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

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.