Effect of compensation plan on employee performance in the insurance industry in Uganda; case study: Sanlam Insurance Company –Mbale branch

Abstract

Companies offer compensation to help draw in and hold employees and to enhance their job performance .compensation plays an important role since its the heart of employment relationship being vital to both employer and employee. Employees who are valued and well compensated by organization they work for are satisfied and perform better. The study used descriptive research design. A sample of twenty respondents was selected out of the population of forty two employees using stratified sampling technique. This represented a 47.6% sample of the whole population. A structured questionnaire was used to collect data from the respondents. It was interpreted in frequencies, percentages. The findings were presented using tables, graphs and figures. The study found that many of the respondents were not very conversant with the methods used to determine employee compensation at Sanlam Insurance Company, Mbale Branch. In particular they were not familiar with the compensation plan used in the organization. In conclusion the study demonstrated that a proper compensation plan was lacking and employees lacked some of the key information in employee compensation determination. The study recommends that a proper system of compensation plan be developed. The system should have all the fundamentals of a good compensation plan. The organization should ensure that key information on staff and compensation is deliberately communicated to them. This helps to improve the level of awareness by staff. Further recommendation is that management should clearly document pay structures and effectively communicate the same to all.