Compensation Systems and Their Effects on Employees' Satisfaction at Tour Operators in Egypt

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1 Compensation Systems and Their Effects on Employees' Satisfaction at Tour Operators in Egypt Dalia Mohammad Soliman Assistant professor, Department of Tourism Studies, Faculty of Tourism and Hotel management, Helwan University, Egypt. Published by: World Journal of Tourism, Leisure and Sports, Vol. 3, No. 2 (2009) 30-37 Contact details: Tel.: 0020104986270 E-mail: [email protected] Abstract Compensation issues as a human resource function have a significant effect on employees' satisfaction, both economically and psychologically, in other words compensation systems influence both job satisfaction and employee motivation. This research first examines relevant literature on compensation policies, their objectives, factors they are affected by, types and systems in addition to the effect of compensation on employees' satisfaction. The research then investigates the compensation systems applied at tour operators in Egypt and their effects on employees' satisfaction. Results indicated that although the majority of the employees are satisfied with their salaries, they do not feel that fairness and equity are addressed at their firms' pay systems. However, incentives are used and the employees are almost satisfied with them. Although benefits are offered to the majority of the employees, they gave low importance to this type of compensation. They stated also that the policy of pay secrecy adopted at their firms doesn't affect their trust. Recommendations for actions which could improve compensation systems are suggested in this study, and a further research is recommended too.

Transcript of Compensation Systems and Their Effects on Employees' Satisfaction at Tour Operators in Egypt

1

Compensation Systems and Their Effects on Employees' Satisfaction

at Tour Operators in Egypt

Dalia Mohammad Soliman

Assistant professor, Department of Tourism Studies, Faculty of Tourism and Hotel

management, Helwan University, Egypt.

Published by: World Journal of Tourism, Leisure and Sports, Vol. 3, No. 2 (2009) 30-37

Contact details: Tel.: 0020104986270 E-mail: [email protected]

Abstract

Compensation issues as a human resource function have a significant effect on

employees' satisfaction, both economically and psychologically, in other words

compensation systems influence both job satisfaction and employee motivation. This

research first examines relevant literature on compensation policies, their objectives,

factors they are affected by, types and systems in addition to the effect of

compensation on employees' satisfaction. The research then investigates the

compensation systems applied at tour operators in Egypt and their effects on

employees' satisfaction. Results indicated that although the majority of the employees

are satisfied with their salaries, they do not feel that fairness and equity are addressed

at their firms' pay systems. However, incentives are used and the employees are

almost satisfied with them. Although benefits are offered to the majority of the

employees, they gave low importance to this type of compensation. They stated also

that the policy of pay secrecy adopted at their firms doesn't affect their trust.

Recommendations for actions which could improve compensation systems are

suggested in this study, and a further research is recommended too.

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Keywords: Tour operators, Egypt, Salaries, Incentives, Benefits, Employees'

satisfaction.

Introduction

At a broad level, compensation includes anything an employee values and desires that

an employer is able and willing to offer in exchange for employee contribution

(Cascio, 2006). It is also the human resource management function that deals with all

types of reward employees receive in exchange for performing their organizational

tasks (Ivancevich, 1998). According to Byars and Rue (2003) compensation and pay

are not synonymous terms, as compensation refers to all extrinsic rewards, but pay

refers only to monetary payments or financial benefits. Walker (2006) also indicated

that compensation is more than a paycheck, it is a comprehensive reward system,

consisting of established policies and procedures to govern the compensation

package.

Old compensation system is detached from strategic organizational objectives,

focuses on rewarding seniority and is characterized by organizational hierarchies and

incremental progression, while new system focuses on integrating compensation with

corporate strategies to achieve organizational objectives and on managing financial

reward to communicate the right message about performance and corporate values to

employees (Beech and Chadwick, 2006). This agrees with what was mentioned by

Cascio (2006) who stated that today there is a continuing move away from policies of

salary entitlement, in which inflation or seniority, not performance were the driving

forces behind compensation increases, therefore performance is considered now the

new mantra. As stated by Ivancevich et al. (1997) from the employees point of view

the compensation received from work is one of the chief reasons people seek

employment, compensation is the means by which employees provide for their own

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and their families' needs. They added also that compensation has a significant

psychological role, as employees consider it as an indicator to their worth to the

organization.

Compensation objectives

The objective of the traditional compensation function is to create a system of

rewards that is equitable to employer and employee alike (Ivancevich, 1998). Byars

and Rue (2003) claimed that while this objective is straight forward, successfully

attaining it is not an easy task. In order to establish a compensation system, there are

some basic criteria that need to be addressed. They are summarized by Ivancevich

(1998: 309) as follows:

1. Adequate: minimal governmental, union and pay levels should be addressed.

2. Equitable: each employee should be paid fairly, in line with his or her effort,

abilities and training.

3. Balanced: pay, benefits and other rewards should provide a reasonable reward

package.

4. Cost effective: pay should not be excessive, considering what the organization

can afford to pay.

5. Secure: pay should be enough to help an employee feel secure and aid him or

her in satisfying basic needs.

6. Incentive providing: pay should motivate effective and productive work.

7. Acceptable to the employee: the employee should understand the pay system

and feel it is a reasonable system.

Cascio (2006) pointed out that the most important objective of any compensation

system is fairness or equity, which can be assessed on three main dimensions (1)

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internal equity: in terms of the relative individual jobs to an organization, are pay

rates fair?, (2) external equity: are the wages paid by an organization fair in terms of

competitive market rates? and (3) individual equity: is each employee's pay fair

relative to that of other individuals doing the same or similar job?. Ducharme et al.

(2005) emphasized that pay satisfaction is a key goal of an organization’s

compensation system because it affects employee behaviors and organizational

outcomes, such as job satisfaction, turnover, absenteeism, work stoppages, and

employee performance. Haksever et al. (2000) added that the successful

compensation system has a role in developing the public image of the company such

that employees have pride in working for the firm.

Factors affecting compensation:

Compensation systems are affected by a complex set of forces. Besides the laws

governing compensation, there are several basic factors that should be considered by

the organization's management in order to implement an appropriate and effective

compensation policy. Sliedregt et al. (2001) and Beech and Chadwick (2006(reported

that these factors are the value of the job to the organization, the value of the

employee to the organization and the value of the job or employee in the market

place.

Others such as Montana and Charnov (2000) argued that supply and demand are

important factors that should be included. They mentioned that supply and demand of

labor influence the cost of acquiring and retaining human resources, therefore the

management is faced with the task of measuring, analyzing and if possible

anticipating the changing supply and demand for labor. For example, if travel firms

are growing and expanding there is a great competition for the available labor supply,

so in such an expanding industry the management must pay more to acquire and retain

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employees. Conversely, if the labor supply is more than the demand for it,

organizations tend to decrease compensation. Scarborough and Zimmerer (1996)

reported that although the forces of supply and demand work very slowly, their

impact is powerful. Cascio (2006) provided another factor, which is the managerial

attitudes, in other words the management's desire to maintain or improve morale,

attract high- caliber, reduce turnover, and improve employees' standards.

According to Bateman and Snell (1996) compensation systems are based on three

crucial managerial decisions (1) pay level, refers to the choice of whether to be a high,

average or law paying company, (2) the pay structure decision, to decide how to price

different jobs within the organization, and this is almost by grouping jobs together

into families, then determining a pay grade, with a floor and ceiling for each job

family and (3) individual pay decisions, to decide differences in pay within job

families according to seniority and performance.

Compensation systems

Employees have a variety of changing, and often conflicting, needs and expectations

at work which they seek to satisfy in a number of different methods (Mullins, 1998).

Therefore Riley (2000) emphasized that employees have quite separate feelings about

pay that produces their earnings. Montana and Charnov (2000) stated that

compensation could be categorized into two types: cash, which refers to wages or

salaries, and non-cash, which includes all other benefits offered by the organization to

its employees. Ivancevich et al. (1997) provided three selected methods of

compensation; employees can be paid for the time they work (flat rates), the output

they produce (individual incentives), or a combination of those two methods.

Salaries

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Scarborough and Zimmerer (1996) claimed that most employees concentrate too

much on wages or salaries and have less appreciation of the value of the other types of

compensation. Cascio (2006) indicated that the broad objective in developing a pay

system is to assign a monetary value to each job in the organization (a base rate) and a

procedure for increasing the base rate (e.g., based on merit and inflation). As stated by

Boella and Turner (2005) job evaluation may be defined as the process that

established the relative value of jobs in a job hierarchy so that an equitable rate of pay

can be determined for each job. In that respect Zingheim and Schuster (2003) and

Cascio (2006) stressed on the importance of identifying and surveying pay rates in

relevant labor markets, in addition to linking pay to skills or depth of knowledge

(competencies).

Byars and Rue (2003) provided basic methods for job evaluation: (1) job ranking

method; that ranks jobs in order of their difficulty from simplest to most complex, (2)

job classification method; that determines the relative worth of job by comparing it to

a predetermined scale of classes or grades of jobs, and (3) point method; in which a

quantitative point scale is used to evaluate jobs on a factor-by-factor basis. Certo

(1997) pointed out that when employees believe that the pay system is unfair; they

may change their work inputs to better match pay they are receiving, they may also

try to change pay they receive by asking for a raise, or they may decide to quit the job.

Ferris and Buckley (1996) claimed that pay systems have an impact on the

organization's image, performance and the effective use of its human resources.

Not all employees are in favor of job evaluation because it evaluates a job rather than

the person's contribution to the employer, but this criticism can be met, however,

through incentives and merit awards in a well-designed salary structure (Boella &

Turner, 2005).

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Incentives and benefits

As indicated earlier, pay includes only the actual money employees receive in

exchange for their work, incentives are rewards offered in addition to the base salary

and are directly related to performance, and benefits are rewards employees receive as

a result of their employment in the organization (Byars and Rue, 2003).

Incentives are offered in order to focus the employees' attention on the employer

objective; therefore managers consider incentives as the oil that makes the

organization system functions effectively (Hill and Jones, 1998; Boella and Turner,

2005 ; Rubenfeld and David,2006).

In that respect Koh and Neo (2000) stated that incentives schemes if effectively

managed can be a useful mechanism to enhance employee satisfaction, even if the

influence is restricted to their satisfaction with pay and with the organization itself.

Scarborough and Zimmerer (1996) and Cascio (2006) claimed that many incentive

programs are improperly designed, because they violate one or more of the following

rules:(1) be simple; the rules of the system should be clear and understandable, (2) be

specific; employees need to know precisely what they are expected to do, (3) be

attainable; every employee should have a reasonable chance to gain something and (4)

be measurable; measurable objectives are the foundation on which incentive plans are

built.

Individual incentives

An individual incentive system consists of an objective standard against which the

employee's performance is compared, and if effectively designed, individual incentive

plans can be a powerful motivator (Bateman and Snell, 1996).

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Ferris and Buckley (1996) argued that management's inability to accurately measure

individual contribution often results in incentives being incongruent with actual

performance, and the motivational affect disappears. In that respect Baker (2002) and

Lyons and Ben-Ora (2002) added that the strength and value of incentives in

organizations are strongly affected by the performance measures available. Therefore

Ivancevich et al. (1997) emphasized that individual incentives are possible only in

cases where performance can be well specified in terms of output, they added also

that individual incentives are attacked by advocates of teamwork and employee

involvement-oriented plans, thus the encouragement of teamwork is assumed to be

virtually impossible with the traditional plans of individual incentives.

Group incentives

Group incentives mean paying incentives to all group members according to the

performance of entire group; the group may be as large as the entire organizational

work force or as small as three or four members of a work team (Byars and Rue,

2003; Richardson and Fluker, 2004).

Using group incentives is recommended when it is difficult to separate or evaluate

individual performance and when the organization goals or the nature of work

demands close cooperation in the workforce (Ferris and Buckley, 1996; Hill and

Jones, 1998; Wilkinson et al., 1998). Thus, group incentives have the advantage of

encouraging cooperation among employees, on the other hand, group incentives may

lead to competition between teams; and employees will not be able to see their

individual contributions to the output of team, so they will not be motivated enough to

produce more (Cascio, 2006).

Profit sharing systems

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Profit sharing systems are designed to reward employees on the basis of the profit a

company earns in a specific period, as this encourages employees to take a broad view

of their activities and feel connected with the company as a whole (Hill and Jones,

1998). In that respect Certo (1997) claimed that profit sharing system makes

employees think more like an owner and ultimately do a better job of building a

successful organization.

Other authors (Dale et al., 1997; Ivancevich et al, 1997; Byars and Rue, 2003 ;

Cascio, 2006) also stated that this system (1) improves productivity and quality (2)

establishes a flexible system that reflects a company's actual economic position and

(3) encourages employees to reduce costs in order to raise the organization profits. On

the downside, many employees may not feel that their performance have a direct

impact on profits, or at least they can't see that link, specifically with the existence of

many factors affecting profits such as the strength of the demand and competition, so

there is no guarantee that profits will increase automatically according to performance

(Cascio, 2006).

Non- financial benefits

Byars and Rue (2003) defined benefits as all rewards employees receive as a result of

their employment. Non-cash compensation is becoming an important factor in

attracting and retaining qualified employees (Montana and Charnov, 2000). As

indicated by Stahl (1995) and Donnelly et al. (1998) benefits are usually tied to

employment, not performance, as the form of behavior that is rewarded is joining the

organization and staying in it; therefore they are considered as supplementary

compensation, over the salary. Benefits often include: holiday, life insurance, personal

accident insurance, company car schemes, mobile telephone package, and retail

vouchers (Bateman and Snell, 1996; Beech and Chadwick, 2006). It is worth noting

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that benefits vary widely in availability, depending on the size of the tour operator

company and the number of employees; since many tour operation companies use a

small skeleton staff of employees, benefits packages are not too common( Eberts et

al., 2006).

There are other types of benefits that raise the image of the job such as private offices,

cafeterias, advanced communications systems and modern conferences rooms

(Haksever et al., 2000) as much benefits contribute to the quality of working life and

make it an attractive and worthwhile place in which to be employed (Armstrong,

2006).

In his book "How to motivate every employee" Bruce (2003) explained that benefits

offered by the organization should fit for the employee desires and needs, for

instance, a telemarketer appreciates a week-end with meals and accommodation

provided, but for a tour leader such a benefit may not excite him, who spends a great

deal of time in hotels and restaurants. In that respect Byars and Rue (2003)

emphasized that the organization should learn what the employee perceives as a

meaningful reward, which is not necessarily what management perceives.

Certo (1997) claimed that non-monetary benefits can be also through advertising jobs

internally before going outside to fill vacancies, which makes employees committed

and motivated.

Open vs. secret pay

Many organizations have a policy of not disclosing pay- related information; in order

to avoid any discontent that might result from employees' knowing what every

employee else is being paid (Byars and Rue, 2003). In that respect Ferris and Buckley

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(1996) claimed that pay secrecy leads to low trust, and on the other hand open pay can

induce management to effectively administer the pay system.

Employees' satisfaction

Torrington et al. (2005) argued that the compensation policy should be satisfactory

for both the employer and the employee, and meets the objectives of these two parties.

According to Suliman (2007) job satisfaction influences work performance, in that

respect Mullins (1998) stated that motivation, job satisfaction and work performance

are affected by the employees' needs and expectations, and the extent to which they

are fulfilled. Therefore in this more perspective view, Nickson (2007) argued that

employees seek a range of monetary and non-monetary rewards and benefits from

employment, of which money is only one aspect, even if it is often the primary

consideration for employee. Thus employees seek: (1) extrinsic rewards; which

relates to tangible rewards such as pay, fringe benefits and conditions of work, (2)

intrinsic rewards; which relates to psychological rewards and internal feelings such as

the sense of personal satisfaction from the job, challenge, achievement and being

treated in a considerate manner (Mullins, 1998). Everton et al. (2007) stated that when

an organization is perceived to be fair and supportive, employee deviant behavior

(i.e., unexplained absenteeism and stealing) will decrease. As emphasized by Negi

(2002), Kotler et al. (2003) and Kandampully (2007) employee satisfaction produces

ultimately customer satisfaction. Concerning the relation between the retention of

employees and compensation system, Jones and Haven-Tang (2005) mentioned that

there is a correspondence between these factors, they added also that there is a link

between the firm size, pay levels and the retention of employees, because of the fact

that employees in small enterprises often have to apply for jobs in other firms if they

want better positions with higher payment.

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Purpose of the study

The purpose of this study was threefold:

1. To investigate compensation systems applied at tour operators in Egypt.

2. To examine the employees' degree of satisfaction with the different types of

compensation applied at their firms.

3. To suggest recommendations for actions which could enhance the employees'

satisfaction with the compensation systems.

Method

The sample population for the study was employees at tour operators in Egypt. The

data collection instrument was a self completion questionnaire. The questionnaire was

designed to solicit information about compensation systems applied at tour operators

in Egypt and their effects on employees' degree of satisfaction. The questionnaire was

pre-tested using eighteen employees at five tour operators. Changes were made to the

questionnaire form based on their responses. Surveys were distributed to 163

employees. After eliminating partially completed questionnaires, a total of 108 (from

46 tour operators) usable questionnaires (66.26% response rate) remained in the

analysis.

Results and discussion

The employees indicated their degree of dis/satisfaction with their monthly salaries.

As illustrated in table 1, over half of the respondents (53.7%) rated their satisfaction

above the midpoint of the five- point scale (mean 3.08).

Table1. Degree of dis/satisfaction with the monthly salary

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Category of choice n=108

Frequency

mean= 3.08 s.d.= 1.23

%

1. Very dissatisfied 10 9.3

2.Dissatisfied 38 35.2

3.Neutral 2 1.8

4. Satisfied 49 45.4

5. Very satisfied 9 8.3

Regarding the pay equity, results in table 2 indicated that only 35.2 per cent agree that

fairness and equity are considered at their firms' pay systems (mean 2.93). In that

respect Terpstra and Honoree (2005) warned that employees who perceive inequities

might reduce expended effort and decrease the quality of their output. Certo (1997)

added that the more equitable an employee perceives the pay to be, the greater the

satisfaction that employee will experience as a result of receiving it.

Table2. Pay equity

Category of choice n=108

Frequency

mean= 2.93 s.d.= 1.24

%

1. Strongly disagree 13 12.0

2.Disagree 33 30.6

3.Neutral 24 22.2

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4. Agree 24 22.2

5. Strongly agree 14 13.0

Concerning individual incentives, 67.6 per cent (73 employees) stated that they are

offered at their companies. Further investigation of the employees' opinions regarding

the contradiction between individual incentives applied at their companies and the

sense of teamwork, revealed that over half of them indicated that there is no

contradiction between individual incentives and teamwork (mean 2.86) (table 3).

This indicates that individual incentives applied at these companies are well designed

and administered. It is worth noting that thirty employees out of seventy three (40%)

stated that individual incentives applied at their companies have bad effects on sense

of teamwork. In that respect Cascio (2006) suggested that if an employee is overly

competitive with fellow employees, the incentives of this employee should be smaller

in order to foster the notion of teamwork.

Table 3. Contradiction between individual incentives and sense of teamwork

Category of choice n=73

Frequency

mean= 2.86 s.d.= 1.43

%

1. Strongly disagree 12 16.4

2.Disagree 30 41.1

3.Neutral 1 1.4

4. Agree 16 21.9

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5. Strongly agree 14 19.2

Regarding group incentives, 52.8 per cent (57respondents) stated that they are offered

at their companies. Over half of these employees (mean 2.75) stated that this type of

incentives doesn't lead to the dependence of some employees on the others. This

result is in consistency with that reported by Byars and Rue (2003) that if a group

member is not performing well and thus is lowering the production of the entire

group, the group will usually pressure the individual to improve. Nevertheless, this

way might not work all the time, therefore twenty one employees believe that group

incentives lead to inequity (table4).

Table 4. Relation between group incentives and inequity

Category of choice n=57

Frequency

mean= 2.75 s.d.= 1.35

%

1. Strongly disagree 10 17.5

2.Disagree 23 40.4

3.Neutral 3 5.3

4. Agree 13 22.8

5. Strongly agree 8 14.0

Regarding fringe benefits offered to investigated employees, the most used types of

benefits are discounted or free vacations and free drinks during the working hours,

followed respectively by medical insurance, full or partial payment for mobile phone

expenses, retail vouchers and free meals during working hours (table 5). It is worth

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noting that only twelve respondents (11.1%) stated they do not receive any type of

fringe benefits. As observed by Boella and Turner (2005), although the presence of

many fringe benefits may not be a positive incentive to work harder, the absence of

fringe benefits, on the other hand, may be a disincentive and will put the firm at a

disadvantage in recruiting and retaining employees.

Table 5. Employees' fringe benefits programs

Type of benefit

Yes No

Frequency % Frequency %

Free drinks 53 49.1 55 50.9

Free meals 10 9.3 98 90.7

Medical insurance 51 47.2 57 52.8

payment for mobile expenses 28 25.9 80 74.1

Discounted or free vacations 53 49.1 55 50.9

Retail vouchers 14 13.0 94 87.0

Further investigation regarding the employees' dis/satisfaction with the workplace

standard of furniture revealed that the majority (mean 3.84) stated that they are

satisfied with their firms standard of furniture (Table 6). It is worth noting that the

satisfactory standard of office furniture enhances the image of the job as well as the

quality of work life.

Table6. The workplace standard of furniture

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Category of choice n=108

Frequency

mean=3.84 s.d.= 1.01

%

1. Very dissatisfied 3 2.8

2.Dissatisfied 13 12.0

3.Neutral 8 7.4

4. Satisfied 58 53.7

5. Very satisfied 26 24.1

Concerning the issue of pay secrecy, the results depict that 57.4 per cent (62

respondents) stated that pay secrecy policy is applied at their companies. Furthermore,

as shown in table7, these respondents stated that this policy doesn't negatively affect

their trust (mean 2.69).

This finding doesn't entirely concur with Ferris and Buckley's (1996) assertion that

pay secrecy leads to low trust. In that respect Cascio (2006) stated that pay openness

forces managers to reduce differences in pay among subordinates in order to avoid

conflict and the need to explain such differences to disappointed employees.

Table7.The effect of pay secrecy on lowering the trust

Category of choice n=62

Frequency

mean= 2.69 s.d.= 1.51

%

1. Strongly disagree 15 24.2

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2.Disagree 21 33.9

3.Neutral 4 6.4

4. Agree 12 19.4

5. Strongly agree 10 16.1

Respondents were asked to state their degree of dis/agreement on five statements as

reasons or motivations influencing their decision in case of deciding to leave their

current companies to other ones. As shown in table 8, the highest level of agreement

was recorded for "higher salaries"(mean 4.10), with the lowest standard deviation

(1.03), followed respectively by "bigger firm size"(mean 3.37), "higher position"

(mean 3.36) and "better physical working environment"(mean 3.34). Only one

statement received aggregate mean score below the midpoint of three indicating

disagreement with the statement, this statement was "better fringe benefits i.e.

healthcare" (mean 2.73).

These results support what was stated by Scarborough and Zimmerer (1996), Boella

and Turner (2005) and Cascio (2006), who emphasized that most employees

concentrate too much on salaries and give lower importance to the other types of

compensation. The reason behind the second and third motivations could be that

employees often have to apply for jobs in larger firms if they want promotion (Jones

and Haven-Tang, 2005).

The low mean score recorded for fringe benefits does endorse the view that most

employees have very little appreciation of the value of the fringe benefits they receive

(Scarborough and Zimmerer, 1996).

Table8. Motivations affecting decisions of leaving current companies

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Statement Mean Rank s.d.

Higher salary 4.10 1 1.03

Higher position 3.36 3 1.19

Bigger firm size 3.37 2 1.45

Better fringe benefits 2.73 5 1.31

Better working environment 3.34 4 1.71

Conclusion and recommendations

Compensation is every type of reward that employees receive for performing

organizational tasks. Compensation can be categorized into: cash; as salaries and

incentives, and non-cash; as insurance and working conditions. There are main

characteristics that should be addressed by the successful compensation system;

amongst them are adequacy, equity and incentive-providing. Compensation system

should be satisfactory for and meet the objectives of both the employer and employee.

The research objective was to investigate the compensation policies adopted at tour

operators in Egypt and to examine their effects on employees' satisfaction. Research

findings have shown that over half of the employees are satisfied with their salaries.

Moreover, they stated that fairness and equity are almost not addressed at their firms'

pay systems. Regarding individual incentives, about two thirds of the employees

stated they are applied at their firms, and they indicated that there is no contradiction

between this type of incentives and the sense of teamwork, which indicated that

individual incentives at their firms are well designed and administered. Concerning

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group incentives, they are less applied, as only about half of the employees stated they

are offered, and they believe that this type of incentives doesn't lead to inequity;

therefore this proved that group incentives are well designed at their companies, as

every employee carries his share of the load. Furthermore, results revealed that the

most used type of fringe benefits are discounted or free vacations as well as free

drinks during working hours. Regarding the work place standard of furniture, the

majority are satisfied with it. It was stated also by the majority that their firms apply

the policy of not disclosing pay related information and it was surprising that this

policy doesn't negatively affect their trust. Moreover, they stated that when deciding

to leave their current firms, they concentrate firstly on higher salary followed

respectively by bigger firm size, higher position and better physical working

conditions. In terms of fringe benefits, they were given low importance which was

unexpected.

In order to achieve and induce the employees' job satisfaction, the firm should

regularly investigate pay satisfaction, and accordingly adjust compensation systems

applied, because it is believed that the employee's satisfaction positively affects his

general attitude toward the job and produces customer satisfaction. It should be noted

that the employee should be very satisfied not only satisfied. Furthermore, the tour

operators should use various types of compensation, to benefit from the advantages of

these different types. For incentive plan to be effective, it should be viewed by

employees as being fair, plus it should be well managed and employed to enforce the

sense of team work. Regarding fringe benefits , since results stated that the majority

of the employees do not value the importance of fringe benefits, it is better for the

tour operators to explain the importance of benefits provided(specially in the form of

health care) than to minimize benefits offered, because this influences retaining

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employees. Finally, it should be noted that the more employees believe in pay equity

within their firms, the more confidence and trust will be developed.

Further study

It is recommended that a further study could be conducted to examine and evaluate

the intrinsic rewards as well as the psychological working conditions that affect

employees' satisfaction at tour operators in Egypt.

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