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

Author

Listed:
  • 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
    SCIRE Foundation, 00867 Warsaw, Poland)

  • K. M. Anwarul Islam

    (Department of Business Administration, The Millennium University, Dhaka 1217, Bangladesh)

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.

Suggested Citation

  • Nurul Mohammad Zayed & Md. Mamunur Rashid & Saad Darwish & Md. Faisal-E-Alam & Vitalii Nitsenko & K. M. Anwarul Islam, 2022. "The Power of Compensation System (CS) on Employee Satisfaction (ES): The Mediating Role of Employee Motivation (EM)," Economies, MDPI, vol. 10(11), pages 1-16, November.
    • Handle: RePEc:gam:jecomi:v:10:y:2022:i:11:p:290-:d:977050
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    References listed on IDEAS

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    1. Jun-Chul Ha & Jun-Woo Lee, 2022. "Promoting Psychological Well-Being at Workplace through Protean Career Attitude: Dual Mediating Effect of Career Satisfaction and Career Commitment," IJERPH, MDPI, vol. 19(18), pages 1-16, September.
    2. Clark, Andrew E. & Oswald, Andrew J., 1996. "Satisfaction and comparison income," Journal of Public Economics, Elsevier, vol. 61(3), pages 359-381, September.
    3. Carolyn Stringer & Jeni Didham & Paul Theivananthampillai, 2011. "Motivation, pay satisfaction, and job satisfaction of front‐line employees," Qualitative Research in Accounting & Management, Emerald Group Publishing Limited, vol. 8(2), pages 161-179, June.
    4. Eva Gorgenyi-Hegyes & Robert Jeyakumar Nathan & Maria Fekete-Farkas, 2021. "Workplace Health Promotion, Employee Wellbeing and Loyalty during Covid-19 Pandemic—Large Scale Empirical Evidence from Hungary," Economies, MDPI, vol. 9(2), pages 1-22, April.
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    2. Oladejo Segilola Yewande & Saka Abdul-Afeez Ayomide, 2024. "Compensation System and Employee Motivation in the Public Sector: A Case Study of Ogun State Civil Service," Management of Organizations: Systematic Research, Sciendo, vol. 91(1), pages 89-114.
    3. repec:bcp:journl:v:9:y:2025:i:11:p:7049-7067 is not listed on IDEAS
    4. Oleg Bazaluk & Muhammad Ataur Rahman & Nurul Mohammad Zayed & Md. Faisal-E-Alam & Vitalii Nitsenko & Lesia Kucher, 2024. "Crowdsourcing review: the crowd workers’ perspective," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 51(3), pages 647-666, September.
    5. Olga Ponisciakova & Zuzana Rosnerova & Eva Kicova, 2023. "Motivation as an Element of Managerial Decision Making in Manufacturing Companies: The Case of the Slovak Republic," Sustainability, MDPI, vol. 15(12), pages 1-21, June.

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