COMPENSATION AND REWARDS: A PANACEA FOR ATTAINING EMPLOYEE COMMITMENT

Abstract

This study examines the effect of compensation and rewards on employee commitment. From the literature review compensation and rewards have a positive effect on employee commitment and different types of compensation and rewards can have different effects. Higher levels of performance-based rewards, monetary, career development and health scheme lead to higher levels of employee commitment. Greater levels of compensation and rewards lead to higher levels of organizational performance because the employees have a sense of commitment to the organization and they perform maximally. Organizations need to have an effective compensation and rewards strategy in order to maximize employee commitment and organizational performance. This study concluded that monetary reward, career development and health scheme motivate the employees to be committed to their organization which will in turn, aid in accomplishing organizational objectives.