“Impact of Compensation and Work Environment on Job

Satisfaction”

Research Proposal…… SEMESTER 2022-23

Submission date (March 7, 2023)

BY

HAJRA MAJEED 19010920-062

AYESHA IFTIKHAR 19010920-074

COURSE CODE: MGT-303

COURSE TITLE

Research Method in Business

Submitted To: MAM AYESHA NAZISH

BBA 7th Section B-

DEPARTMENT OF MANAGEMENT SCIENCES

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 Table of Content
SL Contents Pg#
Table of Contents 2
Abstract 3
1 Introduction
Problem Statement
Research Questions
Research Objective
Significance of Research
2. Literature Review
compensation
Work environment
Job Satisfaction
Compensation link to Job Satisfaction
Work Environment links to job satisfaction
Conceptual Frame work
variables
Hypothesis
3. Methodology
Research Approach
Measure
Sampling
Procedure
Research Instrument
References
Appendix

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 Abstract
This study is purposed to find out the impact of compensation and work environment toward
job satisfaction. The compensation is a form of human resource management which is the form
of benefits that employees receive for their employment. Work environment is the physical
place for the employees including all the facilities equipment, financial benefits, and all others.
While job satisfaction is the positive feeling of employees towards their job. This study is based
on the primary data collection. The collection of data is based on the self-administrative survey
through question air. The research is conducted at the Pakistan Companies. The research uses
the quantitative associative method. The result shows that a positive and good environment and
compensation have a positive effect on the job satisfaction. As the compensation and work
environment directly linked with the job satisfaction. The instruments which is used for the
collection of data is question air on the variables compensation, and work environment towards
the job satisfaction. The both variables are directly linked with the job satisfaction. Hence the
satisfaction is essential part for an organization which enhance the productivity.

Key words: Compensation, Work Environment, Job Satisfaction

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 1. INTRODUCTION

For the importance of job satisfaction, it is failed to recognize the importance of work
environment and compensation by countless businesses. To outshine their contestants,
internally weedy organizations incapable to introduce advanced products into the marketplace.
(Aiken, Clarke, & Sloane , 2002). In the procedure of attaining the mission and vision of the
business, the employee is an important element. To confirm the quality of the work,
performance criteria are set by the organization which should meet by the workers (Reid, 2000).
Employees need a working environment and compensation that lets them work efficiently
without problems to meet the standards of the organization and imprison them from execution
up to the level of their full potential. Within the organization, many businesses ignore the
working environment which results in an adverse effect on the job satisfaction of the employee
(Spector, 1997). Protection of staff, job safety, good relations with co-workers,
acknowledgement for best performance, inspiration for executing well and involvement in the
decision-making procedure of the firm are all involved in a work environment (Simon, 2001).
High job volume and pressure are experienced by the worker according to the inner survey
when salaries or compensation is non still good enough. Due to the inflation that rise the price
of basic goods, the employee obtains salaries and reward is not sufficient to pay their bills.
Problem Statement
To understand the effect of compensation and work environment to inspire job satisfaction, an
empirical study has been completed. An outcome has been compensation and work
environment effect in the direction of job satisfaction according to experiential study. Some
studies have revealed the encouraging result (Mardiana, 2005) but other studies show the
undesirable result (Sophia, 2013). Hence the study’s fundamental problem will be formulated
as: Do the compensation and the work environment have a straight encouraging effect towards
the satisfaction of the workers.
Research Questions
Employee Job Satisfaction can affect by many aspects but compensation and the work
environment have played a very significant role in the construction of Job Satisfaction. The
two-research query of the study will be:

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  What is the connection between the working environment and employee job
satisfaction?
 What is the connection between compensation and employee job satisfaction.
Research Objectives
Main Objectives
 To determine the relationship of compensation and good working environment with job
satisfaction.
Sub Objectives
 To find whether the employees derive job satisfaction from rewards and compensation.
 To find the most satisfying component in the job of an employee.
Significance of the Study
Petterson (1998) argues that inside a business the interface between employees is crucial for
completing the executive goals. Furthermore, in a timely style, the communication of
knowledge must be appropriately finished so that the processes of the organization are running
efficiently. It is problematic to attain the purposes of an organization if there is a clash between
colleagues. Significantly finding the interconnection of employees with the satisfaction of job,
compensation and work environment is the fundamental motive of this study. Through a survey
or questionnaire, the information for this research is gathered. The involvement of this research
is to support the gathering of the information and also confidence in the repetition in the world
that is linked to the performance of the compensation variables impact.

LITERATURE REVIEW
Compensation:
The compensation is the form of services including bonus and benefits that employees receive
at job (Newman, 1999). (sedarmyanti, 2009) Stated that the compensation employees receive
for their work activities must be fair and should be proper. According to Sedarmayanti (2014:
241) there are the total of six indicators which help in measuring the compensation involving in
incentives, bonus, security, house and rent benefits etc. (Dessler, 2009) Stated that the
compensation involved all type of income that employee receive for their job. Compensation
and management system provide the benefits to the employers as well as employees in all way.
(mayhew, 2013). Compensation is the pay choice that is available for the employee based on
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their performance and experience. (Gomez, 1987). Compensation is designed in a way to
provide benefits to the white collars for their employement.it involved in salary which
calculated on quarterly or monthly basis. (white, 2000). Compensation are the benefits other
than salary which provide to the employees in the form of incentives, pension after retirement.
It is the fixed amount paid to the employees after the process of retirement. (Amrstrong, 2002).
Work Environment:
The work environment consist of two dimension one is relate to the social and the other one is
relate with the working condition. (Skalli, 2008). The work environment in an organization
relate to the facilities, good working condition, satisfied job, maintain, performance etc. overall
performance of the employees relate to the good working environments. (lane, Esser J, Holte B,
Anne, & M,M, 2010). A smooth run of information plays a vital role in organizations success.
The satisfaction depends on the condition of good working environment. (Petterson, 1998). A
work environment relate to physical environment which involved space for working all the
equipment’s, material, tool, technology. The impact of good working environment relate to
positive attitude. (Huysamen, 1997).
Job satisfaction:
Job satisfaction is the positive feeling or behavior which relate to the job. (al & Herz berg,
1959).most of the satisfied employees (Onukwube, 2012) feeling proud on their jobs. When the
need of employees, their desire fulfill because of compensation they are more satisfied and
turnover rate are low. (Bright, 2008). Every one perceive job satisfaction in their own way of
perception. (locke, 1976). Onukwube (2015) states that job satisfaction is the feeling of
positivity and wellbeing, and pleasure.it relates to the happiness of the employees. (Robbins,
2005) Defined that job satisfaction is the feeling of employees based on positivity which
enhance the productivity and a high value towards job satisfaction. Job satisfaction relate to the
feeling and attitude of the employees. Positive attitude shows a higher level of job satisfaction.
And negative attitude shows dissatisfaction towards the job. In other words job satisfaction is
the extent to which employees are totally satisfied with the job they performed. (Dipboye,
1994). Intrinsic factor in job are most related to define the job satisfaction. (Borzega, 2006). If
the employees are not satisfied with their task they are not certain about the security. (clerk,
1997). If the worker feel unsafe and the employer does not give them security they feel separate
and do not take part in decision making etc.

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Compensation links to job satisfaction:
Compensation is considered as employee’s reaction towards their job experience (Berry, 1997).
Job satisfaction is related with the employee’s perception and benefits they receive (locke,
1976). Job satisfaction relates with the four variables of the compensation include
compensation benefits, work, opportunities and growth (Berg, 1976). Compensation package
create the greatest satisfaction towards the employees (et, 2001). The compensation and job
satisfaction are correlated with each other. (Hulin, 1993). The work related activities involved
pay, incentives, bonus, promotion, productivity impact the satisfaction of job positively.
(Luthan, 1993). A study shows that a salary package have greatest importance towards the
satisfaction level. When employee receive many benefits from the job they are fully satisfied.
(Khalsa, 2003).a result conduction shows that there was a positive relation between the
compensation package and satisfaction level (al., 2017). The level of satisfaction could be
enhanced through the facilities that are available to the employees and it causes the reduction in
stress and rises the compensation benefits (sedarmyanti, 2009).

Work Environment links to job satisfaction:

The working environment have positive impact towards the level of satisfaction (lane, Esser J,
Holte B, Anne, & M,M, 2010). (Chandsaker, 2011) Argues that the organization should create a
good and supportive work environment for the employees for satisfaction level. (babic, 2013)
Found that the employees who work under the good working condition are more satisfied and
on the other hand employees who worked under difficult condition are more dissatisfied.
Positive work environment have more influence on the satisfaction of employees. Spector
(1997) Observed in their studies that the most of the organization ignore the good working
environment thinking that this causing adverse effect on the level of satisfaction. (Arntez, 1999)
Argues that most of the employees face rude behavior of their supervisor. The employer did not
give them respect a worst working environment decrease satisfaction. A good working
environment are directly link with the job satisfaction and it effect the management and
employees satisfaction. (lane, Esser J, Holte B, Anne, & M,M, 2010).

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Conceptual Framework:

Variables:
C= Compensation
WE=Work Environment
JS=Job Satisfaction
Hypothesis:
Hypothesis I: The compensation have positive impact towards job satisfaction
Hypothesis II: The good working environment have positive impact towards job
satisfaction.

3. METHODOLOGY
Research Approach
(Crosswell, 2003) Exposed that by subsequent specific procedure, research can be undergone by
researchers. The approach of inductive research method is used in this study in which linked to
the topic of curiosity, data is gathered. Once a generous amount of data has been assembled,

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there will stop collecting the data, walking back to sight the data by gaining a bird’s eye.
Furthermore, probability sampling is used to retain the research impartial.
Measure:

Variables Indicators Scale Source

 Salary
 Incentives
Compensation
(Amrstrong,
 Allowance
2002)
 Facilities

 Physical
 Equipment’s
Work Environment Liker Scale Spector (1997)
 Financial
benefits
 Non physical
 Work itself
 Promotion
Job satisfaction (Bright, 2008)
 Supervision
 Decision
maker

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Sampling
The goal of the study is gratified by the probability method of sampling. According to the
geographical places, into the cluster mark population was alienated to choose a sample. Into
four clusters, Pakistan is split up according to the provinces include: Balochistan, Punjab, and
Sindh along with the North West Frontier Province. Through humble random sampling, from
these four clusters, we pick simply one cluster. Punjab which is the chosen cluster is
additionally split into the sub-cluster according to the corporations. With the support of
Structural Equation Modeling, the sampling size was drawn (Kline, 2011). The sample size was
defined as 32x10=320 according to the measures. In the company, the average number of
workers is 15. So, through humble random sampling, 20 companies were designated. Among
the respondent, 320 surveys were dispersed.
Procedure
Both methods of investigation were used for data gathering analysis which are descriptive
statistics and inferential statistics. The sample of this study distinguishing was used to recognize
by Descriptive analysis. Using the Structural equation model, the proposed equation model and
measure validity are estimated. Previous to valuation, the SEM model was reread or model
threshold. The goodness of fit, average variance retrieved, and composite reliability of the
measurement model was studied. According to (Lin & Li, 2004) the population uses a sample,
and numerous analytical tools are used by inferential statistics to draw inferences. The data
estimation is developed from the inferential statistic. Moreover, it simplifies the data from the
wider population (Yaseen, 2013).
Research Instrument
For data gathering, the tool used is the survey which is contained close-ended queries.

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References
Aiken, L., Clarke, S., & Sloane , D. (2002). Hospital Staffing. Internation journal for Quality
in Health Care, 87-94.
Croswell, A. (2003). "Evaluating structural equation models with unobservable variables and
measurement error", Journal of Marketing Research, Vol. 18 No. 1, pp. 39-50.
Kline, R. (2011). Principle and practice of structural equation modelling The Guilford Press.
Lin, H., & Li, G. (2004). Perception of senior manager toward job satisfaction (Vol. 42).
Mardiana. (2005). Manajemen Produksi. Jakarta: Badan penerbit.
Petterson, I. (1998). Psychological stressors and well-being in health careworkers. the impact of
an intervention program, Vols. 47(11):1763–1771.
Reid, I. (2000). The Impact of Compensation on the Job Satisfaction of Public Sector
Construction Worker of Jigawa State of Nigeria. The Business and Management
Review, Vol. 6, no. 4.
Simon, S. (2001). Sumber Daya Manusia dan Produktivitas Kerja. Jakarta: Mandar Maju.
Sophia. (2013). The Effect of Compensation toward Job Satisfaction and Job Performance.
International Journal of Learning & Development, Vol. 3, no. 2.
Spector, P. (1997). JOB SATISFACTION. Sage Publications, Vol 3. Retrieved from sage
Publications.
Yaseen, A. (2013). Effect of Compensation Factors on Employee Satisfaction. International
Journal of Human Resource Studies, 3.

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 APPENDIX

QUESTIONAIRE

We (Ayesha Iftikhar and Hajra Majeed) students of BBA honors, are chasing our research from
the University of Gujrat. For the research project, we are going to research. “Impact of
Compensation and Work Environment on Job Satisfaction: Pakistan Companies quantitative
study” is the topic of our research.
Concealment of Identity
The information will only use for research purposes that support us in providing our research
objectives which are provided by you and will remain confidential. About your participation, if
you have any questions then please feel free to email me at 19010920-074@uog.edu.pk or
19010920-062@uog.edu.pk
SECTION A
Kindly give the appropriate response about yourself without leaving any item unanswerable.
Respondent Profile
Name (optional): _____________________ Mobile# ________________________
Company Name: _____________________
Age:
□ Below 18 □ 18-25 □ 26-31
□ 31-50 □ Above 50
Gender:
□ Male □ Female
Marital Status:
□ Single □ Married
Education Level:
□ Inter □ Bachelor □ Masters
□ MS/ M Phil □ PhD
Salary:
□ Below 10,000 □ 70,001-90,000 □ 50,001-70,000
□ 30,001-50,000 □ 10,001-30,000 □ Above 90,000

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Your experience in that company ___________ (in years).
SECTION B
According to the detail which is given below, tick any one column.
Strongly Agree=1, Agree=2, Neutral=3, Disagree=4, Strongly Disagree=5
A. Compensation 1 2 3 4 5
1. Income is received constructed on the job
that is given by the company.
2. On the spot in the corporation, the sum of
salary is created.
3. With annual bonuses, work attainment will
be pleased.
4. Extra profits or additions will be provided
by the company.
5. To high-achieving workers, encouragement
will be provided by the head of the
corporation.
6. To vast work Enthusiasm, encouragement
will be provided.
7. Health insurance will be provided by the
corporation.
8. Protected by health insurance.
9. As long as he/she is employed at the
corporation, workers will get safety
assurance.
10. Protected by safety assurance.
11. To have some break, leave profits can be
used.
12. On a trip or leave, obtain compensation
wage.
B. Work Environment 1 2 3 4 5

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13. Lighting in the workstation is appropriate.
14. Warmness and nervousness can be produced
by over-bright lightning.
15. With air conditioners, all the rooms are
equipped.
16. Air movement is already good.
17. In the workstation, there is no sound.
18. Due to the least noise level, there is relaxed
working.
19. The apartment colouring is previously
decent.
20. Associated with the occupations, directed by
the administrator.
21. From an administrator, always get an
updating.
22. Zero difficulties of infrastructures.
23. With co-workers, work collectively.
C. Job Satisfaction 1 2 3 4 5
24. Have an exciting occupation.
25. Pleased with the profession.
26. On time, the income is paid.
27. Based on the work outcome, the
encouragements are acknowledged.
28. To all employees, the promotion is open.
29. Reasonable selection procedure.
30. Fair administrator.
31. Having a decent co-worker.
32. Helpful co-worker.
Thank You for your time

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