SAN Institute of Management Sciences (SIMS), Lahore. Affiliated withRIPHAH INTERNATIONAL UNIVERSITY, ISLAMABAD

MBA (HRM), Session (2007-2009)

Presented by:

Usman Babar 27F-603Abdul Muneeb Arshad 27F-607

Presented to:

Syed Tanvir Hussain Kazmi

Title of the ProjectTitle of the Project

THE IMPACT OF THE IMPACT OF COMPENSATION, HYGIENE COMPENSATION, HYGIENE FACTORS ON MOTIVATION FACTORS ON MOTIVATION

AND PERFORMANCEAND PERFORMANCE

Introduction

This is a descriptive study looking into the impact of compensation and hygiene factors on motivation and performance. Many researchers have done research on these variables.

CCompensation, Hygiene Factors, Motivation, Job ompensation, Hygiene Factors, Motivation, Job satisfaction and performance 2009satisfaction and performance 2009relates to specific relationships within an relates to specific relationships within an organizational setting. Currently, there is a lack of organizational setting. Currently, there is a lack of research in Pakistan specially the area of research in Pakistan specially the area of compensation and hygiene factors, with even less compensation and hygiene factors, with even less attention to the relationship between compensation, attention to the relationship between compensation, hygiene factors and motivation, performance.hygiene factors and motivation, performance.

Importance of the StudyImportance of the Study

This study will contribute to research and This study will contribute to research and business communities by expanding the business communities by expanding the knowledge base of compensation and knowledge base of compensation and environmental factors in organizations as itenvironmental factors in organizations as it

Purpose of the Study

The purpose of this study was to gather information aboutThe purpose of this study was to gather information about

the compensation, hygiene factors that are used in differentthe compensation, hygiene factors that are used in different

organizations to motivate their employees in order to takeorganizations to motivate their employees in order to take

high productivity in limited time. what effecthigh productivity in limited time. what effect

compensation, hygiene factors, had on employees‘compensation, hygiene factors, had on employees‘

motivation and performance. The study also gatheredmotivation and performance. The study also gathered

qualitative information about compensation and hygienequalitative information about compensation and hygiene

factors and their impact on performance and motivation.factors and their impact on performance and motivation.

The Significance of Study The Significance of Study

The current study will add the The current study will add the existingexisting

knowledge by signifying:knowledge by signifying:1. Relationship between 1. Relationship between compensation and compensation and motivation.motivation.2. 2. Relationship between Relationship between compensation and compensation and performance.performance.3.3. Relationship between Relationship between motivation and motivation and performance.performance.4.4. By looking into the By looking into the motivation's aspect of motivation's aspect of employees employees performance.performance.

Key terms of the study defined Key terms of the study defined

Compensation Benefits Compensation Benefits

When employee's managers do annual employee performance reviews. The downside of this is that employees may begin to see it as a given that they will get a salary increase after each evaluation, and it ceases to be a motivation to perform better in their jobs. For this reason, more companies are moving toward more of a reward-based compensation style, also called Incentive Compensation.

Hygiene Factors Hygiene Factors Particular factors often caused a worker to feel Particular factors often caused a worker to feel unsatisfied with his or her job. These factors unsatisfied with his or her job. These factors seemed directly related to the person's seemed directly related to the person's environment, for example, the physical environment, for example, the physical surroundings, other personnel such as surroundings, other personnel such as supervisors and even the company itself.supervisors and even the company itself.

If you make sure the environmental factors are If you make sure the environmental factors are in place the worker will be more efficient in in place the worker will be more efficient in terms of performance.terms of performance.

However, the independent drive associated with motivation may still be lacking. Hygiene might include:Policy.Relationship with supervisor and other managers.Work conditions.Physical environment.Salary.Company canStatus.Security.Relationship with subordinates.Personal life.

Motivation Motivation

““Predisposition to behave in a purposive Predisposition to behave in a purposive manner to achieve specific, unmet needs”manner to achieve specific, unmet needs”

MotivationMotivation is the activation or energization of is the activation or energization of

goal-oriented behavior. Motivation may begoal-oriented behavior. Motivation may be

internal or external. The term is generally usedinternal or external. The term is generally used

for humans but, theoretically, it can also be usedfor humans but, theoretically, it can also be used

to describe the causes for animal behavior as well to describe the causes for animal behavior as well

Performance Performance Performance is the accomplishment of Performance is the accomplishment of work assignments or responsibilities and work assignments or responsibilities and contributions to the organizational goals, contributions to the organizational goals, including behavior and professional including behavior and professional demeanor (actions, attitude, and manner of demeanor (actions, attitude, and manner of performance) as demonstrated by the performance) as demonstrated by the employee's approach to completing work employee's approach to completing work assignments.assignments.

Job Satisfaction Job Satisfaction

Locke and Lathan (1976) give a comprehensiveLocke and Lathan (1976) give a comprehensive

definition of job satisfaction as pleasurable ordefinition of job satisfaction as pleasurable or

positive emotional state resulting from thepositive emotional state resulting from the

appraisal of ones job or job experience.appraisal of ones job or job experience.

Compensation, Hygiene Factors, Motivation,Compensation, Hygiene Factors, Motivation,

Job satisfaction and performance 2009.Job satisfaction and performance 2009.

Compensation Benefits and Compensation Benefits and MotivationMotivation

Throughout the ages, pay for performance has beenThroughout the ages, pay for performance has beenused to reward both low-level employees as well asused to reward both low-level employees as well astop executives. The upper-left quadrant of the matrixtop executives. The upper-left quadrant of the matrixrefers to the empirical literature on incentiverefers to the empirical literature on incentivecompensation, which tries to answer the questioncompensation, which tries to answer the questionhow incentives can influence behavior, in particularhow incentives can influence behavior, in particularproductivity. A specific subfield, on which empiricistsproductivity. A specific subfield, on which empiricistsfrom various fields such as finance, industrialfrom various fields such as finance, industrialorganization and organizational behavior haveorganization and organizational behavior havefocused, deals with executive compensation.focused, deals with executive compensation.

HypothesisHypothesis

HHoo: There is no relationship between Hygiene: There is no relationship between Hygiene

factors and Motivation.factors and Motivation.

HH11: There is a significance relationship : There is a significance relationship between hygiene factors and performancbetween hygiene factors and performance.e.

Compensation and performance Compensation and performance Good remuneration has been found over the years to be one of the policies the organization can adopt to increase their workers performance and thereby increase the organizations productivity. Also, with the present global economic trend, most employers of labour have realized the fact that for their organizations to compete favourably, the performance of their employees goes a long way in determining the success of the organization. On the other hand, performance of employees in any organization is vital not only for the growth of the organization but also for the employees.

FrequencyFrequency tabletable ofofPerformancePerformance

Frequency PercentValid

PercentCumulative

Percent

Valid2.63 1 .4 .8 .8

2.75 1 .4 .8 1.7

4.00 1 .4 .8 2.5

5.13 1 .4 .8 3.4

5.25 1 .4 .8 4.2

5.38 5 2.1 4.2 8.4

5.50 5 2.1 4.2 12.6

5.63 4 1.7 3.4 16.0

5.75 7 2.9 5.9 21.8

5.88 12 5.0 10.1 31.9

6.00 7 2.9 5.9 37.8

6.13 11 4.6 9.2 47.1

6.25 10 4.2 8.4 55.5

6.38 5 2.1 4.2 59.7

6.50 7 2.9 5.9 65.5

6.63 12 5.0 10.1 75.6

6.75 9 3.8 7.6 83.2

6.88 8 3.4 6.7 89.9

7.00 12 5.0 10.1 100.0

Total 119 50.0 100.0

MissingSystem 119 50.0

Total 238 100.0

Explanation Explanation The above table shows the frequency of participants' responses for compensation, the total number of respondents is 119. From the whole 12 falls in 7.00, 6.63 and 5.88 that are 5% of the sample, 11 falls in 6.13 that are 4.6% of the sample, 10 falls in 6.25 that are 4.2% of the sample, 9 falls in 6.75 that is 3.8% of the sample, 8 falls in 6.88 that are 3.4% of the sample, 7 falls in 6.50, 6.00 and 5.75 that are 2.9% of the sample, 5 falls in 5.38, 5.50 and 6.38 that are 2.1 of the sample, 4 falls in 5.63 that are 1.7% of the sample, and at the end 1 falls in 2.63, 2.75, 4.00, 5.13, and 5.25 so that are the 0.4% of the whole sample.

SummarySummary

This study suggests the positive relationship between This study suggests the positive relationship between compensation benefits, hygiene factors, motivation compensation benefits, hygiene factors, motivation and performance. Pay is a key element in the and performance. Pay is a key element in the management of people. The importance of pay begins management of people. The importance of pay begins with pay administration that deals accurately and with pay administration that deals accurately and swiftly with payroll-related matters. The hygiene swiftly with payroll-related matters. The hygiene factors are also affect able on performance because factors are also affect able on performance because better hygiene make employees effective and better hygiene make employees effective and motivated so in this study these factors will also motivated so in this study these factors will also under consideration. under consideration.

Thank youThank you