Relation of Compensation and Benefits on Employees’ Performance: Mediating Role of Motivation

Abstract

Effect of compensation and benefits on employee performance supported by motivation. The aim of this study is to analyse the impact of compensation and benefits on employee performance with the mediating role of motivation. It is hypothesized that compensation and benefits positively impact employee performance. Motivation always mediates the effect of compensation and benefits on employee performance in a positive way. Also, compensation and benefits have significant effect on motivation. Employees from different organizations were chosen to fill an online survey questionnaire to collect required data. There was total 100 respondents who filled responses based on their experience. Out of which, 20 were extracted due to improperly filled questionnaires. 80 responses were selected to be researched on and run analysis. Smart PLS was used to perform SEM analysis. The results generated through bootstrapping in structural model analysis were mostly supported, with significant values p <0.05 and t > 1.96. The respondents of the survey could relate their experience to the background of research i.e. compensation and benefits have a significant effect on employee performance. Therefore, the results of this study support the findings of previous research work of different authors who stated that compensation and benefits overall have a positive effect on employee performance.