The Relationship between Compensation and Rewards and Performance of Employees: A Survey of Small and Medium Sized Firm



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Abstract

This study aimed to understand the relationship between compensation and rewards and performance of employees. For this study, the case of small and medium sized organisations was chosen and discussed. In order to find out the impact of rewards and compensation on employees' performance, quantitative research methodology was selected. Data was gathered from both primary and secondary sources. The participants of this research were employees working at SMEs. The participants were from 5 small and medium sized organisations, and the total number of participants was 100. According to the findings of this study, there is a correlation between employees' performance and rewards and compensation received by them. The rewards which influence employees' performance and motivate them include recognition, acknowledgment, bonuses, salary, and others.

Table of Contents

ACKNOWLEDGMENTII

DECLARATIONIII

ABSTRACTIV

CHAPTER 01: INTRODUCTION1

Background of the Problem1

Theoretical Framework2

Problem Statement5

Aim of the Research6

Research Questions6

Objectives of the Study6

Significance of the Study7

CHAPTER 02: LITERATURE REVIEW8

Employee Motivation and Company Performance16

Use of Rewards in Motivation17

CHAPTER 03: METHODOLOGY20

Quantitative Research Methodology20

Research Design20

Data Sources21

Sample Selection21

Research Instrument21

Ethics22

Method of Data Analysis22

CHAPTER 04: RESEARCH PLAN24

Time Scale24

Expected Outcomes24

Expected Problems24

CHAPTER 05: FINDINGS25

Section 01: Basic Information25

Section 2: How important are the following to you?29

Section 03: Express the Degree to which you Agree or Disagree with the following statements33

Section 04: Indicate your level of satisfaction or dissatisfaction with the following statements35

Hypothesis45

CHAPTER 06: DISCUSSION AND CONCLUSION46

Recommendation48

Further Research48

REFERENCES50

CHAPTER 01: INTRODUCTION

The first chapter of the research is introduction. The introduction section includes a background of the study, theoretical framework, problem statement, research aims and objectives, significance of the study, and research questions.

Background of the Problem

Human resource management is an essential organisation function which is particularly important for entrepreneurial firms because they are based on the intellectual level of employees (Williamson, Cable and Aldrich, 2002, pp. 83). Human resource is considered to be one of the most important tools used to achieve a competitive advantage. It allows an organisation to differentiate itself from its competitors. However, in order to achieve a sustainable competitive advantage, it is important to utilise this tool in an effective manner (Madhani, 2012, pp. 31).

One of the important roles of human resource management, in an organisation, is to reward employees and to provide them with incentives. Rewards and incentives are considered important because they are associated with the performance of employees. According to Dewhurst et al. (2010), there are different ways that are used to reward employees. The concept of rewards and incentives is not limited to financial compensation. In fact, it also includes verbal recognition and appreciation from managers and supervisors.

In the modern world, constant changes are taking place which are particularly ...