Motivation: The Compensation Perspective

Compensation decision making is becoming more complex with growing uncertainty and competition in business. These decisions affect the motivation levels of the employees to a large extent. Motivation has a direct impact on the performance of the employees and their decision to stay with the organization. The reward system which includes both transactional and relational rewards offers an array of elements which have motivational implications. In this paper an attempt has been made to analyse various theories of motivation in the compensation perspective. The analysis has been done with the objective of highlighting the applicability of these theories in the formulation of compensation decisions.