DOES COMPENSATION AFFECT TASK PERFORMANCE? A CASE FROM PUBLIC SECTOR HOSPITALS OF KARACHI – PAKISTAN

Authors

  • Munaza Bibi Bahria University

Keywords:

Salary, bonus, employee recognition, flexible working hours, task performance.

Abstract

The performance of human resources is regarded as a contributory factor to the performance of an organization. Nowadays compensation is considered the most influential factor to motivate human resources to accomplish the designated tasks. This study examines the effect of salary and bonus as a form of direct compensation while employee recognition and flexible working hours as a form of indirect compensation on the task performance. A deductive approach was employed to determine the causal link with a sample of 370 employees working in public sector hospitals while the developed hypotheses have been examined by structural equation modeling. The results of the study revealed that salary, bonus, employee recognition, and flexible working hours have a positive effect on task performance. So, managers of public sector hospitals need to seriously deliberate when formulating the compensation strategy as it directly links with the performance of employees which will finally be deciphered into better delivery of services.

References

Abbas, Q., & Yaqoob, S. (2009). Effect of leadership development on employee performance in Pakistan. Pakistan Economic and Social Review, 47(2), 269-292.

Abid, S., & Barech, D. K. (2017 ). The Impact Of Flexible Working Hours On The Employees Performance. International Journal of Economics, Commerce and Management United Kingdom, V(7), 450-466.

Ahmad, S., & Shahzad, K. (2011). HRM and employee performance: A case of university teachers of Azad Jammu and Kashmir (AJK) in Pakistan. African Journal of Business Management, 5(13), 5249-5253.

Akter, N., & Husain, M. M. (2016). Effect of Compensation on Job Performance: An Empirical Study. International Journal of Engineering Technology, Management and Applied Sciences, 4(8), 103-116.

Antwi, J. O., Opoku, A. C., Seth, A., & Margaret, O.-B. (2016). Assessing The Human Resource Management Practices Of Public Banks From Employees’ Perspective: Case Study Of Selected Branches Of Ghana Commercial Bank, Kumasi. Global Journal of Human Resource Management, 4(1), 13-30.

Blau, P. M. (1964). Exchange and Power in Social Life. New York: John Wiley.

Carpini, J. A., Parker, S. K., & Griffin, M. A. (2017). A Look Back and a Leap Forward: A Review and Synthesis of the Individual Work Performance Literature. Academy of Management Annals, 11(2), 825-885.

Chamorro-Premuzic, T. ( 2013, April 10). Does Money Really Affect Motivation? A Review of the Research. Harvard Business Review.

Coenen, M., & Kok, R. A. (2014). Workplace flexibility and new product development performance: The role of telework and flexible work schedules. European Management Journal, 32(4), 564-576.

Conway, E., & Monks, K. (2008). HR practices and commitment to change: an employeeâ€level analysis. Human Resource Management Journal, 18(1), 72-89.

Dagnall, N., Denovan, A., Parker, A., Drinkwater, K., & Walsh, R. S. (2018). Confirmatory Factor Analysis of the Inventory of Personality Organization-Reality Testing Subscale. Frontiers in Psychology, 9, 1-12.

Dayanandan, D. R. (2017). Effects Of Compensation On The Job Performance Among Hospital Employees - A Meta Analysis. Journal of Management and Science, 7(4), 1-27.

De Menezes, L. M., & Kelliher, C. (2017). Flexible working, individual performance, and employee attitudes: Comparing formal and informal arrangements. Human Resource Management, 56(6), 1051-1070.

Delic, A., Kozarevic, E., Perić, A., & Civic, B. (2014). The Monetary and Non-monetary Incentives Impact on Job Satisfaction: Evidence From Bosnia and Herzegovina Banking Sector. Paper presented at the Annual Paris Business and Social Science Research Conference, Theme “Research for Advancementâ€, Paris.

Duvie, A. N., & Nwokediuko, I. C. (2017). Direct Compensation Management As Correlate Of Teacher Task Performance. European Journal of Education Studies, 3(11), 132-149.

Erkal, N., Gangadharan, L., & Koh, B. H. (2018). Monetary and non-monetary incentives in real-effort tournaments. European Economic Review, 101, 528-545.

Fogleman, S. L., & McCorkle, D. (2013). Human Resource Management: Employee Compensation Guide. AgriLife Communications, The Texas A&M System, E-553 RM8-5.0, 1-4.

Galea, C., Houkes, I., & De Rijk, A. (2014). An insider's point of view: how a system of flexible working hours helps employees to strike a proper balance between work and personal life. The International Journal of Human Resource Management, 25(8), 1090-1111.

Gupta, M. (2014). Employees’ satisfaction towards monetary compensation practices. Global Journal of Finance and Management, 6(8), 757-764.

Hafeez, A., Khan, Z., Bile, K. M., Jooma, R., & Sheikh, R. (2010). Pakistan human resource for health assessment. Eastern Mediterranean Health Journal, 16(1), 141-151.

Hair, J., Black, W., Babin, B., & Anderson, R. (2014 ). Multivariate Data Analysis. (7 ed.). United States of America: Pearson

Hair, J. F., Black, W. C., & Babin, B. J. (2010). RE Anderson Multivariate data analysis: A global perspective. New Jersey: Pearson Prentice Hall.

Hettiararchchi, H., & Jayarathna, S. (2014). The effect of Employee related work attitudes on Employee Job Performance: A Study of Tertiary. IOSR Journal of Business and Management, 74-83.

Idrees, Z. A., Xinping, X., Shafi, K., Hua, L. D., & Nazeer, A. (2015). Effect of salary, training and motivation on job performance of employees. American Journal of Business, Economics and Management, 3(2), 55-58.

Inuwa., M., Mashi, M. S., & Salisu, I. M. (2017 ). Job Attitude and Employee Performance: An Empirical Study of Non-Academic Staff of Bauchi State University Gadau Nigeria. International Journal of Business and Management Future, 1(1), 1-13.

Jean, K. N., Ngui, T. K., & Robert, A. (2017). Effect of Compensation Strategies on Employee Performance: A Case Study of Mombasa Cement Limited. International Journal of Innovative Social Sciences & Humanities Research, 5(3), 25-42.

Johari, J., & Yahya, K. K. (2012). An Assessment of the Reliability and Validity of Job Performance Measurement. Jurnal Pengurusan, 36, 17 - 31.

Kameli, M. J. R., Darabi, R., Jafari, M., & Namjo, M. (2011). Evaluation of the role of wage and salary management system on efficiency of Naja staffs. Journal of Human Resource Management and Logistics, 6(20), 41-70.

Karadal, H., & Arasli, H. (2009). The impacts of superior politics on frontline employees' behavioral and psychological outcomes. Social Behavior and Personality: an international journal, 37(2), 175-190.

Khalid, K., & Nawab, S. (2018). Employee participation and employee retention in view of compensation. SAGE Open, 8(4), 2158244018810067.

Khan, S. (2019). A study on employees attitude towards monetary and non monetary rewards. International Journal of Management, IT and Engineering, 9(6), 20-38.

Kim, H.-Y. (2013). Statistical notes for clinical researchers: assessing normal distribution (2) using skewness and kurtosis. Restorative dentistry & endodontics, 38(1), 52-54.

Lee, Y.-j., & Sabharwal, M. (2016). Education–job match, salary, and job satisfaction across the public, non-profit, and for-profit sectors: Survey of recent college graduates. Public Management Review, 18(1), 40-64.

Luthans, F., & Stajkovic, A. D. (2001). The Impact of Recognition on Employee Performance: Theory, Research and Practice: University of Nebraska, Department of Management Lincoln.

Manurung, S. P. (2017). The Effect Of Direct And Indirect Compensation To Employee’s Loyalty: Case Study At Directorate Of Human Resources In PT POS Indonesia. Journal of Indonesian Applied Economics, 6(1), 84-102.

Molnar, M. M., Torbiörn, I., & Hellgren, J. (2013). Effects of staff bonus systems on safety behaviors. Human Resource Management Review, 24, 17-30.

Muda, I., Rafiki, A., & Harahap, M. R. (2014). Factors Influencing Employees’ Performance: A Study on the Islamic Banks in Indonesia. International Journal of Business and Social Science, 5(2), 73-80.

Nadarajah, S., Kadiresan, V., Kumar, R., Kamil, N. N. A., & Yusoff, Y. M. (2012). The Relationship of HR Practices and Job Performance of Academicians towards Career Development in Malaysian Private Higher Institutions. Procedia-Social and Behavioral Sciences, 57, 102-118.

Naveen, S., & Yenugula, P. ( 2017). The Impact of Monetary and Non-Monetary Incentives on Performance of Employees: A Research Study on Beverage Industry, A.P, In India International Journal of Recent Trends in Engineering & Research, 3(5), 21-26.

Ndungu, D. N. (2017). The Effects of Rewards and Recognition on Employee Performance in Public Educational Institutions: A Case of Kenyatta University, Kenya Global Journal of Management and Business Research: Administration and Management, 17(1), 43-68.

Nzyoka, C. M., & Orwa, B. H. (2016). The relationship between Total compensation and employee performance in the insurance industry, case of Mayfair insurance company limited. Psychology and Behavioral Sciences, 5(1), 20-36.

Obisi, C. (2017). Impact Of Flexible Work Arrangement On Employees Performance In Public Schools In Lagos State, Nigeria. Ideal Journal of Economics and Management Sciences, 3(1), 1-8.

Okwudili, B. E. (2015). Effect of Non-Monetary Rewards on Productivity of Employees Among Selected Government Parastatals In ABIA State, Nigeria. IOSR Journal of Business and Management, 17(2), 6-11.

Patnaik, B. C., & Padhi, P. C. (2012). Compensation Management: A theoretical preview. Trans Asian Journal of Marketing and Management Research, 1(1), 39-48.

Ponta, L., Delfino, F., & Cainarca, G. C. (2020). The role of monetary incentives: bonus and/or stimulus. Administrative sciences, 10(1), 8.

Raghib, M., Naveed, A., Alamdar, H., & Mehtab, H. (2015). Impact Of Rewards On Job Satisfaction Evidences From Ttelecom Sector Of Pakistan. Arabian Journal Of Business and Management Review (OMAN Chapter), 4(11), 47-60.

Rajapaksa, D., Gifford, R., Torgler, B., Garcia-Valiñas, M., Athukorala, W., Managi, S., & Wilson, C. (2019). Do monetary and non-monetary incentives influence environmental attitudes and behavior? Evidence from an experimental analysis. Resources, Conservation and Recycling, 149, 168-176.

Rajendran, M. M. A., Mosisa, K. M., & Nedelea, A.-M. (2017). Effects Of Non-Monetary Benefits On Employees Performance (A Case Of Bako Agricultural Research Center, Western Shoa, Ethiopia). ECOFORUM, 6(2(11)), 1-14.

Rashid, M., Tasmin, R., Qureshi, M. I., & Shafiq, M. (2017). Relationship Of Servant Leadership With Employee Inrole And Extra-Role Performance In GLC’S Of Malaysia. City University Research Journal(Special Issue: AIC, Malaysia), 88-95.

Rashid, M. A. A., Rashid, B., Othman, A., Othman, M. Z., & Fatini, N. (2016). The Influence Of Compensation On Job Performance Among Employees In Malaysia. Paper presented at the 1st International R Conference on Business Management and social Science, At Penang, Malaysia.

Ridic, O., Avdibegovic, A., & Bušatlić, S. (2016). Analysis Of Relationship Between Flexible Work Arrangements, Work Life Balance And Employees’ Efficiency: Evidence From Bosnia And Herzegovina’s (Bih) IT Sector. Economic Review, XIV(2), 44-55.

Schumacker, R. E., & Lomax, R. G. (2010). A Beginner’s Guide to Structural Equation Modeling. NewYork: Routledge.

Shmailan, A. S. B. (2016). The relationship between job satisfaction, job performance and employee engagement: An explorative study. Issues in Business Management and Economics, 4(1), 1-8.

Suhail, A., & Azhar, A. (2016). Managing Human Resources in Public Health Care System in South Asia: Case Study of Pakistan. South Asian Journal of Human Resources Management, 3(1), 75-83.

Tabiu, A., Pangil, F., & Othman, S. Z. (2016). Examining the link between HRM Practices and Employees’ performance in Nigerian public sector. Management Science Letters, 6, 395-408.

Taras, V. (2012). Direct Versus Indirect Compensation. Compensation & Benefits Review, 44(1), 24-28.

Tepper, B. J., & Taylor, E. C. (2003). Relationships among supervisors' and subordinates' procedural justice perceptions and organizational citizenship behaviors. Academy of Management Journal, 46(1), 97-105.

Tessema, M. T., Ready, K. J., & Embaye, A. B. (2013). The Effects of Employee Recognition, Pay, and Benefits on Job Satisfaction: Cross Country Evidence. Journal of Business and Economics, 4(1), 1-12.

Uwizeye, H., & Muryungi, D. P. (2017). Influence Of Compensation Practices On Employee Performance Of Tea Companies In Rwanda: A Case Study Of Rwanda Mountain Tea. European Journal Of Business And Social Sciences, 6(06), 160-167.

Van der Stede, W. A., Wu, A., & Wu, S. Y. (2020). An empirical analysis of employee responses to bonuses and penalties. The Accounting Review, 1-40.

Wayne, S. J., Shore, L. M., & Liden, R. C. (1997). Perceived organizational support and leadermember exchange: a social exchange perspective. Academy of Management Journal, 40, 82-111.

Wu, M. Y., & Lee, Y. R. (2011). The effects of internal marketing, job satisfaction and service attitude on job performance among high-tech firm. African Journal of Business Management, 5(32), 12551-12562.

Yan, Y.-H., & Kung, C.-M. (2017). Hospital image and compensation/benefit system on organizational attractiveness. Public Health Open Journal, 2(1), 33-41.

Downloads

Published

31.12.2020