COMPENSATION ADMINISTRATION: ITS EFFECT ON THE PERFORMANCE OF WORKERS
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COMPENSATION ADMINISTRATION: ITS EFFECT ON THE PERFORMANCE OF WORKERS
Chapter One
Introduction
1.1 Background of the Study.
The topic of pay is vital in the employment contract, which is fundamentally a two-way exchange of input and output. It is the foundation of each contractual relationship at work. Pay is frequently the key issue in workplace strife.
Compensation is one aspect of boosting and maintaining productivity and morale. It is, of course, an important aspect in attracting and retaining quality staff.
Compensation administration is thus one of the strategic tools used by businesses to attract and retain qualified personnel, who contribute a significant portion of the organization’s expenses. It investigates how to reward and motivate people for their efforts towards achieving the organization’s goals.
Compensation is a systematic way to giving employees with monetary and non-monetary rewards in exchange for their work performance. Essentially, remuneration allows employees to keep a fair level of living. Beyond that, it provides a tangible assessment of an employee’s contribution to the organisation.
In practice, to establish an effective compensation administration system, the administration must make specific decisions regarding wage level, wage structure, and individual wage determination.
Economically, man works for money, and the money is utilised more directly to satisfy his physiological demands, such as purchasing food, housing, and other necessities of life. In truth, money provides status, a large savings account, and a sense of security.
1.2 Statement of Problem
The purpose of the study is to determine the influence of pay administration on worker performance. Because compensation administration aids in the performance of an organisation, it must be treated correctly; thus, the study will seek to determine whether compensation administration aids in the performance of an organisation.
Prior to the major problem described above, the following individual problem questions will be investigated.
1. Can a lack of compensation administration increase employee commitment?
2. Can compensation administration lead to increased worker productivity?
1.3 Goals and Objectives of the Study
The primary goal of this research is to investigate the impact of pay administration on worker performance.
Other aims that this study would try to attain are as follows:
(1) Determine whether compensation administration is actually used to improve employee performance.
(2) Understand the external relationship between worker remuneration and performance.
(3) Determine the efficacy of workers’ performance through compensation chains.
1.4 Research Questions.
At the conclusion of this study, the following coherent research question must have been adequately answered.
(i) Does compensation administration affect employee performance?
(ii) How does compensation administration affect workers’ productivity in Ijebu North Local Government?
(iii) Does Ijebu North Local Government’s compensation administration actually evaluate the ways of rewarding and encouraging employees for their efforts towards the achievement of organisational goals?
1.5 Research Hypothesis
During this research, the following hypothesis will be tested.
Ho: Compensation administration has no major effect on employee performance.
Hi: Compensation administration has a substantial impact on workers’ performance.
1.6 Methodology of the Study.
The methodology of the study focused on the approach utilised to carry out this research project within the following heading.
(i) Source of Data: that uses both primary and secondary data to gather information.
(ii) Data Collection Method: Questionnaires will be sent to the study’s target population.
(iii) Data Analysis approach: This study will be investigated using frequency distribution, simple percentage, and the chi-square approach.
1.7 Scope of Study
Due to time and financial constraints, this study was limited to the operations of the Ijebu-Ode North Local Government (INLG). However, given that INLG is one of the top local governments in Ogun State, it is intended that we would cover practically all aspects of compensation administration and the methods used to administer compensation in INLG. This investigation will last six years (2003–2009).
1.8 Limitations of the Study
This study is mostly focused on INLG in Ogun State, Nigeria. Staff at Ijebu – North Local Government do not cooperate fully when questionnaires are administered for fear of being quoted or misunderstood.
The research will cost a lot of money to process the data acquired.
Time constraints will also be a hindrance because the deadline for submitting completed work is set, thus the work must be completed within a limited period of time. Despite the constraints, the research promises to be consistent, dependable, and useful for future research.
1.9 Justification for the Study
The purpose of this research is to determine how well compensation administration may be used as a tool to improve job performance and working conditions for employees in an organisation.
However, after a thorough examination of various theories of motivation, it is clear that compensation through monetary and non-monetary incentives has been the primary source of improving worker performance in an organisation, and thus will aid in the resolution of all employee performance issues.
1.10 Definition of Terms.
i. Compensation:- Includes any awards received as a result of employment. As such, it is more than just monetary income.
ii. Pay:- The amount of money paid to a person for executing a job; this is direct financial remuneration.
iii. Benefit: Additional financial perks beyond basic income, such as paid holidays, medical insurance, and many more.
iv. Non-Financial:- Non-monetary rewards that an employee may obtain, such as job satisfaction, a pleasant working environment, and status.
v. Salary: is a fixed periodical payment made to a non-manual employee. It is commonly defined in annual terms, implying a somewhat permanent job connection through a monthly payment interval.
vi. Wage: A wage is the payment received for manual labour. It is almost often stated as a rate per hair.
vii. Incentive: This term refers to wage payment programmes that directly relate salaries to productivity standards.
viii. INLG: Ijebu-North Local Government.
1.11 Organisation of the Study
This research would be divided into five chapters, beginning with an introductory chapter, followed by a statement of the problem, objective of the study, research question, scope of the study, limitation of the study, justification of the study, research hypothesis, term definition, and study organisation.
This will be followed by a literature review and theoretical framework in chapter two. Chapter three will be devoted to the methodology of the research study with the study are
while the fourth chapter will deal with data presentation analysis and interpretation of results. Finally, the study will end with a summary of the study conclusion and policy recommendations, which will be organised in Chapter 5.
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