Performance-Based Rewards
When employees salary and rewards based on their achievements and contributions rather than their role and post it recognise the valuing of individual efforts. Fair and transparent reward systems can boost employee morale and retention and employees will drive towards results and revenue automatically “Employees should be managed properly and motivated by providing best remuneration and compensation as per the industry standard” (IOSR Journal Volume 25, Issue 9, Series 1 2020) .
The restraining effect
Ensuring fair and competitive compensation for employees with similar roles and responsibilities receive comparable pay. It Helps to reduce the feeling of unfairness and promoting a sense of equality within the organization. Additionally there are none financial benefits such as EPF , ETD , Medical and life insurance, Paid leaves , Reward schemes, Awards (Bhat , Grover and Sharma 2020) .
in order to attract and retain top talent companies need to compensate employees with industry standards and market rates which will preventing employees from leaving . Rewarding high performers and arrange incentives which may lead to increased motivation and overall company performance.
Figure 01 source - https://www.aihr.com/blog/compensation-issues/?form=MG0AV3
Key Problem Area
Having state the above the recent COVID-19 pandemic rapidly transformed the workplace as many of the practices need re adjustments as organisations navigate the Fourth Industrial Revolution and recover from the economical impact (Bezuidenhout, M. 2022). Organisations must reassess their pay practices. Traditional employee compensation methods may no longer be sustainable.
Compensation on Employee Performance in Sri Lanka
Approximately LKR 73.9 million investment has been made by Bank of Ceylon in employee education, focusing on areas like information technology and compliance to adapt to digital financial services. BOC mange to engage many employees through transparent communication and performance-based awards while providing training via virtual platforms (BOC 2022).
Another success story from well know MAS holding who has adapted new welfare program to support when COVID-19 Pandemic time . Situation based additions been paid to employees as well as donations specially with dry food rations and other needs .MAS has gone extra mile the company increase the availability of their mental health counsellors to provide supporting their employees mental health (MAS 2023)
Figure 02 Source - https://masholdings.com/media-centre/mas-makes-employee-welfare-a-top-priority-amid-economic-crisis/
conclusion
It is obvious that Remuneration is vital in helping Sri Lankan companies keep employees by ensuring financial motivation with Competitive salaries, job satisfaction , performance based incentives and non monetary benefits . Sri Lankan companies are reassessing traditional compensation methods and implementing adaptive strategies to support their employees putting best practices in place
Reference
Bezuidenhout, M. (2022). Remuneration Strategies in the New Normal Potgieter, I.L., Ferreira, N. (eds) Managing Human Resources. Springer, Cham. [Online]. Available at https://doi.org/10.1007/978-3-031-09803-1_8 [ Accessed on 02nd March 2025].
(2001), "Paying for Contribution: Real Performance-related Pay Strategies", Vol. 50 No. 1. Emerald Group Publishing Limited[Online]. Available at https://www.emerald.com/insight/content/doi/10.1108/ws.2001.07950aae.004/full/html [ Accessed on 02nd March 2025].
(2020 ) Impact of Compensation on
Employee Performance IOSR Journal of
Humanities And Social Science Volume 25, Issue 9, Series 1 (September. 2020)[Online].
Available at https://www.academia.edu/44292513/Impact_of_Compensation_on_Employee_Performance?form=MG0AV3 [ Accessed on 02nd March 2025].
Bhatt V, Grover S and Sharma A,( 2020 ) COVID-19 Pandemic, Lockdown and the Indian Labour Market . Indira Gandhi Institute of Development Research [Online]. Available at https://www.researchgate.net/profile/Ajay-Sharma-50/publication/342509974_COVID-19_Pandemic_Lockdown_and_the_Indian_Labour_Market_Evidence_from_PLFS_2017-18/links/5ef84e01299bf18816ede335/COVID-19-Pandemic-Lockdown-and-the-Indian-Labour-Market-Evidence-from-PLFS-2017-18.pdf [ Accessed on 02nd March 2025].
Annual Report (2022) Bank of Celyon Stakeholder Outcomes Employees [Online]. Available athttps://boc2022.annualreports.lk/stakeholder_outcomes/employees.html? [ Accessed on 06th March 2025].
MAS (2023 ) MAS makes employee welfare a top priority amid economic crisis [Online]. Available at https://masholdings.com/media-centre/mas-makes-employee-welfare-a-top-priority-amid-economic-crisis/ [ Accessed on 06th March 2025].
Insightful article. Compensation indeed play a major role of a employee life cycle in a particular company. Some private firms use this strategy to retain their best employees with them by offering them with high compensation benefits which an individual will not think about other good opportunities he may be offered in the job market
ReplyDeleteThe Bank of Ceylon and MAS Holdings examples show how Sri Lankan businesses are modifying their compensation plans in reaction to changes in the economy and in technology. It's good to see that more importance is being placed on employee wellbeing and mental health support in addition to financial rewards.
ReplyDeleteCompany insurance benifits is very important for employee and his or her family health protection.it will help to reduce living cost and to balance working life and family life because of financial benifits given by insuerence
ReplyDeleteIt would be interesting to investigate how employees motivational levels improve when organizations introduce pay systems based on skill development or share profits with staff workers across multiple industries.Additional knowledge on this subject matters to me greatly.
ReplyDeleteIt is a good move that Sri Lanka is looking forward to performance based compensation. Then it should be uniformly equal for all the members in the organisation. Companies can motivate their employees to make significant contribution to the company and get the rewords according. Ultimately both parties have win win situation
ReplyDeleteYour article provides a great analysis of how remuneration influences employee performance in Sri Lanka. Highlighting performance-based rewards and non-financial benefits shows the importance of a holistic compensation approach. The examples from Bank of Ceylon and MAS Holdings during the COVID-19 pandemic effectively explain adaptive strategies in challenging times. This piece offers valuable insights for organizations aiming to balance fair compensation with employee motivation and retention.
ReplyDeleteIndeed, most of Sri Lankan companies still use traditional evaluation and compensation method rather than performance based system. This practice often gives unfavourable situations for hard working employees due to their performance is not evaluated properly. It leads to a demoralised workforce and high turnover.
ReplyDeleteA well-explained analysis of how remuneration can impact employee motivation and organizational performance! The discussion on balancing fair compensation with performance expectations is highly relevant in today's corporate landscape. This article provides valuable insights for HR professionals striving to create effective reward structures. Thank you
ReplyDeleteWhen dealing with performance based rewards, the restraining effect plays a major role since all employees will be notified about their remuneration prior to the final assessment about how they will be compensated. Further, since the captioned methodology confirms the uniformity, none of the employee will be dissatisfied with the final reward. Hope its high time that the government institutions will also look into the possibilities of getting adopted to a similar kind of methodology while harnessing the maximum potential of the state workers.
ReplyDeleteThe article on current remuneration packages in Sri Lanka provides valuable insights into the evolving landscape of employee compensation in the country. It's interesting to see how various industries and sectors are adapting to the changing economic conditions and Talent acquisition strategies. However, I think it would be beneficial to explore the impact of these remuneration packages on employee satisfaction, retention, and overall productivity.
ReplyDeleteIt’s great to see Sri Lankan companies focusing on fair pay to keep their employees happy and motivated. With competitive salaries, performance-based rewards, and other benefits, they’re creating a better work environment. It’s encouraging to see them adapt and improve their compensation strategies to support their teams.
ReplyDeleteRemuneration plays a significant role in employee motivation and retention. Balancing fair compensation with business goals is key to maintaining employee satisfaction.
ReplyDeleteCompensation significantly impacts employee performance, motivation, and retention in Sri Lanka. A well-designed system—combining salaries, bonuses, incentives, and non-monetary benefits—boosts productivity and job satisfaction. Many Sri Lankan firms now use performance-based pay to align employee efforts with business goals, improving engagement and reducing turnover. Insightful Article
ReplyDelete