Approval by Mentor

APPROVAL BY MENTOR
The impact of fringe benefits on job satisfaction and engagement 1
DISSERTATION REPORT
On
The Impact of Fringe Benefits on Job Satisfaction and Engagement
By
Prateek Kumar Sharma
Under the guidance of
Dr. Ashish Chandra
Department of Commerce
Delhi School of Economics
Submitted to
University of Delhi
At
University of Delhi
2020
DECLARATION
I, Prateek Kumar Sharma, Roll. No. 30, bona fide student of MBA-HRD, Delhi School of
Economics declare that the project entitled “The impact of fringe benefits on job satisfaction
and engagement” in the partial fulfillment of MBA-HRD degree, Delhi School of Economics,
University of Delhi, is my own work and is not formed on the basis for the award of the title to
any candidate to any university.
This dissertation is an original and authentic piece of work by myself. I have fully
acknowledged and referenced all material incorporated from secondary sources. It has not, in
whole or part, been presented elsewhere for assessment.
This project has been done under the regular guidance of my project guide Dr. Ashish Chandra.
Sincerely,
Mr. Prateek Kumar Sharma
Exam Roll No: 50492

MBA HRD
University of Delhi
CERTIFICATE OF GUIDE
This is to certify that the project titled “The impact of fringe benefits on job satisfaction
and engagement” is an academic work done by PRATEEK KUMAR SHARMA
submitted in the partial fulfillment of the requirement for the award of the degree of
“Master of Business Administration in Human Resource Development” from
Department of Commerce, Delhi School of Economics, University of Delhi, conducted
under my guidance.
Dr. Ashish Chandra

Associate Professor
Department of
Commerce
Delhi School of
Economics
University of Delhi
ACKNOWLEDGEMENT
This is to acknowledge with sincere thanks for the assistance, guidance and support that I have
received during the project. I would like to take this opportunity to thank all those people who
helped me to complete this project and assisted me during the critical analysis.
The following Dissertation Report was successfully completed under the guidance of Dr. Ashish
Chandra Department of Commerce, University of Delhi.
I would like to express my gratitude towards all the managers and employees for taking part in
the survey and filling the questionnaire diligently to aide my research.
Finally I would like to thank all my faculty members and mentors at Department of Commerce
for providing me with teachings and learning’s that enabled me to contribute positively.
I also thank my group members & friends for their valuable suggestions, comments and
criticism. Gratitude is extended to every unnamed individual who has helped in making this
project a great learning experience.
Sincerely,
Prateek Kumar Sharma
Exam Roll No: 50492

MBA HRD
University of Delhi
EXECUTIVE SUMMARY
Subject: A study to determine the impact of fringe benefits on job satisfaction

and engagement
The study addresses the impact that fringe benefits have on the levels of job satisfaction and
engagement of the employees. A survey research design was used with a specifically developed
questionnaire as the data gathering instrument. The participants represent the employees from
different organization students who are about to join the organization as well as those
participants who have been a part of one or more internships. A total of 117 participants
completed the questionnaires. Employees from different areas, gender, age and academic levels
participated. The majority of the respondents were in the age group 26 – 30 (44.4%).
Because all the questionnaires represented the population and not just a sample, only a test to
determine practical correlation was performed. For the purpose of the correlation test, the
Pearson’s correlation coefficient (r) was used. The statistical analysis indicated a highly
important correlation between Job Satisfaction and Engagement. Thus a high level of job
satisfaction will imply a high level of engagement and vice versa. It has also indicated that Job
Satisfaction and Fringe Benefits shows a low practically significant correlation. The test for
correlation between Engagement and Fringe Benefits shows a low practically significant
correlation.
TABLE OF CONTENTS
Declaration i
Certificate from Guide ii
Acknowledgement iii
Executive Summary iv
Chapter 1: Introduction 5
1.1 Problem Statement 6
1.2 Research Objectives 6
1.3 Research Method 7
1.3.1 Literature Review
1.3.2 Research Design
1.3.3 Measuring Instrument
1.4 Research Procedure 7
1.5 Division of Chapters 7
1.6 Chapter Summary 8
Chapter 2: Literature Review 9

2.1 Job Benefit and Satisfaction 9
2.2 Engagement 16
2.3 Structuring of Remuneration Packages 21
Chapter 3: Research Methodology 29

3.1 Introduction 29
3.2 Research Design 29
3.3 Universe of Study 29
3.4 Questionnaire 30
3.5 Sample Population 30

3.6 Method of Data Collection 30
3.7 Sampling Method 30
Chapter 4: Result and Analysis 31
Chapter 5: Conclusions and Suggestions 38

4.1 Conclusions and Suggestions 38
4.2 Conclusions 38
4.3 Suggestions 40
References 42
Annexure 45
CHAPTER 1: INTRODUCTION
This dissertation focuses on a comparative study to determine the impact of fringe benefits on
job satisfaction and engagement.
Fringe benefits, or that part of the total compensation package other than pay for time worked
provided to employees in whole or in part by employer payments, play a major role in the
structuring of compensation packages (Williams, 1995:1097).
If asked about their organisation’s compensation programs, most managers criticize them as not
working (Jensen & McMullen, 2007:2). This statement reflects the opinion of various managers
in the corporate world, as managers are powerless with regards to the compensation of their
employees and the limitations which are placed by the laws of the organisation on the structuring
of their employee’s remuneration packages.
Managers have the authority to make major business decisions sometimes worth millions of
Rands, but they don’t always have the authority to change the structure of their employees’
remuneration packages (Jensen & McMullen, 2007:2). Most remuneration packages are based on
market related information, and one can ask the question – do these market related rewards
reflect the contribution that a specific employee makes to an organisation? (Jensen & McMullen,
2007:2).
Today’s managers do not believe that their organisation’s compensation programs are effective
in getting the desired results for which they are held accountable (Jensen & McMullen, 2007:2).
For most managers, compensation is their largest controllable operating expense. If it is
successfully managed, the compensation offered to employees gives them a great tool to achieve
the best possible business results.
When managers or employees criticize the organisation’s remuneration packages or reward

structures, it is often assumed that money is the reason. But people or employees are motivated
by more than just money. According to Jensen and McMullen (2007:5), some people say that
money is not a motivator for them at all.
According to McCaffery and Harvey (1997:1), there are six key reasons why remuneration
packages need to be structured, and why fringe benefits will not be eliminated.
It’s the law: Certain fringe benefits are required by law. In the United States Social Security,
Medicare, and Family and Medical Leave are mandated federally. All the states require workers’
compensation coverage and unemployment insurance. A few states have non-occupational
temporary disability benefit laws and mandatory health benefit coverage.
Duty to bargain with unions: Virtually every conceivable employee benefit qualifies as a
“mandatory subject for bargaining” under federal labour law. This means that in collective
bargaining, employers cannot ignore union proposals or eliminate benefit coverage unilaterally.
Competition: Even most small employers now sponsor some benefit plans for their employees –
if only paid-time-off allowances and employee-pay-all coverage. A company opting for an “all
cash” compensation program certainly would be disadvantaged competitively in the employment
marketplace.
Benefits are tax-advantaged: Unlike pay, which is subject to federal and state taxes, most
benefits enjoy either a tax-exempt or tax-deferred status. This enables employers to take current-
year tax deductions for expenditures without directly or immediately increasing employees’
taxable income.
Employees want benefits: Employees are accustomed to receiving benefit coverage as part of
their total compensation. They realize that because of tax advantages and economies-of-scale,
they are better off having their employers provide benefits. This is evident especially in flexible
(cafeteria) plans where most employees forego cash pay-outs for benefit choices.
Benefits support employer strategies: Companies find that certain benefits are often more
effective than pay in helping to achieve objectives related to recruitment, retention and
motivation of employees, cost management, and social responsibility. Examples of this are
profit-sharing plans, work-and-family programs and flexible benefit plans.
The bottom line is every organisation is different – different employees with different cultures,
different needs and different objectives (Jensen & McMullen, 2007:157). Effective benefits will
align employee needs with the organisation’s goals, and this is based on careful research into
what employees want what the organisation offers, what it wants to offer, and ultimately what it
can afford to offer.
1.1 PROBLEM STATEMENT
The study addresses the impact that fringe benefits have on the level of job satisfaction and
engagement of the employees. Job satisfaction can only exist when the interests of both the
employee and the organisation are in equilibrium. The organisation relies on the manager to
evaluate the value of the work performed by an employee, and with the interest of the s at heart,
to determine the appropriate remuneration for this work. In order to offer the employee
compensation which is competitive with other companies’ and appropriate for the employee’s
duties, the manager needs to have an in-depth understanding of the real value of the work.
1.2 RESEARCH OBJECTIVES
The general objective of this research is to determine the impact of fringe benefits on job
satisfaction and engagement.
1.3 RESEARCH METHOD
The research method consists of a literature review and an empirical study.
1.3.1 Literature review
The literature review focuses on the structuring of remuneration packages, fringe benefits and
their impact on job satisfaction and engagement.
1.3.2 Research design
One of the most popular and effective measurement tools to determine the impact that fringe
benefits have on job satisfaction and engagement is a research survey. Therefore, a questionnaire
was designed to obtain information regarding their perceptions on job satisfaction, engagement,
remuneration and benefits. A questionnaire of 3 sections was developed. Section A consisted of
7 questions regarding job satisfaction. Section B consisted of 7 questions regarding engagement.
Section C comprised of 8 questions about fringe benefits and remuneration. The participants
were informed that the purpose of the questionnaire was to gather responses on how they
perceived the impact that remuneration packages and fringe benefits have on job satisfaction and
engagement.
1.3.3 Measuring instrument
Questions were answered based upon the five-point agreement-disagreement Likert format,
varying from strongly agree to strongly disagree. However, for the purpose of this study, the
scaling was adapted to a four-point scale to force the participants to select a definite opinion
rather than choosing the middle option of “Neither agree nor disagree”. Likert’s scaling is based
on a bipolar scaling method.
A questionnaire of 3 sections was developed. Section A consisted of 7 questions regarding job

satisfaction. Section B consisted of 7 questions regarding engagement. Section C comprised of 8
questions about fringe benefits and remuneration. The participants, were informed that the
purpose of the questionnaire was to gather responses on how they perceived the impact that
remuneration packages and fringe benefits have on job satisfaction and engagement.
1.4 RESEARCH PROCEDURE

Responses were gathered from participants on all the items of the questionnaire. All responses
were used for data and statistical analysis.
1.5 DIVISION OF CHAPTERS
The chapters in this dissertation are presented as follows:
Chapter 1: Introduction, problem statement and objectives
Chapter 2: Literature study
Chapter 3: Research methodology
Chapter 4: Result and Analysis
Chapter 5: Conclusion and Suggestions
1.6 CHAPTER SUMMARY
This chapter discussed the problem statement and research objectives. The measuring
instruments and research method used when doing the research were explained. A brief overview
of the chapters followed.
CHAPTER 2: LITERATURE REVIEW
A thorough literature study needs to be conducted to form a complete conceptualization of the

terms job satisfaction, engagement, fringe benefits and remuneration. For the purpose of
clarification the following definitions will be apply to this study.
2.1 JOB AND BENEFIT SATISFACTION
As a manager in the modern organisation, one must be fully aware of the diverse cultures in the
organisation as well as the human resources practices needed to establish the best workable
solutions for an optimal reward strategy. If one has all these aspects successfully implemented in
the organisation, it would ultimately lead to better individual and organisational performance
(Jensen & McMullen 2007:38).
How can a manager reward individuals within the guidelines of a company without jeopardising
the company’s reward guidelines? There is not one suitable remuneration structure that is
suitable for all industries and all organisations across a broad spectrum of businesses. What
works for a certain company would not necessarily work for another company.
The manager cannot force people to perform nor can satisfy all their needs, but manager is,
however, able to create a motivating climate in which his employees are motivated to perform
well and to experience job satisfaction (Coetsee, 2003:58).
According to Milkovich and Newman (2005:272), some of the advantages of a successful

compensation structure are:
• People join a firm because of pay structures
• People stay in a firm because of pay structures
• People agree to develop job skills because of pay
• People perform better on their jobs because of pay

Most well-known theories on the principle of motivation revolve around the idea that an
employee’s needs influence his motivation. An employee’s needs could be characterised as
physiological or psychological deficiencies that trigger specific behaviour from the employee.
The needs of employees could vary over time and place and are subject to the influence of
external and environmental factors. This implies that people will react to satisfy those needs that
are not fully satisfied (Kreitner & Kinicki, 2007: 236).
2.1.1 Maslow & Herzberg’s Theories of Needs
One way to understand and motivate the employee is to revisit Abraham Maslow’s Hierarchy of
Needs (Maslow, 1954). Maslow created a visualization of his hypothesis in the shape of a
pyramid that is divided into five levels, starting from the bottom upwards, and the needs could be
described as:
1. Physiological: The most basic need, having enough food, air and water to survive. In the
business context this could imply the employee’s salary, air conditioning in the office, or the
availability of a cafeteria at the work place.
2. Safety: The need to be safe from physical and psychological harm. In the business context this
could mean the possibility of a salary increase, a pension plan, hospital and medical plans or
disability insurance.
3. Love: The desire to be loved and to love. It contains the need for affection and belonging. In
the business context this could mean employee-centered supervision, personal and professional
friends, office parties or social gatherings.
4. Esteem: The need for reputation, prestige and recognition from others. This includes the need
for self-confidence and strength. In the business context this could mean the employee’s job title,
office furnishings or deserved salary increase.
5. Self-actualization: The desire for self-fulfillment - to become the best one is capable of
becoming. In the business context this could mean advancement for the employee, challenging
assignments, development opportunities, or opportunities to use one’s skills.
Maslow’s Needs Hierarchy is illustrated in Figure 1 below:
Herzberg (1975) suggested a two-step framework to understand employee motivation and

satisfaction. His theory was developed to explain employee reaction to their work and the work
environment. Herzberg highlighted that all factors could be categorized in two groups. The first
group is called Hygiene or Maintenance factors, and the second group is called the Motivating
factors.
Herzberg theory is illustrated in Figure 2 below:
Motivating Factors:
Motivating factors could lead to an individual’s need for personal growth. When in existence,
motivating factors could easily contribute to job satisfaction. When it is most effective, it could
motivate an employee to perform above average and above expectations. Herzberg’s (1975)
motivating factors could include:
• Status
• Opportunity for advancement
• Gaining recognition
• Responsibility
• Challenging / stimulating work
• Sense of personal achievement & personal growth in a job
Herzberg (1975) proposed that when hygiene factors are lacking in the workplace, the employee
will experience dissatisfaction or unhappiness. However, when these factors are present, the
employee does not necessarily experience satisfaction. The employee simply does not feel
dissatisfaction. When motivating factors are present, the employee feels satisfied.
Hygiene Factors:
Hygiene factors are based on the needs of the organisation in order to prevent unpleasantness in
the working environment. When employees are under the impression that these factors are
inadequate, it could lead to dissatisfaction in the work place. Herzberg’s (1975) hygiene factors
could include:
• Company policy and administration
• Wages, salaries and other financial remuneration
• Quality of supervision
• Quality of interpersonal relations
• Working conditions
• Feelings of job security
There are certain similarities between Herzberg's and Maslow's theories. Both suggest that
certain needs have to be satisfied before an employee can be motivated. Figure 3 below
illustrates the Herzberg’s theories:
Given these need theories, the question could be asked: How does the manager motivate his
employees with the influence allocated to his authority? The answer would lie in his ability to
make employees feel secure, needed and appreciated.
2.1.2 Motivation of employees
Employers tend to utilize default remuneration styles despite the historical failure of the tried and
true solutions that have been used to address conditions in the new organisation (Tropman,
2001:18). It is worth noting that organisations depend on the commitment and motivation of their
employees. Overloading them, stressing them, micro-managing them, or letting work spill over
into their private lives does not develop the engagement and loyalty organisations need to
succeed (Cooper, 2008:18).
According to Tropman (2001:18), repeated attempts are sustained in part by false theories about
the employees, which form an integral element in the resistance to change.
These false theories are explained by Tropman (2001:18) as follows:
• Misunderstanding of the motivational component of performance
• Misunderstanding of the importance of Theory Y
• Misunderstanding of job structures and the order of satisfaction with work and the
completion of good work
• Misunderstanding of job satisfiers and job dissatisfiers
• Misunderstanding of the motivational structure of the employee
• Misunderstanding of the cultural conflict between achievement and equality in the

workplace
• Misunderstanding of the motivational hierarchy of needs
For the purpose of this paper, the importance of these theories can be explained as follows:
• Components of performance: The employer’s obligation towards the organisation is not only
limited to recruiting the suitable employee, but also to develop existing employees. Employers
regularly underestimate their own responsibility towards employees and their performance.
Employees with lesser ability can be motivated in order to achieve their performance targets
whereas those employees with greater ability do not have to be motivated as much to achieve or
exceed the same performance targets. Employers often overestimate the importance of training,
which, in turn can contribute immensely to the aptitude of employees. It is also an integral role
of the employer to create an organisation where employees want to come to work and understand
the importance of their work towards the performance of the organisation (Tropman, 2001:18).
• According to Tropman (2001:19), management styles can be divided into either Theory X or
Theory Y styles. The Theory X managers believe that employees are lazy and do not want to
work and that it is the obligation of the employer to either reward or punish such employees to
ensure that they show up and shape up. Theory Y managers believe the opposite in that
employees want to work and that they will get ultimate job satisfaction from doing a good job.
The purpose of the employer is not to control the employee, but to provide him with the
necessary resources to perform his duties. According to Tropman (2001:19), one of the biggest
problems is that organisations have Theory X mindsets in a Theory Y environment. Old
compensation systems are still, in many ways, driven by Theory X thinking.
• Structure of the job: Employers tend to believe that satisfied employees produce good work,
hence they try to create an improved morale with the expectation that it will lead to improved
quality. The employer should instead improve the structure of the job, which will lead to
satisfied employees, which in turn lead to higher quality and improved productivity. Elements
that contribute to employee satisfaction are meaningful work, successful completion of a task,
variety by using different skills, ability to work on his own and responsibility (Tropman,
2001:20).
• Satisfiers and dissatisfiers: One of the common mistakes made by employers is that they
believe that satisfiers and dissatisfiers are the same thing. When an element is present, it can act
as a satisfier, but if the same element is missing, it does not necessarily mean that it is a
dissatisfier and vice versa. Table 1 provides a list of elements that employees like and dislike, as
proposed by (Tropman, 2001:21).
TOP SATISFIERS TOP DISSATISFIERS

Achievement Company policy and management
Recognition Supervision
Work itself Relationship with supervisor
Responsibility Work conditions
Attachment Relationship with peers

Growth Relationship with sub-ordinates
It can be noted that the list of top dissatisfiers is largely based on relationships within the
organisation.
2.1.3 Benefit Satisfaction
Basic benefit satisfaction can be defined as an employee’s attitude towards organisational

benefits focusing on employee safety and security-related needs (Blau et al., 2001:671). Benefits
included under basic benefit satisfaction can be classified as:
• Vacation
• Sick Leave
• Retirement
• Life Insurance
• Disability
• Health
• Maternity/Family leave
Career enrichment satisfaction was defined by Blau et al. (2001:671) as “an employee’s attitude
towards organisational benefits focusing on employee employability and skill development
needs.” The benefits included under career enrichment satisfaction can be classified as:
• Release time for continuing education or professional meetings
• Educational assistance or reimbursement for tuition
• Special work schedules

• Rewards for advanced degrees or certification
According to Williams (1995:1098,) benefit satisfaction is important for two reasons:
• The costs of employee benefits are high to companies and because costs increases and
generally exceed inflation, therefore companies have implemented changes in benefits programs
to control costs.
• Benefit satisfaction is of theoretical importance because of its potential links with other
important constructs.
Benefit satisfaction may be related to various behavioral attitudes such as organisational

commitment. According to Williams (1995:1098), employee attitudes towards benefits have
been found to be significant determinants of pay satisfaction and have been linked to behavioral
outcomes such as absenteeism and turnover. Therefore, an understanding of benefit satisfaction
may lead to an increased understanding of other important employee attitudes and behaviors.
In a study conducted by Lust (1990:92) the findings about benefit satisfaction was no surprise:
employees who are more satisfied with their pay are also more satisfied with their benefits. It
goes hand in hand and make up the total compensation package.
2.2 ENGAGEMENT
The origin of the term “employee engagement” lies in research into the extent to which people
employ, or leave out, their personal selves when performing their work roles. When people are
engaged, they tend to express themselves physically, cognitively and emotionally during role
performances (Kahn, 1990:692).
Engagement is a controversial subject and there are various definitions for this term. According
to Schneider et al. (2009:23), some of the definitions are:
• The individual’s involvement and satisfaction as well as enthusiasm for work

• A result that is achieved by stimulating employees’ enthusiasm for their work and directing it
towards organisational success
• The extent to which people value, enjoy and believe in what they do
• The capability and willingness to help the company succeed, i.e., discretionary performance
• A heightened emotional and intellectual connection that employees have for their job,
organisation, manager or co-workers that in turn influences them to apply additional
discretionary effort to their work
Employee engagement is the key to human capital management because it focuses on managing
employees to produce for the organisation rather than focusing on what the organisation does for
the employees. Employee engagement is different from employee satisfaction with the latter
connoting satiation and the former connoting energy (Schneider et al., 2009:27).
An engaged employee is aware of business context, and works with colleagues to improve
performance within the job for the benefit of the organisation. The organisation must work to
develop and nurture engagement, which requires a two-way relationship between employer and
employee. Therefore, employee engagement will be the barometer that determines the
association of a person with the organisation (Vazirani, 2007:3).
Reward is a hygiene factor and getting it wrong results in disengagement, but getting it right
does not create engagement (Robinson, 2008:57). It is commonly perceived that engagement
affects the bottom line of an organisation: engaged employees identify with their organisation,
co-operate with their co-workers and work productively in a team. They also fully understand the
business context of the organisation.
According to Vazirani (2007:6), the advantages of engaged employees are:
• Engaged employees stay with the company
• They normally perform better and are more motivated
• There is a significant link between employee engagement and profitability
• They form an emotional connection with the company

• It builds passion, commitment and alignment with the organisation’s strategies and goals
• Increases employee’s trust in the organisation
• Creates a sense of loyalty in a competitive environment
• Provides a high-energy working environment
• Boosts business growth
• Makes the employees effective brand ambassadors for the company
Research has shown that higher employee engagement is associated with gains in employee
retention and performance, customer service and satisfaction, and business performance (Wiley,
2009:58).
2.2.1 Engagement challenges
According to Robinson (2008:57), the potential challenges facing the theory behind engagement
include:
• Engagement typically goes down as length of service goes up
• Experienced people are an asset, so how can organisations engage people who have been with
them for a while and may have had disappointments, such as not being promoted?
• Professionals usually owe their engagement to their profession, not their organisation
According to Truss (2009:47), high levels of engagement create a statistically significant

improvement to personal well-being, loyalty, job satisfaction and performance as well as a
reduction in likelihood of leaving.
Truss (2009:47) also states that it is of utmost importance to focus on the employee - job fit,
management style, involvement and communication in order to increase levels of engagement. It
should be noted that engagement strategies should vary depending on the context.
According to Wiley (2009:58), research has shown that higher employee engagement is
associated with gains in employee retention and performance, customer service and satisfaction
and business performance. Pollitt (2005:25) found that environments that foster inclusion (of
which equity is a large part) were found to:
• Promote innovation
• Create a safer work environment
• Drive employee engagement, commitment, and pride
• Positively impact customer satisfaction
• Benefit financial performance
2.2.2 Engagement measurement
According to Schneider et al. (2009:23), the most common measure of employee engagement
used by companies contains four traditional survey items, namely:
• How satisfied are you with working for this organisation?
• Do you plan on working for this organisation a year from now?
• How proud are you that you work for this organisation?
• Would you recommend to a friend that they come and work for this organisation?
These questions are normally asked in order to form an index of engagement. These questions
are more inclined to measure the satisfaction that a person experience when they work for an
organisation.
According to Schneider et al. (2009:23), these questions measure the following three aspects:
• The level of satisfaction with the job security

• The level of satisfaction with fringe benefits
• The opportunities
No one can argue that the level of satisfaction is not important, but it does not indicate the level
of engagement of the employees. It is important to measure and manage the level of engagement,
as it is the engagement of the employees that costs the organisation money. When the employee
is not fully engaged, the organisation still needs to pay his full salary, even though they have not
earned it.
In organisations with only average levels of employee engagement, between 30% and 50% of
their payroll is going down the drain (Ayers, 2007:16). The level of engagement is important for
the organisation because it needs to maximize the output it gets from employees, thus
maximizing their engagement.
Measures of engagement need to be different from measures of satisfaction found in the typical
employee opinion survey. Employee feelings of engagement and behavioral engagement relate
significantly to market and financial performance, and a measure of engagement targeted on
customer service is significantly related to customer satisfaction (Schneider et al., 2009:27). The
latter suggests that focused engagement measures may be quite useful as a tactic for assessing
engagement in relation to important organisational outcomes such as customer satisfaction, but
also perhaps for other outcomes such as innovation and safety (Schneider et al., 2009:27).
2.2.3 Engagement drivers
Schneider et al. (2009:23) defined engagement as having two major components:
• Feelings for engagement - this implies the heightened state of energy and enthusiasm
associated with work and the organisation.
• Engagement behaviors - this implies the demonstration in the service of accomplishing

organisational goals.
It is obvious that employee engagement feelings and behaviors are different from job satisfaction
- they address different kinds of issues and have different drivers.
According to Schneider et al. (2009:23), the three strongest drivers for feeling of engagement
are:
• Feeling that there is full utilization of one’s skill and abilities
• Seeing that there is a link between one’s work and the objectives of the organisation
• Being encouraged to innovate
According to Schneider et al. (2009:23), the three strongest drivers for engagement behaviors
are:
• Quality of relationships with co-workers
• Feeling trusted and respected
• Supervisor credibility
In a research study done by Wiley (2009:58), the top ten drivers of employee engagement are:
• Confidence in the organisation’s future
• A promising future for the employee
• Support for work-life balance
• Safety is a priority
• Excitement about work
• Confidence in the organisation’s senior leaders
• Satisfaction with recognition

• Corporate responsibility efforts that increase overall satisfaction
• Satisfaction with on-the-job training
• A manager who treats employees with respect and dignity
From the list of drivers mentioned above, it could be concluded that offering praise for a job well
done is a simple and inexpensive way to encourage employee engagement.
According to Blizzard (2003;1), the various job categories also differ with regards to the drivers
of workers’ satisfaction and engagement - or the lack thereof. Each category faces challenges
specific to the type of work involved. Blizzard (2003:2) illustrated the employee engagement
hierarchy as follows:
According to McBain (2006:21), the employee engagement concept has emerged as perhaps the
most useful idea for HR practitioners in the 21st century. Indeed, such engagement is the
“ultimate prize” for employers, according to one consultancy which has done much research into
the area (Towers Perrin, 2003:3). Its emergence stems, at least in part, from the way the concept
seems to integrate so many different aspects of HR, such as employee satisfaction, commitment,
motivation, job design, and involvement (Stairs, 2005). “Given the clear relationship found
between employee satisfaction with diversity and employee engagement, the future focus should
hinge on increasing employees’ perceptions of diversity efforts, thus leading to increased levels
of employee engagement and reduced turnover,”(Sheridan, 2010:1). “Chief Executive Officers
and General Managers who have discounted the importance and efforts can no longer afford to
do so.” value of diversity Increasing evidence suggests employee engagement can make a
difference to the performance of employees and teams within organisations. The employee
engagement theory reflects change in the organisational environment, and the mutual
expectations of employees and employers in the “physiological contract” mirror changing
patterns of motivation: many individuals are seeking greater personal fulfillment in their working
lives and are not solely motivated by financial rewards. In addition, changes in the business
landscape will require more flexibility, collaboration, project-based activities and talent-led
teams (McBain, 2006:21).
Sufficient evidence exists to indicate that employee engagement has significant potential to assist
managers in improving team and organisational performance by improving the daily experience
of employees within the organisation. There are however, more issues remaining, like the precise
definition of “employee engagement” and the distinguishing between engagement, satisfaction
and commitment. The truth is, there is no quick fix, no more than there is a quick fix for cancer.
But if diagnosed early, both can be cured (Ayers, 2007:16).
The conclusion is that employee engagement is the key to successful use of an organisation’s
human capital. However, employee satisfaction has not become an irrelevant measure. If it is
used appropriately within the larger framework of engagement, employee satisfaction measures
can provide useful insight for the organisation (Blizzard, 2003:2).
2.3 STRUCTURING OF REMUNERATION PACKAGES
Why does the remuneration package have to be structured with the aid of fringe benefits?
Considering the growing complexity of remuneration packages, and the cost of structuring,
administering and financing them, this question is even more important. If all of these fringe
benefits were eliminated, compensation management would become much easier and simpler,
but not necessarily cheaper, although administration costs would decrease (McCaffery &
Harvey, 1997:1).
Compensation is an important factor in the design, implementation and maintenance of

organisations. However, compensation includes not only wages paid to employees but also non-
wage benefits such as medical insurance and a retirement plan (Weathington & Jones:
2006:292). Wages and benefits together are often the biggest expense incurred by organisations.
2.3.1 The “Old Pay” System
Tropman (2001:7) argued: “Compensation is the “elephant in the living room” of most
organisations - large, oppressive, and un-addressed. Attention to pay systems is often non-
attention. This era of thinking included Tropman’s (2001:7) comment that: “Letting individuals
construct some of their own pay packages? Can’t do it! Could never do it! Must have been
designed by a professor!” These comments are still relevant when dealing with an employer who
still believes in the “one size fits all” philosophy where every employee must be satisfied with
the remuneration package that is chosen for him by management. This phenomenon is called
“the old pay system”.
Components of the “Old Pay” System
According to Tropman (2001:8), the typical “old pay” system consists of five parts:
• Base pay
• Annual merit raise
• Benefits
• A few perks
• Occasional gratuities
These five elements together form the compensation package, which could be described as a
return received in exchange for the employee’s performance and ideas in the organisation. This
exchange relationship is summarized in the terms and conditions of the employment contract,
which along with the unstated exchange agreement forms the implicit contract.
According to Milkovich and Newman (2005:12), the implicit contract can be explained as: “an
implicit contract is an unwritten understanding between employers and employees over their
reciprocal obligations and returns; employees contribute towards achieving the goals of the
employer in exchange for returns given by the employer and valued by the employee.”
Problems arising from the “Old Pay” System
Employers often realize that old pay systems create certain problems in the organisation. These
problems might include employees feeling that they are entitled to their pay every month. This
situation can be compared to that of runners with a stone in their shoe; it irritates them to the
edge, but they can’t seem to find time to stop and change the situation. According to Tropman
(2001:9), there are inherent problems in the way the old pay system is conceptualized:
• Pay becomes entitlement driven: In old pay, employees feel they are entitled to their pay, and to
raises in pay, unconnected with any accomplishments they produce.
• Increases cap out: With old pay, increases are cut off when the employee reaches the top of a
job’s range. Employers thus “bump” workers to higher job classifications solely to give them
more pay.
• Failure to motivate: Old pay does not motivate because it is mostly unlinked to the employee’s
production and contribution. To begin with, base pay (before “merit” adjustment) is frequently
unconnected to any results or accomplishments. It is almost as if one is paid a salary just to show
up.
• Annuitized: With old pay, each raise goes into the base. Hence employees pay year in and year
out for last year’s accomplishments. This means that employee investments keep costing more
without any parallel increase in productivity.
• Cost of living increase: This increase comes every year.
• Increase attached to base: That is, raises are added to the employee’s base pay.
• Increase largely based on seniority: Raises are greater for those who have been with the
organisation for longer, sometimes because length of service is directly figured in and sometimes
because, using a percentage increase model, those who have been there longer make more money
and hence receive a bigger base increase.
• Grade-based promotion: Promotion to higher salary grades (based on seniority) carries

employees to higher pay potential, both in salary and bonus. (Bonuses are typically calibrated as
a percent of salary so in this model the more you make, the more you are paid).
• Trophies: At various anniversary dates of employment (five years, ten years, and so on)
employees are given mementos of their association with the company. Trophies are, of course,
more meaningful if they are given for some actual accomplishment rather than just for hanging
around.
• Holiday gifts: At holiday time, especially Christmas, the company gives employees a gift.
• Bonuses: Periodically, but often unconnected or connected only hazily to anything the
employee can figure out, a bonus is provided.
2.3.2 The Total Compensation Package Components of the Total

Compensation Package
Tropman (2001:4) asked: “But is pay all there is? The answer is no, because pay is often badly
configured and other things besides pay are needed to attract, retain, and motivate employees.”
The total compensation packages consist of various forms of compensation that the employee
receives, and sometimes even expects to receive from the employer. This total compensation
package can be categorized into total remuneration and relational compensation. The relational
compensation consists of work factors that have a psychological impact on the employee. These
factors are often categorized as motivating factors according to Herzberg’s (1975) motivational
hygiene theory. When these motivating factors are present, the employee will experience job
satisfaction. When the motivating factors are absent, the employee will experience
dissatisfaction.
The total remuneration consists of hygiene factors that will contribute to the motivation of the
employee. When these factors are absent, the employee will not necessarily feel dissatisfied, but
not fully satisfied. These factors can be categorized into the cash component and the fringe
benefits. The cash component typically consists of components like the basic salary along with
the merit increases that the employee receives. The fringe benefits can be a combination of
various components like the car allowance, housing allowance, medical aid insurance, pension
fund contributions, etc. The layout for the Total Compensation is illustrated in Figure 5 below:
2.3.3 Factors Influencing Benefit Choice

Milkovich and Newman (2005:409) provide the following list of factors which they believe will
influence the benefits chosen both by employees and employers depending on their different
preferences.
These factors are outlined in Table 2 below.
Employer Factors Employee Factors

Relationship to total compensation costs Equity, fairness historically and i
n
relationship to what others receive
Costs relative to benefits Personal needs as linked to:
Comparator offerings Age
Role of benefits in: Sex
Attraction Marital status
Retention Number of dependents
Motivation
Legal requirements
Table 2 indicates that there are a number of factors influencing employer preferences when it
comes to the selection of fringe benefits for the employee. It is of utmost importance for the
employer to consider the costs of employee benefits as part of the total compensation costs for
the organisation. Frequently employees are under the impression that when a certain fringe
benefit is fashionable, it should be included into their compensation package, despite the taxable
implication of this inclusion.
Table 2 also indicates that the factors influencing employee preferences are mainly based on two
groups of factors. On the one hand are the needs of the particular employee, and on the other
hand is the perception of that employee about the fairness of his total compensation package. The
fringe benefits perceived to best satisfy an unfulfilled need are the most desired benefits at that
moment. The second important aspect to consider is the factor of equity or inequity.
No matter how confidential their total compensation packages are, they always surface in
conversations between employees. They in turn then discuss and compare their compensation
packages and form their own opinion about equity or inequity based on their perceptions. These
perceptions can be either a motivating factor for the employees that feels they are sufficiently
compensated for his contribution or a de-motivating factor when the employees feel they are not
sufficiently compensated.
CHAPTER 3: RESEARCH METHODOLOGY
3.1 INTRODUCTION
The main objective of this comparative study is to assess whether there is a definite correlation
between the fringe benefits that are included in the remuneration package of an employee and the
level of job satisfaction that the employee experiences at the workplace, as well as the level of
engagement the employee displays towards his position and the organisation.
3.2 RESEARCH DESIGN
A questionnaire was designed to obtain information regarding their perceptions on job

satisfaction, engagement, remuneration and benefits. A questionnaire of 3 sections was
developed. Section A consisted of 7 questions regarding job satisfaction. Section B consisted of
7 questions regarding engagement. Section C comprised of 8 questions about fringe benefits and
remuneration. The participants were informed that the purpose of the questionnaire was to gather
responses on how they perceived the impact that remuneration packages and fringe benefits have
on job satisfaction and engagement.
3.3 UNIVERSE OF STUDY
For the required dissertation the Department of Commerce, Delhi University and organizations
such as TCS, SHRM, Sapient, Jubilant Life Science etc. are the universe of study as all the
respondents are from these organizations.
3.3 QUESTIONNAIRE
A questionnaire was designed to obtain information regarding their perception and opinions on
these subjects.
The questionnaire consisted of 3 individual sections:
• Section A – Job Satisfaction
• Section B – Engagement
• Section C – Fringe Benefits and Remuneration
Several questionnaires were studied for background information that assisted with the structuring
of the questions. All questions in Section A, B & C were measured on a Likert scale, where 1
indicated strongly agree, 2 indicated agree, 3 indicated disagree and 4 indicated strongly
disagree.
A copy of the questionnaire is provided in the Appendix A.
3.5 SAMPLE POPULATION
The sample population for the study consisted of 117 People which includes students who have
done their internship training from different organization as well as individuals currently
working in organization such as TCS, SHRM, Sapient, Jubilant Life Science etc. For the
purposes of this study, professionals are defined as individuals currently working in the said
organization, regardless of their function, industry, length of time, or job title within the
organization itself.
3.6 METHOD OF DATA COLLECTION
Research was undertaken through the following sources:
• Primary data: Collected from various professionals through an online questionnaire circulated
as a Google Form.
• Secondary data: Resources such as scholarly articles, magazines, journals, and books were
referred to which have been cited in the references section of this report.
3.7 SAMPLING METHOD
Convenience sampling is used in exploratory research where the researcher is interested in

getting an inexpensive approximation of the truth. As the name implies, the sample is selected
because they are convenient. This non-probability method is often used during preliminary
research efforts to get a gross estimate of the results, without incurring the cost or time required
to select a random sample. Thus, convenience sampling was used for the quick and significant
data collection due to which the sample was readily available and easily accessible.
CHAPTER 4: RESULT AND ANALYSIS
4.1 STATISTICAL ANALYSIS
The statistical analysis was divided into 4 sections:
• Frequency distribution and descriptive statistics of the individual items
• Cronbach’s Coefficient Alpha
• Descriptive statistics for the selected sections
• Test for correlation between sections
4.1.1 Frequency Distribution and Descriptive Statistics of the Individual Items
The population was divided according to gender, age as well as per the employment status, and
the representation is indicated in figures below:
The majority of the population was male, being represented by 61.5% against the 38.5%
representation of the female participants.
Age wise distribution
Employment Status Wise Distribution

Sections A, B and C of the questionnaires are summarized in Table 8 below. For each of the
questions, the percentages of the participants who indicated each of the criteria have been
indicated.
Frequency Distribution
Strongly Agree Agree Disagree Strongly Disagree
Section Question
Count % Count % Count % Count %
Q1 19 16.2% 62 53.0% 34 29.1% 2 1.7%
Q2 17 14.5% 62 53.0% 30 25.6% 8 6.8%
Q3 39 33.3% 57 48.7% 21 17.9% 0 0.0%
A Q4 14 12.0% 66 56.4% 29 24.8% 8 6.8%

Q5 27 23.1% 69 59.0% 19 16.2% 2 1.7%
Q6 21 17.9% 63 53.8% 28 23.9% 5 4.3%
Q7 12 10.3% 59 50.4% 44 37.6% 2 1.7%
Q1 61 52.1% 53 45.3% 2 1.7% 1 0.9%
Q2 43 36.8% 64 54.7% 8 6.8% 2 1.7%
Q3 53 45.3% 59 50.4% 5 4.3% 0 0.0%
B Q4 26 22.2% 63 53.8% 20 17.1% 8 6.8%

Q5 28 23.9% 56 47.9% 20 17.1% 13 11.1%
Q6 20 17.1% 52 44.4% 36 30.8% 9 7.7%
Q7 57 48.7% 56 47.9% 3 2.6% 1 0.9%
Q1 58 49.6% 53 45.3% 5 4.3% 1 0.9%
Q2 60 51.3% 45 38.5% 11 9.4% 1 0.9%
Q3 25 21.4% 52 44.4% 34 29.1% 6 5.1%
Q4 33 28.2% 57 48.7% 23 19.7% 4 3.4%
C
Q5 25 21.4% 57 48.7% 27 23.1% 8 6.8%
Q6 29 24.8% 55 47.0% 29 24.8% 4 3.4%
Q7 40 34.2% 52 44.4% 22 18.8% 3 2.6%
Q8 18 15.4% 63 53.8% 27 23.1% 9 7.7%
4.1.2 Cronbach’s Coefficient Alpha
This test was performed to test for consistency in responses in the individual sections. A
Cronbach’s coefficient alpha value of greater than 0.7 indicates an internal consistency of the
answering pattern of the participants in the section, which indicates reliability of the section
(subscale) (Nunnally, 1978: 295).
4.1.3 Descriptive statistics for the selected sections
After the Cronbach’s coefficient alpha was calculated, the descriptive statistics for each section
were statistically calculated as indicated in Table 9 below.
Descriptive Statistics Std.

Section N Mean Deviation
A 117 2.13 0.72
B 117 1.85 0.71
C 117 1.96 0.77
Given the scale used in the questionnaire, ranging from 1 to 4, where 1 indicated strongly agree,
2 indicated agree, 3 indicated disagree and 4 indicated strongly disagree, a mean value of 2.13
indicates a notion of agreement by participants in Section A. In Section B, a mean value of 1.85
also indicates a notion of agreement with the questions raised in the questionnaire. Section C
indicated a mean value of 1.96, which also indicates that the participants are mostly in agreement
with the questions raised about fringe benefits.
The standard deviation gives an indication of the variability of the responses. The answers of
Section C remuneration show the largest variability of all sections.
4.1.3 Test for Correlation between Sections
Correlations were calculated for:
• Job Satisfaction and Engagement
• Job Satisfaction and Remuneration & Benefits
• Engagement and Remuneration & Benefits

For the purpose of the correlation test, the Nonparametric Spearman’s correlation coefficient (r)
was used. This correlation coefficient does not depend on the assumption of normality and is
based on ranks of the data (Field, 2009:180).
For practically significant correlation, a correlation coefficient of 0.1 indicated a small, non-
practically significant correlation. A correlation coefficient of 0.3 indicated a medium,
practically visible correlation. A correlation coefficient of 0.5 indicated a large, practically
important correlation (Steyn, 2009:4).
The results for Spearman’s nonparametric correlation coefficients are shown in Table 10 below:
Correlations
Satisfaction Engagement Benefits
Correlation
1.000 .531** .334**
Coefficient
Satisfaction Sig. (2-
0.000 0.000
tailed)
N 117 117 117
Correlation
.531** 1.000 .249**
Coefficient
Spearman's
Engagement Sig. (2-
rho 0.000 0.007
tailed)
N 117 117 117
Correlation
.334** .249** 1.000
Coefficient
Benefits Sig. (2-
0.000 0.007
tailed)
N 117 117 117
**. Correlation is significant at the 0.01 level (2-tailed).
The correlations between the individual sections are as follows:
• Job Satisfaction and Engagement: r = 0.531

The correlation coefficient of 0.531 indicates a highly important correlation. Thus a high level of
job satisfaction will imply a high level of engagement and vice versa.
• Job Satisfaction and Remuneration & Benefits: r = 0.334
The correlation coefficient of 0.334 indicates a low to medium correlation. Therefore, these two
variables show a low practically significant correlation. This can indicate that the level of job
satisfaction of an employee is not dependent on the Remuneration & Benefits an employee
receives from the organisation.
• Engagement and Remuneration & Benefits: r = 0.249
variables show a low practically significant correlation. This can indicate that the level of
engagement of an employee is not dependent on the fringe benefits an employee receives from
the organisation.
CHAPTER 5: CONCLUSIONS AND SUGGESTIONS
5.1 CONCLUSIONS AND SUGGESTIONS
This chapter discusses the conclusions that can be drawn from the literature review and provides
recommendations to improve job satisfaction and engagement that an employee experiences in
the organisation.
5.2 CONCLUSIONS
Most well-known theories on motivation revolve around the idea that an employee’s needs
influence in his motivation. An employee’s needs could be characterized as physiological or
psychological deficiencies that trigger specific behavior. The needs of employees could vary
over time and place and are subject to the influence of external and environmental factors. This
implies that people will react to satisfy unsatisfied needs (Kreitner & Kinicki, 2007: 236).
The level, to which these employee needs are satisfied, will have an impact on the level of job
satisfaction and engagement that that employee will experience in the organisation. The
organisation thus needs to strive towards customizing the remuneration packages of the
employees to such an extent that the level of job satisfaction and engagement is maximized for
the particular employee.
According to Milkovich and Newman (2005:272), some of the advantages of a successful

compensation structure are:
• People join a firm because of pay structures
• People stay in a firm because of pay structures
• People agree to develop job skills because of pay
• People perform better on their jobs because of pay

Compensation is an important factor in the design, implementation and maintenance of

organisations. However, compensation includes not only wages paid to employees but also non-
wage benefits such as medical insurance and a retirement plan (Weathington & Jones:
2007:292). Wages and benefits together are often the biggest expense incurred by organisations.
The aim of this paper is to investigate and determine the correlation between the remuneration &
benefits package and the level of job satisfaction and engagement. This was approached by
focusing on the following specific objectives:
• To determine the importance of remuneration & benefits amongst employees
• To determine the impact of remuneration & benefits on the level of job satisfaction of the
employee
• To determine the impact of remuneration & benefits on employee engagement
These specific objectives were investigated by means of a specifically drafted questionnaire that
was distributed amongst employed people as well those who are about to join the organization. A
total of 117 questionnaires were distributed and returned for analysis. This contributed to the
study of a complete population and not just a sample. The statistical analysis was divided into 4
sections:
• Frequency distribution and descriptive statistics of the individual items
• Cronbach’s Coefficient Alpha
• Descriptive statistics for the selected sections
• Test for correlation between sections
The questionnaires were completed by 72 males and 45 females. The Cronbach's coefficient
alpha was calculated to determine whether there was consistency in how the participants
answered the questions for each of the individual sections of the questionnaire.
Given the scale used in the questionnaire, ranging from 1 to 4, where 1 indicated strongly agree,
2 indicated agree, 3 indicated disagree and 4 indicated strongly disagree, a mean value of 2.13
indicates a notion of agreement by participants in Section A. In Section B, a mean value of 1.85
also indicates an agreement with the questions raised in the questionnaire. Section C indicated a
mean value of 1.96, which also indicates that the participants are in agreement with the questions
raised about remuneration & benefits.
For the purpose of the correlation test, the Nonparametric Spearman’s correlation coefficient (r)
was used. This correlation coefficient does not depend on the assumption of normality and is
based on ranks of the data (Field, 2009:180).
For practically significant correlation, a correlation coefficient of 0.1 indicated a small, non-
practically significant correlation. A correlation coefficient of 0.3 indicated a medium,
practically visible correlation. A correlation coefficient of 0.5 indicated a large, practically
important correlation (Steyn, 2009:4).
The correlations between the individual sections are as follows:
• Job Satisfaction and Engagement: r = 0.531
The correlation coefficient of 0.531 indicates a highly important correlation. Thus a high level of
job satisfaction will imply a high level of engagement and vice versa.
• Job Satisfaction and Remuneration & Benefits: r = 0.334
variables show a low practically significant correlation. This can indicate that the level of job
satisfaction of an employee is not dependent on the Remuneration & Benefits an employee
receives from the organisation.
• Engagement and Remuneration & Benefits: r = 0.249

variables show a low practically significant correlation. This can indicate that the level of
engagement of an employee is not dependent on the fringe benefits an employee receives from
the organisation.
5.3 SUGGESTIONS
The following suggestions can be implemented to solve issues identified:
• The commitment activities can be more job focused, so as to increase the level of Jobs
Satisfaction.
• For the same, more engagement via training and development, job rotation, supervisor
reviews can be provided.
• To improve satisfaction of employees with the supervisors, a two way feedback and regular
performance discussion between both of them should be held.
• To align the employees to the goals of organization, there must be more and timely
communication to the employees, which enables them to see the larger picture of
organization goals and actions.
• Moreover, organization values and culture can play a role in making an employee feel that
his job is important and valued.
In general, the survey report showed that HR professionals perceive several factors to be more
important to employees than the employees did (Meisinger, 2007:8).
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ANNEXURE
THE IMPACT OF FRINGE BENEFITS ON JOB SATISFACTION AND

ENGAGEMENT QUESTIONNAIRE
Questionnaire
1. Name : _______________________________________
2. Age
a. 20-25 Years
b. 26-30 Years
c. 31-35 years
d. 35-40 Years
e. Above 40
3. Gender
a. Male
b. Female
c. Prefer not to disclose
4. Education/Employment Status
a. Student
b. Employed
Strongly Disagree
Strongly Agree
Que
Disagree
Neutral
Agree
Section Questionnaire Items
No.
1 Prior to being hired, I understood very little about this position o o o o o
The training I received was adequate to prepare me for doing this

2 o o o o o
job
Job
Satisfaction
This position demands a high level of emotional and mental
3 o o o o o
resilience
4 The induction programme prepared me well for this position o o o o o
5 I receive adequate support from my Line Manager o o o o o
After I joined the company, and I felt that I needed more training,
6 o o o o o
my Line Manager would arrange it for me
Before I accepted this position, I understood all the expectations

7 o o o o o
of the job
Que
Disagree
Disagree
Strongly
Strongly
Neutral
Agree
Agree
Section Questionnaire Items
No.
1 I find that the job I am doing is meaningful to the organisation o o o o o
In my position, I have the opportunity to learn and grow within the

2 o o o o o
organisation
3 I am proud to say that I work for this organisation o o o o o

Engagement
4 I regularly receive praise or recognition for a job well done o o o o o
5 My Line Manager encourages my personal development at work o o o o o
We have regular feedback sessions at work regarding our

6 o o o o o
performance
7 Accomplishments in my work, makes me happy o o o o o
1 I would prefer to have a medical aid contribution by the employer o o o o o
2 I prefer the company to reimburse all my medical expenses o o o o o
I would prefer to receive an allowance from the organisation to

3 o o o o o
purchase my own vehicle
4 I would prefer to use a vehicle supplied by the organisation o o o o o
Remuneration
The organisation assists me with a monthly allowance to buy or
and Benefits 5 o o o o o
rent accommodation
It is important for me to get assistance from the organisation to

6 o o o o o
buy or rent accommodation
The organisation provides us with the opportunity for in-house

7 o o o o o
education
8 I feel that for the amount of work I do, the pay is sufficient o o o o o

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The impact of fringe benefits on job satisfaction and engagement 1

The Impact of Fringe Benefits on Job Satisfaction and Engagement

Prateek Kumar Sharma

Under the guidance of

Dr. Ashish Chandra

Delhi School of Economics

Mr. Prateek Kumar Sharma

Exam Roll No: 50492

Dr. Ashish Chandra

Prateek Kumar Sharma

Exam Roll No: 50492

Subject: A study to determine the impact of fringe benefits on job satisfaction

Chapter 2: Literature Review 9

Chapter 3: Research Methodology 29

3.5 Sample Population 30

Chapter 4: Result and Analysis 31

Chapter 5: Conclusions and Suggestions 38

When managers or employees criticize the organisation’s remuneration packages or reward

1.1 PROBLEM STATEMENT

1.2 RESEARCH OBJECTIVES

1.3 RESEARCH METHOD

The research method consists of a literature review and an empirical study.

1.3.1 Literature review

1.3.2 Research design

1.3.3 Measuring instrument

A questionnaire of 3 sections was developed. Section A consisted of 7 questions regarding job

1.4 RESEARCH PROCEDURE

1.5 DIVISION OF CHAPTERS

The chapters in this dissertation are presented as follows:

Chapter 1: Introduction, problem statement and objectives

Chapter 2: Literature study

Chapter 3: Research methodology

Chapter 4: Result and Analysis

Chapter 5: Conclusion and Suggestions

1.6 CHAPTER SUMMARY

CHAPTER 2: LITERATURE REVIEW

A thorough literature study needs to be conducted to form a complete conceptualization of the

2.1 JOB AND BENEFIT SATISFACTION

According to Milkovich and Newman (2005:272), some of the advantages of a successful

• People join a firm because of pay structures

• People stay in a firm because of pay structures

• People agree to develop job skills because of pay

• People perform better on their jobs because of pay

2.1.1 Maslow & Herzberg’s Theories of Needs

Maslow’s Needs Hierarchy is illustrated in Figure 1 below:

Herzberg (1975) suggested a two-step framework to understand employee motivation and

Herzberg theory is illustrated in Figure 2 below:

• Opportunity for advancement

• Challenging / stimulating work

• Sense of personal achievement & personal growth in a job

• Company policy and administration

• Wages, salaries and other financial remuneration

• Quality of interpersonal relations

• Feelings of job security

2.1.2 Motivation of employees

These false theories are explained by Tropman (2001:18) as follows:

• Misunderstanding of the motivational component of performance

• Misunderstanding of the importance of Theory Y