Impact of Compensation Strategies on Employees Satisfaction Case Study in the A. S. XYZ Organization

Abstract

Purpose: The objective of this study is to investigate the impact of compensation on employee loyalty and performance, through job satisfaction as mediator at A.  S.  XYZ.

Methodology: The research population comprised all the employees of A.  S.  XYZ. Simple random sampling, which is a probability sampling method, was adopted to include members of the population at random, leading to a total sample size of 327 people. Data analysis derived from the results of questionnaire responses in Google Forms and data extracted from A.  S.  XYZ was conducted. The questions were tested using Cronbach's alpha and face validity tests in order to assess the reliability and validity of the research instrument.

Findings: The findings indicated that compensation and job satisfaction had a positive and direct effect on employee loyalty and performance. Also, the study revealed that job satisfaction serves as a partial mediator between compensation and employee loyalty and performance, implying that compensation can influence employee loyalty and performance directly or indirectly through the mediating capacity of job satisfaction.

Unique Contribution to Theory, Practice and Policy: This research adds to the body of literature by affirming the theoretical implications of prior research and providing recommendations for A. S.  XYZ to improve its compensation methods and meet employees' needs. The findings stress on the fact that the payment systems should be constantly monitored and adjusted in the context of other factors influencing employee satisfaction like career development and work environment as well. This research highlights the importance of open communication between supervisors and workers that help in recognizing and resolving the problems quickly. Further, the research suggests that organizations should apply a holistic method of employee satisfaction rather than depending only on compensation matters. The outcomes of this research are relevant for theory, practice, and policy. Theoretically, the research supports and develops the current frameworks on the link between compensation, job satisfaction, employee loyalty, and performance. In practical terms, the research gives implementable recommendations for A.  S.  XYZ and other organizations to align their compensation policies and create a content, loyal and productive workforce. Policy wise, the study emphasizes the importance of organizations developing holistic employee satisfaction policies that extend beyond financial rewards to encompass additional aspects such as career development and work environment. Additional research could study other variables that contribute to employee satisfaction and recommend techniques on how to sustain high levels of satisfaction for extended periods using a mixed method approach.  An alternative methodology entails both qualitative and quantitative methods.