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 239
- Downloads 0
IMPACT OF THE NATIONAL ECONOMY ON FINANCING THE HEALTH SYSTEM OF THE REPUBLIC OF SRPSKA
Health is the first priority of every individual, and therefore of each community. Or at least it should be. The unobstructed functioning of the healthcare system is crucial for every society. The disturbance of its func...
Value Added as a Measure of Economic Profit
Economic profit is the concept immanent for the value added. It is an attempt to analyze properly the business success in terms of contribution of profit to the increase in the company value and the stockholders’ wealth....
GLOBAL FINANCIAL AND ECONOMIC CRISIS
The crisis began with the abolition of the Gold Standard in 1971, since when the unlimited emitting of the dollar has begun. Besides, the dollar has begun a global currency, and the United States have gained the status o...
Opportunity for Sales Promotion Using the RFID Technology
Radio Frequency Identifcation (RFID) is a revolution in industrial control, because it has the potential to simplify and make more robust tracking of parts or part carriers through manufacture, storage, distribution, and...
The Internal Interpreneurship and Enterpreneurial Intelligence in TNC
The globalization process of the world economy has created changes in terms of principles and standards of the international corporative interpreneurship. The beares of international corporative interpreneurship are main...