What Is The Nexus Between Organizational Compensation And Employee Performance?

Abstract

The basic desire of any organization is usually to achieve set goals through the collective activities
of members of the organization in the forms of assigned duties which were carried out individually
and collectively. This study adopted a longitudinal survey research design, and employed the
Freund and William’s statistical formula to determine the sample size with principal objective to
ascertain the functional relationship existing between compensation in an organization and
employees’ performance. The R2
of 0.777 suggests that organizational condition of service
variables accounted for approximately 78 percent of the variation of the employees’ output; this
implies a strong relationship. The results from the test of the hypotheses: F-calculated {429.036}
is greater than the F-tabulated {2.7858} (i.e Fcal > F-tab). Consequently, this study concludes that
there is a positive relationship between organizational compensation and employee performance.
Based on the major findings, the study therefore recommend that firms should strategically
structure their compensation plan accordingly.