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Impact Of Reward System And Fringe Benefits On Job Satisfaction
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CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Reward being seen as a vital instrument in employee performance. A well rewarded employee feels that he/she is being valued by the company that he/she is working for. They are also encouraged to work harder and better if they are aware that their well-being is taken seriously by their employers, and that their career and self development are also being honed and taken care of by their company. Employees are the engine of organization vehicles while reward is the fuel. In the modern time management, no organization can achieve its stated objectives without commiserate rewards and fringe benefits for its employees (Martocchio, 2011).
The role of reward system in shaping the live of an organization cannot be overemphasized. Reward system has been described as the development, implementation, maintenance, communication and evaluation of compensation processes (Galanou, Georgakopolous, Sotiropoulous and Dimitris, 2010). Ordinarily, the management of people at work is an integral part of the management process, put differently managers need to understand the critical importance of people in their organizations so as to recognize that the human element and the organization are synonymous (Popoola and Ayeni, 2007). Therefore, it is imperative and morally worthwhile to have a sound reward system and fringe benefits in place.
Fringe benefit is defined as any form of compensation provided by the organization other than wages or salaries that is paid for in whole or in part by the employer. Employee benefits are also essential for the development of corporate industrial relations. Examples include retirement plans, child care, elder care, hospitalization programs, social security, vacation and paid holidays (Christoph, cited in Ju, Kong and Hussin, 2008).
Cascio (2003) asserted that because of the importance that rewards holds on people's lifestyle and self esteem, individuals are very concerned about what they are paid. While on the other hands organizations are concerned with what they pay because it motivates important decisions of employees about job satisfaction and overall corporate performance.
The happier people are with their jobs, the more satisfied they are said to be (Odunlade, 2012). The perception of being paid what one is worth predicts job satisfaction. Job satisfaction is perceived as an individual’s attitude and behavior towards aspects of his own job. Personal job satisfaction is an affective or emotional response toward various facets and outcomes of one’s job; meaning that personal satisfaction in relation to a job is not unitary, as a person may be satisfied with one aspect of his or her job and may be dissatisfied with the rest (Bozeman and Gaughan, 2011).
Employees will demonstrate pleasurable positive attitudes when they are satisfied with the corporate reward system and fringe benefits which the job brings. Thus, good reward system and fringe benefits will increase the employees’ job satisfaction which will invariably affect corporate productivity and performance (Millan et al, 2011). But, whether reward system and fringe benefits negatively or positively determines workers job satisfaction in Nigeria remains open to empirical studies. Hence, this study will investigate the impact of reward system and fringe benefits on job satisfaction with a special reference to Ensure Insurance Plc.
CHAPTER ONE -- [Total Page(s) 2]
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