly be
becoming low.

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4.4 ANOVA Statistics and Co-efficient
4.4.1 ANOVA Statistics
ANOVA
df SS MS F
Significance
F
Regression 1
42.2
7 42.27
71.87
4 0.000
Residual 48
28.2
3 0.59
Total 49
70.5
0
Table 11: ANOVA (1st Variable)
ANOVA
df SS MS F
Significance
F
Regression 1 52.63 52.63 188.9180 0.0000
Residual 48 13.37 0.28
Total 49 66.00
Table 12: ANOVA (2nd Variable)
4.4.2 Coefficient
Coefficients
Standard
Error
t
Stat
P-
value
Lowe
r 95%
Uppe
r 95%
Lowe
r
95.0
%
Upper
95.0%
Intercept 0.4170 0.3345
1.24
64
0.2
18
7
-
0.255
67
1.089
619
-
0.255
67 1.089619
I am compensated
well for my
employment
services 0.8437 0.0995
8.47
78
0.0
00
0
0.643
619
1.043
818
0.643
619 1.043818
Table 13: 1st Variable
Coefficients
Standard
Error
t
Stat
P-
value
Lowe
r 95%
Upper
95%
Lowe
r
95.0
%
Upper
95.0%
Intercept 0.3141 0.2092
1.50
18
0.139
7
-
0.106
44310
7
0.7347284
64
-
0.106
44310
7
0.734728
464
I am not paid
well for my
services 0.9074 0.0660
13.7
447
0.000
0
0.774
64853
3
1.0401199
27
0.774
64853
3
1.040119
927

29RESEARCH PAPER
Table 14: 2nd Variable
From this particular table we can find out that the independent variable which is the
compensation of an employee can be related to the dependent variable which is the employee
productivity in this particular scenario. From the ANOVA table it is easy to find out the result
of the regression analysis statistically significant. Thus, the anticipated impact of the
employee productivity and compensation is found to be e dependent on each other and at the
same time they are statistically significant. Employee compensation is found to have highest
impact on the trust of the customers from their organization and their productivity.
Chapter 5: Conclusions and Recommendations
5.1 Conclusion
Concluding the entire research, it can be said that the establishment that the thesis
pointed at regarding the relationship between employee compensation and employee
productivity can clearly be seen throughout the thesis from both the primary data analysis and
secondary data analysis. The relation between the compensation of an employee is directly
proportional to the productivity of the particular person employed within the organization.
With the competitive environment in the employment market being extremely high, the
employers are trying to implement the compensation package that they would offer to the
employees and they would be attracted by them. This should not just work as the point of
attraction for the employees to comment for the interviews what should also be the base of
the employee retention possibilities and the motivation of the employees during their tenure
in the organization. The study for the research has been trying to show this exploratory that at
the employee compensation is affecting the productivity of the employee instantly and
directly. Nevertheless, the research also finds out that at the compensation aspiration of the
employees can be made at some point of the time if there are implemented systems within the

30RESEARCH PAPER
Human Resource Department or if there are strategies made to motivate the employees in
several ways so that they would be interested enough in retaining their positions with their
organizations that their currency working in. This can be achieved by implementing reward
system and constant appraisals for the work that they do.
During the research process, a survey questionnaire was formulated to find out the
relationship between employee compensation and employee productivity. this survey
consisted of 50 participants who are given a set of questions based on the two variables found
or established for this research. The two variables selected for this research were
compensation and employee productivity. This for that was related to the satisfaction of the
employees so that they would retain their position or leave their position from the
organization. After the survey and collection of primary data it was found that indeed the
motivation and interest of an employee to work within an organization is dependent upon the
compensation that they are paid in return of their what and implemented skills.
5.2 Linking with Objectives
The objectives of this particular study where to find out or determine the relationship
that existed between the total compensation of an employee and how it affected the
performance of an employee and evaluate their productivity to see how this has affected them
positively or negatively. During the survey questions and the participants while answering
them it was found out that most of the employees where satisfied when their compensation
were higher than the expectations and when these compensation survey lower, the employees
were demotivated. this has affected their productivity since with dissatisfaction and
demotivation what cannot be done skillfully and efficiently.

31RESEARCH PAPER
The next objective of the thesis was to identify the types of compensation strategies
which various organizations use and how each one of these compensation types can relate to
affect the performance of the employees. with the secondary data collection process of
identifying researchers and reviewing them by the previous analysts it was found that there
are various strategies that Human Resource Department already used to keep the employees
motivated. These are some of the recognition and rewarding techniques that makes an
employee feel important and appreciated for the work they do. With this they feel motivated
and this affect positively to their productivity.
The next objective was to identify the factor within the organization which was the
determinants of the compensation packages for the employees. it was found during the
secondary return analysis that compensation packages were dependent upon the skill levels,
the educational background and age group of the employees.
The last objective to find out what was the compensation provided to the employee at
the present time which were affecting their performances. To this, the research has found out
that when the employees were compensated below the expectation that had negatively
affected their performances and when they were paid higher or almost similar to their
expectations their performances naturally became affected positively and their productivity
increased.
5.3 Recommendations
The recommendations that the thesis can make was extremely primitive and it was
formulated by the findings of the entire study. Compensation alone is in the soul factor by
which the employees within an organization remained grounded for retain their position at
the organization. There are several factors that affect the motivation levels and walking

32RESEARCH PAPER
abilities of an employee and based on that they decide whether they would retain their
position or look for a better job.
All the compensation plays an important part in all these aspects that make an
employee be motivated about the work they do and provide increasingly enhancing
performances to the organization. it is not just recommended that the executive is of the
organization make a decision of providing a lucrative for attractive salary for the aspiring and
the existing employees for the organization, but they are also recommended that a regular
appraisal program must be held twice every year to let the employees working for more than
one year within the organization be appreciated for the work they do and get a raised
compensation for that. Other than that rewards and recognition systems can also be
formulated regularly at an interval of about a quarter, that is, thrice every year.
The employee should also be asked for their feedback at regular interval about the
type of work they do and how motivated they are to for their work with the organization and
that a much better level. this would help the people within the organization understand the
motivation level of the employees and based on that they could make effective decisions
about the compensation and reward for the employees to keep them motivated.
5.4 Limitations of research
During the entire research process there are several limitations that the analyst had to
face. The participants who were called for the interview for the interview were not all
available at once and therefore there was a time constraint. Few of them could not understand
the question well, and since it was a matter of salary disclosure, even if they were made
aware of the discreteness of the research process did not want to disclose it. Other than that
few of the participants were not available to meet face to face for the survey and therefore

33RESEARCH PAPER
they had to be contacted through phone conversations. Some of the participants did not allow
recording them and thus the answers of the question answers were being dependent entirely
upon the memory of the researcher. The other problems that were faced were the
incompleteness of some of the survey questionnaires which are not answer properly by all the
participants. Out of this, 50 complete information sheets were collected and were presented
for the analysis process.
5.5 Future scope of the study
The analysis had who presented the idea of how the relationship between the
compensation of an employee positively or negatively affects the productivity of an
employee. This research has enough scope for future analysts so that they could focus on how
the relationship between employee productivity and compensation works. This can further be
cultivated into developing methods or strategies that would be implemented within an
organizational environment through the development of policies that would and sure right
from the beginning, how would the employer be compensated or rewarded positively
throughout their tenure. The analysts can also implement various findings from this thesis to
etch out the ideas of implementing compensation policies and revise them within
organizations that would attract and retain employee is within the organization more and
more along with enhancing the productivity of employees by making them feel motivated.

34RESEARCH PAPER
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