Mediation of Government Policies on Compensation Strategy and Employee Performance: A Structural Equation Model Approach
Keywords:
Mediation, Compensation Strategy, Employee Performance and Structural Equation Model.Abstract
The underlying axiom that organizations that fail to develop appropriate compensation packages for their employees tend to record high rates of turnover of staff has spurred research in the field of management. This study, therefore, examines the effect of compensation strategies on employee performance as well as the mediating role of government policies. It adopts a descriptive survey design involving the distribution of 304 research questionnaires to the staff of selected tertiary institutions in the States of Delta and Rivers in Nigeria. Quantitative data were collected using a five-point Likert scale to measure relevant variables used for the analysis. A structural equation modeling statistical analysis technique was used to analyze the data generated. The results reveal a positive and statistically significant relationship between employee performance and proxies of the compensation strategy, namely salary, flexible working hours, and retirement benefits. Contrary to expectations, a negative, statistically significant relationship was found between employee performance and promotion. The relationship of employee performance with government policies is statistically insignificant at the 5% confidence level. It is recommended that institutional administrators develop promotional criteria that will impact academic staff performance while upholding policies regarding salaries, flexible working hours, and retirement benefits.
References
Abdul Hameed, M; Muhammad, R; Harfiz, M; Ghazanfar, A., & Muhammad, A. (2014). Impact of compensation on employee performance (Empirical evidence from the banking sector of Pakistan).International Journal of Business and Social Sciences, 5(2), 302-309.
Abdulraheem, I. (2014). The implications of employee turnover in Nigerian higher education. Journal of Research and Development, 1(10), 44-53.
Adams, J.S. (1965). Injustice in social exchange. In Berkowitz, L. (ed) Advances in Experimental Social Psychology, Academic Press. Abridged in Steers, R.M. and Porter, L.W.(1979). Motivation and work behavior, second edition, McGraw-Hill, 107-124
Agba, A. M., & Nwosu, U.W. (2011). Contributory pension scheme, workers commitment, retention and attitude towards retirement in the Nigerian civil service. Global Journal of Management and Business Research, 11(4), 12-26.
Akekere, J., & Yousuo, P.O. (2013). Impact of wage differentials on labour turn over in Nigeria. International Journal of Academic Research in Business and Social Sciences, 3(9), 552-560.
Al-Zawahreh, A., & Al-Madi, F. (2012). The utility of equity theory in enhancing organizational effectiveness. European Journal of Economics, Finance and Administrative Sciences, 46,158-170.
Ali, M.Z., & Ahmed, N.(2017). Impact of pay promotion and recognition in job satisfaction: A study of banking sector employees Karachi. Global Management Journal for Academic & Corporate Studies, 7(2),131-141.
Armstrong, M. (2003). Strategic
human resources management: A guide to action, UK: Kogan.
Azasu, S. (2017). Rewards and performance of Swedish real estate firms, Compensation & Benefits Review, 41(4), 19-28.
Babagana, A., &Dangus, B. (2015). Staff remuneration and the performance of Ramat Polytechnic Maiduguri students from 1995 to 2011. European Journal of Research and Reflection in Management Sciences, 3(5),1-10.
Baker, G., & Holmstrom, B. (1995). Internal labor markets: Too many theories, too few facts, American Economic Review, 85(2), 255–259.
Baker, G., Biggs, M., & Holmstrom, B. (1994). The internal economics of the firm: Evidence from personnel data, The Quarterly Journal of Economics, 109(4), 881–919.
Bana, B., & Kessy, A. (2017). Staff Management and Organisational Performance in Tanzania and Uganda: Public Servant Perspectives.
Baron, R.M., & Kenny, D.A (1986). The moderator-mediator variable distinction in social psychological research: Conceptual, strategic and statistical considerations. Journal of Personality and Social Psychology, 51(6),1173-1183.
Barron, J.M., and Loewenstein, M.A. (1985). On employer-specific information and internal labor markets, Southern Economic Journal, 52(2), 431–445.
Bretz, R.D., & Thomas, G.F (2012). Do people make the place? An examination of the attraction-selection-attrition hypothesis. Personnel Psychology,42,561-581.
Chan, W. (1996). External recruitment versus internal promotion. Journal of Labour Economics, 14(4),555-570.
Chris, K.U., &Attamah, N. (2015). Impact of contributory pension scheme on workers’ savings and investment in Nigeria: Anambra state case study. IOSR Journal of Economics and Finance (IOSR-JEF) 6(2),9-20.
Civelek, M.E (2018). Essentials of structural equation modelling. Zea Books Lincn, Nebraska.
Clegg, B., & Birch, P. (2012). Crash course in Managing people, Kogan Page, 120 Pentoville Road, London N19JN
Dankaew, T., & Silpcharu, T. (2020). Guidelines for business advantage management for export of Thai industrial products. ABAC Journal, 40(2), 53-73
De Nissi, A. S., & Griffin, R. W. (2014). Human Resource Management. New York: Houghton Mifflin.
Deslauriers, J; Dostie,B; Gagne,R., & Pare,J (2018). Estimating the impacts of payroll taxes: Evidence from Canadian employer-employee tax data. I Z A Institute of Labor Economics, Discussion paper series. IZA DP No.11598.
Dimitrous, A., & Hall, S.G. (2007).
Applied Econometrics: A Modern Approach. Revised edition. New York: Palgrave Macmillan.
Duggush, S.I., &IIiya, A.D. (2018). Effect of retirement plans on employee performance in private sector organizations in Nigeria. A case of Ashaka Cement Plc, Gombe. International Journal of Business and Management Invention, 7(3), 20-27.
Fuller, S.R., & Huber, V.L. (1998). Recruitment and Selection.In M. Poole and M. Warner (Eds.) The Handbook of Human Resource Management. International Thomson Business Press, London.
George, D., & Mallery, P. (2003). SPSS for windows step by step. A Simple guide and reference.11.0 update (4th ed). Boston: Allyn & Bacon.
Golembiewski, R.T; Yeager, S., & Hilles, R. (1975). Factor analysis of some flexitime effects: Attitudinal and behavioural consequences of a structural intervention. Academy of Management Journal, 18, 500-509.
Grabara, J. (2013). Employer’s expectations towards the employees from the marketing and management department. Polish Journal of Management Studies, 7, 58-70.
Gunawan, H., & Amalia, R (2015). Wages and employee’s performance: The quality of work-life as moderator.
Hamermesh, D.S. (1979). New
estimates of the incidence of the payroll tax. Southern Economic Journal 45(4),1208.
Hayes, A.F. (2013). Introduction to mediation, moderation and conditional process analysis: A regression-based approach. New York. Guilford Press.
Holt, D.H. (1993). Management: Concept and Practices. New Jersey: Prentice-Hall, Englewood Cliffs.
Huselid, M.A., & Becker, B.E (2000). Comment on “Measurement error in research on human resources and firm performance: How much error is there and how does it influence effect size estimate?” by Gerhart, Wright McMahan, and Snell. Personnel Psychology, 53,835-854.
Kamau, H. N. (2013). Fringe benefits effect on employee productivity in the public sector (A case study of the state department of water, Nairobi country, Kenya). A project work submitted to the School of Business, Kenyatta University.
Kimani, N.J, Thomas, K.N., & Arasa, R. (2017). Effect of compensation strategies on employee performance: A case study of Mombasa Cement Ltd. International Journal of Innovative Social Sciences & Humanities Research 5(3), 25-42.
Korkeamaki, O., &Uusitalo, R. (2008). Employment and wage effects of a payroll-tax cut-evidence from regional experiment. International Tax and Public Finance 16(6), 753-772.
Kothari, C.R., & Garg, G. (2019). Research methodology: Methods and techniques, 4th Edition. New Age Publishers Pvt Ltd, India.
Kumar, S., & Upadhaya, G. (2017). Structure equation modeling basic assumptions and concepts: A novice guide. International Journal of Quantitative and Qualitative Research Methods, 5(4),10-16.
Lazear, E.P. (1992). The Job as a Concept.In W.J. Bruns (Ed.), Performance Measurement, Evaluation, and Incentives. Harvard Business School Press, Boston, MA, 183–215.
Mayson, S., & Barret, R. (2005). Getting and keeping good staff: An analysis of human resources management “problems” in small firms. Report to CPA Australia, 23(4), 56-78.
Milo, A.C, Namusonge, G; Kanali, C., & Makakha, E.N (2014). Reward and compensation as determinant of employee commitment: A survey of Ktda Tea factories in Kenya. European Journal of Business and Management, 6(15),117-125.
Mitchell, T.R, Holtom, B.C., & Lee, T.W. (1993). How to keep your Werther, In Williams B and Davis, Keith. (1996). Human Resources and Personnel Management. New York: Mcgraw Hill, Inc.
Patrick, K. M (2014). The effect of compensation on employee motivation: A case study of Chloride Exide. United States International University.
Pinquart, M., & Schindler, I. (2007). Changes of life satisfaction in the transition to retirement: A latent class approach. Psychology and Aging, 22,442-455.
Pruchno, R; Litchfield, L., & Fried, M. (2000). Measuring the impact of workplace flexibility: Findings from the National Work/Life Measurement Project. Chestnut Hill, MA: Center for Work and Family at Boston College.
Raza, S.A., & Hanif, N. (2013). Factors affecting internet banking adoption among internal and external customers: A case of Pakistan.
Sheilds, M.A., & Ward, M. (2001). Improving nurse retention in the National Health Service in England: The impact of job satisfaction on intention to quit. Journal of Health Economics, 20,677-701.
Shin-Rong, S.H., & Chin-Wei, C. (2012). Outside director experience, compensation and performance. Management Finance, 38(10),914-938.
Tarurhor, M.E. (2017). Work stress and employees performance amongst staff of Delta State University, Abraka: The moderating role of career development. Ilorin Journal of Management Sciences, 4(1), 1-12.
Tarurhor, M.E (2020). Lean manufacturing and firm performance in the palm oil industries in Delta State, Nigeria. International Journal of Economics and Business Administration, VIII (4), 319-331.
Wholey, D.R. (1985). Determinants of Firm Internal Labor Markets in Large Law Firms, Administrative Science Quarterly, 30(3), 318–335.
Worrall, L., & Cooper, C. L (1999). Working patterns and working hours: Their impact on UK managers. Leadership & Organization Development Journal, 20(1), 6-10.
