





































THE INTERNATIONAL JOURNAL OF RESEARCH IN BUSINESS AND SOCIAL SCIENCES


47 
 

 

  

IMPACT OF EMPLOYEE COMPENSATION SYSTEM OF TOTAL 

UGANDA CO LIMITED ON JOB SATISFACTION (An Empirical 

Evidence of the Petroleum and Gas business of Uganda considering a case of 

Total E&P Uganda Limited). 

 

Marianne Birungi Mukalazi 

Lawrencia Agen-Davis 

Theophilus Teye Amanor 

Daniela Daniel Ndunguru 

Proffesor Dang Wei 



European Journal of Human Resource                                                                                      

ISSN 2520-4697 (Online)     

Vol.5, Issue 1 pp 48 - 59, 2021                                                              www.ajpojournals.org                                          
 
 

48 
 

IMPACT OF EMPLOYEE COMPENSATION SYSTEM OF TOTAL UGANDA CO 

LIMITED ON JOB SATISFACTION (An Empirical Evidence of the Petroleum and Gas 

business of Uganda considering a case of Total E&P Uganda Limited) 

1Marianne Birungi Mukalazi 

MSc. Enterprise Management 

Email: birungimarianne@outlook.com 
2Lawrencia Agen-Davis 

MSc. Enterprise Management 
3Theophilus Teye Amanor 

MSc. Enterprise Management 
4Daniela Daniel Ndunguru 

MSc. Logistics Management 
5Proffesor Dang Wei 

School of Economics and Management 
1, 2, 3, 4, 5 Lanzhou Jiaotong University 

Abstract 

Purpose: Motivation through an effective compensation system of the organization can never be 

over looked in in relation to improving satisfaction and performance of the employees. The 

purpose of this study was to establish the relationship between employee compensation and job 

satisfaction considering a case study of Total E&P Uganda Limited. 

Methodology: The study employed a descriptive-cross sectional research design. Using a Krejcie 

and Morgan approach the study focused on 80 staff of Total E&P from which a sample of 66 

respondents was chosen.  The study used interviews and surveys as data collection instruments. 

Data from the answered questionnaires was analyzed using SPSSv20 and descriptive statistics 

calculator (online). The collected data was checked for consistency and then frequencies and 

percentages were be used to show responses of the distribution. The results were presented in 

tables and chart form.  

Findings: It was found from different results that compensation has positive impact on job 

satisfaction. It was proved from Bi-variate Pearson Correlation coefficient analysis that 

independent variables have strong positive relationship to each other. Descriptive analysis also 

revealed that all the independent variables have positive impact on job satisfaction. Descriptive 

analysis of the results of the findings indicated that generally majority of the organization workers 

are not contented with the salaries and wages given to them by the organization. It was indicated 

in descriptive analysis that majority of the respondents had considerable knowledge on the concept 

of job satisfaction. This is justified basing on the fact that each respondent knows what can spur 

his or her commitment and motivation.  

Limitations/implications of the research: Following the justifiable challenges the company is 

apparently facing, the study recommends that to ovoid a nosedived performance, a well 

streamlined compensation structure has to be adopted.  

Keywords: Benefits, Employee Bonus, satisfaction, Salary, Rewards, Compensation and 

Employee Performance. 

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European Journal of Human Resource                                                                                      

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Vol.5, Issue 1 pp 48 - 59, 2021                                                              www.ajpojournals.org                                          
 
 

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1.0 INTRODUCTION 

Compensation or remuneration is a systematic approach to provide monetary value to employees 

in exchange for work performed by them is called as compensation or remuneration, (Nakshita, 

2017). In the case of Human Resource Management, compensation is referred to as money and 

other benefits that are received by an employee for providing services to his employer. 

In Clifford’s study Rehman et al. (2015) stated that there is a strong relationship between 

compensation systems and job satisfaction. Scholars use the concept of compensation management 

to point out a mixture of employee feelings towards the various facets of job satisfaction like the 

character of the work itself, level of pay, promotion opportunities, and satisfaction with co-workers 

(Schermerhorn, Hunt, & Osborn, 2015). 

In relating reward strategies and job satisfaction, Georgakopoulos et al (2015) checked out 

compensation as motivational factor towards employee job satisfaction. Furthermore, theories of 

compensation optimization system focus on the satisfaction of the needs for autonomy, 

competence and relatedness (Gagne & Deci, 2015). He added that employees are satisfied when 

they feel that the rewards they receive from their jobs correspond to their skills and effort. 

1.1 Problem Statement  

Uganda’s Vision 2040 states that there is a strong positive correlation between industrialization 

and rapid development. A strong and competitive industrial base is important to create 

employment, advance technology and create a resilient economy. In Uganda, industrialization 

offers more export earnings, wider tax base, increased purchasing power, increased integration 

with agriculture, product diversification, greater efficiency, and technical modernization and 

higher productivity throughout the whole economy (Byaruhanga et al. 2016). Since independence, 

Uganda has made efforts of capitalizing on industrialization to propel the economy to middle 

income status and eventually to a first world economy. Several measures were introduced to 

nurture infant industries. Foremost was an over-valued exchange rate that discriminated against 

imported finished goods, but allowed exceptions for imports of intermediate inputs. According to 

Ggoobi et al (2017), interest rates were influenced by government intervention to help spur 

domestic investments and heavy import duties were imposed on goods which directly competed 

with locally made products. There were also provisions for special loans and equity capital; and 

quotas allowing access to foreign exchange for imported inputs and remittances at subsidized 

official rates. 

Despite of all those measures, industrial sector still lags behind compared to her counterparts. The 

sector is exposed to external economic shocks that have particularly manifested in volatility in the 

foreign exchange rates and poor performance of exports, which undermine the competitiveness of 

the private sector. Furthermore, the economy also reveals significant high import content of inputs 

for Uganda’s industrial sectors thus hampering its pace of development. It’s against this 

background that the researcher sought to examine why industrial development level in Uganda 

still remains low compared to other countries. 

 

 

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European Journal of Human Resource                                                                                      

ISSN 2520-4697 (Online)     

Vol.5, Issue 1 pp 48 - 59, 2021                                                              www.ajpojournals.org                                          
 
 

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2.0 Literature Review 

H1: 1.There is a significant relationship between salaries and wages on job satisfaction in Total 

E&P Uganda. 

2.1.1 Salary 

Salary structure is the details of the salary being offered, in terms of the breakup of the different 

components constituting the compensation. While the salary structure within the enterprise 

mobility is very large, the lack of staff for the different positions can be raised according to wages 

and salaries, and thus attracting more talents to come to employment in the organization.   

Wage or salary is vital for both employers and employees regarding attracting, retaining, and 

motivating employees. Asegid et al. (2014) regarded compensation within the sort of salaries and 

wages as important for workers since it's one among the most reasons people work. Qasim et al. 

(2014) stated that monetary rewards play major role in determining job satisfaction. Pay is one of 

the basic components of job satisfaction since it is a strong effect in determining job satisfaction. 

The growing needs of individuals with high living costs force workers to hunt higher income which 

will guarantee their future and life satisfaction, (Galanou et al, 2015). 

Moreover, if individuals believe they're not compensated well, therefore, a state of emotional job 

dissatisfaction are going to be developed. These emotional discrepancies will grow and accumulate 

over time thus make employees unhappy and unsatisfied working for the organization, (Galanou 

et al, 2015). Greenberg and Baron, (2014) indicated that a perceived low salary results in job 

dissatisfaction and a serious contributor to increased turnover rate. Khan et al. (2014) posited that 

academic staff commitment are often enhanced and their degree of satisfaction might be improved 

by identifying the influence of compensation. 

H1: 2.There is a significant relationship between incentive schemes influence job satisfaction in 

Total E&P Uganda. 

2.1.2 Employee Incentive 

Employee Incentive bonus schemes focus on recognizing and rewarding staff for their hard work. 

Incentive bonus schemes can vary in terms of the rewards given, but they are usually put in place 

to encourage employees to work towards specific targets, (Dancer et al, 2015). Several Incentive 

bonus schemes have been identified to influence high job satisfaction in the workplace; amongst 

these are career development and progression, opportunities for growth, effective communication, 

training and other work related programs (Bennett & Minty, 2015).  

Salau, et al. (2014) asserts that in the world of business, the relationship between Incentive bonus 

schemes and job satisfaction cannot be undervalued, the two variables depend on each other but 

respond in different ways to increased employees engagement, participation and retention, 

competence, commitment and involvement. Furthermore, Khan et al. (2014) argue that Incentive 

bonus schemes can be incredibly helpful in building growth within a business, and that it can be 

really difficult to maintain a grip on progress without some bonus schemes.  

 

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European Journal of Human Resource                                                                                      

ISSN 2520-4697 (Online)     

Vol.5, Issue 1 pp 48 - 59, 2021                                                              www.ajpojournals.org                                          
 
 

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Incentive bonus schemes have been a shared factor influencing the job satisfaction of employees 

at workplace, Khan et al. (2014). This corroborates with the findings of Kinicki and Kreitner 

(2003) that when the sincere needs in form of bonuses and other supplications of the employees 

are not taken into consideration and managed properly, then displeasure in their respective jobs, 

discontent and pilfering prevails and this facilitates unattractive state of the mind towards work.  

Rothwell and Azanas (2014), discovered that organizational effectiveness becomes vague the 

instant an employee feels displeased, disgruntled or discouraged about how things are done. 

However, it becomes necessary for organizations to put in place the best bonus schemes that will 

help to decrease the depressing factors, bearing in mind the principle of individual differences 

when it comes to satisfying their (employees) needs and requirements.  

H1: 3.There is a significant relationship between employee benefits on job satisfaction in Total 

E&P Uganda. 

2.1.3 Employee Benefits  

World at Work (2008), stated that benefits include packages an employer practices to supplement 

the cash compensation that employees receive. It comprises of health, income protection, savings 

and retirement programs provide security for employees and their families. A specific set of 

organizational practices, policies and programmes, plus a philosophy that actively supports efforts 

to help employees achieve success at both work and home. Fringe benefits include any variety of 

programmes that provide paid time off, employee services and protection programmes. According 

to Bratton and Gold (2007), fringe benefits refer to the part of the rewards package provided to an 

employee in addition to the guaranteed basic remuneration.  

Asegid et al, (2014) revealed that fringe benefits were a significant of overall job satisfaction. 

Conversely, Tella et al. (2007)included the most of the fringe benefits such as employee welfare, 

social security, employee security, payments for time not worked, health benefits, 

retirement benefits and compensation benefits that are positive and significantly related to job 

satisfaction and that one is negative and significant. In addition, the study by Artz (2010) revealed 

that the previously mentioned fringe benefits have a significant and positive relationship with job 

satisfaction. Furthermore, Artz (2010) revealed that fringe benefits make up a significant portion 

of employer compensation packages but their impact on worker job satisfaction has given much 

attention. Also Artz (2010) attested that fringe benefits can affect job satisfaction in opposing 

ways. First of all, since fringe benefits are generally less taxed than wages, they can be purchased 

at less cost through an employer than if bought on the market. Second, fringe benefits are often 

desirable pieces of compensation packages and so increase job satisfaction. It is evident that 

compensation and fringe benefits have a significant relationship from organizational level, the 

literature is inaudible about petroleum companies. Therefore, the current study seeks to fill that 

gap. 

2.1.4 Job satisfaction 

Job satisfaction is a pleasurable or positive emotional state, resulting from the appraisal of one’s 

job experiences (Robertson et al, 2012). It means that optimistic feeling about work and 

environment around job lead someone towards satisfaction. It is the extent to which employees 

wants or like to perform work. Satisfaction is the contentment of a desire which is come true or to 

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http://scialert.net/fulltext/?doi=rjbm.2017.80.90#153939_b
http://www.scialert.net/asci/result.php?searchin=Keywords&cat=&ascicat=ALL&Submit=Search&keyword=job+satisfactionv
http://www.scialert.net/asci/result.php?searchin=Keywords&cat=&ascicat=ALL&Submit=Search&keyword=job+satisfactionv
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http://www.scialert.net/asci/result.php?searchin=Keywords&cat=&ascicat=ALL&Submit=Search&keyword=job+satisfactionv
http://scialert.net/fulltext/?doi=rjbm.2017.80.90#1671381_ja
http://www.scialert.net/asci/result.php?searchin=Keywords&cat=&ascicat=ALL&Submit=Search&keyword=job+satisfactionv
http://scialert.net/fulltext/?doi=rjbm.2017.80.90#1671381_ja
http://www.scialert.net/asci/result.php?searchin=Keywords&cat=&ascicat=ALL&Submit=Search&keyword=job+satisfactionv
http://www.scialert.net/asci/result.php?searchin=Keywords&cat=&ascicat=ALL&Submit=Search&keyword=job+satisfactionv


European Journal of Human Resource                                                                                      

ISSN 2520-4697 (Online)     

Vol.5, Issue 1 pp 48 - 59, 2021                                                              www.ajpojournals.org                                          
 
 

52 
 

achieve sacred fulfillment from a wish.  

Job satisfaction and dissatisfaction not only depends on the nature of the job, it also depend on the 

expectation what’s the job supply to an employee (Hussami, 2008). Lower convenience costs, 

higher organizational and social and intrinsic reward will increase job satisfaction (Vidal, 2007). 

Job satisfaction is complex phenomenon with multi facets (Fisher et al, 2000); it is influenced by 

the factors like salary, working environment, autonomy, communication, and organizational 

commitment (Lane et al, 2010). There are a variety of factors that can influence a person’s level 

of job satisfaction. Some of these factors include the level of pay and benefits, the perceived 

fairness of the promotion system within a company, the quality of the working conditions, 

leadership and social relationships, the job itself (the variety of tasks involved, the interest and 

challenge the job generates, and the clarity of the job description/requirements).  

2.2 Conceptual framework 

i) Independent Variables 

 Salaries and Wages 

 Incentive bonus schemes 

 Benefits 

ii) Dependent variable 

Job satisfaction  

            INDEPENDENT VARIABLE  DEPENDENT VARIABLE  

 

 

 

 

 

 

 

 

 

 

 

 

Figure 1: Conceptual framework  

Source: (Adopted and Modified from Vroom V, 1974) 

JOB SATISFACTION COMPENSATION 

 Remuneration/ Pay  

 Working conditions 

 Individual attitudes or 

perception 

 

 Salaries and Wages 

 Incentive bonus schemes 

 Benefits 

 

INTERVENING VARIABLES  

 Organizational policies 

 Government policies 

 Organizational culture 

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European Journal of Human Resource                                                                                      

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Vol.5, Issue 1 pp 48 - 59, 2021                                                              www.ajpojournals.org                                          
 
 

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In reference to figure 1 above, the study is conceptualized using independent and dependent 

variables. The independent variable (compensation) has three indicators namely; salaries and 

wages, benefits and incentive bonus schemes while the dependent variable (job satisfaction) which 

is job satisfaction indicators include; remuneration or pay, working conditions and individual 

attitudes or perceptions. The two main variables are influenced by intervening variables that affects 

their relationship and these include organizational policies, government policy and organizational 

culture. 

2.3 Company salary system 

2.3.1 Weakness in the current system 

Owing to the strategies set by the management to cope with good remuneration of the Total E& P 

Uganda Limited, it’s still evident the locals still earn lower than expatriates. It is obvious that the 

income of local people is still lower than that of foreign employees due to the management’s 

strategy of coping with the company's high salary.            

2.4 Total Salary system optimization design 

2.4.1 Optimization design principle of salary system       

Certain principles must be followed when designing compensation. These principles include 

strategic orientation, economy, embodying employee value, motivation, relative fairness, and 

external competitiveness. 

2.4.2 Design ideas of salary system   

First, clarify the difference between the concepts of contribution and effective contribution, 

income, partial income, and full income. All employees’ efforts at work are "paying", but it is 

different from "effective paying". Only what really creates value for the company is "effective 

paying". Only "effective paying" can help employees earn income. You should make more money 

if you are busy.  

Second, increase employees' awareness of the value of their positions through open job evaluation 

methods. 

Third, strictly implement the performance appraisal system. Not only performance pay must be 

strictly based on performance, other non-mandatory benefits, training, spiritual rewards, 

promotion, etc. are also closely linked to performance appraisal.  

Fourth, Cut-off comparison is also a method. However, this method only avoids the sense of 

unfairness to a certain extent, and does not directly lead to employees’ sense of internal fairness 

and salary satisfaction.  

 

 

 

 

 

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European Journal of Human Resource                                                                                      

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Vol.5, Issue 1 pp 48 - 59, 2021                                                              www.ajpojournals.org                                          
 
 

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2.4.3 Optimization Compensation Strategy 

 

 

Figure 2: Showing Optimization Compensation Strategy 

In this framework (Figure above), maintaining the linkages between the phases within the loop is 

crucial in perpetuating effective sales effort. A staff perceives the connection between sales effort 

and sales performance through pay level because it reflects sales rewards. Pay mix provides the 

motivational impact of the motivation system by aligning interests of staff with organizational 

goals. 

3.0 Methods 

3.1 Area of study 

The study area for this research was Total E & P Uganda. The participants of this study were 

human resource managers, employees and employee welfare officers who are responsible for 

employee performance. The company was selected because of its large number of employees and 

the high staff turnover rate and high internal conflicts. 

3.2 Data collection and analysis method 

This describes how both qualitative and quantitative data for the study was obtained. By mixing 

both quantitative and qualitative research and data, the researcher gained in breadth and depth of 

understanding and corroboration, while offsetting the weaknesses inherent to using each approach. 

  

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European Journal of Human Resource                                                                                      

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A. Data collection sources 

In this study both primary and secondary data sources were used.  

B. Data Collection Method and instruments 

Two major methods were used to obtain adequate and reliable information for this study. These 

included interviews and surveys with closed-ended questions. This study used data collection 

instruments which involve interview guide and questionnaires respectively.  

3.3 Data Processing and Analysis and presentation 

a. Data Processing 

Validity  

Validity is the extent to which the scores from a measure represent the variable they are intended 

to. Content validity is the degree to which an instrument has an appropriate sample of items for 

the construct being measured and is an important procedure in scale development. Content validity 

index (CVI) is the most widely used index in quantitative evaluation. Out validity cut off point 

will be 0.78.  

Reliability  

Reliability is seen as the degree to which a test is free from measurement errors, since the more 

measurement errors occur the less reliable the test. Here the researcher will use the most common 

internal consistency measure that’s Cronbach's alpha, which is usually interpreted as the mean of 

all possible split-half coefficients. An acceptable Cronbach's alpha score of 0.7 ≤ α < 0.8 will be 

targeted.   

b. Data Analysis and presentation 

Data from the answered questionnaires in this study were analyzed by using percentages. The 

collected data was checked for consistency and then frequencies and percentages were used to 

show responses of the distribution. The results were presented in tables and chart form. The 

software that was used for analysis of the findings was Ms Excel, SPSSv20 and descriptive 

statistics calculator (online).  

4.0 Findings  

4.1 Response rate 

Questionnaires (80) sent to the field fetched 81% response (65 frequency) and a 19% none 

response. This implies a high degree of response that the study realized from the target 

respondents.  

4.2 Demographic findings 

Findings indicated that majority of the respondents at least had a certificate qualification (40%). 

This is because it’s the minimum requirement for a fuel pump operator. Least number of the 

married employed implies that due to the busy schedule that the organization management dictates, 

it requires a worker with less family commitments thus the high number of singles employed. The 

majority respondents under the age of 20-25 years reveals that the recruitment policy at the 

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https://en.wikipedia.org/wiki/Cronbach%27s_alpha
https://en.wikipedia.org/wiki/Cronbach%27s_alpha


European Journal of Human Resource                                                                                      

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Vol.5, Issue 1 pp 48 - 59, 2021                                                              www.ajpojournals.org                                          
 
 

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operational level that favors energetic and aggressive youths to manage a busy customer carrying 

capacity that flocks in at the various station pumps and more challenging tasks. Majority of the 

respondents were male (62%) and the female were 38%. This shows that the recruitment policy of 

Total E&P favors more of male than feminine recruitment.  

4.3 Descriptive Discussion of Findings 

4.3.1 Salaries and wages  

It was also found that majority of the respondents reported that the organization disregards the 

moving economic trends in regard to adjustments on remuneration programs. This is contrary to 

the market theory of wage determination by Classical Economists, they argue that wages or the 

price of labor are determined (like all prices) by supply and demand. They add that when workers 

sell their labor, the price they can charge is influenced by several factors on the supply side and 

several factors on the demand side. 

4.3.2 Incentive bonus schemes  

In summary of the descriptive analysis on the second objective of the study it’s indicated that there 

is a huge difference between the respondents who agreed and those who disagreed on respective 

investigations. It was indicated that Total E&P normally pays teams effort in equal measures, Total 

E&P always shares annual profits with its employees, respondents strongly agreed that they indeed 

receive non-monetary compensation in addition to their normal payment and all bonuses offered 

to them are performance based. However, majority of the respondents disagreed with the above. 

4.3.3 Employee benefits  

In summary of the descriptive analysis on the third objective of the study, it was realized that 

majority of the respondents are not satisfied with the benefits given to them by the organization. 

They argue that employee fringe benefits such as salary loans, health insurance among others are 

only enjoyed by workers at the strategic level and expatriates.  

4.3.4 Job Satisfaction 

In summary of the last objective of the study, it was indicated in descriptive analysis that majority 

of the respondents had considerable knowledge on the concept of job satisfaction. This was 

justified basing on the fact that each respondent knows what can spur his or her commitment and 

motivation. Among the factors respondents reacted on was availability of tools necessary in the 

course of their duties, conduciveness of the working environment, a feeling of connection to the 

organization, how contented they are with salaries and wages, supervisory support among others.  

 

 

 

 

 

 

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European Journal of Human Resource                                                                                      

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4.4 Correlation analysis 

Table 1: Showing Bi-variate Pearson Correlation coefficient of the variables 

 OBJ 1: Effect of salaries and wages on job 

satisfaction 

Salaries and 

Wages 

Job Satisfaction 

Salaries and 

Wages 

Pearson Correlation 1  

Sig. (2-tailed)  .617 

N 65 65 

Job Satisfaction 

Pearson Correlation  1 

Sig. (2-tailed) .617  

N 65 65 

OBJ 2: Influence of incentive bonus schemes on job 

satisfaction 

Incentive Bonuses Job Satisfaction 

Incentive 

Bonuses 

Pearson Correlation 1  

Sig. (2-tailed)  .517 

N 65 65 

Job Satisfaction 

Pearson Correlation  1 

Sig. (2-tailed) .517  

N 65 65 

OBJ 3: Relationship between employee benefits and 

job satisfaction 

Employee 

Benefits 

Job Satisfaction 

Employee 

Benefits 

Pearson Correlation 1  

Sig. (2-tailed)  .701 

N 65 65 

Job Satisfaction 

Pearson Correlation  1 

Sig. (2-tailed) .701  

N 65 65 

 

 

 

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European Journal of Human Resource                                                                                      

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Table 2:  Showing interpretation of the Pearson Correlation Coefficient 

Results 
Interpretation  

0 
No relationship between the variables 

0.1-0.25   
Very weak relationship between the variables 

0.26-0.49 
weak relationship between the variables 

0.5-0.75 
Strong relationship between the variables 

0.76-1 
Very Strong relationship between the variables 

Source: Taylor (1990) 

The researcher used Bi-variate Pearson Correlation coefficient to establish a quantitative 

presentation of the degree of relationship between variables in each of the three objectives. From 

an investigation into the first objective it was indicated that that the R value was 0.617 indicating 

a strong relationship between salaries and wages and job satisfaction. This further shows that 

salaries and wages have a 61.7% effect on job satisfaction leaving a gap of 38.3% influence by 

other factors.  

It was also indicated that R value was 0.517 after an analysis into the relationship between 

incentive bonuses and job satisfaction. This shows a 51.7% impact of incentive bonuses on job 

satisfaction. Finally it was also indicated that R value was 0.701 after an analysis into the 

relationship between incentive bonuses and job satisfaction. This shows a very strong 70.1% 

impact of incentive bonuses on job satisfaction.  

5.0 Recommendations 

From the foregoing, organizations need to take the issue of reward and incentives seriously as it 

has the ability of influencing employee’s attitude, contribution and commitment towards the 

organization. In order to increase productivity and have competitive edge, organizations must 

reward effectively. Rewards are means of motivating organizational members. It should be used 

to make employees to bring out their best performance at the work place. It is expected that the 

reward system will improve productivity, and influence the effective and efficient utilization of 

corporate resources to achieve corporate objectives. Organizations should reward committed 

employees to promote loyalty and satisfaction. The effective use of incentives can go a long way 

in making managers concentrate on more serious issues like planning and innovating.  

6.0 Limitations 

The major limitation of this research was scope since it only covered the Petroleum business sector 

in Uganda. Another limitation was exclusion of many compensation variables due to limited 

interaction between the researcher and employees as a result of COVID-19 guidelines.   

 

 

 

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European Journal of Human Resource                                                                                      

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