The Impact of Compensation and Reward System on the Performance of Employees

Abstract

This study is meant to ascertain the relationship between compensation and employees’ performance. The study aims to find out how satisfactory compensation enhances employee performance. The impact of reward administration on worker performance can be appropriate to those who develop their inspiration from it. Consequently, to say that reward influence workforces to perform may be fictitious and overstatement. Human requirements are dynamic in nature. For the sustainability, a compensation strategy should also illuminate the connexion between remunerations, salaries and reimbursements to the crucial success dynamics of the businesses. Against such a complex background of varied effects of compensation on employee performance several arguments can be put forward: A remuneration policy should entail other components of variable pay that is pay, which is linked to the performance of employees. Thus, employees must be made to believe that greater efforts result in greater rewards.