Task performance refers to the adaptability of employee to work environment.

It means that
how well the employee knows his work, how well the environment is designed for the
employees to work and how well he will be able to achieve his desired goals. The more
adaptability, the higher task performance. On the other hand, compensation refers to the
factors that will lead to high task performance. It means that compensation is the driving
factor of employee retention. Compensation is yet the most important factor to motivate
employee which will impact employee’s performance in a positive manner. Compensation is
divided into two branches i.e.; direct compensation and indirect compensation. Compensation
is a strategy used by Human Resource Management of companies to improve performance,
enhance employee engagement and increase satisfaction level (satisfaction level will be of
employee as well as employer. Employer will be satisfied to recruit such an employee who
brings benefits to the organization. Employee knows that he is working under right conditions
and will work with more enthusiasm). Moreover, compensation leads to completive
advantage in such a way that workers of the hospital are getting compensation from hospital,
this will make them more determinants towards his work, he will work more that will lead to
success of firm. Now if firm is progressing, its will leave behind its competitors. But that’s
not the case. Hospitals have high turnover rate, meaning there is less employee retention and
people are leaving their jobs. This is because the workers are not being compensated of what
they do and what they require. Compensation is also related to the behavioral aspects and
contributions of human resources. Good compensation, good performance of employees
refers to good behavioral aspects and contributions by human resource management to drive
company to competitive advantage. Employer will provide employee with both direct and
indirect compensation, which will increase employee retention and employee engagement. It
will decrease turnover rate and employee will work with full determination and result in
achieving organization’s strategic goals which will reflect that human resources had positive
behavior towards organizations goals and have contributed to such an extent that they can
achieve their strategic goals. Therefore, compensation is yet important factor that enables
employees to put their most of energy and establish positive attitude towards organization by
accomplishing their task and enhancing their task performance. Moreover, compensation and
strategic goals of organization are interlinked. It is such that if the employer will take care of
employees (in form of compensation), employees will take care of employer (in form of
achieving strategic goals). Thus it is a give and take situation between employee and human
resources that works simultaneously. Human resources must maintain equilibrium amongst
both categories of compensation i.e.; direct (monetary) and indirect (non-monetary)
compensation. Employer can’t only do appraisal (indirect compensation) and not paying
attention on providing employee with salary and rewards (direct compensation). Yet, both of
these branches should be maintained with balance.
Direct compensation refers to tangible aspects. These are also regarded as financial benefits
like salary and bonus. These are provided directly to the employees without any third
medium in between. Salary refers to monetary benefit provided by employer to employee
which is a fixed component irrespective of positions or increments. However, bonuses are
also monetary benefit but bonus is not fixed. It depends upon the performance of employees.
As salary are fixed, it doesn’t help in enhancing task performance of the employees.
Employees know that they will complete certain task and will get their salary but they aren’t
looking to enhance their skills whereas compensation cultivate the abilities on employees,
resulting in good task performance.
On the other hand, indirect compensation refers to non-financial rewards like motivation
(motivation directly refers to employee recognition where the task performed by the
employee are being appreciated by the employer) and flexible hours. These require third
medium like to motivate, the employer needs to deal with cognitive aspect of employee. The
employer needs to provide feedbacks for employee recognition whereas in flexible hours,
employee emotions are attached to some extent that they can enjoy working at different
working hours which will also bring change to working environment. Flexible hours reduce
stress upon the employee to product effective and efficient task performance.
Direct and indirect compensation are the drivers which helps in increasing the potential of
employees. But that’s not the case in major public sector hospitals of Pakistan. The human
resources of those hospitals don’t focus on compensation either it be direct compensation
(salary and bonus) or it be indirect compensation (flexible hours, employee recognition). As
they lack compensating their employees, their employee retention rate is very low (employee
turnover rate is high). Monetary and non-monetary compensation have direct impact on task
performance which leads to the accomplishment of strategic goals of the company.