The Importance Of Rewards And Compensation

Employees’ contributions and performances are acknowledge and recognized by the organization and they are shown by rewards and compensations (Aguenza & Mat Som, 2012). Rewards and compensations are ranged from intrinsic and extrinsic factors and it is commonly used to attract and retain the employees’. Reward and compensations is certainly necessary for employees’ as it will cover their basic needs of income, at the same time gives the sense of job security and recognition for their hard work and effort. Researches had done several studies that had proven rewards such as pension, parental leave and salaries are vital for employees’ to remain employed (Tourangeau, Cummings, Cranley, Ferron, & Harvey, 2010).

Ng, et. al. (2012), had argued that failure in planning proper rewards and compensation by the organization could cause dissatisfactions among the employees and generate a negative atmosphere leading to destructions’. This strategy should be able to attract the scarce and talented employees, retain and sustain potential employees (Terera & Ngirande, 2014). The reward system should be fair and gives a positive impression to the employees that they are

Kim, Leong, & Lee, (2005) had stated that, employee retention is a continuous system where the employee is committed to work with a particular organization for a period of time. Employee retention is also referred to the policies and practices of the organization that applies to the prevention of employees from leaving which focuses on the promotions to sustain the talented and valuable employees (Kim, et. al., 2005). Kyi (2011), had argued that, organizations have to cultivate and put in numerous efforts to encourage the employees to be committed, loyal and rooted to the organization that they are working