Influence of Compensation on Employees’ Productivity

Enobun-Nwidi Patience Enyiamaka, Hannatu G. Danbature, Irhibhor Beatrice

Abstract


The objective of this paper is to investigate how compensation impacts employees' productivity in Shoes Making Company in Aba, Abia State. The study conducted a survey research and gathered opinions from 85 employees using closed-ended structured questionnaires with 5-point Likert scale ratings. To ensure instrument reliability, Cronbach’s Alpha coefficient was employed, while face validity was used to determine instrument validity. Data were coded using Statistical Package for the Social Sciences (SPSS) version 23.0 and analyzed through descriptive statistics and multiple regressions. The findings indicate that salary, allowance, fringe benefit, and bonus significantly and positively influence employees' productivity. In conclusion, for organizations to maximize productivity, they must prioritize key compensation variables identified in this study. The implications suggest that providing adequate and timely compensation, including salaries, allowances, fringe benefits, and bonuses, is crucial to boost employee motivation and productivity. Therefore, the paper recommends that company owners and managers continue to prioritize employees' compensation, providing regular salary adjustments, allowances, and fringe benefits tailored to individual needs, along with frequent bonuses to enhance both employee and organizational productivity.


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References


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