RELATIONSHIP BETWEEN COMPENSATION AND EMPLOYEE PRODUCTIVITY: A STUDY OF THE HEALTH SECTOR

Abstract

The study examines the relationship between compensation and employee productivity. Compensation strategy helps to improve productivity as well as fulfilling other objectives such as legal compliance, labor cost control, perceived fairness towards employees enhancement and performance. The research problem is based on the neglected of employee compensation by management of establishments which negatively affected the timely and sustained achievement of institutional objectives. The objective of the study is to examine the relationship between compensation strategy, training strategy, welfare strategy and employee productivity. The study adopts a longitudinal research design to sample six (6) quoted Health and Pharmaceutical Companies were randomly selected and Kendall’s tau-b correlation is used to test the formulated hypotheses. The empirical results show that compensation strategy has positive coefficient and moderately related with employee productivity and statistically significant at 5% level of significance, training strategy has positive coefficient and moderately related with employee productivity and statistically insignificant and welfare strategy has positive coefficient and weakly related with employee productivity and statistically insignificant. The study recommends management of health and pharmaceutical companies should a strong compensation strategy scheme that consistently enhances employee productivity.