Abstract:
A successful strategic employee compensation plan allows a business to compete in the market
for the best employees in the existing industry and employee compensation refers to all forms of
a pay or rewards going to employees and arising from their employment with its two
components. The purpose of this thesis to assess the effect of compensation on employee’s job
satisfaction in case of Ethiopian airlines ground services division. This research was conducted
through casual research design by employing quantitative and qualitative research method. The
simple random sampling method was employed to select respondents. A total of 326
questionnaires were distributed to the employees in the in the division and a total of 295
employees completed and returned the questionnaire properly. In addition to this, the analysis
was done by the help of SPSS version 24. The findings of the study indicated that there is a
significant positive relationship between basic pay, allowance, incentives on employee’s job
satisfaction. In addition, the study finding is showed that the effect of recognition and promotion
was positive and insignificant on job satisfaction. The study also revealed that there was positive
and significant relationship between fringe benefits, health and insurance and job satisfaction.
Generally, the study finding shows that financial compensation was the highest predictor of
Ethiopian airline ground service employee’s job satisfaction rather than non-financial
compensation. Therefore, the company needs to make the working environment well working
environment safe and more pleasant.
