Analysis of the relationship between compensation practices and business performance
Journal Title: Acta Economica - Year 2012, Vol 10, Issue 17
Abstract
Compensations are total rewards (tangible and intangible) that employees receiving for their work. Since the amount and structure of total compensation directly influences motivation, attitudes and behaviors of employees, employers tend to put compensations in the function of achievement of business objectives. A review of relevant literature in this fled, we conclude that the successful companies worldwide are long time ago rejected the traditional system of remuneration which has been based solely on a fixed basic pay, while this system is in the domestic business organizations still dominant. Instead, successful companies have embraced a new system of remuneration that emphasizes the significance of intangible components of a compensation package, because without a significant increase in remuneration costs may increase the attractiveness of jobs, attract, motivate and retain employees. In addition to consideration of the role and importance of compensation management in organizations, and analysis of contemporary practices and compensatory instruments available to employers, through this work and practical research, we evaluated the adequacy of the remuneration system in large and medium-sized enterprises operating in the Republic of Srpska. The results show that there is no strong link between material reward, expressed as a basic pay, and business performance, which indicates the inadequacy of the existing system of remuneration. Furthermore, the results suggest that material reward does not represent a sufficient motivation to employees to increase their work performance and thereby contribute to improving of the business performance of domestic companies.
Authors and Affiliations
Гордана Илић, Бранка Золак Пољашевић, Саша Вученовић
Keywords
Related Articles
- EP ID EP43746
- DOI https://doi.org/10.7251/ACE1217031I
- Views 265
- Downloads 0
DETERMINING AND MAINTAINING THE AMOUNT OF PROFITABILITY OF NET WORKING ASSETS
Net working assets are an important indicator of a company’s liquidity. To determine the optimal amount, the management has to know that over‐investing into net working assets can lead to a decline in the company’s profi...
European union - the crisis and development challenges and survival
The economic crisis has wiped out the progress of European economies achieved in the years before the crisis. Steady economic growth and employment growth that characterized the decade before the crisis are gone. In term...
SLOVENIAN EXPORT COMPANIES IN TIMES OF ECONOMIC CRISIS AND GOVERNMENT MEASURES AGAINST IT
The article analyses economic crisis from two perspectives, one is looking at expectations of Slovenian export companies in times of economic crisis and the other are government measures against the crisis, the so called...
CONTROVERSIONS ON THE ROLE OF AUDITORS IN PREVENTING AND DISCOVERING FRAUDS
Since the forties of the last century, there has been a continuous discussion on the role of auditors in preventing and discovering frauds. It arises from the gap between what auditors believe they should and can offer w...
THE PROBLEM OF ENTERPRISE VALUE ASSESSMENT
One of the most complex problems in economy is Business Appraisal. Global crisis and inactive and illiquid financial markets influence the Business Appraisal. Given the mission of a business to create value in a business...