Psychology and Behavioral Sciences

| Peer-Reviewed |

The Relationship Between Total Compensation and Employee Performance in the Insurance Industry, Case of Mayfair Insurance Company Limited

Received: 05 January 2016    Accepted: 18 January 2016    Published: 19 February 2016
Views:       Downloads:

Share This Article

Abstract

Today’s organizations are operating in a dynamic and highly competitive environment which requires constant adjustment of competitive strategies to remain relevant. Total compensation is one of the ways an organization can built a competitive strategy for attracting, retaining suitable employees as well as maintaining peak performance. Mayfair Insurance Company Limited is an organization that offers both life and general insurance to both the individual and corporate clients. The management has set up compensation system in the organization in pursuit of increased performance and the general growth to ensure this is sustained. However, the relationship between the total compensation and employee performance at Mayfair Insurance Company Limited has not yet been established. This study was done to establish the relationship between total compensation and employee performance at Mayfair Insurance Company Limited. Specifically the study will try to establish the relationship of various components of compensation including basis pay, incentives, benefits, non-financial rewards including career development, flexi work schedules and recognition and appreciation. The study will adopt descriptive research design. A sample size of 100 employees of the company was selected from 334 total employees using stratified random method. Data was collected using questionnaires and descriptive statistics (frequency tables and percentages) has been used to present data. Data was analysed using Statistical Package for Social Sciences (SPSS) computer package. Conclusions have been based on findings that there is a positive significant relationship between Total compensation and employee performance at Mayfair Insurance Company Limited and recommendations with benefits, recognition and appreciation being key factors in compensation. This study found the need for comparative studies in other industries like manufacturing and use of varied factors to reach a conclusive finding for generalised findings.

DOI 10.11648/j.pbs.20160501.14
Published in Psychology and Behavioral Sciences (Volume 5, Issue 1, February 2016)
Page(s) 20-36
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Compensation, Employee Performance, Descriptive, Insurance Industry, Relationship

References
[1] Appelbaum G, Schroeder J. E, Cain MS and Mitroff S. R (2011) Improved visual cognition through stroboscopic training. Frontier Psychology 2: 276.
[2] Armstrong, M. (2006). A Handbook of Human Resource Management Practice (10th ed.). London: Kogan Page.
[3] Blau, F. D., De Varo, J (2007), New Evidence on Gender Differences in Promotion Rates: An Empirical Analysis of a Sample of new Hires Journal of Industrial Relations, 46(3), 511-550.
[4] Bohlander, G., Snell, S. Sherman, A. (2001). Managing human resources. New York: South- Western College.
[5] Bowen, B. B, (2000), Recognizing and rewarding employees, McGraw-Hill.
[6] Coopersmith, S. (1967). The antecedents of self-esteem. San Francisco, CA: Freeman.
[7] Frey, B. (1997). On the Relationship between Intrinsic and Extrinsic Work Motivation. International Journal of Industrial Organization, 15, p 427 – 439.
[8] Greenberg J. (1990), Employee theft as a reaction to underpayment inequity: hidden costs of pay cuts. Journal of Applied Psychology, 5, 561-568.
[9] Hakala, D. (2008). How to Measure Employee Performance, 16 Ways. HR World Newsletter.
[10] Harrison, L. L., Novak, D. (2006). Evaluation of a Gerontological nursing continuing education programme: Effect on nurses' knowledge and attitudes and on patients' perceptions and satisfaction. Journal of Advanced Nursing, 13(6), 684-692.
[11] Heneman, H. G. Schwab, D. P. (1985). Pay satisfaction: Its multidimensional nature and measurement. International Journal of Psychology, 20, 129-141.
[12] Herzberg, F. (1986). One more time: How do you motivate employees? In J. N. Williamson (Ed.), The leader-Manager (pp. 433-448).
[13] Hill, C. W. L. (1990). Cooperation, Opportunism, and the Invisible Hand: Implications for Transaction Cost Theory. Academy of Management Review, Vol. 15, No. 3, pp. 500-513., ISSN: 0363-7425.
[14] Huseman, R. H (1987). A New Perspective on Equity Theory: The Equity Sensitivity Construct. The Academy of Management Review, 12, 222-234.
[15] Johnson, R. R. (2009). Using organizational characteristics to explain patrol officer drug arrest activity. Policing: An International Journal of Police Strategies and Management, 32(1), 6-20.
[16] Kalim, S. U (2010), ‘The Relationship between Rewards and Employee Motivation in Commercial Banks of Pakistan’, Research Journal of International Studies, 14, pp 70-72.
[17] Korman, A. (1976). Hypothesis of work behaviour revisited and an extension. Academy of Management Review, 1, 50–63.
[18] Kouzes J. M., Posner B. Z. (2002). Leadership Challenge. San Francisco, CA: Jossey-Bass.
[19] Mathibe, I. R. 2008, Expectancy Theory and its implications for employee motivation. Academic Leadership Journal. Volume 6 Issue 3.
[20] Mark Saunders, Philip Lewis, Adrian Thornhill (2009), Research Methods for Business Students, 5th Ed. Pearson, England.
[21] Michael Armstrong (2006) Handbook on Human Resource Management practice (10th Edition), Kogan page, 120 pentoville, London, NI 9JN, United Kingdom.
[22] Milkovich, G., Milkovich, C. (1992). Strengthening the pay–performance relationship: The research. Compensation and Benefits Review, 24, 53–62.
[23] Milkovich, G. T., Newman, J. M. (2005). Compensation, 8th Ed. New York: McGraw-Hill/Irwin.
[24] Mondy, R. W. (2008). Human Resource Management (10th ed.). New Jersey: Pearson Prentice Hall.
[25] Njanja, R. K (2013) Effect of Reward on Employee Performance: A Case of Kenya Power and Lighting Company Ltd., Nakuru, Kenya, International Journal of Business and Management; 8(21) 41-49.
[26] Opsahl, R. L. Dunnette, M. D. (1966). The role of financial incentives in industrial motivation. Psychological Bulletin 12, 45-47.
[27] Page D., Wong P. T. (2000). A Conceptual Framework for Measuring Servant Leadership. Academy of Management Journal. 38 (1442-56).
[28] Payam Gohari, A. A, (2013) The Relationship Between Rewards and Employee Performance. Interdisciplinary Journal of Contemporary Research in Business, 5(3), 543–569.
[29] Pinter C. C (2008). Work Motivation in Organizational behaviour. New York: Psychology press.
[30] Podrug, N. (2010) Stewardship Relations within Management Hierarchy in Large Croatian Companies. Doctoral dissertation. Faculty of economics and business Zagreb, Zagreb.
[31] Redmond, B. F. (2009). Lesson 5: Equity Theory: Equity Theory: Is what I get for my work fair compared to others? Work attitudes and motivation. The Pennsylvania State University World Campus.
[32] Redmond, B. F. (2010). Lecture on expectancy theory (Lesson 4). Personal Collection of B. F. Redmond, Penn State University, University Park, PA.
[33] Reio, G, T. Callahon, J. L. (2004). Affect, Curiosity, and socialization-related Learning; a path analysis of antecedents to job performance, Journal of Business and Psychology, Vol. 19, pp3-22.
[34] Riketta, M., Dick, R. V. (2005). Foci of attachment in organizations: A meta-analytic comparison of the strength and correlates of workgroup versus organizational identification and commitment. Journal of Vocational Behaviour, 67(3), 490-510.
[35] Rothman, S and Coetzer, E. P., (2003). The Big Five Personality Dimension on Job Performance. SA Journal of Industrial Psychology 72.
[36] Ryan, R. M., and Deci, E. L. (2000). When rewards compete with nature: The undermining of intrinsic motivation and self-regulation, San Diego: Academic Press pp. 14-54.
[37] Stajkovic, A. D., Luthans, F. (1999). The relative effects of different incentive motivators on work performance. Paper presented at the Academy of Management Meeting, San Diego, CA.
[38] Stetched M. D, Rosse, J. G. (2007). Understanding reactions to workplace injustice through process theories of motivation. A teaching module and simulation. Journal of Management Education, 31, 777-796.
[39] Sturman, M. C. (2001). The compensation conundrum: Does the hospitality industry short-change its employees – and itself? The Cornell Hotel and Restaurant Administration Quarterly, 47, 70-76.
[40] Umar, G (2010) The Influence of Compensation on Performance of Sales Representatives of Pharmaceutical Companies Based in Ilorin –Nigeria, An International Multi-Disciplinary Journal, Ethiopia, 4 (3b) 223–239.
[41] Woodbury, Stephen, A. (1983) Substitution between wages and non-wage Benefits, American Economic Review 73, 166-182.
Author Information
  • MSC Graduate, School of Business, Kenyatta University, Nairobi, Kenya

  • Department of Business Administration, School of Business, Kenyatta University, Nairobi, Kenya

Cite This Article
  • APA Style

    Christopher Muthusi Nzyoka, Bulah Hannah Orwa. (2016). The Relationship Between Total Compensation and Employee Performance in the Insurance Industry, Case of Mayfair Insurance Company Limited. Psychology and Behavioral Sciences, 5(1), 20-36. https://doi.org/10.11648/j.pbs.20160501.14

    Copy | Download

    ACS Style

    Christopher Muthusi Nzyoka; Bulah Hannah Orwa. The Relationship Between Total Compensation and Employee Performance in the Insurance Industry, Case of Mayfair Insurance Company Limited. Psychol. Behav. Sci. 2016, 5(1), 20-36. doi: 10.11648/j.pbs.20160501.14

    Copy | Download

    AMA Style

    Christopher Muthusi Nzyoka, Bulah Hannah Orwa. The Relationship Between Total Compensation and Employee Performance in the Insurance Industry, Case of Mayfair Insurance Company Limited. Psychol Behav Sci. 2016;5(1):20-36. doi: 10.11648/j.pbs.20160501.14

    Copy | Download

  • @article{10.11648/j.pbs.20160501.14,
      author = {Christopher Muthusi Nzyoka and Bulah Hannah Orwa},
      title = {The Relationship Between Total Compensation and Employee Performance in the Insurance Industry, Case of Mayfair Insurance Company Limited},
      journal = {Psychology and Behavioral Sciences},
      volume = {5},
      number = {1},
      pages = {20-36},
      doi = {10.11648/j.pbs.20160501.14},
      url = {https://doi.org/10.11648/j.pbs.20160501.14},
      eprint = {https://download.sciencepg.com/pdf/10.11648.j.pbs.20160501.14},
      abstract = {Today’s organizations are operating in a dynamic and highly competitive environment which requires constant adjustment of competitive strategies to remain relevant. Total compensation is one of the ways an organization can built a competitive strategy for attracting, retaining suitable employees as well as maintaining peak performance. Mayfair Insurance Company Limited is an organization that offers both life and general insurance to both the individual and corporate clients. The management has set up compensation system in the organization in pursuit of increased performance and the general growth to ensure this is sustained. However, the relationship between the total compensation and employee performance at Mayfair Insurance Company Limited has not yet been established. This study was done to establish the relationship between total compensation and employee performance at Mayfair Insurance Company Limited. Specifically the study will try to establish the relationship of various components of compensation including basis pay, incentives, benefits, non-financial rewards including career development, flexi work schedules and recognition and appreciation. The study will adopt descriptive research design. A sample size of 100 employees of the company was selected from 334 total employees using stratified random method. Data was collected using questionnaires and descriptive statistics (frequency tables and percentages) has been used to present data. Data was analysed using Statistical Package for Social Sciences (SPSS) computer package. Conclusions have been based on findings that there is a positive significant relationship between Total compensation and employee performance at Mayfair Insurance Company Limited and recommendations with benefits, recognition and appreciation being key factors in compensation. This study found the need for comparative studies in other industries like manufacturing and use of varied factors to reach a conclusive finding for generalised findings.},
     year = {2016}
    }
    

    Copy | Download

  • TY  - JOUR
    T1  - The Relationship Between Total Compensation and Employee Performance in the Insurance Industry, Case of Mayfair Insurance Company Limited
    AU  - Christopher Muthusi Nzyoka
    AU  - Bulah Hannah Orwa
    Y1  - 2016/02/19
    PY  - 2016
    N1  - https://doi.org/10.11648/j.pbs.20160501.14
    DO  - 10.11648/j.pbs.20160501.14
    T2  - Psychology and Behavioral Sciences
    JF  - Psychology and Behavioral Sciences
    JO  - Psychology and Behavioral Sciences
    SP  - 20
    EP  - 36
    PB  - Science Publishing Group
    SN  - 2328-7845
    UR  - https://doi.org/10.11648/j.pbs.20160501.14
    AB  - Today’s organizations are operating in a dynamic and highly competitive environment which requires constant adjustment of competitive strategies to remain relevant. Total compensation is one of the ways an organization can built a competitive strategy for attracting, retaining suitable employees as well as maintaining peak performance. Mayfair Insurance Company Limited is an organization that offers both life and general insurance to both the individual and corporate clients. The management has set up compensation system in the organization in pursuit of increased performance and the general growth to ensure this is sustained. However, the relationship between the total compensation and employee performance at Mayfair Insurance Company Limited has not yet been established. This study was done to establish the relationship between total compensation and employee performance at Mayfair Insurance Company Limited. Specifically the study will try to establish the relationship of various components of compensation including basis pay, incentives, benefits, non-financial rewards including career development, flexi work schedules and recognition and appreciation. The study will adopt descriptive research design. A sample size of 100 employees of the company was selected from 334 total employees using stratified random method. Data was collected using questionnaires and descriptive statistics (frequency tables and percentages) has been used to present data. Data was analysed using Statistical Package for Social Sciences (SPSS) computer package. Conclusions have been based on findings that there is a positive significant relationship between Total compensation and employee performance at Mayfair Insurance Company Limited and recommendations with benefits, recognition and appreciation being key factors in compensation. This study found the need for comparative studies in other industries like manufacturing and use of varied factors to reach a conclusive finding for generalised findings.
    VL  - 5
    IS  - 1
    ER  - 

    Copy | Download

  • Sections