Motivating Compensation Package For Pakistan Telecommunication Employees Business Essay

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This study is done to investigate the compensation packages offered to employees of telecommunication sector of Pakistan and what should be the best mix of compensation package that should be offered to them. In order for human resource managers to effectively and efficiently build their human resource they need to know the compensation package that employees want and which compensation factor is more motivational for them. Secondary research, which was used for the literature review, basically consisted of articles gathered from multiple online advertising and marketing journals. The primary research was based upon a survey of 45 questionnaires conducted in franchises of 5 telecom companies in Lahore, to examine the role of compensation packages and the effectiveness of their sub variables. The data obtained was analyzed and interpreted using the SPSS software by frequency computations and cross-tabulations. The most motivational factor was direct payment and least was executive benefits. Overall, it is suggested that human resource managers should use the direct payment but they can offer executive benefits to those areas where there is some security concerns.

Introduction

Overview and Background of the topic

Past compensation research has largely reflected organizational characteristics and personnel practices that had an internal rather than an external focus. Internal labor markets typically characterized organizations following WWII up until the 1980s. Consequently compensation research focused on issues related to managing compensation in this type of structure that emphasized areas such as internal equity, job evaluation, and individual reactions to pay. Recent changes in the environment have resulted in a greater role of external factors, such as external labor markets, market pricing, and external competitiveness, on compensation practice. While practitioners today have more of an external focus in compensation system design, present compensation research has not kept pace. In the following paper we argue there is a need to redirect future compensation research to include a consideration of external factors.

As the time has passed, the compensation system has witnessed a drastic change in the past two decades including job classification system, salary ranges, and pay policies and procedures. For example, in Telecom industry dissimilar jobs were often found in the same salary range. Today there is a set of 8 to 10 salary ranges for every role. The salary range is assigned based on market data for that job. If no market data is available for a specific job, the job is slotted into a range based on other factors, such as other jobs in the department, similar jobs in the company, or recruitment and hiring experience.

In the older days, the employees were given limited benefits, which included pay raise or job promotion. In today's world, the salary packages are fully loaded with fringe benefits which include medical, sick leaves and other allowances. Nowadays, it has become very hard to recruit and retain skilled employees, so these measures offer the motivation to stick with a particular job.

Today every firm is involved in head hunting of its competitor's employees. The firm offers them a better salary package then what they are getting in their current job to attract them towards their company.

Importance and role of Human Resource Management in Telecom sector

Employee benefits play a critical role in the lives of employees and their families by assisting in health needs, future financial security, needed absences from work, and more. Benefits may include programs like paid time off, medical insurance, life insurance, retirement benefits, family leave, education and training programs, bonuses and commissions.

In telecom, employee benefits play a vital role because firms tend to have a mix of part time and full time employees. Part-time employees are rarely offered benefits. This could create an impression of discrimination in the minds of the part time workers and would demotivate them. To tackle this issue, the companies have started designing compensation packages for them also.

In telecom, generally the benefits that are given are health benefits, phone allowance, fuel, sick leaves and bonuses. Rewards are given to employees on the basis of their performances and dedication towards the organization. These benefits really help the employee morale and make them feel enthusiastic at work.

The Human Resource Management (HRM) includes a lot of activities related to staffing, recruiting, training and dealing with performance issues. It also include making employees compensation and benefit packages and also maintain employees record The role of human resource management in organization is at counter stage. Managers are aware that HRM is a function that must play a vital role in the success of organization. It is an active participant in planning the strategic course an organization must take place to remain competitive, productive and efficient. Its focal point is people; people are the life blood of the organization. The uniqueness of HRM lies in its emphases on the people in work setting and its concerns for the well living and comfort of the human resources in an organization. The HRM function is much more integrated and strategically involved. HRM and every other functions must work together to achieve the level of organization. Effectiveness required competing locally and internationally.

The role of HR in telecom is of utmost importance as numerous competitors have entered the arena.HR plays a pivotal role to remain competitive in the environment.

HRM increase the communication, coordination and involvement so that chances of misunderstanding will be minimum. Even in organizations with educated and experienced staff, due to the lack of cooperation on part of the management, the department cannot carry out its functions.

The basic concept of HRM is to attract and retain the right person at right place in right time with right salary. In telecom, HRM should appoint the skillful employee at the right place where he expresses his capabilities, because if we place non-qualified people at the call centers then he will face so many problems. For telecom, it is compulsory that the company treat the employee as an asset of the company. In telecom, a major issue is the wages and salary with time, so HR takes care about that and make structure in such a way that it satisfies both; employees and management .HR play just like a bridge between management and employees.

In telecom, proper training of employees is mandatory; the HR department makes sure that the employee is given adequate training before asked to perform the job.

Research Significance with respect to Pakistan and World

Success of any organization rests on the contribution of its Human Resource. As the time has passed, the contribution of employees is considered a pivotal source of success of an organization. Therefore, employee satisfaction should be a company's main goal to recruit and retain employees.

One of the ways to ensure that the employees are satisfied and committed towards the job is to compensate them on a regular basis. This would not only motivate them towards the work but also save high costs of the company which could arise because of high turnover if otherwise. Commitment and dedication towards the work can make an average employee work better than the one who is highly skilled but demoralized. This study aims to provide the policies to compensate and reward the employees that would help the companies with an environment which would foster creativity and motivation. If the employees are not motivated they would not be giving their 100% at work as a result the organization's performance would have an adverse effect.

As employees are the largest cost and the largest human capital source of an organization, understanding factors which contribute towards building commitment is necessary for an organization to prosper.

It is clear that compensation/benefit policy can have a sizable impact on employee turnover, motivation, performance, and attitudes. However, because of changing employee and employer needs, coupled with stagnant reward systems and outdated benefit plans, most compensation/benefit programs are far from optimal and almost all programs will undergo substantial redesign in the next decade.

This research will help the telecommunication companies in Pakistan in such a way that the human resource department of different companies will know that how they should formulate their compensation package and what are the main factors that are influence the employees of the telecommunication sector. In this way companies can reduce their employees turn over hence employees will be committed to their work hence will generate profits for the company and company will not have to spend on hiring new employee and spending time and money on training them.

Research question

Secondary research shows that there is a limited material available about the topic especially about the telecommunication sector of Pakistan. So this research is done to the answer the "Importance of compensation package in motivating employees of telecommunication sector of Pakistan".

Literature Review

Anthony M, et al (1990) conducted an applied research tried to find out, that which of the methods is most effective to keep the employees satisfied. Major variables discussed in this study include: benefits, fixed pay, satisfaction, job experience, job safety. The methodology consists of cross sectional data, as it is collected by observing many subjects (such as individuals, firms or countries/regions) at the same point of time, or without regard to differences in time. The analytical approach of the study is Descriptive analysis done by the author on different trends of compensation based on different experiences. The key finding in this case is that every individual has his own set of needs and wants, so the employees should be surveyed on their preferences and then later should be compensated based on those needs. Another important factor in this study is that if these needs are met from time to time, the individual will feel satisfied in his job. The methods mentioned in this study don't guarantee worker motivation or job satisfaction; there are several other factors that contribute to this issue which are not mentioned in this study. The compensable factors alone are not a solution to the problems; there are several other factors that affect job satisfaction. Every individual has differing needs, so it would be very hard to design a compensation system that could cater to every employee.

David A. Malueg; Marius Schwartz (2001) conducted a research to find out different issues that lead to employee compensation in different countries. Major variables include wages, other compensations, and total compensation, Industry, Country, Cultural Cluster. The compensation data used in this study were derived from a compensation cost report prepared by the U.S. Department of Labor, Bureau of Labor Statistics, Office of Productivity and Technology [1986]. These data were collected from national earnings statistics. By way of background, compensation traditionally is divided into three components: (1) wages, the direct payment to the worker in exchange for competently performing assigned work, (2) incentives, payments (including bonuses) made to the worker for high levels of individual or group performance, and (3) benefits, a combination of legally mandated costs (e.g., unemployment insurance) and other non-wage compensation (e.g., health insurance) that figure into the total cost of compensating a given employee. The sum of all of these parts represents total compensation cost. The significance of the results should indicate that there is some merit to the application of cultural cluster theory to compensation practices. Other variables that should be considered might include unionization densities, per capita GNP, and worker attitudinal data.

David L, et al (1996) conducted this study as a part of a larger study of personnel reform in five federal government agencies. Extensive interviews, on-site observations, surveys, and record audits from this larger study supplemented the archival data reported in the present study. The Social Security Administration (SSA) was the site of this study. The measurements of the four indicators of organizational performance at regular intervals form four time series of observations. Series of studies on the effects of externally-mediated rewards, such as pay, on laboratory subjects' intrinsic motivation to engage in tasks. Deci drew on this research to argue that contingent payment plans should be avoided because they reduce intrinsic motivation, lead individuals to develop strategies that will enable them to get rewards with the least effort, and can easily break down, if for instance, "no one is looking." These arguments are particularly relevant to managerial jobs, since such jobs are more likely than routine jobs to be intrinsically rewarding and are less likely to be subject to extensive surveillance. Deci suggested that salaries not directly based on performance are less likely to reduce intrinsic motivation than are salaries that are performance- contingent; unfortunately, it is not clear from his argument whether this substitution in task motivations will necessarily result in either increased or decreased task performance. There are limitations to this study that prevent drawing definitive conclusions about the effect of merit pay on organizational performance. First, of necessity, the majority of our statistical tests focus on the implementation of merit pay. Perry and Porter (1981) found that many managers did not trust the motives behind this compensation program, seeing it as political "window dressing" by the Carter and Reagan administrations; some managers apparently believed that this program was intended by the political leadership to communicate its dissatisfaction with bureaucratic inefficiency to the electorate rather than to actually reward high performance (Perry & Porter, 1981).

Warren E, et al (1988) conducted an Applied Research, as the goal of the study is to find out different methods to enhance organizational performance through different employee compensation programs. Major Variables include: performance, rewards, job satisfaction. Findings of the study confirm hypothesis that the level of managerial discretion held by executives moderates the relationship between firm performance and executive compensation. Indeed, the higher the level of managerial discretion held by executives, the more contingent their compensation is to firm performance measures such as stock market returns and return on assets. More specifically, banks with a broadly defined strategic domain (wholesale, international or super-regional orientation) and no regulations in their operating environment (no branching or takeover state regulations) provide their CEOs with compensation that is more performance-contingent than banks with a limited strategic domain (retail, domestic or local focus) or a restrictive operating environment (branching or takeover regulations).

John M. Abowd; David S. Kaplan (1999) conducted a study and the goal of the study was to find out different methods to enhance organizational performance through different employee compensation programs. Findings of the study show that the level of managerial discretion held by executives moderates the relationship between firm performance and executive compensation. Indeed, the higher the level of managerial discretion held by executives, the more contingent their compensation is to firm performance measures such as stock market returns and return on assets. More specifically, banks with a broadly defined strategic domain (wholesale, international or super-regional orientation) and no regulations in their operating environment (no branching or takeover state regulations) provide their CEOs with compensation that is more performance-contingent than banks with a limited strategic domain (retail, domestic or local focus) or a restrictive operating environment (branching or takeover regulations). Results show that there is a weak link between firm performance and CEO compensation . Using a corporate finance (agency theory) framework, this weak link is often deemed inefficient and a sign of managerial entrenchment. For example, the adoption by a state of takeover restrictions is posited to lower the accountability of a firm's executives, with compensation that is noncontingent upon firm performance (Karpoff and Rice, 1989) and stock price declines (Marr, 1992) being likely outcomes. In contrast, a managerial discretion framework suggests that the more tenuous link between firm performance and CEO compensation found in regulated environments is a rational response by directors.

Taylor J. (1998) conducted a study to find out different methods to enhance organizational performance through different employee compensation programs. Major variables include: Annual Base Salary, Bonus, and Job Level. The managerial compensation data used in this study were derived from the annual cash compensation survey of a major compensation consulting firm. The data cover approximately 75 top management employees for the period from 1981 to 1986 for each of about 600 corporations. The company, executive, and position are all identified in the survey data. Therefore, it is possible to follow both individuals and positions across years within a single company. All financial data used in this study were derived from Standard and Poor's Compustat data base. In this model performance-sensitivity in the compensation system can be varied continuously. The effects of this performance-sensitivity are captured by two interaction terms that measure the association between future performance and current compensation when current performance is below average and when current performance is above average. Most studies of managerial compensation have investigated the empirical relation between the level or rate of change of managerial compensation and corporate financial, economic, and market performance indicators.

Luis R. Gomez-Mejia (1992) conducted research on how to cut costs while making sure that employee satisfaction also remains. It is time series data because these observations are done on past practices in the organizations. The study is on finding the most appropriate methods to gain competitive advantage by ensuring low costs. For pay rates to be internally consistent, an organization first must determine the overall importance or worth of each job. A job's worth typically is assessed through a systematic process known as job evaluation. In general, the evaluation is based on "informed judgments" regarding such things as the amount of skill and effort required to perform the job, the difficulty of the job, and the amount of responsibility assumed by the jobholder. Job evaluation judgments must be accurate and fair, given that the pay each employee receives is so heavily influenced by them. An organization's compensation practices can have far-reaching effects on its competitive advantage. As compensation expert Richard Henderson notes, "To develop a competitive advantage in a global economy, the compensation program of the organization must support totally the strategic plans and actions of the organization." Labor costs greatly affect competitive advantage because they represent a large portion of a company's operating budget. By effectively controlling these costs, a firm can achieve cost leadership. The impact of labor costs on competitive advantage is particularly strong in service and other labor-intensive organizations, where employers spend between 40 and 80 cents of each revenue dollar on such costs. This means that for each dollar of revenue generated, as much as 80 cents may go to employee pay and benefits.

Matt Bloom; George T. Milkovich (1998) conducted a critical analysis, it is reflecting on different methods to improve the compensation system in a company. Major variables in this article are: skill, performance, responsibility, working conditions and turbulence. The finding that concentration raises wages is very robust and does not depend on cyclical factors such as high unemployment and stable prices, as suggested by Haworth and Reuther, or on concentration's being less than some critical value, as estimated by Dalton and Ford.14 This conclusion (as well as those of previous studies) should be tempered, however, by the recognized weaknesses of concentration ratios, including the fact that the industry definitions used in their measurement are arbitrary and do not necessarily conform to economic markets and also the fact that no information is provided about the market shares of individual firms. Much of the recent agency-based compensation research supports the notion that incentive pay can be useful for aligning the actions of agents with desired organizational outcomes (Baker, Jensen, & Murphy, 1988; Jensen & Murphy, 1990; Tosi & Gomez-Mejia, 1989). For example, Murphy (1985) studied the pay-performance relationship of 501 managers in 72 companies and found that salary, bonus, and total compensation were positively related to total shareholder return and growth in firm sales.

Methodology

Research type

This is cross sectional study, which will be conducted in a natural setting with minimal interference with the normal flow of work. It will be based on primary and secondary research. The level of investigation in this study will be focused on the collection of data about different employees in telecom firms; therefore the unit of analysis is organized.

Target population & sample size

The target population will comprise of all the full time and part time male and female employees working in five different telecom companies in three branches each in Lahore. A total of 15 branches of telecom companies will be visited for this study.

Data Collection Procedure

The relevant data will be collected through a survey. For this purpose a questionnaire will be designed and administered among the respondents. The questionnaire will include information regarding respondent's personal characteristics, compensation system prevalent in their company and data pertaining to work satisfaction characteristics and job characteristics. After designing and testing the questionnaire, it would be floated to the respondents for their responses.

Compensation

Direct Payments:

Wages

Incentives

bonuses

Executive benefits:

Retirement plans

Life insurance

Health insurance

Paid holidays

Vacations and holidays

Sick leaves

Parental leaves

Personal Characteristics:

Age

Gender

Race/ ethnicity

Marital status

Theoretical framework

Variable Definition

Variables

Book Definition

Operation Definition

Dependant Variable

Compensation

Reward for Hard work

Direct and Indirect benefits other than the basic pay

Independent Variables

Rewards

Gifts given to some one.

Gifts given to someone for the extra effort he has put in.

Job satisfaction

Satisfaction with job

When you are cared in the job, your wishes are fulfilled

Employee turnover

Employees leaving the job

Employees dissatisfied with the firm and deciding to leave.

Seniority

High posts in the job

Higher than your job;your Boss

Commissions

incentives

Extra incentives other than pay

Job tenure

Length of service

Number of years a person has worked

Job rank

Job designation

The designation of a person;e.g CRO

Fixed pay

Fixed Salary

The employee will only receive his fixed salary.

Variable pay

Pay for Performance

Extra benefits for extra input offered.

Independent Variables

Absenteeism

Absent from job

An employee not attending the operations.

Commitment

Attitude towards work

Dedication towards work

Organizational Performance

Performance of the firm

How well the company is performing under all perspectives.

Research Hypothesis

The following hypotheses were developed to study the relationship of the variables

Hypothesis 1

H0: Compensation package offered differ with personal characteristics.

H1: Compensation package does not differ with personal characteristics.

Hypothesis 2

H0: Paid leaves are not important component of compensation package.

H1: Paid leaves are important component of compensation package.

Hypothesis 3

H0: Direct payments are not important part of compensation package.

H1: Direct payments are important part of compensation package.

Hypothesis 4

H0: executive benefits are not important in compensation package.

H1: Executive benefits are important in compensation package.

Analysis of results

Respondents were asked that whether compensation is important for employee's motivation. The results of frequency tabulation are shown in the table 1, which indicates that most of the respondents, 20 out of 45 respondents or 44 % agree that compensation is important for employee's motivation. While 11 out of 45 respondents or 24 % are neutral about the role of compensation on employee's motivation, further 9 out of 45 respondents or 20% strongly agree with the importance of compensation. Just 4 out of 45 disagree and 1 out of 45 strongly disagree with that.

Table 1:

Dependent

Frequency

Percent

Valid Percent

Cumulative Percent

Valid

1.00

1

2.2

2.2

2.2

2.00

4

8.9

8.9

11.1

3.00

11

24.4

24.4

35.6

4.00

20

44.4

44.4

80.0

5.00

9

20.0

20.0

100.0

Total

45

100.0

100.0

Personal Characteristics

H0: Compensation package offered differ with personal characteristics.

H1: Compensation package does not differ with personal characteristics.

Respondents were asked that does compensation package offer to them differ with personal characteristics and the results are shown in table 2 (shown below) of frequency tabulation which clearly shows that most of the respondents agree with that as 15 out of 45 respondents or 33% agree with that and 11 out of 45 or 24 % strongly agree with that and 11 out of 45 or 24% remains neutral. While only 16 % disagree with that and only 2 % strongly disagree with that so on the basis of these results we can accept the H1.

Table 2:

Personal characteristics

Frequency

Percent

Valid Percent

Cumulative Percent

Valid

1.00

1

2.2

2.2

2.2

2.00

7

15.6

15.6

17.8

3.00

11

24.4

24.4

42.2

4.00

15

33.3

33.3

75.6

5.00

11

24.4

24.4

100.

0

Total

45

100.0

100.0

The cross tabulation of dependent variable with personal characteristics is shown below in table 3 which shows that 6 people who agree that compensation in important also agree that compensation differ on the basis of personal characteristics. 6 of the respondents who agree with the importance of compensation strongly agree with the fact that compensation package differs on the basis of personal characteristics.

Table 3:

Dependent * personal characteristics Cross tabulation

Count

Personal characteristics

1.00

2.00

3.00

4.00

5.00

Dependent

1.00

0

0

0

1

0

2.00

0

0

1

2

1

3.00

0

3

3

3

2

4.00

1

3

4

6

6

5.00

0

1

3

3

2

Total

1

7

11

15

11

Out of 45 respondents, 6 respondents who feel that compensation packages differ on the basis of personal characteristics also agree package differs on the basis of age. While 6 of the respondents who feel that compensation package differs on the basis of personal characteristics strongly agree with the fact that compensation differs on the basis on age. While 6 of the respondents who strongly agree that compensation differs on the basis of interpersonal skills also strongly agree that this is done on the basis of age.

9 of the respondents who agree that compensation package differ on the basis of personal characteristics also strongly agree that compensation package is differs on the basis on gender. 6 of the respondents who strongly agree that compensation package differs on the basis of personal characteristics also strongly agree that compensation package differs on the basis of gender.

8 of the respondents who agree that compensation package differs on the basis of personal characteristics disagree that compensation package differs on the basis of race. 6 of the respondents who strongly agree that compensation package differs on the basis of personal characteristics also strongly disagree that compensation package differs on the basis of gender.

Characteristics also strongly agree that compensation package differs on the basis of gender.

7 of the respondents are neutral that compensation package differs on the basis of personal characteristics are also neutral that compensation package differs on the basis of marital status. 7 of the respondents who strongly agree that compensation package differs on the basis of personal characteristics also disagree that compensation package differs on the basis of marital status.

It is interesting that only 1 out of 45 respondent said that personal characteristics are not very important.

Paid Leaves

H0: Paid leaves are not important component of compensation package.

H1: Paid leaves are important component of compensation package.

Respondents were asked that whether paid leaves are important in compensation package. The results that were collected shown in table 4 clearly show that 26 out of 45 or 57% agree that paid leaves are important in factor in compensation package, further 4 out of 45 or 9% strongly agree with the importance of paid leaves in compensation package. While 13 out of 45 or 29% remain neutral on the importance of paid leaves. It is important to mention that none of the respondents strongly disagree with the importance of paid leaves.

Table 4:

Paid leaves

Frequency

Percent

Valid Percent

Cumulative Percent

Valid

2.00

2

4.4

4.4

4.4

3.00

13

28.9

28.9

33.3

4.00

26

57.8

57.8

91.1

5.00

4

8.9

8.9

100.0

Total

45

100.0

100.0

Cross tabulation of dependent variable with paid leaves is shown below in Table 5. The results that are generated from cross tabulation show that 14 out of 45 respondents who agree that compensation is important for employee's motivation also believe that paid leaves are important part of compensation package.

12 out of 45 respondents who agree with the importance of paid leaves also agree that vocations are important in paid leaves. While 13 out of 45 respondents who agree with the importance of paid leaves also agree that sick leaves should be the part of pay package. But 10 out of 45 respondents who agree with the importance of paid leaves remain neutral on the importance of parental leaves in compensation package.

Table 5:

Dependent * Paid leaves Cross tabulation

Count

Paid leaves

2.00

3.00

4.00

5.00

Dependent

1.00

0

1

0

0

2.00

0

1

3

0

3.00

0

5

5

1

4.00

2

4

14

0

5.00

0

2

4

3

Total

2

13

26

4

Direct payment

H0: Direct payments are not important part of compensation package.

H1: Direct payments are important part of compensation package.

Respondents were asked that whether directs payments are important part of compensation package or not and the frequency tabulation ( Table 6 ) show that 22 out of 45 agree that compensation is important part of compensation package while 18 out of 45 strongly agree that compensation is important part of compensation package. So from the results we can say that H1 is accepted.

Table 6:

Direct Payment

Frequency

Percent

Valid Percent

Cumulative Percent

Valid

3.00

5

11.1

11.1

11.1

4.00

22

48.9

48.9

60.0

5.00

18

40.0

40.0

100.0

Total

45

100.0

100.0

The results of cross tabulation of dependent variable with direct payments are shown in Table 7 which shows that 9 out of 45 respondents who believe that compensation package is important for employee's motivation also agree that direct payments are important part of compensation package. While 8 of 45 respondents who believe that compensation package is important for employee's motivation also strongly agree that direct payments are important part of compensation package.

Table 7:

Dependent * Direct Payment Cross tabulation

Count

Direct Payment

3.00

4.00

5.00

Dependent

1.00

0

0

1

2.00

0

3

1

3.00

2

6

3

4.00

3

9

8

5.00

0

4

5

Total

5

22

18

The results also show that 10 of the respondents who agree that direct payment are important in compensation package also agree that wages are important in compensation package. 12 who agree that direct payment is important also agree those bonuses are important part of compensation package. While only 9 agree with direct payment also agree with importance of commission.

Executive Benefits:

H0: executive benefits are not important in compensation package.

H1: Executive benefits are important in compensation package.

Respondents were asked that whether Executive benefits are important part of compensation package or not and the frequency tabulation ( Table 8 ) show that 13 out of 45 remain neutral that compensation is important part of compensation package while 16 out of 45 agree that compensation is important part of compensation package. So from the results we can say that H1 is accepted.

Table 8:

Executive benefits

Frequency

Percent

Valid Percent

Cumulative Percent

Valid

1.00

4

8.9

8.9

8.9

2.00

9

20.0

20.0

28.9

3.00

13

28.9

28.9

57.8

4.00

16

35.6

35.6

93.3

5.00

3

6.7

6.7

100.0

Total

45

100.0

100.0

The results of cross tabulation of dependent variable with Executive benefits are shown in Table 9 which shows that 8 out of 45 respondents who believe that compensation package is important for employee's motivation also agree that direct payments are important part of compensation package.

Dependent * Executive benefits Cross tabulation

Count

Executive benefits

1.00

2.00

3.00

4.00

5.00

Dependent

1.00

0

0

0

0

1

2.00

0

0

3

0

1

3.00

1

3

3

4

0

4.00

3

2

6

8

1

5.00

0

4

1

4

0

Total

4

9

13

16

3

The results also show that 9 of the respondents who agree that executive benefits are important in compensation package remain neutral that retirement plan is important in compensation package. 6 of the respondents who agree that executive benefits are important in compensation package remain neutral that life insurance is important in compensation package. The results also show that 6 of the respondents who agree that executive benefits are important in compensation package remain neutral that health insurance is important in compensation package.

Conclusion and recommendation

After thorough analysis of the data, it can be concluded that both compensation package and different components of compensation package has a significant relationship with employee's motivation. The most preferred type of compensation package that was chosen by respondents was direct payment and followed by executive benefits and paid leaves. While it is also established from the research that in Pakistan there is a lot of variation of compensation package according to personal characteristics especially on the basis of gender. In direct payments most of the respondents choose wages followed by commission and in executive benefits most of the respondents choose life retirement plan but there was a mix of both health and life insurance.

An understanding of this information can help HR managers to formulate such a compensation package for the employees of telecom sector which help to increase motivation. This will not only help the employees but will also increases productivity for the companies and hence it will add to the whole economy at large.

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