The Power of Compensation System (CS) on Employee Satisfaction (ES): The Mediating Role of Employee Motivation (EM)

Nurul Mohammad Zayed, Md. Mamunur Rashid, Saad Darwish, Md. Faisal-E-Alam, Vitalii Nitsenko () and K. M. Anwarul Islam
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Nurul Mohammad Zayed: Department of Business Administration, Faculty of Business and Entrepreneurship, Daffodil International University, Dhaka 1341, Bangladesh
Md. Mamunur Rashid: Department of Management Studies, University of Rajshahi, Rajshahi 6205, Bangladesh
Saad Darwish: Department of Business Management, Kingdom University, Kingdom of Bahrain, Riffa Building 287, Road 3903, Block 939, Riffa P.O. Box 40434, Bahrain
Md. Faisal-E-Alam: Department of Management Studies, Faculty of Business Studies, Begum Rokeya University, Rangpur 5404, Bangladesh
Vitalii Nitsenko: Department of Entrepreneurship and Marketing, Institute of Economics and Management, Ivano-Frankivsk National Technical Oil and Gas University, 76019 Ivano-Frankivsk, Ukraine
K. M. Anwarul Islam: Department of Business Administration, The Millennium University, Dhaka 1217, Bangladesh

Economies, 2022, vol. 10, issue 11, 1-16

Abstract: The compensation system, employee motivation, and employee satisfaction have received much attention from academics for many years. Existing research, however, does not yet detail the mediation effect of employee motivation on the relationship between the entire compensation system and employee satisfaction. The study explores the influence of the compensation structure on employee satisfaction using employee motivation as mediation. This research embraced a quantitative design, positivism paradigm, deductive approach, and explanatory research. Cross-sectional data from 100 employees were drawn with a random sampling technique using a self-administered survey questionnaire. First, in sequence of analysis, descriptive statistics were conducted. After that, a reliability test was used to test internal consistency. Finally, a correlation test, direct effect, indirect effect, and total effect were used to test the hypotheses at the 0.05 level while analyzing the data. The findings show that the compensation system has a favorable impact on employee satisfaction by partially mediating motivation. Concurrently, this study establishes awareness intending to revise a robust compensation strategy so that employee morale, engagement will increase and turnover will reduce. The study outcomes will assist policymakers in improving the situation of the existing workforce in insurance companies and other financial companies in Bangladesh.

Keywords: compensation system; employee motivation; employee satisfaction; JBC; Bangladesh (search for similar items in EconPapers)
JEL-codes: E F I J O Q (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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