Relation of Compensation and Benefits on Employees’ Performance: A Study of Audit Firms in Bahrain

Abstract

Abstract:The study is about the assessment of compensation and benefits in selected audit firms in the Kingdom of Bahrain. The research study appraised the current status of compensation and benefits of the firms in terms of remuneration, allowance, promotion and incentives. Also, it endeavored to figure out the perceptions of the employees of the selected audit firms in the Kingdom of Bahrain on the level of effectiveness of compensation and benefits along with the same variables in order to establish a base for enhancement of performance of employees. The study used a descriptive survey method to analyze the perception on compensation and benefits in selected audit firms in the Kingdom of Bahrain. Also, this method is used to analyze the significant relationship of the perception of the employees along with the same variables. The respondents of the study were the 100 employees of the audit firms in the Kingdom of Bahrain. The primary tool in gathering data was the questionnaire. Secondary sources were utilized such as: books, articles, unpublished theses and other printed resources related to the study that were used to support and strengthen the findings of the study. Descriptive statistics were used to analyze and interpret the data gathered such as: weighted mean to identify the average perception of the respondents. T-test was used to calculate the difference in the perception of the respondents. The correlation assessed whether the means of two groups are statistically different from each other. The following were the major findings in the study: 1) The status of the employees' compensation and benefits in audit firms in Bahrain is found to be good as revealed by an overall mean score of 3.93.2)The effectiveness of the employee performance in audit firms in the light of the four components of compensation and benefits is found to be effective. This is drawn from an overall mean score 3.98. 3) There is a significant relationship between employees' compensation and benefits in audit firms in Bahrain and effectiveness of employee performance. The problems that encountered by employees in relation to compensation and benefits in audit firms in Bahrain include: a) Non-compliance between rises in salaries and rises in prices; b) Non-compliance between salaries of counterparts in other jobs; c) Allowances are not provided on fair criteria; d) Allowances are in accordance unaccepted criteria; e)There are non-clear basis for distribution of allowances such as productivity; f) Vagueness of the applied criteria for promotion; g) Absence of regulations to control the promotion procedures; and h) Lack of transparency in terms of incentives.

The Effect of Compensation and Benefits Towards Employee Performance

“…This is because, sometimes there are unfair compensation to the employee because of the bias of the manager. The allowances are not provided on fair criteria [2]. Besides, many employees do not understand about the compensation and benefits.…”

“…Prior research has sought to identify a "pay for performance" relationship in executive compensation, but discovered no clear link between presidential salaries and performance measures [8]. However, the poor compensation and benefits will lead to low performance, thus lead to low satisfaction level and increase absenteeism in employee and the outcome will decrease [2]. The organization that manage compensation and benefits of the employee poorly will decrease the motivation of the employee to work harder [9].…”

“…Section B is about the benchmark of employee performance this questionnaire is adopted from Pradhan & Jena [37]. While, section C measuring the compensation and benefits where the questionnaire is adapted from Feraro-Banta and Shaikh [2]. Section B and C was evaluated by using six-point Likert scale (1-Strongly disagree, 2-Disagree, 3-Somewhat disagree, 4-Somewhat agree, 5-Agree, 6-Strongly agree).…”

“…Currently, compensation and benefit plays a significant role for the organization that aim to accomplish their objectives and goals. The poor compensation and benefits will lead to low performance and that will lead to low satisfaction level that will increase absenteeism in employee and the outcome will decrease [2].…”

Does Compensation & Benefits Matters to Working Women to Perform Well? A Case of Public School Teachers

“…The researcher such as Anitha, (2014) found employee engagement was a significant predictor of employee performance. In addition, this research will be using employee compensation & benefits, which the previous researcher such as Feraro-Banta and Shaikh, (2017) found that there is an important association between employees' compensation and benefits and employee performance in audit firms in Bahrain. Moreover, previous research has also shown that employee recognition and employee performance are correlated.…”