Paper Title
Influence of Merit - Based Pay on Employee Loyalty: A Case Study of Tanzania Breweries Limited, Mwanza City, Tanzania
Article Identifiers
Registration ID: IJNRD_302711
Published ID: IJNRD2412133
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Keywords
Merit-Based Pay, Employee Loyalty, Bonus Pay, Commission Pay, Profit-Sharing Vroom’s Expectancy Theory, Organizational Commitment, Motivation and Engagement Tanzanian Breweries Limited, Workforce Compensation Practices.
Abstract
Merit-based pay systems are critical in shaping the dynamics of employee-employer relationships, particularly in influencing satisfaction, engagement, job performance, attitudes, commitment, and loyalty. This study examines the impact of three key components of merit-based pay—bonus pay, commission pay, and profit-sharing—on employee loyalty, with a specific focus on Tanzania Breweries Limited in Mwanza City. Grounded in Vroom's Expectancy Theory, the research explores how these compensation strategies influence employee motivation, engagement, and performance, offering insights into the mechanisms that drive loyalty within an organisational context. The study employs a positivist research philosophy and an explanatory research design to ensure rigorous analysis. Data were collected using a structured questionnaire adapted from validated scales in prior studies. Reliability and validity were confirmed, with Cronbach’s Alpha values exceeding the 0.70 threshold. A sample of 202 employees was surveyed, achieving a 100% response rate. Descriptive statistics were used to summarise employee perceptions, while inferential statistical techniques, including Spearman’s rank correlation and ordinal logistic regression, analysed the relationships between merit-based pay components and employee loyalty. The findings indicate that merit-based pay significantly enhances employee loyalty, primarily through its positive impact on motivation and engagement. Statistical results demonstrate a strong relationship between compensation systems and loyalty, with high explanatory power (R² = 0.723, F = 92.456, p = 0.001). Bonus pay, commission pay, and profit-sharing were identified as effective tools for driving employee commitment and performance. These results underscore the importance of aligning compensation systems with performance metrics to foster organisational loyalty and motivation. This study contributes original insights by focusing on merit-based pay within the Tanzanian context, an area with limited empirical research. By incorporating Vroom’s Expectancy Theory, the research adds theoretical depth to the understanding of how compensation systems shape employee attitudes and loyalty. The findings also provide practical recommendations for organisations, emphasising the need for transparent and equitable merit-based pay systems. Timely delivery of incentives and clear communication about pay structures are essential for sustaining motivation and loyalty in competitive business environments. Beyond its organisational implications, the study highlights the broader social benefits of fair and performance-aligned compensation practices. Transparent pay systems contribute to building trust, reducing workplace inequalities, and promoting employee well-being. Organisations can improve their internal culture and societal impact by cultivating a motivated and inclusive workforce.
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How To Cite (APA)
Abbas Abdulkadir Iwodyah, Dr. Neema Mtebe, & Dr. Paul Gwaltu (December-2024). Influence of Merit - Based Pay on Employee Loyalty: A Case Study of Tanzania Breweries Limited, Mwanza City, Tanzania. INTERNATIONAL JOURNAL OF NOVEL RESEARCH AND DEVELOPMENT, 9(12), b337-b348. https://ijnrd.org/papers/IJNRD2412133.pdf
Issue
Volume 9 Issue 12, December-2024
Pages : b337-b348
Other Publication Details
Paper Reg. ID: IJNRD_302711
Published Paper Id: IJNRD2412133
Research Area: Management All
Author Type: Foreign Author
Country: NYAMAGANA, MWANZA, Tanzania, United Republic of
Published Paper PDF: https://ijnrd.org/papers/IJNRD2412133.pdf
Published Paper URL: https://ijnrd.org/viewpaperforall?paper=IJNRD2412133
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