Page 1 of 10
Journal for Studies in Management and Planning
Available at
http://edupediapublications.org/journals/index.php/JSMaP/
ISSN: 2395-0463
Volume 04 Issue 03
March 2018
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 355
A Study Of Compensation Practices In Leading
Corporate Retail Stores
Dr. Malisetty Venkata Suryanarayana
IIAM-Vizag Business School, Visakhapatnam, Andhra Pradesh, India.
malisettyvsn@gmail.com
Dr. M. Nagavalli
Asst. Professor ©, AU College of Engineering for Women Andhra University, Visakhapatnam,
Andhra Pradesh, India.
nagavalli.malisetty@gmail.com
Abstract
Compensation means the remuneration received by an employee for his services to the
organization. Effective compensation management attracts and retains talented employees in the
organization. In the present competitive labor market, organizations need to leverage their
human capital to keep up a competitive position. The reward system is primarily based on the
employees’ performance and contributions to the company. In general, monetary or non- monetray compensation benefits are definitive in the organization and it matters a lot to the
individual employees. Thus, the retail in particular is a service sector and growing rapidly in
India. The massive growth creates competition among the retail organizations. Therefore, a lot
of demand is generated for skilled employees in this industry. To meet this demand,
organizations have to offer good pay packages to their employees. With this important aspect,
the current study has been taken up to investigate and suggest the corporate retail stores for
implementing good compensation practices. The current study reveals the employees’
satisfaction levels on compensation practices followed by the leading corporate retail stores.
Keywords: Compensation, Reward, Motivation.
1. Introduction:
The enormous growth in the retail
sector in India and its consistent point in
demand for talents have under counted the
needs for effective human resource systems.
The role of HR has a vital significance in
retail as the personnel function in an
exclusive environment. In the retail
organisation, people who deal with the
consumers/customers at a one-to-one level
are considered to be the face of the
organisation. Employees are often motivated
by money. The salary an employee is paid by
his/her employer can have an abundant effect
on his/her performance in the organization.
An employee doesn’t simply view his/her
salary as an amount, he/she sees it as the
value his/her employer places on him/her as
a worker. The level of appreciation the
employees feel can have a direct influence
on their complete performance. Employeees
are more likely to perform to their potential
if they are happy with the salary they are
Page 2 of 10
Journal for Studies in Management and Planning
Available at
http://edupediapublications.org/journals/index.php/JSMaP/
ISSN: 2395-0463
Volume 04 Issue 03
March 2018
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 356
receiving. The highly motivated employees
can do their job perfect. According Maslows
hierarchical theory the first need of human
beings are basic needs, the needs of
employees of different age groups will differ
from each other, the compensation paid by
the organizations should meet their needs.
For this organization should follow good
compensation practices based on the
respondents’ needs and wants. Employees
feel happy when their present needs are
fulfilled with the support of the organization.
A system of monetary rewards such
as bonuses, incentives, etc., never be treated
as part of regular pay. Equate financial
rewards with comprehensive
accomplishments. The reward system can
apply to individual employee or groups. For
example, for meeting their annual profit goal,
they could offer profit sharing to the
employee who contributed the most to their
success or to an entire team. Employee
rewards can be intrinsic or extrinsic. Intrinsci
rewards are those that provide employees
with a sense of accomplishment; they
include giving their employees autonomy or
providing opportunities for growth. Extrinsic
rewards are tangible, such as offering stock
options or demonstrating employee
recognition by presenting plaques or
certificates before an audience of their peers.
Dr. Jyoti Joshi & Kalpana Bhagwat
(2013) stated that organizations advertise
some posts and declares a compensation
scheme or salary package in order to attract
people. In this case the compensation
package can be treated as a stimulus. People
would respond differently to this package
according to their attitudes, perception,
requirements, priorities and future
expectations. The people whose priority is
mere financial income will apply. Suppose in
addition to the compensation package, the
firm adds career path or promotion package
or attractive incentives, some more people
are likely to pay attention and apply.
The effective Compensation Practices
are very much vital for any organization to
reach its goals. In order to motivate the
employees within and beyond their
expectation, the management should have an
ability to implement effective compensation
packages in the organization. Compensation
practices always plays an important role as
its brings loyalty, dedication among the
employees and it builds a relations between
employees and employers. The reason
behind employees typically depend on
salaries or wages and the companesation
must be equivalent to the work done.
However, to the management, the decisions
related to compensation directly influence
the cost of doing business and thus, their
ability to sell at a competitive price in the
product market. Compensation can be direct
or indirect. The direct compensation
includes salary, house rent allowance, leave
travel allowance, conveyance, medical
reimbursements, special allowances, gratuity,
bonus, etc., and indirect compnensation
includes the benefits like perks, time off,
etc.,
2. Objectives of the study:
The main objectives of the study are
as follows:
1. To examine Compensation Practices
of leading Corporate Retail Stores.
Page 3 of 10
Journal for Studies in Management and Planning
Available at
http://edupediapublications.org/journals/index.php/JSMaP/
ISSN: 2395-0463
Volume 04 Issue 03
March 2018
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 357
2. To evaluate the Compensation
Practices based on sample
characteristics of select employees.
3. To examine the deficiencies and
suggest effective measures for
implementing best compensation
practices in the leading corporate
retail stores.
3. Research Questions
The current study is carried out in
search of empirical answers to the
following research questions that are
raised based on the gaps identified in
literature related to the retail industry.
1. Are the employees happy with the
compensation practices followed by
corporate retail stores?
2. Are the retail employees getting
salaries comparable to their
counterparts in the organized sector?
3. What are the living standards of
employees working in corporate retail
stores.
4. Research Hypotheses
H01: There is no significant difference in
the perception of select employees on
Compensation Practices.
H02: There is no significant difference in
the Compensation Practices based on
sample characteristics of select
employees.
5. Research Methodology and
Sampling
A questionnaire has been prepared
based on the objectives of the current study.
The questionnaire has been prepared for
employees to examine the compensation
practices followed in the leading corporate
retail stores in the State of Andhra Pradesh,
India. For the purpose of administering the
questionnaire, a sample of 300 respondents
has been selected on the basis of random
sampling method. The sample consists of
Customer Sales Associates, Supervisors,
Assistant Managers and Managers of
corporate retail organizations. The method,
therefore, consists of identifying some
specific variables, for developing
hypotheses, collecting data via a survey
through a predetermined questionnaire which
can be statistically tested in support of the
hypotheses or otherwise. The period of study
spans ten years from 2008 to 2017. The data
have been analyzed with the help of
appropriate statistical techniques by using
SPSS-17.0. The researcher had put an
attempt to analyze the relationship between
the independent variables (gender, age,
education, social status) and dependent
variables (Compensation Practices).
Appropriate hypotheses have been framed
for the purpose of testing.
6. Literature Review
Compensation management as the
name suggests, implies having a
compensation structure in which the
employees who perform better are paid more
than the average performing employees
(Hewitt, A. 2009). The reward is the centre
piece of the employment contract; after all it
is the main reason why people work (Danish,
R.Q. and Usman, A. 2010). Compensation as
the total of all rewards provided to
employees in return for their service, the
complete purposes of which are to attract,
motivate and retain the employees. The
