Compensation and Benefits Final Report - Telenor

2012
COMPENSATION AND BENEFITS
SUBMITTED TO:
MAAM ASFIA OBAID
SUBMITTED BY:
BENISH KHALID JUNAID NASIR QURAT UL AIN SULEMAN MARIAM KHAN RAZA MUBARAK SYEDA SIDRA SHABBIR
12/24/2012
ACKNOWLEDGEMENTS
Starting with the name of Allah, the most gracious, the most compassionate; we would like to thank Allah Almighty for giving us the strength and the opportunity to successfully carry out and complete this project. We are thankful to our project supervisor, Ms. Asfia Obaid, under whose encouragement, guidance and support we were able to understand the subject and cope with any difficulties faced during this project. We would also like to acknowledge the support of our Parents and our friends who provided us with their objective and honest opinions. Lastly, we thank all of those who supported us in any respect for the entire duration of the project.
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TABLE OF CONTENTS
ACKNOWLEDGEMENTS .......................................................................................................................... 2 INTRODUCTION ........................................................................................................................................ 4 Scope of the Study .................................................................................................................................... 4 Objective of the Study .............................................................................................................................. 4 Research Design and Methodology .......................................................................................................... 4 LITERATURE REVIEW ............................................................................................................................. 5 THEORETICAL FRAMEWORK .............................................................................................................. 17 COMPANYS PROFILE- TELENOR ................................................................................................... 19 RESULTS AND ANALYSIS OF PAY SATISFACTION AT TELENOR ............................................... 20 QUESTIONNAIRE ANALYSIS ............................................................................................................ 20 Equity Theory and Pay Satisfaction ........................................................................................................ 20 Fixed Pay and Pay Satisfaction ................................................................................................................ 23 Sense of Belonging and Pay Satisfaction ................................................................................................ 27 Benefits and Pay Satisfaction.................................................................................................................. 35 Variable Pay and Pay Satisfaction .......................................................................................................... 42 KEY FINDINGS......................................................................................................................................... 45 RECOMMENDATIONS ............................................................................................................................ 46 LIMITATIONS ........................................................................................................................................... 48 REFERENCES ........................................................................................................................................... 48 APPENDIX ................................................................................................................................................. 52 Respondent Information................................................................................................................... 52
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INTRODUCTION
Scope of the Study The scope of the study is to determine what criteria of compensation and benefits are considered by employees as being vital parts of their pay satisfaction. Objective of the Study The purpose of this study was to examine the existing compensation and benefits present in the company in order to infer its effect on satisfaction of employees with regards to pay. Also, to analyze what previous researches articulate about the key components affecting employees in a workplace and then compare it to the current situation of Telenor. In doing so, we will see the difference between the ground realities and what the literature suggests and based on that we will give recommendations accordingly. Research Design and Methodology The sector chosen for this study was telecommunication Industry and within it, the aim was to study Telenor as the chosen organization. The reason to choose this organization was the fact that it had a stringent Human Resource Department and also that it is rated as the top Telecommunication Company. The goal to be achieved was to evaluate the compensation and benefits structure in the organization and the employees perspective towards their pay. 1. Hypothesis testing study This research is mainly based upon hypothesis testing. Weve made different hypothesis for different set of variables, made their statements and after putting them in the questionnaires, weve calculated their answers. Those answers either rejected or approved our hypothesis, making our research fall in the category of hypothesis-testing study. 2. Unit of Analysis The unit of analysis for this research is individual employees of Telenor. 3. Data Collection Method In order to achieve the goal, questionnaires were administered (attached in the appendix). Likert scale was used and no open-ended questions were asked which mightve resulted in varying responses.
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LITERATURE REVIEW
This chapter thoroughly sketches out the entire process of research conducted using references such as journal articles, books and other published sources. It provides an overview of the relevant literature on the key areas of compensation and benefits and how they play an essential role in pay satisfaction ultimately leading to a high performance of an organization. Satisfaction of employees can ensue both from the job they do and the pay they get and since this research tries to extrapolate the effect of pay on employees satisfaction, variables according to that are measured. We will briefly discuss the variables of compensation and benefits and then the literature will lead towards pay satisfaction and the theories that have been studied overtime for it. In this research, compensation is the combination of Fixed Pay and Variable Pay and is different from Benefits which is considered as a separate variable which will be discussed later in the literature. Monetary incentives have an important function of a mediator for motivation and have a considerable role in enhancing the overall performance of employees. Compensation systems have an effect on both the compensation policies of an organization and the behavior of employees (Lawler, 1995). Pay satisfaction is becoming an important issue during the past years because of the leveling and decreases in salaries and wages occurring in the previous years (Heneman & Schwab, 1985; Heneman, Greenberger & Strasser, 1988; Judge & Welbourne, 1994). It influences employees engagement, the desire to stay with the organization and general job satisfaction. When employees are more satisfied with pay and understand how it is determined, they are less likely to question it. Pay satisfaction not only has an impact on job satisfaction and motivation of employees but is also an important factor in the competition for talent by offering competitive salaries. Considering the present economic crisis it is difficult for organizations to attract, retain and motivate talent by offering competitive total rewards, hence it is important to consider other determinants of pay satisfaction such as compensation and benefits. These determinants will substitute competitive salaries and will increase the job satisfaction of employees which will further lead to better organizational performance.
Job satisfaction is perceived to be linked directly towards the productivity of an employee which in turn enhances the organizational effectiveness. This is the reason that a lot of articles and
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studies have been published and many dissertations have been written on this subject. Job satisfaction is a pleasurable or positive emotional state, resulting from the appraisal of ones job experiences (Malik, 2012). It tells about the extent to which the employees like to perform work. It shows the positive and affective orientation of employees towards the organization in which they are performing. Therefore, it can be said that job satisfaction is an emotional state that results from employees perception of their jobs and of the fulfillment of important functions of the job. Job satisfaction also refers to the employee attitude. High level of job satisfaction means a positive attitude towards the job and low level of job satisfaction means negative attitude of the employee towards the job. Workers with high level of job satisfaction are more likely to be creative, innovative, flexible and loyal and it further results in a workforce that is motivated and committed to higher quality of performance (Currall et al., 2005). The affect of job satisfaction on the organizational performance and effectiveness makes the exploration of job satisfaction very important and one of the most important elements that lead to high levels of job satisfaction is compensation and benefits. On the other hand, evidence suggests that dissatisfaction leads to negative affectivity in behavior such as detachment from work, turnover and increasing intentions to leave and absence (Motowidlo, 1983; Currall et al., 2005). Further division of satisfaction has been made as intrinsic and extrinsic in literature where intrinsic satisfaction is more oriented towards a persons level of actualization in terms of their performance in the job that they are liable for and sense of accomplishment. However, extrinsic satisfaction ensues from rewards and recognition (monetary and non-monetary) as well as career advancement. The focus of the present study is on extrinsic satisfaction (Naumann, 1993; Suutari & Tornikoski, 2001). Compensation and Benefits Total compensation includes cash compensation and benefits. For the sake of this research, well use the term compensation for cash compensation. According to Deluca (1993) and Rajkumar (1996), compensation is defined as pay, reward, remuneration or salary and wage management. Compensation can be direct and indirect payments, monetary and non-monetary rewards and cash and non-cash payments, which are primarily used to reward employees for their performance in the organization (Noe, Hollenbeck, Gerhart & Wright, 2004). Compensation in monetary form is seen as a measure of justice; therefore, mostly it is seen in the form of financial
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returns and tangible services and is considered as the major source of financial security by the employees (Milkovich & Newman, 2008). Chen and Brian (2004) proposed that mostly compensation in organizations has the components of base pay; overtime pay (OT), bonuses, commissions, the dollar value of restricted stock awards and gains from exercising stock options, profit sharing, and so on. Benefits on the other hand are non-financial form of compensation to better the lives and working experience of an organizations employees (Nazir, 2010). These are the most important motivator of employees. They are one of the major financial expenditure that an organization incurs and plays a significant role in motivating employees as well, which is why significant amount of research has been done on it (Rynes & Gerhart, 2000; Lawler, 1990; Henderson, 2000; Weathington & Jones, 2008). A job should suit with the creativity and the talent of an employee and more importantly it should compensate the employee both in terms of salary and other benefits in accordance with the job. In an organization controlling, planning and organizing of pay systems is emphasized by compensation which makes it a very important human resource management function. However, compensation alone cannot direct an employees performance to a certain level unless it is accompanied by employee benefits. According to Beam and McFadden (2000), employee benefits are all the benefits and services other than wages paid to employees for time worked, that are provided to employees by the employer in whole or in parts. When World War 2 ended and Europe was completely destroyed, none of the powers emerged as victorious and financial crisis was there in every nation; in such a situation it was very difficult for the employers to reward their employees with a competitive salary. This effected employees job satisfaction and in turn had a profound effect on their performance. This job dissatisfaction was then countered by the employee benefits in order to enhance organizational effectiveness. There are employee benefits that are mandated by law while some are provided by the employers to enhance the employees job satisfaction. Employee's benefits include disability income protection, retirement benefits, work-life balance (for example sick leave, vacation, jury duty and et cetera), allowances (dental, insurance, medical, transportation, housing, mobile phone et cetera), and so on. In todays fast moving world, where competition is so strong that if an organization does not perform, it is ousted of the business, the organizations need a well informed, involved and highly
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motivated work force and this is possible only when they have a strategic, holistic and integrated approach to compensation and benefits (Chen & Hsieh, 2006). Compensation paid to employees serves the employer or the organization many important objectives. The most important objectives served by compensation are to attract, retain and motivate high-potential employees but at the same time there are certain constraints that the organization faces and should be taken into consideration while planning a compensation strategy for the employees such as the maintenance of equity, cost control and legal requirements (For example, wage and salary legislation) (Steven & Loring, 1996). Compensation rewards performance relative to others and there is progressive improvement in year-to-year results. Compensation also provides regular measures of success or progress of the employees which in turn reflects the organizational performance. It also balances rewards with risks and provides capital accumulation opportunity to the employees. Therefore, compensation is very crucial to both, the employees and the employers or organizations (Yale & Donald, 2002). Fixed Pay A very important component of compensation is fixed pay. Diener and Seligman (2004) argued that with a much lower pay, pay satisfaction can be a little higher. Mostly sales people who were remunerated through fixed salary demonstrated higher level of job satisfaction and fewer turnovers was observed contrary to their fellow employees who were remunerated through incentive pay, who showed dissatisfaction with their pay (Chaudhrya, Sabirb, Rafi, & Kalyarc) Different perception prevails about the pay. Employees with positive thinking appear to be more satisfied with pay as compared to employees with negative thinking (negative affectivity). Negative affectivity may result in employees being dissatisfied with certain aspects of their jobs which in return may have an effect on organizational outcome. Other factors determining pay satisfaction may include ownership of the organization. Employees having the sense of ownership of firm may seem satisfied with pay as compared to others lacking sense of ownership. (Sharma & Bajpai, 2011) Flatherty and Pappas (2002) argued that people who are paid fixed salary show higher satisfaction and lower intentions of employees for leaving the organization during exploration while salespeople in establishment demonstrated the same higher satisfaction and lower turnover
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when given incentives. Employees who were hired by organizations that were pursuing analyzer or prospector strategy showed higher satisfaction than those who were employed in defender firm in establishment stage. Pappas (2002) proposed that employees compensated through fixed salary showed higher job satisfaction and decreased turnover rate than their counterparts who were numerated via incentive pay. (Sharma & Bajpai, 2011) Job security also plays an important role in pay satisfaction. Employees who want security are more satisfied from job than those who want pay increase. Kathawala et al., (1990) argued that some employees preferred increase in pay rather than job security. (Sharma & Bajpai, 2011) Many others authors of behavior school of thought argued that pay satisfaction also depends upon age and seniority. Lawler and Porter (1963) proposed that many factors affect pay including seniority, time in position, organizational size and age. Seniority can also be used as a predictor to determine the actual pay. It can be argued that age and seniority do lead to increased performance, as an employee seeks experience his or her ability to perform a job increases which would lead to a better organizational outcome. The correlation between pay and seniority depict that organizations are compensating for merit (Sharma & Bajpai, 2011). Seniority bonuses also are the component of fixed salary which is usually given to employees after serving the organization for certain time period (experience). Merit increments are also added in base pay after evaluating the past performance of an employee. These are not earned again as in the incentive case, in which incentives are re-earned because they are given to achieve certain objectives. Variable Pay Pay is considered as an essential factor or variable for determining job satisfaction. It is a relative thing as discussed in the theories above. A certain amount of pay, to meet ones needs, is crucial for people however, beyond that level flexible pay schemes play a significant role in pay satisfaction. Organizations performance is enhanced if the flexible benefit scheme is aligned with both the HR and business strategy of the organization. Flexible benefits concept originated from North America in the 1960s. Today, many organizations use flexible pay as a reward for high productivity of its employees. Flexible reward
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schemes impacts recruitment, selection, retention, employment relationship, organization and individual performance. Traditional fixed pay reward system (one-fits-all benefits package) will eventually phase out as it doesnt meet the need and demand of increasing diversified employees. Flexible pay system could be achieved by increasing the variable pay and short/medium term deferred income in the compensation package of the employee. Variable pay distribution is uncertain and it consists of bonuses, incentives, goal-based pay, overtime, gain sharing, et cetera, where as deferred income are sums that are blocked for a certain period of time before becoming available and it includes employee stock ownership plans, company saving schemes, profit sharing. Financial incentives will get people to do more of what they are doing (Calvin, 1998). This means that employees will do a better job if they have been promised some sort of incentive. There exists a relationship between variable pay schemes with employees job satisfaction and organization performance. Flexible pay corresponds to the need of the organization and employee. The whole idea behind flexible pay system in an organization is to cut the fixed costs/variable cost ratios. Flexible schemes or benefits decreases employees turnover and helps to attract candidates. This results in reducing costs of recruiting, selecting and training workers. It allows the organization to use the savings into developing the existing experienced workforce and will result in improved individual and company performance. Researchers discovered that flexible pay schemes can result in a positive relationship and increased employee satisfaction (Barber, 1992). The increased employees satisfaction with benefits, will promote a higher level of motivation and productivity (McFadden, 1988). However, flexible pay schemes approaches differ considerably from one organization to another. This indicates that they are tailoring programs to fit their needs of the workforce and the workplace. Flexible benefits providing staff with a choice to adopt, or flex their reward package, in order to meet their personal circumstances (Hutchinson, 2004). Based on expectancy motivation theory, a flexible benefits system has relevance in context of expectancy of motivation because it allows employees to choose the best rewards system that most fits their needs. (Mckenna, 2000). This means in order to attain desired performance or
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result, organization should go for a customer-driven approach to their benefits program to achieve personal circumstances. Flexible pay schemes have considerably impacted organizations as whole. The scheme helps to build up a good relationship through employee empowerment, engagement and involvement. Flexible benefits offer many benefits to both work force and work place in the form of work-life balance, financial incentives and organization performance. Flexible schemes also have drawbacks in terms of difficulty of administration and enormous running costs. For its successful implementation, transparency and communication should be insured. If flexible benefits reward strategy integrated seamlessly with the business objective and HR strategy, it will improve employees motivation level and raise the organizations performance Benefits Like compensation, benefits also have importance for both the organization and the employees. Benefits are crucial for the organizations because they are used to attract and retain good and talented workers. On the other hand, for employees, benefits carry more importance because they rely on benefits such as medical subsidies, vacations, and retirement et cetera. to secure their financial well-being. Benefits vary with respect to the seniority of the employees in the organization and this makes the workers reluctant to change their jobs (Gerhart & Milkovich, 1992). Employee benefits are used by the organizations to recruit and retain talented employees. In the present day, almost all the economies of the world are facing financial crisis and in times like these it is not possible for the organizations to offer their employees pay raises and bonuses. It is here at this point where employee benefits become an important tool for the employers to increase loyalty, productivity and job satisfaction. Benefits are made up of three major components. Firstly, benefits consist of the allowances part which are mainly the housing, food and transportation allowances. The second part of benefits consists of employee welfare programs and recreational opportunities concerning tickets for various entertainment events, family assistance, scholarships. Included in this are also flexible work timings (telecommuting, nonpaid time off et cetera), drug counseling, jury duty, vacations, child and elder care and a fulfilling work environment. Lastly, it includes pension plans, disabled workers allowance, medical insurance, retirement plans, life insurance and savings plan. The
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types and levels of benefits package that is provided by the organization to its employees and the employee contributions determine the satisfaction level with the pay. Keeping a check on how benefits satisfy the employers is the key to keeping employees happy. If employees work hard and put effort in order to gain better benefits and are also rewarded then they will perform better, have higher levels of pay satisfaction. Therefore, benefits create an economic exchange with organizations because employers get better quality work and employees want better benefits in their pay package to be satisfied and are willing to put time and effort for it (Faulk, 2002). The traditional approach for measuring employee satisfaction with benefits was to measure the benefit as a part of the pay satisfaction and therefore measuring the replies provided by the employees to the benefits package provided by the organization (Balkin, 1993). Benefits satisfaction is comprised of two parts, the satisfaction associated with the benefits cost and the quality of the provided benefits. Both of these components are measured by comparisons with the referent other and also what employees perception are towards the organizations ability to provide benefits. These perceptions are influenced by the overall benefits provided, the actual use of these benefits by the employees, the cost associated with them and the contribution from the employers side. Along with this, an employees values, expectations and their personality also affect the benefits package. An employee also needs to be aware of the total available benefits accessible to them which are enhanced through proper communication by their employers (Lust, 1990). Benefits play a vital part in the total reward package hence impacting the organizational performance in the total reward system (Lin, 2010). Therefore benefits are an important part of the pay package. Employees also view benefits as entitlements for organizational membership. They need to be individual specific which will enhance its acceptance and give the highest satisfaction. Those employees who are satisfied with their benefits are therefore less likely to quit the organization which in turn results in better organizational performance and better turnover. Flexible benefits plans demonstrate the significance of benefits congruence to employee needs. For high employee satisfaction, managers who provide benefits need to collaborate with employees to identify the personal needs on the basis on which they can provide them with benefits. Theory of Reasoned Action claims employees belief over the value benefits provide and how it develops a positive attitude of employees towards these benefits which in turn determines the satisfaction level. This
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satisfaction then leads to their commitment with the organization which is based primarily on their pay satisfaction (Markova, n.d.). Their satisfaction with the benefits component of pay is also determined by how quickly reimbursements take place. Employees who perceived that the process of disbursements of benefits by managers were fair also contributed to the overall satisfaction level with the benefits specially in the case of sick leave and vacation time. There was less satisfaction with individuals who perceived the process as less fair. Also employee participation in benefits decision as well as individuals perception that their preferences for the benefits plan was taken into account, created a high degree of pay component satisfaction (Williams, 2002). Pay Satisfaction Pay is considered as episodic payment to an employee due to the employee and employer relationship (employment contract). On the contrary piece wages are paid separately, rather than on periodic basis. Pay is considered as an important tool to motivate employees and direct their attitude and behavior towards the organizational goals and objectives. There are many other tools present to motivate employee and increase their job satisfaction but satisfaction from pay is necessary. Katzell (1964) stated that pay satisfaction depends on the difference between the perceived pay and the amount of pay a person received. (Sharma & Bajpai, 2011; Chaudhrya et al., n.d). Pay satisfaction has a narrow scope than job satisfaction but it is the most important factor that can affect organizational outcomes. Dissatisfaction with pay may lead to reduced motivation and performance of employees and increased absenteeism and turnover. During many years observations, it was noticed that monthly pay, that were obtained by employees, were favored in contrast to incentive pay which varied in context. (Sharma & Bajpai, 2011) Empirical evidence on pay satisfaction has significantly increased and research suggests that, despite it being a part of job satisfaction, it still has various dimensions to itself as well. Heneman and Schwab (1995) have been considered the first amongst researchers to identify the multiple dimensions of pay satisfaction and gestate its constructs including pay level, pay raises, benefits structure and administration where these are measured by the Pay Satisfaction Questionnaire (PSQ) (Fong & Shaffer, 2003). However, some authors opinion differs and they
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argue that pay satisfaction is has no further dimensions (Miceli, Near and Schwenk, 1991; Faulk, 2002). Due to this variance in research on pay satisfactions own dimensionality, it has been suggested to investigate the association of pay satisfaction with other variables as it results in more significance towards organizations (Faulk, 2002; Heneman and Judge, 2000). With the investigation and research of pay satisfaction for the past 3 decades, it being an interesting dimension affecting the organizational performance as well as employee behavior and attitude, several theories and models have been formulated and applied since its introduction in the field of research. The most common and well-known models which help in determining pay satisfaction is the Equity Theory (Adams, 1963) and Discrepancy Model (Lawler, 1971). These models elucidate employees drawing out satisfaction from their compensation plans. Equity theorys roots lie in the concept of social comparison where an employee equates the amount of input they give and the resulting output they get with that of others. This comparison of input/output ratio can be done with employees in the same organization as well as other organizations and if the ratio is lesser or smaller than that of another employee, it results in inequity and dissatisfaction and employees are motivated to lessen the inequity. These perceptual comparisons can be done with factors such as pay, time-off, benefits and recognition (Adams, 1963, 1965; Faulk, 2002). The theoretical basis of the discrepancy theory, proposed by Lawler in 1971, lies in the concept of social comparison, just the same as equity theory. In addition to that, Vrooms expectancy theory is also utilized to formulate discrepancy theory. According to Vroom (1964), employees behavior is motivated by pay if it leads to desirable outcomes and the employee gives it a high valence. Discrepancy theory focuses on what an employee expects and the reality and the discrepancy between the two affects the employees satisfaction levels. It is basically the perception an employee has and the difference between those two perceptions regarding the characteristics of the tasks he/she considers worthy. This highly depends upon the personal needs and aims of the employee as well as what he values, his beliefs and expectations from the outcomes of the job. Hence, the satisfaction from such aspects of a job results when the employee perceives the reality of these aspects and what they should be (Igalens & Roussel, 1999; Lawler, 1971). This was the one dimensional aspect of pay satisfaction in literature after which Heneman and Schwab (1985) built upon Lawlers work and modified the theory to
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conceptualize the multi-dimensionality of pay satisfaction with 4 dimensions and developed PSQ. Implications of this study suggested that these dimensions of pay satisfaction might affect the outcomes in a different manner (Faulk, 2002). Pay satisfaction differs according to levels of management and departments as the job descriptions also vary from level to level and department to department (Dreher, 1981). In formal organizations, pay is considered to be one of the most significant components as it affects significant organizational behavior variables. According to the hypothesis of the article by Tames A. Roberts (1996), pay satisfaction (money) is the basic motivator for employees (including bonuses and commissions). In other cases, financial motivation might not be necessary, like research employees might give more importance to the fringe benefits, career progression and learning opportunities. Another important factor for employees is the equity and fairness of rewards amongst coworkers following internal equity and their perception. The perception of fairness also depends on the comparison with other organizations if followed external equity. These comparisons mount to the perception of fairness and ultimately pay satisfaction. Roberts (1996) also emphasizes that employees, such as salespersons, are more prone to commission based salaries with a fixed salary which increases their motivation and in return helps the organization to achieve high (individual as well as team) performance related to pay. The pay satisfaction as said for the operational level employees is mainly monetary, increasing the probability of high performance which in comparison to knowledge workers is variant as the pay satisfaction for them would ensue from opportunities to develop themselves and such. Monetary pay satisfaction is vital for every level of employees but here the focus is more on fringe benefits along with career development and learning opportunities. Research level employees are not too much concerned with the equity aspect of the pay as their main concern are the flexible benefits that they would get on the basis of their competencies, skills, job contribution and education. Pay satisfaction is affected by a number of variables which as identified by Heneman and Schwab (1985). The performance level increases with pay raises as the affect is direct between the two. The raise in most of the organizations is considered to be a promotion or a step forward
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in taller hierarchies, showing increase in cumulative pay. However, in many organizations the increase in the pay can be non-cumulative depending upon targets or if the pay structure is commission-based. The pay raises are different at senior, middle and lower level of management. The benefit sets can also be fixed or flexible depending upon the pay package for the employees. Mostly flexible benefits basket is used by the organic organizations and fixed benefits in mechanistic structure. Generally defined benefits at all levels are considered easy to monitor but increases cost, providing all benefits to all employees even when they do not require it. Such benefit plans also fail to provide meaningful benefits to employees as they have varying age, needs, interests and lifestyle. The employees at high and senior level want their pay benefits to be flexible choosing from the basket and generally low level employees have fixed and defined benefits. So pay compensation is dependent on level, raise and benefits which in turn effects the organizational commitment of employees. According to research, the empirical evidence for both the samples taken in a study by Tremblay (2008) proves that these four variables are important for pay satisfaction. These factors act as motivators, increasing positive correlation of high performance and high commitment from bottom to top that is for low to senior levels of employees maintaining a high performance organization.
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THEORETICAL FRAMEWORK
1 Theoretical Framework
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This theoretical model explains the relationship of compensation and benefits (independent variables) on pay satisfaction (dependent variable). Compensation and benefits have either a positive or negative relationship with pay satisfaction. Compensation is further divided into two main components .i.e. fixed pay and variable pay. These two are then separately linked with pay satisfaction in order to deduce that either one or all positively contribute towards pay satisfaction. These two are further explained below: Fixed Pay Fixed pay is further divided into three subcomponents which are base pay, seniority bonuses and merit increments. Base pay is the fixed amount paid monthly. Seniority bonuses are the incentives received by employees due to the experience or time period spent with the organization. Merit increments are incentives given to employees on their past performance evaluation which is usually added to base pay. Variable Pay Variable pay is the component of compensation which is varied according to individual performance. It is sub divided into various components like goal sharing, profit sharing, gain sharing et cetera. In the light of above literature, this study is focused towards measuring the relationship of various components (discussed above) of compensation and benefit and pay satisfaction. Thus, hypothesis for this study are as follows: H1: Fixed pay is positively related to pay satisfaction H2: Benefits are positively related to pay satisfaction H3: Variable pay is positively related to pay satisfaction
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COMPANYS PROFILE- TELENOR

Telenor was established in the year 1855 in Norway. It ranks as the worlds seventh leading mobile operator with above 150 million subscribers. Telenor is owned by Telenor ASA and adds on to its operations in Asia together with Thailand, Malaysia and Bangladesh. It is an international provider of high quality voice, content, data and communication services. Telenor Pakistan was launched in the year 2005 as a single major European investment in Pakistan. Telenor Pakistan has now become a leading mobile communication services provider of the country. Its corporate headquarters are located in the capital city Islamabad and its regional offices are in Karachi, Lahore, Faisalabad, Multan, Hyderabad and Peshawar In the beginning of the year 2012, Telenor Pakistan had a reported market share of 24% and a subscriber base of 28.47 million, making Telenor the second largest mobile operator of the country. Telenor is growing at a great pace and is present in many remotest areas of Pakistan as well. Telenor is investing deeply in infrastructure expansion in order to stay ahead of other cellular network companies operating in the country. Telenor has already invested USD2 billion and has further extended agreements with vendors for network expansion and services. Telenor has created 2,500 direct and more than 25,000 indirect employment opportunities across Pakistan. The company has coverage in 3500-plus cities and towns throughout the country, making it the second largest GSM service provider in Pakistan. Telenor has over 7000 cell sites in Pakistan and offers GPRS and EDGE services
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RESULTS AND ANALYSIS OF PAY SATISFACTION AT TELENOR QUESTIONNAIRE ANALYSIS Equity Theory and Pay Satisfaction
Do you think that the annual salary of your peers when compared to yours is more?
15 10 4
Agree
neutral Reply By Respondants
disagree
Figure 2
Analysis
First question depicts whether the equity is being catered to or not. 50% agreed that they are receiving less as compared to their peers and 33% respondents disagree with it. So it is more of a moderate view and is varying among employees but as more employees disagree hence, we deduce that employees at Telenor are putting more efforts than their counterparts but receiving less, which results in pay dissatisfaction and inequity. This may also have bad impact on organizational performance. This showed that there is a difference between employees perceived pay and the actual pay which would result in demonization and reduced individual performance. There could be various reasons for it as explained during an interview from one of the Telenor employees that every job has varying pay ranges. One employee in Telenor might be at a start-up stage while another might have more time and skills to get results hence leading to more pay.
The estimate average annual salary in your region for people holding jobs comparable to your own is less.
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17
Agree
disagree
Figure 3
Analysis This question asks about the estimated average annual salary of employees in the respondents region who are holding jobs comparable to theirs and if it is less than theirs or not. The response to this question shows that almost 52% of the respondents disagreed with this statement showing that the employees at Telenor seem to be considering other organizations to be paying the same or may be more for the same kind of jobs. According to literature, equity theory states that employees compare their input and the output they get for that input with employees in other organizations. Such comparisons may result in an increase in motivation or it may also have a negative effect on the motivation of employees depending upon the nature of the result that comes out of the comparison, that is, if the employees consider their salary greater than that of employees in another organization, they will be motivated but if the average annual salary is considered lower than the employees in other organizations than the motivation level of employees will be negatively affected. Keeping in view the above description from literature and the data collected, it shows that majority of the employees do not consider their estimated annual salaries greater than those employees working in other organizations in the same region. As the question does not give the detailed information about whether they considered their salaries on the same level or lesser than the salaries that employees get in other organizations so it cannot be directly stated that the employees at Telenor are satisfied or not but it can be inferred from the fact that 48% employees either stayed neutral or agreed with this statement that the satisfaction level of the employees is
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not negatively affected by this comparison. A positive result would have showed a greater level of pay satisfaction which would have further enhanced the organizational effectiveness because although pay satisfaction is a part of job satisfaction but it has a very crucial role in directing organizational effectiveness. Please think of one person at work with whom you most compare yourself. Is the salary of that person more?
14 8 8
Agree
disagree
Figure 4
Do you think that the minimally acceptable annual salary for people holding jobs comparable to your own should be more?
20
8 2 Agree neutral Reply By Respondants disagree
Figure 5
Analysis The above two questions in the questionnaire asked the employees to compare their salaries with one person performing the same work as was performed by the respondent in the same
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organization and to state if the salary of that employee was greater. This question was asked in order to get information about the level of internal equity in Telenor. The employees were asked to compare themselves with an employee in the same organization. The response showed that 44% of the respondents agreed with the statement which means that when they compared themselves with an employee with a job comparable to his, the employee considered the salary of the other employee greater than his salary. Again this is due to the fact, as explained during analysis of question one, that employees may have same job level but different pay as one might be at a start-up stage and other might have more skills and time spent with the company. While on the other hand 24% respondents disagreed to this statement and 32% stayed neutral which shows that almost more than half of the respondents didnt have a positive response to this. So it can be inferred that 56% of the respondents were satisfied with their salaries while comparing their salaries with the employees in the same organization. According to equity theory and the data collected, it can be said that the ratio of effort employees put in their work to the rewards that they get in response for their input is in balance for majority of the respondents and from this it can be inferred that there is no negative effect on the satisfaction level of the employees in Telenor.
Fixed Pay and Pay Satisfaction

Hypothesis 1: Fixed pay is positively related to pay satisfaction I am receiving fair salary if considered the experience I have.
15 9 6
Agree

Figure 6
disagree
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Analysis The question I am receiving fair salary if considered the ex perience I have shows that employees at Telenor are not compensated on the basis of experience or seniority mostly. 50 % of respondents disagree with it which shows that there is no such rigid or bureaucratic hierarchy where employees are remunerated just on the basis of their relationship (time spent in a position) with the organization, rather employees are remunerated according to their contribution towards organization. Pay for performance concept prevails in this organization which indicates a flexible and somewhat flat structure which would be needed in todays competitive environment. This was also supported by the interviewee that they have pay grades with salary bands. This pay structure laid emphasis on employee contribution towards organization rather than just spending time period with organization. Seniority bonuses given to employees are market competitive
20
Agree
disagree
Figure 7
Analysis Second question regarding whether seniority bonuses are market competitive or not indicates neutral responses from the respondents. This means that this factor doesnt contribute towards pay satisfaction as confirmed by the interviewee that they don`t consider the seniority bonuses because their focus is on Total Reward instead of individual offerings and also they have pay for performance culture which negates the seniority bonus concept. Pay for performance as explained by the interviewee at Telenor is contributing towards organization either financial or non-financially. Non-financial means that at operational level for instance, human resource
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department might get the task to reduce turnover rate to say 10% and if the employees achieved it regardless of the fact that he/she is new or old (say ten years experience) in the organization, he would still get the rewards. Merit increments awarded for performance are satisfiable.
16
10
Agree

Figure 8
disagree
Analysis Third questions Merit increments awarded for performance is satisfiable depicts the pay satisfaction among employees through merit increments. About 66% employees are satisfied with the merit increments which they received as a result of their past performance evaluation. Employees are satisfied with company merit increments policy which results in high motivation and enthusiasm to work for the company resulting in high organizational performance. Merit increments reward the individual performance in order to maintain the equity environment which results in high morale of the employees and have positive effect on organizational outcomes. They are cumulative in nature and are added in base pay each year and then next increment is based on new pay. This result shows that employees at Telenor are satisfied with this component of fixed pay which would result in increased individual performance. Merit increments are given frequently
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14 10 6
Agree

Figure 9
disagree
Analysis Last question for fixed pay Merit increments are given frequently shows that approximately 50% of employees receive the merit increments on frequent basis, which has a positive impact on employees satisfaction. This helps in creating positive line of sight towards performance and reward. If the reimbursements are not frequent this might lead to dissatisfaction among employees. As our first hypothesis was: H1: Fixed salary is positively related to pay satisfaction From the above discussion it is clear that our H1 is valid because merit increments are part of fixed pay which contributed towards the pay satisfaction of employees. Rewarding past performance motivates employees to continue his/her performance up to the mark in order to gain these increments on regular basis which in return help the organization to meet its goals efficiently. Seniority bonuses were not cratered to because of the fact that the company has a flexible pay structure of salary bands (six bands) which mostly competitive companies adopt in order to cope with the changing market demands. It has importance in contrast to seniority based culture because it empowered employee which results in quick and effective decision making. Through it the major issue of grade drift is also catered.
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Sense of Belonging and Pay Satisfaction
Are you satisfied with the average annual salary over the past 5 years?
15
Agree
disagree
Figure 10
Analysis It determines the overall picture of the employees satisfaction with their salaries in the past periods as well. 50% agree to the fact that they are satisfied with the pay raises associated with the annual salary they accumulated in the past years. Heneman and Schwab (1995) have identified the multiple dimensions of pay satisfaction and gestated its constructs including pay raises where these are measured by the Pay Satisfaction Questionnaire (PSQ). This is a major indicator of low turnover rates and workers putting in effort towards achieving work. Generally speaking, I am very satisfied with the salary I am receiving.
16 8
Agree

Figure 11
disagree
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Analysis The next question determines the current state of mind of the employees and whether they are satisfied with their salary or not. According to the hypothesis of the article by Tames A. Roberts (1996), pay satisfaction (money) is the basic motivator for employees (including bonuses and commissions), which means that the employees are satisfied with their pay. As fixed pay is a large component of the salary of employees it means that the compensation structure that is being followed at Telenor, more than 50 percent of the employees are happy with it, however around 25 percent seem not to be happy with the current remuneration they are receiving I am content with the kind of work I do in this job.
30
0 Agree neutral Reply By Respondants

Figure 12
0 disagree
Analysis 100 percent of the employees seem to have job satisfaction at the organization which means that their job contains enrichment and keeps them motivated. Job satisfaction is integrally related to pay satisfaction and therefore this would mean that all the employees feel content and own their work. Job satisfaction is perceived to be linked directly towards the productivity of an employee which in turn enhances the organizational effectiveness. Job satisfaction is a pleasurable or positive emotional state, resulting from the appraisal of ones job experiences (Malik, 2012). Their work must provide them with growth opportunities as well as hold interest for them. And
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therefore this must lead them to contribute towards achieving organizational goals and in return display contentment about their compensation package. Most of the people in this company are satisfied with their salary.
14 10 6
Agree

Figure 13
disagree
Analysis This question depicts the employees perception of pay satisfaction among other employees. This could be due to a general level of contentment by peers and the fact that the there exists pay satisfaction among different levels of pay. Only one third agree to this fact while a high percentage remained neutral. I would be very pleased to spend the rest of my career with this organization in terms of salary.
16 10 4
Agree

Figure 14
disagree
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Analysis This response indicates that around 50 percent refused to agree or disagree which means that salary is not only the component that matters when you stay with an organization. The benefits as well as variable components affect the decision making. I do not feel a strong sense of belonging to my organization.
22
6 2 Agree neutral Reply By Respondants

Figure 15
disagree
Analysis The employees refute the fact that there is no sense of belonging. This clearly depicts that not only are they satisfied with the work being provided by the organization but also by the salary and benefits they are receiving. I would switch to other company if I am offered more salary than I am receiving in this organization.
12
10
Agree
disagree
Figure 16
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Analysis This question depicts the fact that 40 percent would not switch to another organization even if their salary was increased which clearly shows that the salary is not only the determinant of employee being in an organization; there are several other factors which might be the work that employees are given, benefits, variable pay or culture. However for 25 percent of the employees, salary is a major factor for them when considering their satisfaction level with the organization. I feel that I have too few options to consider leaving this organization.
18
8 4
Agree

Figure 17
disagree
Analysis An organization tries to retain its employees by providing good pay packages and benefits. However, employees still might consider leaving the organization if better opportunities exist. Looking at the response to this question, it is evident that employees consider it to be a good place to work for as other than this they consider the market has few options if they were to consider leaving Telenor. If I had not already put so much of myself into this organization, I might consider working else where
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14 10 6
Agree

Figure 18
disagree
Analysis Around 33 percent of employees agree that they are with organization only because they believe that they have put a lot of effort in the organization and perhaps they wouldnt like to switch to another organization. On the other hand around 46% are happy with their current job and pay level and have no desire to leave the organization. This shows that they are content with their salary package including the benefits and variable component. It seems there is not much salary progression if I remain with the organization indefinitely.
14 12
Agree

Figure 19
disagree
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Analysis There seems to be discontentment in the salary progression of the organization as it is mostly pay for performance. However, 46% of the employees disagree that their chances of salary progression are less. They believe that the more an employee stays with an organization, more are their chances of salary progression. There's not too much to be gained (other than salary) if I remain with this organization indefinitely
23

Figure 20
disagree
Analysis This once again reiterates the fact that salary is not the only component that contributes towards satisfaction for employees. There are other factors that may account for employees staying with the organization and the employees seem to be satisfied with these other components. This shows that generally the employees of Telenor are satisfied not just with the organizations compensation system but also because it provides them with career growth and development opportunities. I am receiving fair reward for the effort that I put forth.
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17 15
Agree

Figure 21
disagree
Analysis 50 percent of employees perception is that they are not receiving fair remuneration for the amount of hard work they are putting in their jobs. This means they consider the salary to be less than what they expect. However only around 26 percent believe that the salary they are receiving is in lieu with the effort they are putting in. It is stated that pay satisfaction depends on the difference between the perceived pay and the amount of pay a person received. (Sharma & Bajpai, 2011; Chaudhry et al., n.d.; Katzell (1964). So there might be some evidence of this in the minds of the employees. I receive appreciation as well as monetary reward for what I have done well.
14 9 7
Agree
disagree
Figure 22
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Analysis Around 45% of the employees are content with the relational return of appreciation and the monetary reward which includes their fixed pay as well as variable pay given by the organization.
Benefits and Pay Satisfaction

Hypothesis 2: Benefits are positively related to pay satisfaction The medical, transportation, mobile and house allowances are not sufficient.
16
8 5
Agree

Figure 23
disagree
Analysis Benefits play a vital part in the total reward package hence impacting the organizational performance in the total reward system. Around 53% of employees think that the current benefits being provided by Telenor are sufficient and account for their benefits satisfaction. However there are around 26% of employees which agree to the fact that Telenor could provide better benefit packages. Disability income protection concept is not prevailing in this company
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18
10

Figure 24
disagree
Analysis This question analyses the fact that do employees sense a need for more benefits than they are currently getting with regards to disability income protection. Employees have a perception towards the organizations ability to provide benefits. However employees preferred to have a neutral opinion on this question which depicts their benefit satisfaction on the whole without disability income protection or their lack of knowledge about it. Types of employee welfare programs provided could be increased by the organization.
21

Figure 25
disagree
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Analysis This shows that employees want that the benefits under the employee welfare program be increased. To them it serves more as an entitlement than the benefits provided because of their employment with the organization rather than being tied to their pay level. Recreational opportunities provided are Satisfactory.
22
Agree

Figure 26
disagree
Analysis In this question 73% employees seem to be fairly content with the recreational opportunities provided by Telenor which shows that they are satisfied with this component of the benefits. All sorts of benefits are important part of my salary.
30

Figure 27
0 disagree
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Analysis This shows that employees consider benefits as an important of their pay and it contributes towards pay satisfaction. All the employees consider benefits contributing vitally to their overall pay package Hypothesis 2: Benefits are positively related to pay satisfaction On the whole, it is still not clear whether the employees consider benefits as an entitlement or related to their pay level. However employees show that they nonetheless think its am important part of their compensation and are majorly satisfied with it. Personal intentions or bias of top management influence salary decisions.
15 10 6 5 0 Agree neutral Reply By Respondants Series1 disagree 14 10
Figure 28
Analysis 43.7% agree to the statement; however 31% showed a neutral response to this. The high percentage of respondents that agreed to the statement shows that some level of biasness by the top management is perceived to be present in the culture of Telenor. Decisions about salary are made ethically.
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18 16 14 12 10 8 6 4 2 0
16
10
Agree
neutral Reply By Respondants Series1
disagree
Figure 29
Analysis Only a minute percentage of employees (12.5%) believe that the decisions about their salaries are not made ethically. About 50% of employees were neutral to this statement, where as 31.2% employees agreed to it. As the percentage of employees who agreed to the statement is more than the ones who disagreed, we conclude that the decisions regarding the salary of employees are made ethically at Telenor. Accurate information (meeting criteria) is used to make decisions that influence salary.
15 10 5 0 Agree neutral Reply By Respondants disagree 14 8 8
Figure 30
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Analysis 43.7 % of respondents agreed that Telenor consider accurate information to make salary related decisions which shows the transparency of Telenors systems. The employees seem satisfied with its Compensation system as they believe that precise and correct information is considered for their salary.
My input is obtained prior to making decisions (salary and value adding input).
16 14 12 10 8 6 4 2 0 15 13
Agree
neutral Reply By Respondants Series1
disagree
Figure 31
Analysis For the statement, My input is obtained prior to making decisions(salary and value adding input), we receive clashing responses by employees as about 46% respondents believes its true where as 40.6% disagreed to the statement. So we are unable to conclude the response. I am given the opportunity to modify decisions that have already been made.
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25 20 20 15 10 5 0 Agree neutral Reply By Respondants

Figure 32
disagree
Analysis A huge percentage of employees i.e. 62.5% disagreed to this statement. This shows that the employees of Telenor consider that it doesnt take input from all employees once the decisions have been made.
<<<
The reasons behind decisions that affect me are explained.

15 10 5 0 Agree neutral Reply By Respondants
Figure 33
12 9 9
disagree
Analysis We received conflicting response to the statement saying that the reasons behind decisions that affect the employees are explained to them. As a response to this statement, 28.1 % employees showed neutral response, the same percentage of employees disagreed and only a slightly high
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level of percentage i.e. 37% agreed. However, because of the overall high number employees agreeing to the statement as compared to others, we conclude that Telenor mostly explain the reasons behind their decisions to the employees. Concern is shown for my rights.
14 12 10 8 6 4 2 0 12 9 9
Agree

Figure 34
disagree
Analysis 37% respondents believe that concern is shown for their rights at Telenor, which is a slightly high percentage as compared to 28.1% neutral and 28.1% disagreed response by the employees. Considering the result, we conclude that Telenor considers its employees as an important part of the organization and shows concern for their rights.
Variable Pay and Pay Satisfaction

Hypothesis 3: Variable pay is positively related to pay satisfaction. I am satisfied with the profit sharing policies in this company.
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16 14 12 10 8 6 4 2 0 Agree 8
14

Figure 35
disagree
Analysis Financial incentives will get people to do more of what they are doing (Calvin, 1998). Profit sharing policy is a great way to give employees a sense of ownership in the company. However, in the survey we conducted at Telenor, majority of the employees i.e. 46 % showed neutral response regarding the profit sharing policies of the company. 26% were satisfied and only 20% were dissatisfied with such policies at Telenor. Stock options are exercised exceptionally (when compared to competitors).
14 12 10 8 6 4 2 0 Agree neutral Reply By Respondants
Figure 36
13 9
disagree
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Analysis The response we got regarding the Stock Options was mostly neutral. 43% of the respondents were neutral to this question as policy has not yet started in the organization but it is in the process of its implementation. In the interview we conducted at Telenor, we were told that Telenor is planning to launch Stock Ownership Plan in 2013. So after our analysis we conclude that most of the employees showed a neutral response to it as they all are aware of the fact that the organization knows the importance of such schemes and this is the reason why the organization is working on it. Mostly goal based pay concept is exercised.
20 15 10 5 0 Agree neutral Reply By Respondants disagree 5 16 9
Figure 37
Analysis Telenor offers its employees a total package. It believes in awarding its employees according to the goals achieved by them. The employees here are paid for performance which means that the individuals are made responsible for contributing in gaining the organizations goal and in return the employees are rewarded with incentives. According to the survey results, majority of the employees i.e., more than 50%, agreed that Telenor mostly exercises goal based pay. Such policies encourage employees to work for the goal assigned to them and help them keep motivated throughout the process.
Short term incentives are enough to motivate employees towards goal.
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14 12 10 8 6 4 2 0
12
11
Agree

Figure 38
disagree
Analysis Short term incentives are simply a means of reward for hard work. Such employee incentive programs can be used in a company to boost productivity. From the survey it shows that 40% of the respondents agreed to it 36.6% disagreed while 23.3% of the employees showed neutral response. This shows that employees at Telenor appreciate such incentives as it helps in creating a better work environment and entice the employees to implement their work duties to the fullest extent possible.
KEY FINDINGS
After the analysis on the information gathered by Telenor, it is clear that the practices followed by the organization on the whole are satisfactory providing culture that values equity, competitive pay scales, pay for performance, sense of belonging and recognition. The entire analysis helped us to link the formulated hypothesis with the information proving the relevance of the variables to one another. This research was conducted to find out whether total rewards accumulated by employees result in their satisfaction with pay or not. The survey was conducted via questionnaires on a sample of 30 employees of various departments and job groups. According to the analysis done, we find that all of our hypothesis are proven to be true. As studied in the literature, operational level as well as knowledge workers satisfaction increases if
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compensated appropriately, but for knowledge workers quality of work matters as well which has been proven by the answers given in the questionnaire. We can see that pay for performance is mostly exercised in this organization where certain goals are set which are meant to be achieved. In the total rewards given, 15-20% is variable pay in Telenor. During the interview conducted, the HR representative mentioned that any employee who performs exceptionally is rewarded exceptionally as well. The measurement of performance is done by conducting regular reviews and factors such as ability, aspiration and engagement is considered for promotion of employees. Focus of Telenor on the market competitiveness and internal equity is huge. They conduct their pay competitiveness every year and currently their pay system is anchored on the 75% percentile in the market. From our research, the perception of employees and that of the company are found to be aligned which might have resulted in the high sense of belonging to this organization as well according to the results.
RECOMMENDATIONS
Long-term Incentives: The external pay equity followed by Telenor emphasizes the fact that the employees are paid competitively when compared to the employees in other organizations. According to the information provided external equity is followed. Considering the competition in the Telecom sector more specific variable pay criteria in terms of long term variable component should be implemented. The employee interviewed also admitted that more profit sharing and stock options should be given to employees further strengthening the commitment. Telenor has a fair understanding of incentive and sorting effects of pay on employee and employer behavior so the introduction of stock options and profit sharing plans would not be difficult to institutionalize and the advantages would include: sense of ownership and improved performance Linking executive pay to company performance ultimately increasing stockholders' returns
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The introduction of long-term incentives would further enhance the retention power of Telenor which would help them to continue the lead market pay philosophy. The intrinsic and extrinsic satisfaction of employees at Telenor is positive as the pay form has a balanced fixed and variable component so the addition of long term incentives would further benefit the organization. Communication: The pay delivery model used in Telenor inferred is a hybrid of broadband and broad grade as the zones are identified. The pay delivery is aligned with the pay philosophy, pay form, pay assessment and pay plan design. As employees in the organization are skeptical about: the pay progression fair reward given compared to effort (large percentage believes so)
Employees are skeptical about it as it is inferred that the benefits of broad band and broad grade implemented is not communicated properly to the employees. The pay delivery form emphasizes the following which should be communicated to employees: Involves collapsing salary grades into a few broadband each with a sizable range in the case of Telenor it has specified 6 bands which progression and lateral movement defining zones too Pay for performance Skill / competency development provides greater latitude in management pay decisions for exceptional contributors within zones and bands promotes lateral moves or in-grade promotions reduces use of promotions to increase pay promotes career development / learning focus on the person instead of the job
If benefits of the hybrid pay structures are communicated to the employees completely to would be more satisfied if again measured on the same parameters used in the questionnaire. Hence the communication can well satisfy the concerns of employees in terms of progression and gains if they remain with Telenor.
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Participative Pay Plan Design: According to the prevalent culture in pay system analyzed, pay plan design should be participative as it would be aligned with the pay philosophy at Telenor. According to the information we infer that the employees feel their feedback for decisions implemented is not taken. Besides there is a clash of agreement noticed when input to make decisions is required (salary, value adding). It is therefore recommended that the process should be more participative and should strike a balance of centralization and decentralization. Also the percentage of employees agreed to the reasons not communicated properly for the decisions taken about them is high, from which we infer unbalance of centralization and decentralization. Transparency: Transparency should be exercised in an organization as lack of transparency lead to demotivated employees with low trust. The employees should be clearly communicated about the procedural justice as in case of Telenor we infer that top management exercises bias which if continued would influence organizational effectiveness. Such situations if continued also raise politics in organization which can filthy the culture at large.
LIMITATIONS
There exists certain limitation in this study. Firstly a small sample size was used so an increased validity of information imparted might not be seen. Secondly there were certain questions that could not be asked as to the restriction by the organization to its employees on revealing certain aspects of their pay. Lastly the study is restricted to the workings of Telenor in Pakistan only and the results cannot be applied to the organizations worldwide.
REFERENCES
Barber, A. D. (1992). The impact of Flexible benefits on Employee Satisfaction: A Field Study. Burton, T.B. and McFadden, J .J. (2000). Employee Benefits.Dearborn Real Estate Education.
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Chaudhry, M. S., Sabir, H. M., Rafi, N., & Kalyar, M. N. (n.d.). Exploring the relationship between salary satisfaction and job satisfaction: a comparison of public and private sector organizations. The journal of commerce, 3(4). Chun-Hsien, L., Mu-Lan, H. & Nai-Hwa, L. (2006). The impacts of benefit plans on employee turnover: a firm-level analysis approach on Taiwanese manufacturing industry. International Journal of Human Resource Management, 17(11), 1951-1975.
Currall, S.C., Towler, A.J., Judge, T.A. and Kohn, L. (2005). Pay satisfaction and organizational outcomes. Personnel Psychology, 58, 613-640. David B. Balkin, R. W. (1993). The determinants of employee benefits satisfaction. Journal of Business and Psychology. Deluca, M.J. (1993). Handbook of compensation management. New Jersey, US: Prentice-Hall.
Faulk, L. H. (2002). Pay satisfaction consequences: development and test of a theoretical model. (Unpublished doctoral dissertation). Louisiana State University, Louisiana. Fong, S.C.L. and Shaffer, M.A. (2003). The dimensionality and determinants of pay satisfaction: a cross-cultural investigation of a group incentive plan. International Journal of Human Resource Management, 14(4), 559-580. Gerhart, B. & Milkovich, G.T. (1992). Employee compensation: research and practice. In Dunnette, M.D. and Hough, M. (Eds), Handbook of Industrial and Organizational Psychology, Consulting Psychologists Press, Palo Alto, CA, 481-570. Ghazanfar, F. S. C. (2011). A Study of Relationship between Satisfaction with Compensation and Work. International Journal of Business and Social Science, 2(1). Hutchinson, P. (2004). Flexible benefits. CIPD, 18-25. Henderson, R. I. (2000). Compensation management in a knowledge-based world. Upper Saddle River, NJ: Prentice Hall.
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Heneman, III., Herbart, G. & Schwab P. D. (1985). Pay satisfaction: its multidimensional nature and measurement. International Journal of Psychology, 20(1), 129-141. Heneman, R.L., Greenberger, D. B., & Strasser, S. (1988). The relationship between pay for performance perceptions and pay satisfaction. Personnel Psychology, 41, 745-759. Igalens, J. and Roussel, P. (1999). A study of the relationships between compensation package, work motivation and job satisfaction. Journal of Organizational Behavior, 20, 1003-1025. John A.Lust, C. D. (1990). Models of satisfaction with benefits: Research implications based on the nature of the construct. Journal of Business and Psychology . Judge, T.A. & Welbourne, T.M. (1994). A confirmatory investigation of the dimensionality of the pay satisfaction questionnaire. Journal of Applied Psychology, 79(3), 461-466. Lawler, E.E. (1995). The new pay: a strategic approach. Compensation & Benefits Review, 27(4), 14-21. Markova, G. F. J. (n.d.). Attitude Formation of Benefits Satisfaction: Knowledge and Fit of. Internationl Journal Of Business Research and Management , 8. Mckenna, E. F. (2000). Business Psychology and Organization behavior: A Student handbook. Muhammad Ehsan Malik, R. Q. (2012). The Impact of Pay and Promotion on Job Satisfaction: Evidence from Higher Education Institutes of Pakistan. American Journal of Economics. Margaret L. Williams, S. B. (2002). Benefit System and Benefit Level Satisfaction: An Expanded Model of Antecedents and Consequences. Journal of Management , 22. Milkovich, G.T. & Newman, J.M. (2008). Compensation, (9th Ed.). McGraw Hill International Edition, USA. Motowidlo, S.J. (1983). Predicting sales turnover from pay satisfaction and expectation. Journal of Applied Psychology, 68, 484-489. Naumann, E. (1993). Organizational predictors of expatriate job satisfaction. Journal of International Business Studies, 24(1), 6180.
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Rajkumar, K. (1996). Paying for performance: Designing effective compensation strategies. Malaysia: Pelanduk Publications (M) Sdn. Bhd.
Rynes, S. L. & Gerhart, B. (2000). Compensation in organizations: Current research and practice. San Francisco: Jossey-Bass. Sharma, J. P., & Bajpai, N. (2011). Salary satisfaction as an antecedent of job satisfaction: Development of a regression model to determine the linearity between salary satisfaction and job satisfaction in a public and a private organization. European Journal of Social Sciences, 18. Steven H. A. and Loring, M. (1996). Compensation in the year 2000: Pay for Performance. Health Manpower Management, 22(3), 31-39. Suutari, V. and Tornikoski, C. (2001). The challenge of expatriate compensation: the sources of satisfaction and dissatisfaction among expatriates. International Journal of Human Resource Management, 12(3), 389-404. Weathington, B. L. & Jones, A. P. (2006). Measuring the value of nonwage employee benefits: building a model of relation between benefit satisfaction and value. Genetic, Social and General Psychology Monographs, 132(4), 292-328. Vroom, V.H. (1964). Work and Motivation. Wiley, New York. Yale D. T., & Donald R. L. (2002). Executive Compensation. BNA Books, 2002. Zhaohong Lin, L. T. (2010). The developement and implications of China's Employee Benfit Systems. Asia Pacific Journal of Human Resources, 16.
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APPENDIX
The survey is being conducted to analyze and understand the pay structure and policies implemented in Telenor which is the scope of our project. It will take approximately 10 minutes to complete. The purpose of this survey is to find out how rewards (variable) and benefits may affect pay satisfaction of employees. We greatly appreciate and value your cooperation and assure you that the information you will share with us will be kept confidential.
Respondent Information
Gender: Age: Designation:
Male Female
Evaluation Scale
Strongly disagree Disagree Neutral Agree Strongly Agree
1. What is your current monthly salary? 20k 40k 40k 70k 70k 80k above 80k
2. Do you think that the annual salary of your peers when compared to yours is more? Strongly disagree Disagree Neutral Agree Strongly Agree
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3. Please think of one person at work with whom you most compare yourself. Is the salary of that person more? Strongly disagree Disagree Neutral Agree Strongly Agree
4. The estimate average annual salary in your region for people holding jobs comparable to your own is less. Strongly disagree Disagree Neutral Agree Strongly Agree
5. Do you think that the minimally acceptable annual salary for people holding jobs comparable to your own should be more? Strongly disagree Disagree Neutral Agree Strongly Agree
6. Are you satisfied with the average annual salary over the past 5 years? Strongly disagree Disagree Neutral Agree Strongly Agree
7. Generally speaking, I am very satisfied with the salary I am receiving. Strongly disagree Disagree Neutral Agree Strongly Agree
8. I am contented with the kind of work I do in this job. Strongly disagree Disagree Neutral Agree Strongly Agree
9. Most of the people in this company are satisfied with their salary. Strongly disagree Disagree Neutral Agree Strongly Agree
10. I would be very pleased to spend the rest of my career with this organization in terms of salary. Strongly disagree Disagree Neutral
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Agree
Strongly Agree
11. I do not feel a strong sense of belonging to my organization. Strongly disagree Disagree Neutral Agree Strongly Agree
12. I would switch to other company if I am offered more salary than I am receiving in this organization. Strongly disagree Disagree Neutral Agree Strongly Agree
13. I feel that I have too few options to consider leaving this organization. Strongly disagree Disagree Neutral Agree Strongly Agree
14. If I had not already put so much of myself into this organization, I might consider working else where Strongly disagree Disagree Neutral Agree Strongly Agree
15. It seems there is not much salary progression if I remain with the organization indefinitely. Strongly disagree Disagree Neutral Agree Strongly Agree
16. There's not too much to be gained (other than salary) if I remain with this organization indefinitely Strongly disagree Disagree Neutral Agree Strongly Agree
17. Personal intentions or bias of top management influence salary decisions. Strongly disagree Disagree Neutral
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Agree
Strongly Agree
18. Decisions about salary are made ethically. Strongly disagree Disagree Neutral Agree Strongly Agree
19. Accurate information (meeting criteria) is used to make decisions that influence salary Strongly disagree Disagree Neutral Agree Strongly Agree
20. My input is obtained prior to making decisions(salary and value adding input). Strongly disagree Disagree Neutral Agree Strongly Agree
21. I am given the opportunity to modify decisions that have already been made. Strongly disagree Disagree Neutral Agree Strongly Agree
22. The reasons behind decisions that affect me are explained. Strongly disagree Disagree Neutral Agree Strongly Agree
23. Concern is shown for my rights. Strongly disagree Disagree Neutral Agree Strongly Agree
24. Taking into account the education and training that I have had, I am getting fair reward Strongly disagree Disagree Neutral Agree Strongly Agree
25. I am receiving fair salary if considered the experience I have. Strongly disagree Disagree Neutral Agree Strongly Agree
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26. I am receiving fair reward for the effort that I put forth. Strongly disagree Disagree Neutral Agree Strongly Agree
27. I receive appreciation as well as monetary reward for what I have done well. Strongly disagree Disagree Neutral Agree Strongly Agree
28. I am satisfied with the profit sharing policies in this company. Strongly disagree Disagree Neutral Agree Strongly Agree
29. Stock option is exercised exceptionally(when compared to competitors). Strongly disagree Disagree Neutral Agree Strongly Agree
30. Disability income protection concept is not prevailing in this company Strongly disagree Disagree Neutral Agree Strongly Agree
31. The medical, transportation, mobile and house allowances are not sufficient. Strongly disagree Disagree Neutral Agree Strongly Agree
32. Mostly goal based pay concept is exercised . Strongly disagree Disagree Neutral Agree Strongly Agree
33. Short term incentives are enough to motivate employees towards goal. Strongly disagree Disagree Neutral Agree Strongly Agree
34. Seniority bonuses given to employees are market competitive
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Strongly disagree
Disagree
Neutral
Agree
Strongly Agree
35. Merit increments awarded for performance are satisfiable Strongly disagree Disagree Neutral Agree Strongly Agree
36. Merit increments are given frequently Strongly disagree Disagree Neutral Agree Strongly Agree
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Compensation and Benefits Final Report - Telenor

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Compensation and Benefits Final Report - Telenor

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2012

COMPENSATION AND BENEFITS

COMPANYS PROFILE- TELENOR

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8 2 Agree neutral Reply By Respondants disagree

Fixed Pay and Pay Satisfaction

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Sense of Belonging and Pay Satisfaction

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0 Agree neutral Reply By Respondants

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6 2 Agree neutral Reply By Respondants

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5 2 Agree neutral Reply By Respondants

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Benefits and Pay Satisfaction

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7 2 Agree neutral Reply By Respondants

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25 20 20 15 10 5 0 Agree neutral Reply By Respondants

The reasons behind decisions that affect me are explained.

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Variable Pay and Pay Satisfaction

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Short term incentives are enough to motivate employees towards goal.

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34. Seniority bonuses given to employees are market competitive

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