Influence of Employee Compensation on Organizational Performance and Employee Commitment in Adamawa State Polytechnic, Yola

NIJAF MAU
Sep 7
1 min read

Authors: Haziel Pwapiyadi Hassan, Haruna Isa Mohammed and Abdulkarim Musa Abubakar

Abstract

This study investigates the influence of employee compensation on organizational performance and employee commitment at Adamawa State Polytechnic, Yola. It further explores the mediating role of employee commitment in the relationship between compensation and organizational performance. A descriptive survey design was adopted, targeting a population of 787 academic and non-academic staff. A sample size of 260 respondents was determined using Krejcie and Morgan’s table and selected through proportionate stratified random sampling. Data were collected using structured questionnaires based on a five-point Likert scale. Out of the distributed questionnaires, 254 were duly completed and analyzed. Structural Equation Modeling (SEM) and descriptive statistics were employed for data analysis. The results revealed that employee compensation had a significant positive effect on organizational performance (path coefficient = 0.252) and employee commitment (path coefficient = 0.524). In turn, employee commitment significantly influenced organizational performance (path coefficient = 0.427). Furthermore, employee commitment was found to mediate the relationship between compensation and organizational performance (indirect effect = 0.224), highlighting its pivotal role in enhancing institutional performance. The findings emphasize the strategic importance of aligning compensation structures with employee expectations and industry standards. Organizations, particularly within the education sector, should adopt a balanced approach to compensation by combining financial and non-financial incentives to boost employee commitment. This commitment, in turn, acts as a crucial mechanism through which compensation enhances organizational performance.

Keywords: Employee compensation, wages salaries, bonuses, employee commitment, dedication, loyalty, emotional attachment and organizational performance