THE EFFECTIVENES OF COMPENSATION PACKAGE ON WORKERS PERFORMANCE IN AN ORGANIZATION

CHAPTER ONE

1.0     INTRODUCTION

1.1     BACKGROUND OF THE STUDY 

1.2     STATEMENT OF THE PROBLEM

1.3     OBJECTIVES OF THE STUDY     

1.4     RESEARCH QUESTIONS

1.5     SIGNIFICANCE OF THE STUDY 

1.6     SCOPE OF THE STUDY

1.7     LIMITATION OF THE STUDY

1.8     DEFINITION OF TERMS     

CHAPTER TWO

2.0     LITERATURE REVIEW

CHAPTER THREE

3.0     RESEARCH METHODOLOGY

          3.1     INTRODUCTINTRODUCTION

          3.2     RESESEARCH DESIGN

          3.3     STUDY POPULATION

          3.4     SAMPLE AND SAMPLING TECHNIQUE

3.5     DATA FOR THE STUDY: INSTRUMENTATION

          3.6     METHOD OF DATA ANALYSIS

CHAPTER FOUR

4.0     DATA PRESENTPRESENTATATION AND ANALYSIS

          4.1     INTRODUCTION

          4.2     DATA ANALYSIS

CHAPTER FIVE

5.0     SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION

          5.1     SUMMARY OF FINDINGS

          5.2     CONCLUSION AND RECOMMENDATION

          5.3     LIMITATION

          5.4     SUGGESTION FOR FURTHER STUDIES

REFRENCE

APPENDIX

CHAPTER ONE

1.0                                             INTRODUCTION

1.1     Background of the Study

Compensation is one of the physical needs that motivates which in turn will affect the employee performance. Job performance is influenced by many factors externally and internally. Compensation is output and the benefit that employee receive in the form of pay, wages and rewards like monetary exchange for the employee’s to increases the Performance(Johnson et al.,2008). Providing appropriate compensation within the meaning of fair and adequate to meet the requirements is one of the personnel department functions that are difficult to implement. Every organization needs a strategic compensation system for its employees that address compensation, benefits, recognition and appreciation (Kim, 2005). Compensation includes the returns to the services rendered by employees as part of employment relationships. It has a big influence in the recruitment of employees, motivation, and productivity and employee turnover. The level and magnitude of compensation should be of concern because the level of compensation will determine the lifestyle, self-esteem, and the value of the company. Compensation practices plays a crucial and functional role on employee performance of difference companies because it is the heart beat of human resource management. It is also vital to both employees and the employer. This is because employees typically depend on wages and salaries, and must be equivalent to the work done. However, to managers, compensation decisions influence the cost of doing business and thus, their ability to sell at a competitive price in the product market (Salim & al, 2010). In this era of global competition, where attracting effective and efficient employees has become a necessity for competing organizations. Saudi Arabia, is one of the most important international markets in the developing world, provides an ideal background for a study on the impact of compensation on employee’s performance and work-family conflict of an employee, working in the Kingdom of Saudi Arabia. Compensation is output and the benefit that employee receive in the form of pay, wages and also same rewards like monetary exchange for the employee’s to increases the Performance

(Cadran,2004).Compensation is the segment of transition between the employee and the owner that the outcomes employee contract. As the prospective of employee pay is the necessary of life. The payment receives from work done on the behalf of people getting the employment. From the employee prospective one of the most important part of cash flow. Compensation is mostly equal to half of cash flow of the companies. But in the service sector it is more than half. It is the major to attract the employee and motivate employee to increases the performance (Ivanceikh and Jackson, 2009). It is argument that mostly individuals that getting higher education they are not satisfied their jobs and their turnover is more than so that organizations are overcome to that problem design the compensation plain to retain the employees as well plays more to attract, retain and motivate to give man power. Compensation practices can improve the performance of employees when their institution can make them better off than worse off by contributing to employee satisfaction and development (Delaney & al., 2010). Many organizations do not give emphases to the effective utilization of compensation practices so as to ensure employees performance in developing countries. Organization pay directly influences to employee voluntary turnover employee compare to their pay available in other organization. People stay or leave the company more reasons they satisfied with their job promotional opportunity and work environment (Mitchall et.al.2003).

Compensation processes are based on Compensation Philosophies and strategies and contain arrangement in the shape of Policies and strategies, guiding principles, structures and procedures which are devised and managed to provide and maintain appropriate types and levels of pay, benefits and other forms of compensation (Bob, 2011). This constitutes measuring job values, designing and maintaining pay structures, paying for performance, competence and skill, and providing employee benefits. However, compensation administration is not just about money. It is also concerned with that non- financial compensation which provides intrinsic or extrinsic motivation for employees to improve in their performance (Bob, 2011). Compensation implies having a compensation structure in which the employees who perform better are rewarded much more than the average performing employees (Pearce, 2010). Compensation Administration is concerned with the formulation and implementation of strategies and Policies that aim to compensate people fairly, equitably and consistently in accordance with their value to the organization (Armstrong, 2005). The task in compensation administration is to develop policies and procedures that will attain maximum return on Naira spent in the terms of attracting, satisfying, retaining and perhaps motivating employees (Anyebe, 2003).

1.2     Statement of the Problem

Over time it has been a case in some organizations that their employees are under-remunerated or that some organizations do not have good compensation administration programs. This could be that employee promotion does not come in time, or that their pay packages are not commensurate to the work they have done for the organization (Fein, 2010). At times, this could be a deliberate act by management in other to frustrate the employees or that the management lacks the required managerial capabilities to effectively administer a compensation administration program (Dyer, & Schwab 2004). Gone are those days when such issues can be condoned or accepted by the employees, and therefore there is a need to tackle the problem headlong so that employees can bring out their best in terms of performance in order to boost their productivity.

1.3     Objective of the Study

The main objective of this study is to find out how effective compensation package is in an organization and its effect on workers performace, specifically the study intends to:

1.     To examine the effect of financial compensation on employee performance

2.     To identify the contribution of health care benefits on employee performance

3.     To examine the contribution of non-financial compensation on employee performance

4.     To find out how effective compensation benefit is in Nigeria

1.4     Research Questions

1.     What is the effect of financial compensation on employee performance

2.     What is the contribution of health care benefits on employee performance

3.     What is the contribution of non-financial compensation on employee performance

4.     How effective is compensation packages is in Nigeria

1.5     Research Hypothesis

Ho: there is no effect of compensation packages on the performance an employee

Hi: there is effect of compensation packages on the performance an employee

1.6     Significance of the Study

The study primarily has the responsibility to provide insight into the impact of compensation on employees’ performance and productivity in Nigeria. The outcome of the study will also serve as a knowledge base for a comprehensive look into the lapses in the management of compensation. After the study, findings will also serve as a reference source for further research into the field of compensation by future researchers.

1.7     Scope of the Study

The scope of this research work is limited to Otta Ogun state, the organization selected for these study is Dufil foods maker of Indomie instant noodles.

1.8     Limitation of the Study

The challenge of finance for the general research work will be a challenge during the course of study.  However, it is believed that these constraints will be worked on by making the best use of the available materials and spending more than the necessary time in the research work. Therefore, it is strongly believed that despite these constraint, its effect on this research report will be minimal, thus, making the objective and significance of the study achievable.

1.9     Definition of terms:

Effectiveness: the degree to which something is successful in producing a desired result; success.

Compensation: the action or process of awarding compensation

Workers: an employee, especially one who does manual or non-executive work.

Performance: