Motivation of the study

As organizations continue to face mounting competitive pressures, they seek to do more with less and do
it with better quality. As goals for sales volume, profits, innovation, and quality are raised, employment
growth is often tightly controlled and in many cases, substantial cuts in employment have been made. To
accomplish more with fewer employees calls for effective management of human resources. Employee
compensation plays such a key role because it is at the heart of the employment relationship, being of
critical importance to both loyal employees and employers. Employees typically depend on wages,
salaries, and so forth to provide a large share of their income and on benefits to provide income and health
security. For employers, compensation decisions influence their cost of doing business and thus, their
ability to sell at a competitive price in the product market. In addition, compensation decisions influence
the employer's ability to compete for employees in the labor market (attract and retain), as well as their
attitudes and behaviors while with the employer. It is a key factor to bring loyalty into the employees.

Background of the study

Most of us would have heard the term “compensation” in the context of getting paid for the work that we
do. The work can be as part of full time engagement or part time in nature. What is common to them is
that the “reward” that we get for expending our energy not to mention the time is that we are compensated
for it.
From the perspective of the employers, the money that they pay to the employees in return for the work
that they do is something that they need to plan for in an elaborate and systematic manner. Unless the
employer and the employee are in broad agreement (We use the term broad agreement as in many cases,
significant differences in perception about the employee’s worth exist between the two sides), the net
result is dissatisfaction from the employee’s perspective and friction in the relationship.

It can be said that compensation is the “glue” that binds the loyal employee and the employer together and
in the organized sector, this is further codified in the form of a contract or a mutually binding legal
document that spells out exactly how much should be paid to the employee and the components of the
compensation package.

Objective of the study

1. To explore the factors those are important for employee loyalty

2. To draw the best ways of increasing employee loyalty of the organization

3. To formulate the best ways to reward employees of the organization

Research Methodology
for my research, I collected data by using primary source. A qualitative method was used. The
participations were different executives and employees of different level (both male and female) of
different organizations. Participations were selected from various sectors to bring variation in sample.
68executives,10 male employees and 10 female employees were selected as a sample of the study. 40
questionnaires were completed by them. Participations were contacted through telephone and facebook to
determine their eagerness to complete questionnaire. All questionnaires were completed by the
participants in their house and offices. The questionnaire consisted of demographic characteristics of
participants and open ended questions that were asked of all participants. The participants’ experience in
their field ranges from 5 to 20 years.
Limitations of the research methodology
Small sample size was the main limitation of this study because of time constraints and availability of
respondents. Firstly some participants were not interested to talk about their salary and reward systems.
After many requests finally they had started to share their problems obstacles. They could not give me
enough information which was necessary to present statistical issues. Even I did not find enough
secondary data in internet related to my topic. Further research is required to remove the limitations of
the small and narrow sample reported in this study.