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Chapter one

1.0 Introduction

According to Mc Cormic and Tafflin (1979), motivation might be intrinsic or extrinsic. Intrinsic motivation is derived from motivations inherent in the job and enjoyed by the individual as a result of successfully completing the task or achieving his goals.

Intrinsic incentives, sometimes known as “psychological motivations,” include opportunities to use one’s skills, a sense of accomplishment, gratitude, positive acknowledgment, and kind treatment.

According to (Ajila 1997), an intrinsically motivated individual is committed to his or her work to the extent that the job requires him or her to perform tasks that are enjoyable.

Extrinsic motivation refers to factors that are unrelated to the job’s task, such as compensation, working conditions, fringe benefits, security, promotion, service contract, work environment, and working circumstances.

Such tangible motivations are frequently established at the organisational level and may be largely beyond the control of individual managers.

An extrinsically motivated person will work as hard as possible in order to gain or get external rewards for his or her efforts. (Ajila 1997) goes on to say that in order for an individual to be motivated at work, there must be a need that the individual perceives as having the potential to be met through some form of reward.

If the reward is inherent to the task, the desire or motivation is intrinsic, whereas if the reward is external to the job, the incentive is extrinsic.

Good remuneration has been discovered over the years to be one of the strategies that organisations may implement to improve employee performance and so raise organisational productivity.

Furthermore, with the current global economic trend, most employers of labour have realised that in order for their organisations to compete favourably, the performance of their employees goes a long way towards defining the organization’s success.

On the other side, employee performance in an organisation is critical not just for the organization’s growth but also for the development of individual employees.

An organisation must now determine which of its employees are excellent, which require extra training, and which are not contributing to the company’s efficiency and welfare.

Psychologists’ focus on understanding an individual’s motives has led to an oversimplified understanding of motivation, which often differs from layman’s knowledge. It’s important to review what is known about motivation from the psychologist’s perspective.

In Uganda, rewards and motivation have been used to improve worker performance since the 1970s. Poor remuneration has led to concerns about workers’ output and personal expectations.

This attitude is also a societal concern, and it is critical to detect difficulties that arise in industrial settings as a result of managers’ unwillingness to manage their employees by appropriately paying them in order to maximise their output.

All efforts must be directed towards increasing workers’ interest in their jobs so that they are glad to give their all to their work, which will ensure industrial harmony.

Vroom (1964) supported the concept that workers perform better if their salaries are linked to performance and are not based on personal bias or prejudice, but rather on an objective evaluation of an employee’s worth.

Though numerous approaches for measuring job performance have been developed in general, the specific technique used differs according to the nature of employment.

All of these challenges necessitate research efforts to determine how an effective compensation package might motivate or inspire employees to adopt a favourable attitude towards their jobs, hence increasing productivity.

1.1 Background of the Study

“Thou shall eat from your sweat,” declares the Lord to our great, great grandfather and mother at the start of the world. This has caused people, both men and women, young and old, to constantly participate in one or more activities in order to make ends meet and/or put food on the table and possibly clothe themselves.

These activities we engage in are now referred to as employment, and in order for an employment scenario to occur, there must be an employer – one who hires the services of another – and an employee – one whose services are engaged.

The Sales of Goods Act states that in order for a sales contract to be legal, there must be, among other things, what is known as consideration, which could also be referred to as the price or value of the transaction(s).

The employment-related law also specified that in order for an employment contract to be legal, the employer must pay a price to the employee at the conclusion of a fixed period, which might be monthly, quarterly, weekly, or even daily. This is also known as pay or salary. This is the recompense paid to individuals for using their services, or rather, a return on their sweat.

However, the question of what constitutes a fair day’s pay has plagued managers/employers for decades, compounded by the fact that most employers of labour are capitalists who prefer to pay little or nothing in order to create a large profit.

As a result, employees require and must get fair and reasonable compensation for their contributions to organisational goals. This is true because the compensation that employees receive is the most tangible indicator of their value to the organisation.

Compensation comprises all rewards that an individual receives as a result of their employment. As such, it is more than just monetary compensation. The reward can be one or more of the following:

Pay is the money that a person receives for executing a job, often known as direct financial remuneration. perks – financial perks in addition to basic income, such as paid time off, medical insurance, and many more.

Non-monetary rewards that an employee may obtain include satisfaction of their work, a nice working atmosphere, and status.

All of the following sorts of compensation make up a comprehensive compensation package. Naturally, financial reward, both direct and indirect, is at the centre of such systems.

When developing a whole compensation scheme to recruit, retain, and inspire employees, all sorts of awards should be considered. It is important to note that wages and/or salaries account for the majority of remuneration. Then, in this study, we will focus on wages and compensation as a technique for increasing job satisfaction in organisations.


Salaries are not the only tools for motivation, but we all know and respect that money, as the wise saying goes, “doeth all things”. Many motivating theories were proposed by management theorists discussing many topics and how they may help enhance worker production at work, but the subject of salary administration was mostly focused on as a tool for influencing and highlighting workers’ efforts at work.

However, there are no employees who can be claimed to be doing a gratis service for their employer. Such workers must be compensated, no matter how modest the amount. Again, the social context forces most workers to sign into employment agreements since they have no other means to earn a living.

Do not forget that other lesser creatures do most of what humans do, but the distinction is that human beings can invent and develop new techniques of production that animals are incapable of accomplishing.

As a result, in order to discover and maybe develop new ways of production, such an employee must be provided with remuneration that will most likely function as the driving force or, more accurately, the energy boaster.

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