Introduction
Worker motivation and compensation are two issues that plague modern businesses. To reach new heights, every business has to hire competent workers and structure its operations to meet its objectives. It is easier to fathom running a successful firm with the collaboration of skilled individuals, which is, in turn, only possible with an adequate compensation and incentive plan. Employees’ ingenuity, hard work, and initiative are clear factors in the company’s success and the fulfillment of its strategic objectives.
The goal of any incentive system should be to motivate employees to act in a manner that is both fair and consistent with the organization’s values. The reward process also includes its facilitation via design, execution, maintenance, and communication (Demir, 2020). Several types of intrinsic incentives have been demonstrated to enhance worker satisfaction and job performance.
Participation in decision-making, independence in one’s work, the relevance of one’s work, and public acknowledgment are all examples of such benefits. There is little doubt that these incentives contribute to happy and productive staff. Job satisfaction, motivation, and dedication all contribute to a business’s overall improvement. These are the results of creating a favorable and cooperative climate inside an organization and designing an efficient remuneration plan for personnel. When a company’s human resources are properly managed, it may achieve remarkable results (Stefurak et al., 2020). The value that businesses place on their employees’ happiness and motivation at work continues to rise.
Numerous studies have investigated whether and to what extent work rewards and satisfaction impact productivity. This study aims to identify areas for development within the target organization and discover what it will take to create a daily work experience that workers look forward to. Ultimately, this article aims to clarify the connection between motivation and work satisfaction by discussing literature review as a research technique and providing an outline of significant results in this area of study.
Research Approach, Method, and Design
There has been an increase in the rate of knowledge creation in business research, but this growth has occurred in a disorganized and multidisciplinary manner. This makes it difficult to evaluate the body of data in a specific field of business research, much less to stay current with developments in the field and maintain a position of prominence in it. Doing a literature review as part of the study is more important than ever. However, conducting literature reviews ad hoc rather than following a predetermined process sometimes results in superficial and unreliable evaluations. As a result, concerns have been raised concerning the reliability of these ratings.
This research was approached with a postpositivist worldview. Essentially, it is done using a reductionistic intent, which constitutes data collection and reduction to small, discrete sets of ideas. Information on employee management, work satisfaction, and employee motivation was culled from academic papers available online via Google Scholar. The most essential data on the subject were pulled from the discussions and findings, and organized to compile various excerpts into a single, cohesive literature review. This research is more closely aligned with a quantitative analysis of the repeated online information and knowledge on the topic of interest.
Literature Review
Various motivational theories, including need-based, reinforcement, and process theories, are employed to examine the factors that inspire and retain workers, thereby increasing their job satisfaction. The problem lies in identifying motivated workers. The foundation of every firm is the happiness its employees feel from their work. Sometimes, it is challenging to distinguish between being motivated and being happy in one’s profession (Pananrangi et al., 2020).
It is essential to recognize that “motivation” and “work satisfaction” are distinct concepts. They understood that feeling content in one’s work environment is a factor in keeping people motivated. Whereas the focus of motivation is on the actions that lead to the achievement of goals, the focus of work satisfaction is on the feelings of contentment we experience due to the many perks and duties of our jobs (Anwar, 2017). An employee may enjoy all aspects of his work but feel unmotivated (Ha et al., 2020).
Human resource management includes the crucial component of compensation and reward. To what extent workers are dedicated to and remain with a company largely depends on the remuneration scheme offered to them. Offering competitive salaries and benefits is one effective strategy for retaining employees (Anwar & Qadir, 2017).
Offering competitive, market-related compensation and benefits is crucial to an employer’s retention strategy since it encourages workers to become dedicated to the firm. If employees are well-compensated, they are more likely to stay with the company; however, if they are not, they may decide to quit. When workers feel their skills, accomplishments, and efforts are valued, they are more likely to remain with their current employer (Febrianti & Se, 2020).
Job Contentment
Industrial and organizational psychologists’ studies primarily focus on the factors that contribute to workers’ overall sense of job satisfaction. For some individuals, employment is not only a means to an end, but also an end in itself. However, many despise their jobs and go to them out of obligation. The extent to which individuals like their work is reflected in their level of job satisfaction.
Regarding organizational behavior, job satisfaction has received the most attention (Anwar, 2017). The findings of job satisfaction surveys have implications for both employees and employers, making it crucial to get insight into the current state of workplace contentment. From the employees’ perspective, it is clear that everyone appreciates fair treatment. Having employees who are both happy and fulfilled in their jobs may be indicative of decent treatment. From the business perspective, satisfied employees provide greater results, which benefits the company’s bottom line (Smith et al., 2020).
Satisfaction at work is often regarded as a crucial factor in determining whether a company will retain its employees. Increases in output, responsiveness, quality, and recognition service can only be achieved with a satisfied workforce. Factors such as job success or failure, the quality of supervision, and interpersonal connections with coworkers all contribute to an employee’s happiness in their position.
Employees are more likely to behave in ways that benefit the company’s bottom line when they are inspired to do their best work, intensely loyal to their employer, and enjoy their work (Paais & Pattiruhu, 2020). According to the findings, four factors—professional growth, workplace impact, collaboration, and job challenge—are the most influential in determining whether an employee is satisfied with their current position (Riyadi, 2020).
Motivation
Key features of modern organizations focus on boosting employee motivation, commitment, and engagement. Creating effective pay plans is crucial to inspiring employees to give their all in the workplace and achieve exceptional results. Identifying a need is the first step toward being motivated.
The next step is to determine what needs to be done to fulfill this need. Setting up incentives and rewards may motivate individuals to work toward the goal. The principles and culture of a company are part of this background, but so are the decisions and actions of its leadership and management, as well as the impact of the team on which an individual member serves.
Extrinsic motivation is a type of motivation that originates from outside the individual. For an employee to be intrinsically motivated, the task must provide some personal fulfillment. People are believed to look for jobs that they believe will meet their needs, which is consistent with the theory of intrinsic motivation. Responsibility, autonomy, the confidence to utilize and grow one’s own abilities, engaging work, and the prospect of promotion are all aspects that might boost a person’s intrinsic motivation.
What constitutes extrinsic motivation is the extent to which one relies on the efforts of others to propel oneself forward. The benefits provided by management, such as wage increases, compliments, and opportunities for advancement, are examples of extrinsic motivation. Motivation from outside is compelling, but it only sticks around for a short time.
Since people have varying requirements, paying close attention to the objectives and rewards is crucial. Theories of motivation have been studied for a considerable time, shedding light on the various factors that drive people. Human resource policies may be adjusted in light of these beliefs to better engage and motivate workers (Ali, 2021).
Salary is a form of monetary compensation given to employees as a reward for their efforts. It is also a significant source of drive and enthusiasm. When salaries are set and distributed fairly, they may boost morale, output, and job satisfaction. Workers express low levels of contentment with their existing pay. This may indicate that employees are dissatisfied with their pay and seek raises. Managers should consider this aspect, as enhancing it may boost staff motivation and productivity (Hassan et al., 2020).
Staff dissatisfaction often extends to whether or not they are paid fairly. As a result of the work they undertake, they claim they should be paid more (Alrawahi et al., 2020). While some workers were content with their pay, most felt the system was inequitable. A wage increase might serve as a positive incentive. It is discouraging when some employees make more money than others for doing the same job.
Compensation
Compensation plans aim to motivate, attract, and retain employees. However, management must be cautious about spending too much on pay schemes while incentivizing workers. It is crucial to demonstrate to employees that management values their contributions and is concerned about their well-being.Â
Historically, compensation plans aimed to achieve the highest possible internal fairness within payroll systems. Since the economy and a company’s economic circumstances constantly change swiftly, there is no universally applicable method of rewarding the workforce. As a result, every business must pay close attention to its compensation policies.
It is crucial for compensation plans to be fair within the organization, competitive in the market, and inspiring to employees. There are three main factors to consider when determining an appropriate salary for an employee: the salary must be fair in relation to the amount of effort the employee has put in, it must be competitive in relation to market prices in the business field, and it must be sufficient to motivate the employee to give their best performance.
Some workers are paid differently from others, either in relation to one another or in comparison to the market rate. Hence, the first two problems typically overlap. Personal compensation is valued but challenging to implement.
Employees’ perceptions of their pay vary widely from the company’s official stance. Programs for paying workers encompass all aspects related to their compensation (Da Cruz Carvalho et al., 2020). Pay may be incentive-based or non-incentive-based. A Cafeteria plan is a frequent kind of compensation package. A cafeteria plan allows workers to pick and choose the benefits they want to utilize.
Conclusion
Statistics may differ depending on the specific field being studied, the location, and the extent of the research. Most studies have shown that workers are more satisfied with their jobs when they get financial rewards. Although many theories and research results suggest that a salary increase or monetary rewards are a short-term incentive that do not provide lasting results unless comfort is also provided through other incentives, benefits, and organizational structure, many companies still resort to this method. It has also been shown that financial incentives are a significant motivator, positively impacting work satisfaction. Increasing financial incentives has significantly impacted employee performance, loyalty, and satisfaction in the workplace.
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