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The Role of Compensation on Job Satisfaction: A Review
Article Number: SIS619028AI220824
22nd August, 2024
Author(s):
Emmanuel Poatob
Abstract:
The relationship
between pay and job satisfaction is examined in this review, with focus on how
these relationships affect organizational and individual dynamics. Compensation,
which includes both monetary and non-monetary benefits, is a major influence on
how workers behave and think about themselves in the workplace. The
relationship between an individual's subjective feelings and attitudes toward
their work is facilitated by job satisfaction, a complex psychological state
that is critical to the success of an organization. An overview of compensation
is given in the review, along with a description of its various forms and an
emphasis on how it affects employee motivation, retention, and attraction. It
explores compensation procedures, emphasizing the strategic role that
compensation management plays in fostering an environment that is welcoming and
inclusive. Non-financial compensation, which includes opportunities for
professional and personal growth as well as recognition and praise, is examined
alongside monetary compensation, which includes salaries, bonuses, and
incentives. A variety of factors are taken into account when analyzing job
satisfaction, including the type of work, compensation, chances for
advancement, supervision, and relationships with coworkers. Variables and
factors that affect job satisfaction were identified. Work-life balance,
opportunities for skill application, engaging tasks, and recognition and
appreciation are emphasized as crucial elements that contribute to job
satisfaction. It is stressed that providing opportunities for career growth and
development is essential to proving an organization's commitment to its
workers' professional satisfaction. The review establishes a link between
compensation and job satisfaction. Scholars argue that compensation, when
aligned with organizational objectives, significantly contributes to employees'
contentment. The positive correlation between competitive salaries,
performance-based incentives, and job satisfaction is consistently supported
across diverse cultural contexts. Furthermore, the review identifies key
factors and determinants influencing job satisfaction. Engaging job tasks,
opportunities for skill utilization, work-life balance, recognition, and
appreciation are highlighted as critical contributors to job satisfaction.
Opportunities for career growth and development are emphasized as pivotal in
demonstrating organizational commitment to employees' professional
satisfaction. The outcomes of job satisfaction are discussed, emphasizing its
impact on employee performance, productivity, retention, and reduced turnover.
Organizational commitment, creativity, innovation, and customer satisfaction
are identified as tangible outcomes influenced by employees' job satisfaction.