Relevant Theoretical Models: Compensation And Benefits And Job Satisfaction

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2.2 Review of Relevant Theoretical Models

2.2.1 Compensation and Benefits and Job Satisfaction
Theory that has been used is expectancy theory. It related the compensation and benefits with job performances which stress on expected rewards. This theory veiled the increment in rewards will affect job performance increases. Another theory is equity theory, it measures perceived result from perceived inputs to find out whether the situation is favourable or not. When perceived results are smaller than the effort or inputs that they give, the result will be inequity (Odunlade, 2012).
Based on the past empirical studies, the salary level which is one of the components under the form of compensation has positive and fairly constant impact on the job satisfaction (Tremblay, Sire, &Pelchat, 1998). Moreover, type of payment systems has been examined by applying direct effects models in previous studies. The previous studies are using different sample of 2336 employees in a big public research organization, respondents from the 1988 wave of the US National Longitudinal Study of Youth and respondents from 9831 different in United Kingdom. The studies able to determine that properly design of levels of pay based on employees performance have increased job satisfaction (Ismail et al, 2011). Based on the means, standard deviation and correlation for compensation as a dimension for job satisfaction, it shows that there is a significant correlations for employer satisfaction through compensation (r = -0.42, p < 0.01) (Rice, 2009).
2.2.2 Employee Engagement and Job Satisfaction
Engagement is the situation of emotional and intellectual satisfaction to an organisation or team producing behaviour that will help fulfil an organisation’s promises...

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...raham, 2012).
From the research, working environment was found that it can be influencing by the external factors which include climate (humidity, temperature, meteorological conditions). (Bakotić, 2013). This may bring a certain effect of employee job satisfaction. For example profitability and productivity of the company will reduce.
Besides that, the employee motivation level might be decreasing if the work place is in a bad condition. Therefore, it may affect the employee job satisfaction negatively. (Wadhwa, Verghese,&Wadhwa, 2011). The previous studies mention that the internal quality of a working environment contributes most to the employee satisfaction. Internal quality refers to that feelings, benefits and pay that the employee has towards the job. (Heskett,1997).
2.3 Proposed Theoretical/ Conceptual Framework
Independent Variable/Dependent Variable

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