Question

If employee compensation is properly administered, can it be an effective tool to improve employee performance, motivation and satisfaction?

Answer 1

Yes

Well administered employee compensation can prove to be effective in improving employee performance, motivation and satisfaction.

This is because when the compensation given to employee is well administered, it helps the employer in understanding employee needs and satisfaction. It helps the employer understand that how much compensation is effective for the work done by the employee, how it will affect their incentive to work harder or shirk from work, which helps the employer understand whether to increase or decrease wages to maximize employee satisfaction and make them motivated enough.