ASSESSMENT OF COMPENSATION PRACTICES AND CHALLENGES: THE CASE OF ETHIOPIAN CONSTRUCTION WORKS CORPORATION

Abstract

Compensation is one of the main organizational issues that enables any organization to retain, motivate and attract employees in a long term. This research studies about practices and challenges of compensation at Ethiopian Construction Works Corporation (ECWC)which focuses on the direct financial compensation by incorporating different issues such as pay, cost of living, labour market, the job, internal equity, government regulation and the organizations financial ability.The data generated from respondents are analyzed through descriptive research type and both quantitative and qualitative research approach are used. Stratified random sampling were used for a sample size of 235 respondents, questionnaires were distributed to 250respondents which was extra number of respondents involved in order to avoid uncertainty of unreturned questionnaires from a total of 600 populations. Also interview with HRM and Financial Management Department were conducted. The collected data are analyzed and presented with tables and figures using SPSS statistics 20 software as well as interpreted with explained statement. Employees are dissatisfied and demotivated because of the corporation low payment level, unequal pay for same positions, and lack of different kinds of compensation practice. The corporation compensates employees below the labour market and do not equally pay employees who founds at the same job positions. Employees are not compensated based on their performance on job and job evaluation is not conducted by the corporation to set a pay scale for a particular job. Looking over drawbacks of practice of compensation at ECWC, The researcher recommended the corporation to consider cost of living to determine pay scale and to establish a fair internal and external equity as well as to pay employees according to current labour market and to conduct job evaluation to set a pay scale for a specific job position.