The Level Of Compensation On Employees’ Motivation: A Casestudy Of Kolfe Keranio Sub City Adminstration Office, Addis Abeba, Ethiopia

Abstract

The general objective of the study was to determine the level of compensation on employee motivation at kolfe keranio sub city administration office. This study was guided by three research objectives namely: to establish the methods used to determine employee’s compensation at kolfe keranio sub city administration office, to establish the extent to which direct financial motivation affect employee’s motivation at kolfe keranio sub city administration office, and to establish the extent to which benefits affect employee’s motivation at kolfe keranio sub city administration office. The study used descriptive and explanatory research design. A sample of 244 respondents was selected out of 914 total populations using stratified sampling technique. A structured questionnaire was used to collect data from the respondents. The data was analyzed using the Statistical Package for Social Sciences (SPSS) It was interpreted in using means, standard deviation, percentage, frequency, tables, figures, correlations, and ANOVA. The study found that many of the respondents were not very familiar with the methods used to determine employee compensation. In particular they were not well-known with the compensation plan used in the organization. The respondents however, agreed that their jobs were not well defined. With regard, to the extent to which financial payments affect employee’s motivation, the respondents were impressively aware of all entitlements both basic and other conditional payments. The level of motivation was relatively low and the respondents felt that their motivation levels would be raised if their basic pay were to be increased. The response on compensation for employee motivation was negatively high. There were however, a small percentage of respondents who were either not sure, how the financial payments received affected their motivation. In relation to the effect of benefits on employee’s motivation, the study showed that there was a low level of awareness of benefits entitled to the respondents. Thus, the study recommends the organization that a proper system of compensation plan has to be developed. The organization, further, suggested ensuring that key information on staff and compensation is deliberately communicated to them. This helps to improve the level of