Research Article

EFFECT OF COMPENSATION ON EMPLOYEE PRODUCTIVITY: A CASE STUDY OF AL-HIKMAH UNIVERSITY, ILORIN, KWARA STATE

Talihat Imam Umar1*, Mariam Adeyemi Aremu1, Azeez Tunbosun Lawal1, Victoria Ayoola Ademilua2
1 Department of Business Administration, Faculty of Management Sciences, Al-Hikmah University, Ilorin, Kwara State. Nigeria
2 Federal Cooperative College, Eleyele, Ibadan, Nigeria.
* Corresponding author: atlawal@alhikmah.edu.ng
Published: Jun, 2023
DOI: 10.67894/bjms.2023.eyyt0ft2
Pages: 140-161

Abstract

Compensating employees adequately plays a pivotal role in enhancing their effectiveness within an organization. Consequently, their contribution becomes indispensable to the overall functioning of the company. This study evaluates the impact of compensation on employee productivity in the context of Al-Hikmah University. The research design encompasses both descriptive and inferential methodologies, employing questionnaires as the primary data collection instruments. Data are gathered from Al-Hikmah University and subsequently subjected to analysis using SPSS 20.0 Version. The study encompasses the entire employee body of Al-Hikmah University as its population. Through a method of simple stratified random sampling, a sample of 316 employees is selected. The collected data undergoes various analyses, including descriptive, correlation, and regression analyses. The results of the descriptive analysis reveal a discernible influence of all compensation package variables on employee productivity. The correlation analysis underscores a robust positive correlation between non-financial compensation and employee productivity. In contrast, financial compensation displays a weak negative correlation, which is deemed insignificant in terms of its impact on employee productivity. Moving forward to the regression analysis, it is evident that financial compensation exerts an inconsequential and adverse effect on employee productivity. Conversely, non-financial compensation showcases a noteworthy, positive influence on employee productivity. As a recommendation stemming from these findings, it is advisable for the top management of the organization to periodically review the compensation packages provided to employees. This review process should be accompanied by efforts to heighten employees' awareness and comprehension of the compensation structure. Moreover, making the compensation package guidelines accessible to all employees would bolster transparency, fostering confidence among the workforce. 

Keywords

Compensation Employee Performance Al-Hikmah University

References

  1. Anjanarko, T. S., &Jahroni, J. (2022).The Effect of Workload and Compensation on Employee Productivity. International Journal of Service Science, Management, Engineering, and Technology, 1(2), 17-21.
  2. Anyebe,A.(2013). The Nigerian Civil Service, Issues in structures and operation, Journal of Professional Administration. 5;11-17.
  3. Armstrong, M. & Brown, D.(2015). Strategic Reward, Kogan Page, London
  4. Armstrong, M. (2015).A Hand book on Human Resources Management Practices; UK;KoganPage, 986p.
  5. Armstrong,M.(2018).StrategicHumanResourceManagement:AGuidetoAction. Philadelphia: Kogan Page Publishers.
  6. Azmy, A. (2022). Effect of Compensation and Organizational Commitment on Employee Performance During WFH at Digital Company. Jurnal Economia, 18(1), 70-88.
  7. Bob,N(2021).MakingEmployeessuggestioncount.JournalofPersonnelManagement, 17;20-21.
  8. Bowen, R. B. (2020). Recognizing and Rewarding Employees. New York City: McGraw-Hill Professional.
  9. Campbell,J.(2017).Motivation,Attitudes,GoalSetting,PerformanceandInteractiveEffectsOfPayfor Performance. Minneapolis,MN: CapellaUniversity.
  10. Chabra,T.(2021).Human Resource Management Concepts and Issues. 2ndRevised ed. Delhi:DhanpatRai&Co.(P)Ltd.
  11. Darma, P. S., &Supriyanto, A. S. (2017).The effect of compensation on satisfaction and employee performance. Management and Economics Journal (MEC-J), 1(1).
  12. DeNissi, A.S. &Griffin, R.W. (2021).Human Resource Management. NewYork: HoughtonMifflin.
  13. DeNisi A. S. & Griffins R. W. (2018).Human Resources Management. Houghton MifflingCompany. BostonNewYork.rmance.Minneapolis,MN:CapellaUniversity.
  14. Decenzo, D.A. & Robbins, S.P.,(2022). In:3rd, ed.PersonnelHumanResourcemanagement.India:PrenticeHallLtd,pp.424,470.
  15. Decenzo, D. A & Robbins, P.S (2017) Fundamentals of Human Resource Management, Nice Printing Press Daily, America.
  16. Decenzo, David A.& Stephen P. Robbins (2019). Human Resource Management(6thed.). New York: John Wiley and Sons, inc.
  17. Dessler,G.(2018).HumanResourceManagement.UpperSaddleRiver,NJ:Pearson/PrenticeHall.
  18. Diener,F. K. &Biswas-Diener, N. H., (2022). A meta-analysis of the effects of organizational behavior modification on task performance, 1975-1995.Academyof management Journal,40.
  19. Ekhsan, M., Aeni, N., Parashakti, R., & Fahlevi, M. (2019, November). The Impact Of Motivation, Work Satisfaction And Compensation On Employee's Productivity In Coal Companies. In 2019 1st International Conference on Engineering and Management in Industrial System (ICOEMIS 2019) (pp. 406-415).Atlantis Press.
  20. Fajarto, S. P., Aima, M. H., &Karsono, B. (2019).The Effect of Compensation and Job Satisfaction on Increasing Productivity of AsuransiJasindo Head Office Employees Mediated by Motivation Variable. International Journal of Innovative Science and Research Technology, 4(7), 100-113.
  21. Fein, B. (2020). Compensation Management Strategies, Journal of Personnel Administration,18; 13-27.
  22. Franklel,J. R.&Wllan,N. E.(2016).HowTo Design AndEvaluate Research In Education.NewYork:Mcgraw-Hill.
  23. Gomez-Mejia, L.R.(2022).Compensationorganizational strategy and firm performance. Cincinnati: SouthWestern.
  24. Held, K. M. (2021). Money and subjectivewell-beingit's not the money, it's the motives, JournalofPersonalityandSocial Psychology,80.
  25. Heneman, F. (2013).Behavioral management and task performance in organizations:conceptual background, meta-analysis, and test of alternative models. PersonnelPsychology,56.
  26. Hewitt, A. (2019). Managing Performance with incentive pay.Journal of PersonnelManagement,7(1);20-31.
  27. Hoerr,P.(2020).Compensation andworkmotivation,ConsortiumforPolicyResearchinEducation.
  28. Kadir, A., AlHosani, A. H., Ismail, F., &Sehan, N. (2019, September).The effect of compensation and benefits towards employee performance. In Proceedings of the 1st Asian Conference on Humanities, Industry, and Technology for Society, ACHITS 2019, 30-31 July 2019, Surabaya, Indonesia.
  29. Kelechi, N. G., Akpa, V. O., Egwuonwu, T. K., Akintaro, A. A., Shonubi, A. O., &Herbertson, A. E. (2016). The effect of compensation administration on employee productivity. Arabian Journal of Business and Management Review (Oman Chapter), 5(8), 40.
  30. Lawal, A.T., Mustapha, A.M., Abogunrin, A.P. & Yusuf, S. (2019). Assessment of teachers' motivation and job satisfaction for school performance in Kogi state, Nigeria. Entrepreneurial Journal of Management Science. 6(1), 41-57. Published by Faculty of Management Sciences, Al-Hikmah University, Nigeria
  31. Lesmana, M. T., Arif, M., &Barus, M. I. (2021).The Effect of Compensation, Work Environment and Work Discipline on Employee Performance. International Journal of Economic, Technology and Social Sciences (Injects), 2(1), 312-324.
  32. Malsch, B., Tremblay, M.-S., & Gendron, Y. (2012). Sense-Making in Compensation Committees: A Cultural Theory Perspective. Organization Studies, 33(3), 389-421. https://doi.org/10.1177/0170840611433993
  33. Mangale, N. M. (2017). The Effects of Compensation on Employee Productivity a Case Study of Kenya Literature Bureau, South C Nairobi (Doctoral dissertation, MUA).
  34. McCollum,J.S.(2021).Teambasedrewards:currentempiricalevidenceanddirectionsfor future.
  35. Mohrman, M. &Odden, P., (2016). Motivating employees in a new governance era: theperformanceparadigmrevisited,PublicAdministration Review,66.
  36. Mugenda, O. M. &Mugenda, A. G. (2013).Research Methods: Quantitative and QualitativeApproaches.AfricanCentrefor TechnologyStudies,1999.ISDN. 9966411070, 9789966411075
  37. Nelson B & Spitzer D. (2013). The 1001 Reward and Recognition field book: the completeguide,workman publishing. New York. Nkomo,
  38. Odden,P.&Kelley,D.C.,(2022).Dogoalsmediatetheeffectsofincentivesonperformance? AcademyofManagement Review, 5.
  39. Pearce,L(2020).ManagerialCompensationBasedonOrganizationalPerformance.JournalofIndustrialRelation, 52; 3-28
  40. Putra, I. N. S. K., &Mujiati, N. W. (2022). The effect of compensation, work environment, and work motivation on employee productivity. European Journal of Business and Management Research, 7(2), 212-215.
  41. Richardson, L.R.,(2019). Gainsharing:acriticalreviewandafutureresearchagenda. JournalofManagement.
  42. Rosalia, P. D., Mintarti, S., &Heksarini, A. (2020). The effect of compensation and motivation on job satisfaction and employee performance at SMK MedikaSamarinda. Saudi Journal of Business and Management Studies, 5(7), 448-454.
  43. Safitri, R. M., &Yudistira, S. (2020). The Effect of Compensation on Employee Productivity in Grand Rocky Hotel Bukittinggi. International Journal of Tourism, Heritage and Recreation Sport, 2(1), 1-8.
  44. Saman, A. (2020).Effect of compensation on employee satisfaction and employee performance. International Journal of Economics, Business and Accounting Research (IJEBAR), 4(01).
  45. Saunders M; Lewis P; and Thornhill, A. (2019).Research Methods for business students, 5thedEngeland:PrenticeHall.
  46. Setiawan, R., Cavaliere, L. P. L., Chowdhury, A. R., Koti, K., Mittal, P., Subramaniam, T. S., ... & Singh, S. (2021). The impact of motivation on employees productivity in the retail sector: the mediating effect of compensation benefits (Doctoral dissertation, Petra Christian University).
  47. Stajkovic, O. F. and Luthans, S. R., (2006).Show Me the Evidence! Proven and PromisingProgramsforAmerica'sSchools,ThousandOaks,CA:CorwinPress.
  48. Widagdo, A., Widodo, D. S., &Samosir, P. S. (2018).Effect of compensation and motivation to employee performance through commitment. Scholars Journal of Economics, Business and Management (SJEBM), 5(4), 319-325.
How to Cite

Umar, T. I., Aremu, M. A., Lawal, A. T., & Ademilua, V. A. (2023). EFFECT OF COMPENSATION ON EMPLOYEE PRODUCTIVITY: A CASE STUDY OF AL-HIKMAH UNIVERSITY, ILORIN, KWARA STATE. Bayero Journal of Management Sciences, 5(1), 140-161. https://doi.org/10.67894/bjms.2023.eyyt0ft2

T. I. Umar, M. A. Aremu, A. T. Lawal, and V. A. Ademilua, "EFFECT OF COMPENSATION ON EMPLOYEE PRODUCTIVITY: A CASE STUDY OF AL-HIKMAH UNIVERSITY, ILORIN, KWARA STATE," Bayero Journal of Management Sciences, vol. 5, no. 1, pp. 140-161, June 2023. doi: 10.67894/bjms.2023.eyyt0ft2

Share this article:
Facebook X / Twitter LinkedIn
Download PDF View Full Text (PDF) Back to Articles