Study to determine the impact of fringe benefits on job satisfaction

ABSTRACT: The study addresses the impact that fringe benefits have on the levels of job satisfaction and engagement of the employees of Galaxy Mining Services. Galaxy is a global explosives company that serves the mining and construction industries all over the world. The remuneration of employees differs from country to country within the organization and this can lead to confrontations when employees compare remuneration packages amongst one another. To determine the appropriate compensation for the value of the work becomes even more difficult when dealing with a global organization. This matter becomes even more complicated when an organization’s boundaries stretch across country borders. The study aims to compare job satisfaction and engagement of Galaxy employees working in India.

A survey research design was used with a specifically developed questionnaire as the data gathering instrument. The participants represent the total of all employees of Galaxy, a global mining services company. Management supported the study and made participation compulsory. A total of 57 employees completed the questionnaires. Employees from different areas, gender, age, academic levels and income groups participated. The majority of the respondents were in the age group 36 – 40 (28.1%). Educational levels revealed that the majority (68.4%) of participants have a Grade 12 and/or higher qualification.

Because all the questionnaires represented the population and not just a sample, only a test to determine practical correlation was performed. For the purpose of the correlation test, the Nonparametric Spearman’s correlation coefficient (r) was used.

The statistical analysis indicated a highly important correlation between Job Satisfaction and Engagement. Thus a high level of job satisfaction will imply a high level of engagement and vice versa. It has also indicated that Job Satisfaction and Fringe Benefits shows a low practically significant correlation. The test for correlation between Job Satisfaction and Remuneration indicated that the level of job satisfaction an employee experiences in the organization is influenced by his remuneration package. The test for correlation between Engagement and Fringe Benefits shows a low practically significant correlation. The test for correlation between Engagement and Remuneration shows a low practically significant correlation.

The limitations of the study were the limited number of employees in Galaxy India for participation in this comparative study. The structure of remuneration packages is treated as confidential and therefore employees might be hesitant to answer questions regarding fringe benefits and remuneration. The study was conducted within Galaxy and therefore its outcome can only be released with the permission of Galaxy India.


This mini-dissertation focuses on a comparative study to determine the impact of fringe benefits on job satisfaction and engagement.

Fringe benefits, or that part of the total compensation package other than pay for time worked provided to employees in whole or in part by employer payments, play a major role in the structuring of compensation packages (Williams, 1995:1097).

If asked about their organization’s compensation programs, most managers criticize them as not working (Jensen & McMullen, 2007:2). This statement reflects the opinion of various managers in the corporate world, as they are powerless with regards to the compensation of their employees and the limitations which are placed by the laws of the organization on the structuring of their employee’s remuneration packages.

Managers have the authority to make major business decisions sometimes worth millions of Rupees, but they don’t always have the authority to change the structure of their employees’ remuneration packages (Jensen & McMullen, 2007:2). Most remuneration packages are based on market related information, and one can ask the question – do these market related rewards reflect the contribution that a specific employee makes to an organization? (Jensen & McMullen, 2007:2).

Today’s managers do not believe that their organization’s compensation programs are effective in getting the desired results for which they are held accountable (Jensen & McMullen, 2007:2). For most managers, compensation is their largest controllable operating expense. If it is successfully managed, the compensation offered to employees gives them a great tool to achieve the best possible business results.

When managers or employees criticize the organization’s remuneration packages or reward structures, it is often assumed that money is the reason. But people or employees are motivated by more than just money. According to Jensen and McMullen (2007:5), some people say that money is not a motivator for them at all.



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