Understanding Employees Perceptions of Inequity in Organizations’ Reward Systems and Its Effects on Employee Job Satisfaction

Abstract

The purpose of this study is to provide understanding on how employees’ perception of inequity in organizations’ reward systems affects their job satisfaction. Guided by literature on employees’ perception of inequity and its effects on their job satisfaction, data was collected from 50 employees of AirtelTigo (Regional Retail and Franchise unit of the Customer Experience Team) using self-administered questionnaire. Based on descriptive analysis it was found that employees hold the perception that perceived inequity in the organization’s reward system leads to their feeling of low job satisfaction. It was also found that employees believe that with increased effort and higher performance, they will be rewarded more than their counterparts whose input is below the norm. Based on the findings of this study, it is concluded that majority of employees believe they are being paid less than others doing the same job that is they perceive inequity in the organization’s reward system thus creating low job satisfaction. It is recommended that reward systems should be open and fair to all employees and be based on the level of effort exerted by employees on the job to increase employee job satisfaction.