Compensation System Influence on Employees Motivation

An organization’s compensation system is critical in attracting, motivating, satisfying, and retaining employees. The best compensation system ensures that employees are fairly rewarded for their efforts in an organization.

How important is the compensation system in an employees’ productivity?

Regarding the productivity of employees, compensation plays an indirect role. Commitment in an organization takes several forms. Affective commitment is based on emotional bonds, while continuance commitment is connected to monetary rewards that employees receive. Normative commitment is linked to employees’ engagement in charitable activities. Studies have established that compensation does not necessarily motivate. However, when it is low, it could lead to negative effects on employees. Therefore, compensation affects the productivity of employees through absenteeism, low job satisfaction, and increased turnover (Daniel, 2019).

Are there other factors that employers can do to motivate employees?

Various motivation strategies remain at the disposal of employers. Recognition of employees’ efforts boosts their morale and makes them feel valued. This positive feedback increases their commitment to the entity. Engagement of employees in various key activities such as creating goals yields motivation. Active involvement reduces the disengagement of staff, increasing their commitment to the goals and decisions of the company (Stobierski, 2019).

Which is stronger – intrinsic or extrinsic motivation and why?

Intrinsic motivation is stronger than extrinsic motivation. Such motivation is related to fulfilling an individual’s inherent feelings. Therefore, employees who access intrinsic motivation more tend to demonstrate greater job satisfaction and commitment to an entity (Singh, 2016). However, it is important to balance the extrinsic and intrinsic motivating factors.

What type of motivation (intrinsic or extrinsic) do you prefer and why?

I would prefer both intrinsic and extrinsic motivation as an employee. Having both factors of motivation encourages an employee to not only achieve tangible rewards for their meaningful contribution but also enables them to fulfill their ambitions and interests through intangible rewards. It is important to ensure that employees develop an innate interest in various work activities they are expected to perform. This should increase their motivation levels significantly.

References

Daniel, C. O. (2019). Compensation Management and Its Impacts on Organisational Commitment. International Journal of Contemporary Applied Researches, 6(2), 26-36.

Singh, R. (2016). The Impact of Intrinsic and Extrinsic Motivators on Employee Engagement in Information Organizations. Journal of Education for Library and Information Science, 57(2), 197-206.

Stobierski, T. (2019). How to Motivate Employees: 5 Data-Backed Tips for Managers.

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Question

Compensation in an Organization