An Evaluation of the Impact of Remuneration on Employees Attitude

An Evaluation of the Impact of Remuneration on Employees Attitude

Abstract

Everyone works for rewards, whether they are pre-determined salaries, wages, or other perks, or any incentives and remunerations for specific performance. Individuals want to be properly paid and are only happy if they get the anticipated benefits for their work. As a result, the present research looks at whether pay affects employee performance through affecting employee attitudes. According to the current research, pay affects employee performance, while employee attitude mediates the connection between the two. 

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A sample of 200 respondents from Amman stock market listed firms is examined, and using structural equation modelling, it is discovered that in manufacturing organisations, pay substantially affects workers' attitude, which in turn effects their performance. As a result, pay has a substantial impact on employee performance, but only through changing their views about their employment.


Introduction

Pay for performance is a well-known management technique. All compensation plans include incentive and bonus programmes with the aim of incentivizing employees' success by remunerating them (Calvin, 2017). In every company, operations are carried out with the help of assets; machines, materials, cash, and, most importantly, individuals, who utilise these assets to generate value; without people, other assets are useless, torpid, and will not produce anything (Xanthopoulou et al, 2009a). As a result, human capital is the most valuable resource that any company may have and should be prioritised. Human resources provide a foundation for a company to achieve long-term competitive advantage (Christensen, 2011).

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Organizations must create efficient methods for recruiting and keeping competent personnel since they operate in a dynamic and competitive business environment (Baker et al, 2007). Human resource is thought to be the most important resource of any organisation in the modern era, and in order to get the most productive and powerful results from human assets, it has become critical to positively influence their attitudes and behaviours, which leads to them contributing effectively in enhancing organisational productivity by improving their performance (Bauer et al, 2006).


Limitations and Future Suggestions

The current research is restricted to a single industry, but the findings may evolve to include several other industries as well. Furthermore, it primarily focused on manufacturing companies, while a comparable research for service firms might be performed to investigate if pay has a major effect on employee performance in service firms or not.

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