Abstract

The microfinance sector plays a vital role in promoting financial inclusion in the Philippines. However, increasing employee turnover and evolving workforce expectations have encouraged organizations to reassess the effectiveness of their compensation and fringe benefit programs. While numerous studies have explored fringe benefits in large industries, limited research has been conducted within small to medium-sized microfinance institutions. This study focused on Akap Punla Microfinance in Novaliches, Quezon City, to determine the relationship between fringe benefits and job satisfaction among employees and to identify challenges associated with benefit effectiveness. A quantitative descriptive-correlational research design was employed to examine the relationship between fringe benefits and job satisfaction without manipulating variables. Sixty-two (62) employees were selected through consensus sampling. Data were collected using a structured and validated survey questionnaire. Statistical tools utilized included frequency and percentage, weighted mean, Pearson correlation, and ranking. Findings revealed that employees strongly agreed on the effectiveness of fringe benefits (Overall WM = 3.31), particularly the Birthday Token Cake (WM = 3.45) and Anniversary Bonus (WM = 3.31), which were associated with a stronger sense of recognition and belonging. HMO (WM = 3.23) and Load Allowance (WM = 3.24) were also positively perceived, though with slightly lower emotional impact. Employees reported a very high level of job satisfaction (Overall WM = 3.33), with Responsibility (WM = 3.45) and Achievement (WM = 3.31) receiving the highest ratings, while Recognition (WM = 3.23) indicated an area for improvement. Correlation analysis confirmed a moderate positive and statistically significant relationship between fringe benefits and job satisfaction (r = 0.52, p = 0.001), suggesting that improved fringe benefits are associated with higher employee satisfaction. Key challenges identified include limited awareness, inequitable access to benefits, and misalignment between benefits and employee needs. In conclusion, fringe benefits are significantly associated with job satisfaction among employees in the microfinance company. Recognition-based and morale-enhancing benefits were strongly associated with employee motivation and retention. Strengthening communication, ensuring equitable access, and aligning benefits with employee needs may further enhance job satisfaction and organizational stability.